Annual Report 2025
Close Brothers Group plc

At Close Brothers, we are
here to help people and
businesses thrive
over the long term.
Through our deep sector knowledge and expertise, focus on delivering excellent
and specialist service, and strength of established relationships, we support our
customers through the cycle. Our values of deep expertise, consistent service and
long-term relationships embody our distinctive culture and customer-centric approach.
Today, we are a trusted partner to SMEs, our customers and colleagues.
Highlights
Adjusted
1
operating profit
£144.3 million
2024: £167.6 million
Operating profit/(loss)
£(122.4) million
2024: £132.7 million
Adjusted
1
basic earnings per share
(continuingoperations)
59.3p
2024: 75.8p
Basic(loss)/earnings per share
(continuingoperations)
(99.8)p
2024: 56.2p
Return on average tangible equity
2, 3
7.1%
2024: 9.3%
3
Customer sentiment scores
Asset Finance
CSAT
4
92%
2024: 92%
Motor Finance
customer Net Ease
+65
2024: +72
Invoice
Finance CSAT
4
87%
2024: 86%
Savings
online CSAT
4
82%
2024: 75%
Total Scope 1
and2 emissions
(market-based)
1,882 tCO
2
e
2024: 2,351 tCO
2
e
Employee
engagement
78%
2024: 83%
1. Adjusted measures are presented on a basis consistent with prior
periods and exclude any exceptional and adjusting items which do not
reflect underlying trading performance. Current exceptional and
adjusting items include customer remediation provisions, operational or
legal costs incurred in relation to an event that is deemed to be
adjusting, businesses that are held for sale, the Vehicle Hire business
which is in wind-down, restructuring costs and amortisation of
intangible assets on acquisition. Please refer to tables on page 52 for
further details on the reconciliation between operating and adjusted
measures.
2. Adjusted operating profit less tax and AT1 coupons divided by average
total shareholders’ equity, excluding intangible assets and AT1, for
continuing operations. See note 5 on page 13 for further details.
3. Return on average tangible equity has been restated for 2024 to
exclude discontinued operations.
4. Customer satisfaction score (“CSAT”).

At Close Brothers, we are
here to help people and
businesses thrive
over the long term.
Through our deep sector knowledge and expertise, focus on delivering excellent
and specialist service, and strength of established relationships, we support our
customers through the cycle. Our values of deep expertise, consistent service and
long-term relationships embody our distinctive culture and customer-centric approach.
Today, we are a trusted partner to SMEs, our customers and colleagues.
Highlights
Adjusted
1
operating profit
£144.3 million
2024: £167.6 million
Operating profit/(loss)
£(122.4) million
2024: £132.7 million
Adjusted
1
basic earnings per share
(continuingoperations)
59.3p
2024: 75.8p
Basic(loss)/earnings per share
(continuingoperations)
(99.8)p
2024: 56.2p
Return on average tangible equity
2, 3
7.1%
2024: 9.3%
3
Customer sentiment scores
Asset Finance
CSAT
4
92%
2024: 92%
Motor Finance
customer Net Ease
+65
2024: +72
Invoice
Finance CSAT
4
87%
2024: 86%
Savings
online CSAT
4
82%
2024: 75%
Total Scope 1
and2 emissions
(market-based)
1,882 tCO
2
e
2024: 2,351 tCO
2
e
Employee
engagement
78%
2024: 83%
1. Adjusted measures are presented on a basis consistent with prior
periods and exclude any exceptional and adjusting items which do not
reflect underlying trading performance. Current exceptional and
adjusting items include customer remediation provisions, operational or
legal costs incurred in relation to an event that is deemed to be
adjusting, businesses that are held for sale, the Vehicle Hire business
which is in wind-down, restructuring costs and amortisation of
intangible assets on acquisition. Please refer to tables on page 52 for
further details on the reconciliation between operating and adjusted
measures.
2. Adjusted operating profit less tax and AT1 coupons divided by average
total shareholders’ equity, excluding intangible assets and AT1, for
continuing operations. See note 5 on page 13 for further details.
3. Return on average tangible equity has been restated for 2024 to
exclude discontinued operations.
4. Customer satisfaction score (“CSAT”).
Deep
expertise
Our deep industry
knowledge and specialist
expertise help people and
businesses unlock their
potential and plan for the
future with confidence.
See page 18
Consistent
service
We pride ourselves on
delivering the highest levels
of service in specialist
sectors we know and
understand.
See page 26
Long-term
relationships
We take the time to
understand and build strong
long-term relationships with
our customers.
See page 49
Contents
Strategic report
At a glance 2
Chairman’s statement 4
Chief Executive’s statement 6
Historical motor finance commissionarrangements 8
Our strategy 10
Key performance indicators 12
Investment case 14
Our business model 16
Operating environment 19
Stakeholder engagement 22
Section 172 statement 22
Sustainability report 27
Task Force on Climate-related Financial
Disclosuresreport 29
Non-financial and sustainability information statement 50
Financial overview 51
Risk report 68
Going concern 113
Viability statement 114
Governance report
Chairman’s introduction to governance 116
Governance at a glance 118
Board of Directors 120
Executive Committee 123
Corporate governance report 124
Nomination and Governance Committee report 134
Audit Committee report 138
Risk Committee report 144
Directors’ remuneration report 147
Directors’ report 164
Financial statements
Independent auditors’ report 168
Consolidated income statement 177
Consolidated statement of comprehensive income 178
Consolidated balance sheet 179
Consolidated statement of changes in equity 180
Consolidated cash flow statement 181
Company balance sheet 182
Company statement of changes in equity 183
The notes 184
Glossary and definition of key terms 232
Investor relations 235
Cautionary statement 235
Company information 236
1
Strategic report Governance report Financial statements

At a glance
Close Brothers is a UK specialist banking group providing lending, deposit
taking and securities trading.
Banking
Banking provides specialist lending and
deposits across three businesses:
Commercial
Commercial offers specialist and predominantly
secured lending principally to the SME market. Find
out more on page 61.
Retail
Retail provides intermediated finance through motor
dealers, motor finance brokers and insurance
brokers, and savings products for individuals and
corporates. Find out more on page 64.
Property
Property offers residential development finance to
established UK property developers, funding for
commercial properties, and bridging and
refurbishment loans. Find out more on page 66.
£198.3 million
of adjusted operating profit
Securities
Winterflood Securities (“Winterflood”) is a leading
liquidity provider, also offering corporate advisory
services to investment trusts and institutional sales
trading. Winterflood Business Services (“WBS”)
provides outsourced dealing and custody solutions
toc.60 corporate clients. On 25 July 2025, the
groupannounced an agreement to sell Winterflood
toMarex
1
.
£0.3million
of operating profit
£144.3 million
Total adjusted operating profit
2
Serving approximately
two million
customers
c.3,000
employees
Constituent of the
FTSE 250
1. The sale of Winterflood to Marex is expected to complete in early 2026, subject to regulatory approval.
2. Total adjusting operating profit includes the operating loss from Group (central functions) of £54.0 million.
Close Brothers Group plc Annual Report 2025
2
35 offices
predominantly in the UK and Ireland

At a glance
Close Brothers is a UK specialist banking group providing lending, deposit
taking and securities trading.
Banking
Banking provides specialist lending and
deposits across three businesses:
Commercial
Commercial offers specialist and predominantly
secured lending principally to the SME market. Find
out more on page 61.
Retail
Retail provides intermediated finance through motor
dealers, motor finance brokers and insurance
brokers, and savings products for individuals and
corporates. Find out more on page 64.
Property
Property offers residential development finance to
established UK property developers, funding for
commercial properties, and bridging and
refurbishment loans. Find out more on page 66.
£198.3 million
of adjusted operating profit
Securities
Winterflood Securities (“Winterflood”) is a leading
liquidity provider, also offering corporate advisory
services to investment trusts and institutional sales
trading. Winterflood Business Services (“WBS”)
provides outsourced dealing and custody solutions
toc.60 corporate clients. On 25 July 2025, the
groupannounced an agreement to sell Winterflood
toMarex
1
.
£0.3million
of operating profit
£144.3 million
Total adjusted operating profit
2
Serving approximately
two million
customers
c.3,000
employees
Constituent of the
FTSE 250
1. The sale of Winterflood to Marex is expected to complete in early 2026, subject to regulatory approval.
2. Total adjusting operating profit includes the operating loss from Group (central functions) of £54.0 million.
Close Brothers Group plc Annual Report 2025
2
35 offices
predominantly in the UK and Ireland
Our purpose is to help people and businesses
thrive over the long term
Our values embody our distinctive culture
and customer-centric approach
Our strategy: Building on our proven business model and
strong customerrelationships to deliver attractive
returns over the long term
Simplify
See page 10
Optimise
See page 11
Grow
See page 11
Underpinned by our responsibility
To help address the social, economic and environmental challenges facing
our business, employees and clients, now and into the future
Enabling us to create value and deliver positive
outcomes for our stakeholders
Colleagues Regulators and government
Customers and partners Communities and environment
Suppliers Investors
3
Teamwork
Integrity
Deep
expertise
Prudence
Long-term
relationships
Consistent
service
Strategic report Governance report Financial statements

Chairman’s statement
“I am grateful to our team and fellow
Board members for their dedication
and resilience during a challenging
year. With their support, and with the
actions now taken, the group is well
placed to deliver on its potential and
achieve stronger returns.”
Mike Biggs
Chairman
The 2025 financial year was again dominated by
the uncertainty created by the FCA’s review of
motor finance commission arrangements,
intensified by the Court of Appeal’s October
2024 judgment in respect of the Hopcraft case.
It was a year in which we had to deliver on our
decisive actions to preserve capital, while
preparing for a future beyond this period of
regulatory uncertainty. While the range of
possible outcomes of the FCA review is still
uncertain, we welcomed the outcome of the
Supreme Court’s judgment in respect of
Hopcraft in August 2025, which provided much-
needed clarity to the industry. This environment
demanded resilience, focus and intent, qualities
that I am pleased to say were shown in
abundance by both the Board and management
team. I would also like to acknowledge the
constructive engagement of our long-standing
shareholders, who have been supportive
throughout this period and whose feedback
continues to be invaluable.
Performance in the year inevitably reflected the actions we
took to safeguard the group’s position. The loan book was
impacted by the prudent pause in new motor finance lending
following the Court of Appeal’s decision, and by the
deliberate moderation of growth across all of our banking
businesses to preserve capital in the earlier part of the year.
Despite these constraints, we maintained a strong net
interest margin and a resilient credit quality, reflecting the
disciplined approach that underpins our business model.
The Board is acutely aware of the importance of the group’s
dividend to our shareholders. Given the continued
uncertainty regarding the outcome of the FCA’s review of
motor finance commission arrangements, the group will not
pay a final dividend on its ordinary shares for the 2025
financial year. The decision to reinstate dividends will be
reviewed by the Board once there is further clarity on the
financial impact of the FCA review of motor finance
commissions.
Board and management alignment
The Board has worked closely with management to agree
and oversee the actions necessary to strengthen capital,
address legacy issues, and focus the group on its core
specialist banking businesses. The strategy announced in
March 2024, focused on simplification, optimisation and
growth, have since guided the group’s decisions. Progress
has been tangible: over £400 million of Common Equity
Tier 1 (“CET1”) capital was generated or preserved; the
disposals of Close Brothers Asset Management, Winterflood
and Close Brewery Rentals Limited (“CBRL”) leave us leaner
and more focused; certain legacy matters have been
addressed, such as the settlement of long-standing litigation
in Novitas. The foundations are now set for the next stage of
the journey.
Close Brothers Group plc Annual Report 2025
4

Chairman’s statement
“I am grateful to our team and fellow
Board members for their dedication
and resilience during a challenging
year. With their support, and with the
actions now taken, the group is well
placed to deliver on its potential and
achieve stronger returns.”
Mike Biggs
Chairman
The 2025 financial year was again dominated by
the uncertainty created by the FCA’s review of
motor finance commission arrangements,
intensified by the Court of Appeal’s October
2024 judgment in respect of the Hopcraft case.
It was a year in which we had to deliver on our
decisive actions to preserve capital, while
preparing for a future beyond this period of
regulatory uncertainty. While the range of
possible outcomes of the FCA review is still
uncertain, we welcomed the outcome of the
Supreme Court’s judgment in respect of
Hopcraft in August 2025, which provided much-
needed clarity to the industry. This environment
demanded resilience, focus and intent, qualities
that I am pleased to say were shown in
abundance by both the Board and management
team. I would also like to acknowledge the
constructive engagement of our long-standing
shareholders, who have been supportive
throughout this period and whose feedback
continues to be invaluable.
Performance in the year inevitably reflected the actions we
took to safeguard the group’s position. The loan book was
impacted by the prudent pause in new motor finance lending
following the Court of Appeal’s decision, and by the
deliberate moderation of growth across all of our banking
businesses to preserve capital in the earlier part of the year.
Despite these constraints, we maintained a strong net
interest margin and a resilient credit quality, reflecting the
disciplined approach that underpins our business model.
The Board is acutely aware of the importance of the group’s
dividend to our shareholders. Given the continued
uncertainty regarding the outcome of the FCA’s review of
motor finance commission arrangements, the group will not
pay a final dividend on its ordinary shares for the 2025
financial year. The decision to reinstate dividends will be
reviewed by the Board once there is further clarity on the
financial impact of the FCA review of motor finance
commissions.
Board and management alignment
The Board has worked closely with management to agree
and oversee the actions necessary to strengthen capital,
address legacy issues, and focus the group on its core
specialist banking businesses. The strategy announced in
March 2024, focused on simplification, optimisation and
growth, have since guided the group’s decisions. Progress
has been tangible: over £400 million of Common Equity
Tier 1 (“CET1”) capital was generated or preserved; the
disposals of Close Brothers Asset Management, Winterflood
and Close Brewery Rentals Limited (“CBRL”) leave us leaner
and more focused; certain legacy matters have been
addressed, such as the settlement of long-standing litigation
in Novitas. The foundations are now set for the next stage of
the journey.
Close Brothers Group plc Annual Report 2025
4
The Board has also taken important and necessary
decisions. A proactive remediation programme is being
implemented in Motor Finance following the identification of
historical deficiencies in certain operational processes
related to early settlement of loans. Both the Board and
management team have acted quickly to address the issue
and strengthen controls, putting customers at the centre of
our response, and ensuring that those affected are properly
compensated. In addition, we have taken the decision to
place Close Brothers Vehicle Hire into wind-down, which
weighs on the group's near term performance but ensures
the group’s resources are concentrated on businesses
aligned with our core lending expertise.
Alongside this, cost discipline is a clear priority and, in
addition to the savings delivered in the 2025 financial year,
we have a clear plan to deliver additional savings. Combined
with the attractive growth opportunities we see across our
businesses, these steps provide the foundations for the
group to return to double-digit returns by the 2028 financial
year, rising thereafter. I have every confidence in the
leadership team and the depth of experience across the
organisation. Close Brothers remains a strong franchise with
well-established positions in our chosen markets and the
capability to deliver more attractive returns.
Our people and culture
The group’s culture and the engagement of our people
remain central to its long-term success. Our most recent
employee opinion survey, completed in February 2025,
showed engagement at 78%, which remains strong and
positive when benchmarked against external data and other
UK financial services firms, although slightly lower than the
83% recorded last year. We were encouraged by the results,
which reflect our continued commitment to customers and
colleagues: 96% (2024: 94%) of colleagues believe our
culture encourages them to treat customers fairly, and a high
proportion also reported a strong sense of belonging, with
91% (2024: 90%) of colleagues stating that they feel
included. The Board takes these results seriously and
continues to prioritise culture, inclusion and employee
wellbeing. Despite the pressures of the past year, we have
seen remarkable teamwork, professionalism and resilience
from colleagues across the group, which underpins
confidence in our ability to navigate this period successfully.
Repositioning our climate strategy
We remain committed to supporting our customers in their
climate ambitions and to achieving net zero emissions by
2050 or sooner. Good progress has been made during the
financial year, including a 20% reduction in our Scope 1 and
2 emissions and the refining of our product offering to
capture customer demand for alternatively fuelled vehicles in
Motor Finance, with £154.4 million of lending for battery
electric vehicles achieved. In Asset Finance and Leasing, we
also launched a £20 million green asset fund. After careful
consideration, the Board decided to move away from
intermediate emissions targets. This reflects a deliberate shift
to align our positioning with a business-led strategy:
supporting customers in their own sustainability journeys in
ways that are practical, tailored and aligned to their
objectives. Further detail on our climate strategy and broader
sustainability progress can be found on pages 27 to 48 of
this report.
Board and management changes
Following a period of medical leave, Adrian Sainsbury
stepped down as Group Chief Executive and Executive
Director of the Group with effect from 6 January 2025 to
focus on his health. The Board would like to thank Adrian for
his material contribution during his 11 years with the group,
the last four of which were as Chief Executive. We were
pleased to appoint Mike Morgan as Group Chief Executive in
January 2025. Having served as Group Finance Director for
five years and leading the group on an interim basis during
Adrian’s medical leave, he has provided strong and steady
leadership at a critical time for the group.
During the year, Fiona McCarthy was appointed Group Chief
Finance Officer and joined the Board as an Executive
Director with effect from 29 August 2025. She joined the
group in 2019 as the Financial Planning and Analysis Director
and brings over 30 years’ experience in financial services.
The Board is committed to ensuring that it possesses the
right balance of skills and diversity to ensure the success of
the group, and I am pleased to report that our Board is
composed of 56% female Directors and includes one
Director from a minority ethnic background. Furthermore, the
Board now meets the FCA Listing Rule requirement to have
one of the most senior Board positions occupied by a female
Director, following Fiona's appointment as an Executive
Director in August. Further information on the composition of
the Board and its diversity can be found on pages 120 to 123
of this report.
Thanks
Finally, I would like to thank colleagues, management and
fellow Board members for their resilience, professionalism
and commitment during another challenging year. With their
support, and with the actions now taken, I am confident the
group will emerge stronger and be well placed to deliver on
its potential and achieve higher returns.
Michael N. Biggs
Chairman
30 September 2025
5
Strategic report Governance report Financial statements

Chief Executive’s statement
“This year has been about proving that
change is possible and that we can
move at speed. We have tackled
legacy issues head-on, reshaped the
portfolio, and shown that we can
take decisive actions quickly, even
while navigating the uncertainty
around motor commissions.”
Mike Morgan
Chief Executive
When I took on the role of Chief Executive at the
start of 2025, I set out my commitment to
address the issues holding back performance
and to drive the group to deliver the returns we
know it can generate. Our purpose and business
model remain strong: we operate in markets with
long-term demand, where our specialist focus,
deep customer relationships and trusted brand
allow us to differentiate and win. However, in
recent times, our returns have fallen short of
where they should be. The combination of
historical complexity, elevated costs, and recent
events has highlighted the need for change. I am
approaching this with urgency and a focus on
execution, with a leadership team that brings the
right experience to deliver.
This year, we have taken a series of decisive steps to
address legacy issues and reset the business. We have
strengthened our capital position in response to the motor
commissions uncertainty, delivered cost actions resulting in
annualised savings of around £25 million since March 2024,
and simplified the group through the sale of Close Brothers
Asset Management and Winterflood, the repositioning of our
Premium Finance business and the disposal of our Brewery
Rentals business. We have now also successfully settled the
long-standing litigation issued by Novitas, allowing us to
move forward and exit from this business. In addition, as part
of our simplification agenda, we are announcing today our
decision to exit our Vehicle Hire business, which has been
loss-making in a challenging market environment and is not
strategically aligned with our core specialist lending
expertise. Together with the impact of declining asset values,
this has resulted in an impairment charge of £30.0 million in
relation to the assets of this business.
On 1 August 2025, the Supreme Court published its
judgment with respect to the “Hopcraft”, “Johnson” and
“Wrench” cases in relation to motor commissions. We
welcome the positive outcome of this judgment, which
provided much-needed clarity to the industry, and now await
the outcome of the FCA consultation on the design and
scope of an industry-wide redress scheme. The provision
charge in respect of motor finance commissions recognised
in the income statement at the half year of £165.0 million has
been reassessed in light of all available information and
recent developments and remains unchanged.
Our wide-ranging review of the business has also required us
to take other challenging, but necessary, actions. We are
implementing a proactive customer remediation programme
in Motor Finance, where we have identified historical
deficiencies in certain operational processes in relation to the
early settlement of loans. This has resulted in a separate
provision of £33.0 million in the 2025 financial year.
Notwithstanding the significant impact of these actions on
our near-term financial performance, I am confident that they
leave the group better positioned for growth going forward,
with a sharper, more focused portfolio of specialist banking
businesses.
Close Brothers Group plc Annual Report 2025
6

Chief Executive’s statement
“This year has been about proving that
change is possible and that we can
move at speed. We have tackled
legacy issues head-on, reshaped the
portfolio, and shown that we can
take decisive actions quickly, even
while navigating the uncertainty
around motor commissions.”
Mike Morgan
Chief Executive
When I took on the role of Chief Executive at the
start of 2025, I set out my commitment to
address the issues holding back performance
and to drive the group to deliver the returns we
know it can generate. Our purpose and business
model remain strong: we operate in markets with
long-term demand, where our specialist focus,
deep customer relationships and trusted brand
allow us to differentiate and win. However, in
recent times, our returns have fallen short of
where they should be. The combination of
historical complexity, elevated costs, and recent
events has highlighted the need for change. I am
approaching this with urgency and a focus on
execution, with a leadership team that brings the
right experience to deliver.
This year, we have taken a series of decisive steps to
address legacy issues and reset the business. We have
strengthened our capital position in response to the motor
commissions uncertainty, delivered cost actions resulting in
annualised savings of around £25 million since March 2024,
and simplified the group through the sale of Close Brothers
Asset Management and Winterflood, the repositioning of our
Premium Finance business and the disposal of our Brewery
Rentals business. We have now also successfully settled the
long-standing litigation issued by Novitas, allowing us to
move forward and exit from this business. In addition, as part
of our simplification agenda, we are announcing today our
decision to exit our Vehicle Hire business, which has been
loss-making in a challenging market environment and is not
strategically aligned with our core specialist lending
expertise. Together with the impact of declining asset values,
this has resulted in an impairment charge of £30.0 million in
relation to the assets of this business.
On 1 August 2025, the Supreme Court published its
judgment with respect to the “Hopcraft”, “Johnson” and
“Wrench” cases in relation to motor commissions. We
welcome the positive outcome of this judgment, which
provided much-needed clarity to the industry, and now await
the outcome of the FCA consultation on the design and
scope of an industry-wide redress scheme. The provision
charge in respect of motor finance commissions recognised
in the income statement at the half year of £165.0 million has
been reassessed in light of all available information and
recent developments and remains unchanged.
Our wide-ranging review of the business has also required us
to take other challenging, but necessary, actions. We are
implementing a proactive customer remediation programme
in Motor Finance, where we have identified historical
deficiencies in certain operational processes in relation to the
early settlement of loans. This has resulted in a separate
provision of £33.0 million in the 2025 financial year.
Notwithstanding the significant impact of these actions on
our near-term financial performance, I am confident that they
leave the group better positioned for growth going forward,
with a sharper, more focused portfolio of specialist banking
businesses.
Close Brothers Group plc Annual Report 2025
6
Financial performance
We reported a statutory operating loss before tax of £122.4
million (2024: statutory operating profit before tax of £132.7
million) from continuing operations, primarily driven by
adjusting items relating to motor finance commissions,
including the £165.0 million provision charge and £18.7
million associated with complaints handling and other
operational and legal costs. We also recognised a £33.0
million provision for the proactive customer remediation
programme in Motor Finance in relation to early settlement of
loans and an operating loss before tax of £47.5 million for
our rentals businesses, including the £30.0 million write-
down of assets in the Vehicle Hire business.
On an adjusted basis, excluding the impact of these items
which do not reflect the underlying performance of our
business and discontinued operations, the group’s operating
profit decreased 14% to £144.3 million (2024: £167.6 million),
driven by a 2% decline in income and 3% increase in costs,
partly offset by a 6% reduction in impairment charges.
In Banking, adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), as a 2% reduction in income
and 1% increase in costs were partly offset by lower
impairment charges. The loan book declined by 4% to £9.5
billion (31 July 2024: £9.8 billion) as a result of loan book
moderation measures and the temporary pause in UK motor
lending following the Court of Appeal's judgment in October
2024. The net interest margin remained strong at 7.2%
(2024: 7.4%) and credit performance remained resilient, with
a bad debt ratio of 1.0% (2024: 1.0%), below the long-term
average of 1.2%.
We maintained a strong capital, funding and liquidity
position. The group’s CET1 capital ratio was 13.8% at 31
July 2025, reflecting significant progress on our capital
actions, and significantly above our applicable requirement
of 9.7%. This includes the impact of a £165.0 million charge
for the provision in relation to motor finance commissions
and other adjusting items. The recently announced sale of
Winterflood is expected to increase the group’s CET1 capital
ratio by c.55 basis points on a pro-forma basis, of which c.30
basis points will be recognised upon completion, and a
further c.25 basis points is expected in due course from the
reduction in operational risk weighted assets. We have raised
over £1 billion of retail deposits as well as £300 million
through a Motor Finance funding securitisation, supporting a
continued strong funding base at £12.7 billion (31 July 2024:
£13.0 billion) at 31 July 2025. We have also consciously
maintained a higher level of liquidity, with a 12-month
average liquidity coverage ratio (“LCR”) to 31 July 2025 of
1,012% (31 July 2024: 1,034%), substantially above
regulatory requirements.
Executing the next stage of our journey
With our simplification agenda now largely complete, these
actions provide the foundation for the next stage of our
journey: driving efficiency and capturing growth.
We have already delivered £25 million of annualised cost
savings by the end of the 2025 financial year through the
streamlining of our technology, suppliers, property, and
workforce, and are committed to maintaining this momentum
to deliver a step change in operating profitability. We will
deliver at least c.£20 million of additional annualised savings
per annum in each of the next three years, through further
consolidation of centrally provided functions, outsourcing
and offshoring, and the simplification and rationalisation of
technology, including automation and the use of artificial
intelligence. I will personally oversee the planning and
execution of these cost initiatives, and we have mobilised
senior leaders across the group to ensure execution at pace
and alignment at every level.
In parallel, we are evaluating opportunities to optimise
capital, funding and liquidity once the uncertainty around
motor commissions is resolved.
We are confident in the enduring growth opportunity across
our core markets, focusing on areas that offer attractive risk-
adjusted returns. In the earlier part of the year, to preserve
capital, we had to turn away attractive new business that met
our credit and pricing requirements, as reflected in our loan
book growth performance. This, however, demonstrates the
continuing demand we believe exists in our markets.
Accordingly, we are taking steps to capture this growth
opportunity. We are broadening our product offering in
Property Finance, moving into larger build-to-sell loans and
additional asset classes such as build-to-rent and purpose-
built student accommodation; expanding distribution in
Motor Finance through growth in the Irish market, and with
larger partners and brokers; and have a renewed focus on
growing our commercial lines business in Premium Finance.
Our Commercial business is expanding into adjacent
products, such as commercial mortgages, and is focused on
scaling new, specialist teams such as agriculture. We intend
to use our strong market positions, reputation and specialist
expertise to win in the segments where we can truly
differentiate and become the specialist lender of choice for
SMEs in the UK and Ireland.
Together these actions set a clear path back to double-digit
RoTE by the 2028 financial year, rising thereafter. We plan to
provide a full update on our pathway to rising RoTE once
there is clarity on the outcome of the FCA’s consultation and
its impact on the group, potentially early next year, or sooner
depending on when clarity is achieved.
“Our purpose and business model
remain strong: we operate in markets
with long-term demand, where our
specialist focus, deep customer
relationships and trusted brand allow
us to differentiate and win.”
Confident in our future
This year has been about proving that change is possible
and that we can move at speed. We have tackled legacy
issues head-on, reshaped the portfolio, and shown that we
can take decisive actions quickly, even while navigating the
uncertainty around motor commissions. While a number of
these actions carry an upfront financial impact, we are
confident that they will leave us well positioned for the long
term. The task now is to accelerate from here. With a
simpler, more focused portfolio and a leadership team
focused on delivery, we are positioned to reduce costs, drive
growth in our core markets and improve returns. I am
confident we are on the right path and that we will return this
business to double-digit returns.
I want to thank all of our colleagues for their professionalism,
energy and commitment throughout this period of change.
Their dedication and focus have been critical in delivering
these early actions and in positioning the group for the future.
Mike Morgan
Chief Executive
7
Strategic report Governance report Financial statements

Historical motor finance commission
arrangements
Overview of developments in relation to motor
finance commissions
On 11 January 2024, the Financial Conduct Authority (“FCA”)
announced that it would use its powers under section 166 of
the Financial Services and Markets Act 2000 to review
historical motor finance commission arrangements and sales
at several firms, following high numbers of complaints from
customers. The review followed the Financial Ombudsman
Service’s (“FOS”) publication of its first two decisions
upholding customer complaints relating to discretionary
commission arrangements (“DCAs”) against two other
lenders in the market.
On 25 October 2024, the Court of Appeal published its
judgment in respect of Hopcraft v Close Brothers Limited
(“CBL”) (“Hopcraft”) upholding the appeal brought against
CBL. This case, which had initially been determined in CBL's
favour, was heard in early July 2024 alongside two other
claims against FirstRand Bank Limited (“FirstRand”).
CBL obtained permission from the Supreme Court of
England and Wales (the “Supreme Court”) to appeal the
Court of Appeal's judgment against CBL in respect of the
Hopcraft motor finance commissions case (the “Appeal”).
The Appeal was heard by the Supreme Court between 1
April 2025 and 3 April 2025.
On 1 August 2025, the Supreme Court gave its judgment, in
which CBL successfully overturned the Court of Appeal's
judgment in respect of the Hopcraft case. The Supreme
Court determined that motor dealers (acting as a credit
broker) do not owe fiduciary duties to their customers. As a
result, the Supreme Court dismissed the Hopcrafts' claims
against CBL entirely. The Supreme Court reached the same
conclusion on these issues in relation to the two FirstRand
cases (“Wrench” and “Johnson”).
On the issue in Johnson relating to unfairness under s.140A
of the Consumer Credit Act 1974, the Supreme Court made
clear that the test for unfairness is highly fact sensitive and
takes into account a broad range of factors. On the facts of
Johnson, the Supreme Court upheld the Court of Appeal's
decision that the relationship between Mr Johnson and
FirstRand was unfair and required FirstRand to pay Mr
Johnson the value of the commission paid to the dealer plus
compensatory interest at an appropriate commercial rate.
Close Brothers welcomed the outcome of the Appeal, which
provided clarity on important legal and commercial
principles. Following the publication of the Supreme Court's
judgment, the FCA announced on 3 August 2025 its intention
to launch a public consultation by early October 2025 on an
industry-wide redress scheme to compensate motor finance
customers who were treated unfairly.
Until the FCA confirms the design and scope of that scheme,
there remains uncertainty as to the range of outcomes, and
the financial impact to the group.
Provisioning assessment in relation to motor
finance commissions
The provision charge in respect of motor finance
commissions recognised in the income statement at the half
year of £165.0 million has been reassessed in light of all
available information and recent developments and remains
unchanged. The ultimate cost to the group could be
materially higher or lower than the provision taken and
remains subject to further clarity from the FCA on the scope
and design of a redress scheme. Please refer to Note 16
“Other Assets and Liabilities” for further details on the
group's provisioning assessment of this matter.
Strengthened capital position
In response to the motor commissions uncertainty, we have
strengthened our capital position and maintained high levels
of liquidity, substantially above regulatory requirements. The
group's Common Equity Tier 1 (“CET1”) capital ratio was
13.8% at 31 July 2025, reflecting significant progress on our
capital actions. These measures, which included no payment
of the dividend, loan book moderation, cost-saving
initiatives, organic capital generation, and the sale of Close
Brothers Asset Management (“CBAM”) (announced in
September 2024 and completed in February 2025) have
been successfully implemented. This resulted in over £400
million of CET1 capital generated or preserved as of 31 July
2025.
In addition, the sale of Winterflood, announced on 25 July
2025, is expected to increase the group's CET1 capital ratio
by c.55 basis points on a pro-forma basis, from 13.8% to
c.14.3%, of which c.30 basis points will be recognised upon
completion, and a further c.25 basis points is expected in
due course from the reduction in operational risk weighted
assets. The transaction is expected to complete in early
2026, subject to regulatory approval.
Close Brothers Group plc Annual Report 2025
8

Historical motor finance commission
arrangements
Overview of developments in relation to motor
finance commissions
On 11 January 2024, the Financial Conduct Authority (“FCA”)
announced that it would use its powers under section 166 of
the Financial Services and Markets Act 2000 to review
historical motor finance commission arrangements and sales
at several firms, following high numbers of complaints from
customers. The review followed the Financial Ombudsman
Service’s (“FOS”) publication of its first two decisions
upholding customer complaints relating to discretionary
commission arrangements (“DCAs”) against two other
lenders in the market.
On 25 October 2024, the Court of Appeal published its
judgment in respect of Hopcraft v Close Brothers Limited
(“CBL”) (“Hopcraft”) upholding the appeal brought against
CBL. This case, which had initially been determined in CBL's
favour, was heard in early July 2024 alongside two other
claims against FirstRand Bank Limited (“FirstRand”).
CBL obtained permission from the Supreme Court of
England and Wales (the “Supreme Court”) to appeal the
Court of Appeal's judgment against CBL in respect of the
Hopcraft motor finance commissions case (the “Appeal”).
The Appeal was heard by the Supreme Court between 1
April 2025 and 3 April 2025.
On 1 August 2025, the Supreme Court gave its judgment, in
which CBL successfully overturned the Court of Appeal's
judgment in respect of the Hopcraft case. The Supreme
Court determined that motor dealers (acting as a credit
broker) do not owe fiduciary duties to their customers. As a
result, the Supreme Court dismissed the Hopcrafts' claims
against CBL entirely. The Supreme Court reached the same
conclusion on these issues in relation to the two FirstRand
cases (“Wrench” and “Johnson”).
On the issue in Johnson relating to unfairness under s.140A
of the Consumer Credit Act 1974, the Supreme Court made
clear that the test for unfairness is highly fact sensitive and
takes into account a broad range of factors. On the facts of
Johnson, the Supreme Court upheld the Court of Appeal's
decision that the relationship between Mr Johnson and
FirstRand was unfair and required FirstRand to pay Mr
Johnson the value of the commission paid to the dealer plus
compensatory interest at an appropriate commercial rate.
Close Brothers welcomed the outcome of the Appeal, which
provided clarity on important legal and commercial
principles. Following the publication of the Supreme Court's
judgment, the FCA announced on 3 August 2025 its intention
to launch a public consultation by early October 2025 on an
industry-wide redress scheme to compensate motor finance
customers who were treated unfairly.
Until the FCA confirms the design and scope of that scheme,
there remains uncertainty as to the range of outcomes, and
the financial impact to the group.
Provisioning assessment in relation to motor
finance commissions
The provision charge in respect of motor finance
commissions recognised in the income statement at the half
year of £165.0 million has been reassessed in light of all
available information and recent developments and remains
unchanged. The ultimate cost to the group could be
materially higher or lower than the provision taken and
remains subject to further clarity from the FCA on the scope
and design of a redress scheme. Please refer to Note 16
“Other Assets and Liabilities” for further details on the
group's provisioning assessment of this matter.
Strengthened capital position
In response to the motor commissions uncertainty, we have
strengthened our capital position and maintained high levels
of liquidity, substantially above regulatory requirements. The
group's Common Equity Tier 1 (“CET1”) capital ratio was
13.8% at 31 July 2025, reflecting significant progress on our
capital actions. These measures, which included no payment
of the dividend, loan book moderation, cost-saving
initiatives, organic capital generation, and the sale of Close
Brothers Asset Management (“CBAM”) (announced in
September 2024 and completed in February 2025) have
been successfully implemented. This resulted in over £400
million of CET1 capital generated or preserved as of 31 July
2025.
In addition, the sale of Winterflood, announced on 25 July
2025, is expected to increase the group's CET1 capital ratio
by c.55 basis points on a pro-forma basis, from 13.8% to
c.14.3%, of which c.30 basis points will be recognised upon
completion, and a further c.25 basis points is expected in
due course from the reduction in operational risk weighted
assets. The transaction is expected to complete in early
2026, subject to regulatory approval.
Close Brothers Group plc Annual Report 2025
8
Impacts of motor finance commissions on the
group's financial performance
The group's total operating expenses for this financial year
were impacted by £194.0 million in direct and indirect costs
associated with the motor finance commissions uncertainty,
including the £165.0 million provision charge, which has
been recognised as an adjusting item. In addition, the group
incurred complaints handling and other operational and legal
costs amounting to £18.7 million (also recognised as an
adjusting item) and elevated Group (central functions)
expenses related to professional and advisory fees of £10.3
million, which are temporary expenses expected to diminish
once the uncertainties in relation to motor finance
commissions are resolved.
As previously announced, Close Brothers temporarily paused
UK motor finance lending on 25 October 2024. Lending
resumed on 2 November 2024, with all channels fully
operational from January 2025. Underwriting volumes have
now returned to pre-pause levels, and used car finance
demand remains strong and consistent with levels seen prior
to the Court of Appeal judgment.
All relevant new business processes now include updated
documentation to ensure customers are informed about
broker relationships and commission amounts before signing
credit agreements. Additionally, measures are in place to
verify that credit brokers comply with these requirements.
Update on claims and complaints
The FCA has extended the time firms have to respond to
complaints about motor finance involving both DCAs and
non-DCAs until after 4 December 2025. This extension is
part of a broader pause introduced to allow the FCA to
complete its review into historical commission arrangements
and to avoid inconsistent outcomes across the industry.
Consumers now have until 29 July 2026 or 15 months from
the firm’s final response to escalate complaints to the FOS.
There are a number of complaints against Close Brothers
relating to motor finance commission arrangements that
have been referred to the FOS for a determination. To date,
no final FOS decisions have been made upholding these
complaints.
Since the judgment by the Supreme Court on 1 August 2025
and the subsequent announcement by the FCA on 3 August
2025, we have seen a slight reduction in complaints from
Claims Management Companies (“CMCs”) and Claims Law
Firms (“CLFs”), with other channels unchanged. However,
we have also seen an increase in enquiries from CMCs and
CLFs, highlighting their continued interest in this matter.
We have also taken steps to enhance our operational
capabilities to respond to increased complaints volumes and
potential changes, such as the implementation of an
industry-wide redress scheme. This included increased
resourcing to manage complaints and legal expenses. In the
2025 financial year, we have incurred £18.7 million of costs
associated with complaints handling and other operational
and legal costs in relation to motor finance commissions. We
expect these costs will be in the single-digit millions in the
2026 financial year. We continue to monitor the impact on
our current handling of these complaints to ensure we have
the appropriate resources to respond effectively.
9
Strategic report Governance report Financial statements

Our strategy
At Close Brothers, we strive to provide
exceptional service to our customers
across our banking activities. We are
committed to building on our proven
business model and strong customer
relationships to deliver attractive
returns over the long term.
We are focused on supporting our
customers and delivering long-term
value creation. Our strategy is centred
on three clear priorities: Simplify,
Optimise and Grow.
In line with these priorities, we have
streamlined the portfolio of
businesses, and are now focused on
executing the next stage of our
journey, driving efficiency and
capturing growth in our chosen
markets.
Decisive action was taken during the
last year to reposition the business,
implement significant cost reductions
and identify future growth markets to
deliver the strategy and rebuild
returns.
Simplify
An in-depth review and repositioning of our
portfolio of businesses has sharpened our
focus on specialist banking.
Simplified group structure
• During the last year, we have sold Close Brothers
Asset Management, Winterflood and the Brewery
Rentals business.
• This simplifies our portfolio and allows us to focus
on the core lending businesses, where we can
leverage our expertise and deliver growth and
sustainable returns.
• We have settled the long-standing litigation issued
by Novitas, allowing us to move forward and exit
from this business.
Realignment of existing activities with
core business model
• During the 2025 financial year, we have
repositioned our Premium Finance business to
focus on commercial lines.
• We sold our Brewery Rentals business and decided
to exit of our Vehicle Hire business.
• These actions have created a portfolio of
businesses with a strong strategic fit. We are
confident in the enduring growth opportunity
across our core markets, focusing on areas that
offer attractive risk-adjusted returns.
Close Brothers Group plc Annual Report 2025
10

Our strategy
At Close Brothers, we strive to provide
exceptional service to our customers
across our banking activities. We are
committed to building on our proven
business model and strong customer
relationships to deliver attractive
returns over the long term.
We are focused on supporting our
customers and delivering long-term
value creation. Our strategy is centred
on three clear priorities: Simplify,
Optimise and Grow.
In line with these priorities, we have
streamlined the portfolio of
businesses, and are now focused on
executing the next stage of our
journey, driving efficiency and
capturing growth in our chosen
markets.
Decisive action was taken during the
last year to reposition the business,
implement significant cost reductions
and identify future growth markets to
deliver the strategy and rebuild
returns.
Simplify
An in-depth review and repositioning of our
portfolio of businesses has sharpened our
focus on specialist banking.
Simplified group structure
• During the last year, we have sold Close Brothers
Asset Management, Winterflood and the Brewery
Rentals business.
• This simplifies our portfolio and allows us to focus
on the core lending businesses, where we can
leverage our expertise and deliver growth and
sustainable returns.
• We have settled the long-standing litigation issued
by Novitas, allowing us to move forward and exit
from this business.
Realignment of existing activities with
core business model
• During the 2025 financial year, we have
repositioned our Premium Finance business to
focus on commercial lines.
• We sold our Brewery Rentals business and decided
to exit of our Vehicle Hire business.
• These actions have created a portfolio of
businesses with a strong strategic fit. We are
confident in the enduring growth opportunity
across our core markets, focusing on areas that
offer attractive risk-adjusted returns.
Close Brothers Group plc Annual Report 2025
10
Optimise
Implementing a step-change in operating
profitability.
Group-wide cost reduction actions
• An in-depth review of costs across the group will
create a more efficient organisation.
• We delivered £25 million of annualised cost savings
by the end of the 2025 financial year through
streamlining of our technology, suppliers, property
and workforce.
• We are committed to delivering at least c.£20
million of additional annualised savings per annum
in each of the next three years, through further
consolidation of centrally provided functions,
outsourcing and offshoring, and the simplification
and rationalisation of technology, including
automation and the use of artificial intelligence.
A leaner, more agile organisation well
positioned for the future
• We continue to build on the progress from our
technology transformation, initiated in 2023,
focused on simplifying and modernising our
technology estate, as well as consolidating and
increasing our use of strategic partners. This has
helped create a more digitally enabled and agile IT
environment that is secure, resilient and
sustainable.
• In parallel, we are actively evaluating opportunities
to optimise capital, funding and liquidity.
Grow
Using our strong market positions,
reputation and specialist expertise to target
growth in the segments where we can truly
differentiate.
We are actively pursuing targeted growth
opportunities in our chosen markets which
offer attractive risk-adjusted returns.
• In Commercial, there are significant opportunities
to expand lending in a number of our mature
businesses, especially Invoice Finance, Energy,
and intermediated Asset Finance.
• We are expanding distribution in Motor Finance
through growth in the Irish market, and with larger
partners and brokers.
• We have a renewed focus on growing our
commercial lines business in Premium Finance.
Expanding our product offering to target
new areas of growth
• Motor Finance is targeting opportunities through
digitisation, and has expanded its offering to
Alternative Fuel Vehicles (“AFVs”) to access the
rapidly growing market of second-hand EVs and
hybrid vehicles.
• Commercial is expanding into adjacent products,
such as commercial mortgages, and is focused on
scaling new, specialist teams such as agriculture.
• Property Finance is broadening its product offering,
moving into larger build-to-sell loans and additional
asset classes, such as build-to-rent and purpose-
built student accommodation.
11
Strategic report Governance report Financial statements

Key performance indicators
Financial key performance indicators (“KPIs”)
Common Equity Tier 1 capital
ratio (%)
2025
2024
2023
Our CET1 capital ratio is significantly
above theapplicable requirements.
Wehave made significant progress in
strengthening our capital position
through the implementation of a range
ofmanagement actions. Maintaining a
strong capital position is a fundamental
component of our model.
Net interest margin
1
(%)
2025
2024
2023
Net interest margin is a key measure
ofprofitability and reflects both our
pricing discipline on new lending and
our funding costs. Prioritising margin
over volumes is a key facet of our
lending approach.
Bad debt ratio, excluding
Novitas
1,2
(%)
2025
2024
2023
Our bad debt ratio (excluding Novitas)
remains below our long-term average
of 1.2%
3
. The consistent application of
our underwriting and responsible
lending criteria at all stages of the
economic cycle is fundamental to our
long-term approach.
Total funding as a percentage
of loan book
4
(%)
2025
2024
2023
We adopt a conservative approach to
funding based on the principle of
“borrow long, lend short”, with a
prudent maturity profile. Our funding
base is diverse, enabling us to adapt
our position through the cycle, based
on market conditions and demand.
Group expense/income ratio
1
(%)
2025
2024
2023
We delivered £25 million of annualised
cost savings by the end of the 2025
financial year. The group is committed
to maintaining cost momentum to
deliver a step change in operating
profitability.
Liquidity coverage ratio,
12-month average (%)
2025
2024
2023
Our liquidity coverage ratio is
substantially above the minimum
regulatory requirements of 100%, as
we continue to adopt a conservative
liquidity position and prudently
manage our financial resources.
Loan book growth
4
(%)
2025
2024
2023
Loan book growth remains an output
of our business model, as we prioritise
our margins and credit quality. We
have repositioned the business to
focus on segments where we see mid
to high single digit growth potential
through the cycle, leaving us well
positioned to benefit as the economy
and demand recover.
Adjusted basic earnings
pershare share (continuing
operations)
1
(p)
2025
2024
2023
Basic (loss)/earnings per share
(continuing operations)
1
(p)
2025
2024
2023
Close Brothers Group plc Annual Report 2025
12
13.8
12.8
13.3
7.2
7.4
7.7
1.0
1.0
0.9
132
128
130
65
62
66
1,012
1,034
1,143
(4)
6
5
(99.8)
56.2
54.3
59.3
75.8
55.1
We are focused on ensuring that the group is well positioned to generate strong,
sustainable returns and increasing our adjusted earnings per share growth through
our focus on greater simplification, improving operational efficiency and driving
sustainable growth.
In 2025, we incurred adjusting items which impacted the basic EPS metric. These
adjusting items have been excluded from adjusted EPS to present the underlying
performance of the group.

Key performance indicators
Financial key performance indicators (“KPIs”)
Common Equity Tier 1 capital
ratio (%)
2025
2024
2023
Our CET1 capital ratio is significantly
above theapplicable requirements.
Wehave made significant progress in
strengthening our capital position
through the implementation of a range
ofmanagement actions. Maintaining a
strong capital position is a fundamental
component of our model.
Net interest margin
1
(%)
2025
2024
2023
Net interest margin is a key measure
ofprofitability and reflects both our
pricing discipline on new lending and
our funding costs. Prioritising margin
over volumes is a key facet of our
lending approach.
Bad debt ratio, excluding
Novitas
1,2
(%)
2025
2024
2023
Our bad debt ratio (excluding Novitas)
remains below our long-term average
of 1.2%
3
. The consistent application of
our underwriting and responsible
lending criteria at all stages of the
economic cycle is fundamental to our
long-term approach.
Total funding as a percentage
of loan book
4
(%)
2025
2024
2023
We adopt a conservative approach to
funding based on the principle of
“borrow long, lend short”, with a
prudent maturity profile. Our funding
base is diverse, enabling us to adapt
our position through the cycle, based
on market conditions and demand.
Group expense/income ratio
1
(%)
2025
2024
2023
We delivered £25 million of annualised
cost savings by the end of the 2025
financial year. The group is committed
to maintaining cost momentum to
deliver a step change in operating
profitability.
Liquidity coverage ratio,
12-month average (%)
2025
2024
2023
Our liquidity coverage ratio is
substantially above the minimum
regulatory requirements of 100%, as
we continue to adopt a conservative
liquidity position and prudently
manage our financial resources.
Loan book growth
4
(%)
2025
2024
2023
Loan book growth remains an output
of our business model, as we prioritise
our margins and credit quality. We
have repositioned the business to
focus on segments where we see mid
to high single digit growth potential
through the cycle, leaving us well
positioned to benefit as the economy
and demand recover.
Adjusted basic earnings
pershare share (continuing
operations)
1
(p)
2025
2024
2023
Basic (loss)/earnings per share
(continuing operations)
1
(p)
2025
2024
2023
Close Brothers Group plc Annual Report 2025
12
13.8
12.8
13.3
7.2
7.4
7.7
1.0
1.0
0.9
132
128
130
65
62
66
1,012
1,034
1,143
(4)
6
5
(99.8)
56.2
54.3
59.3
75.8
55.1
We are focused on ensuring that the group is well positioned to generate strong,
sustainable returns and increasing our adjusted earnings per share growth through
our focus on greater simplification, improving operational efficiency and driving
sustainable growth.
In 2025, we incurred adjusting items which impacted the basic EPS metric. These
adjusting items have been excluded from adjusted EPS to present the underlying
performance of the group.
Dividend per share (p)
2025
2024
2023
The decision to reinstate dividends will
be reviewed by the Board once there is
further clarity on the financial impact of
the FCA's review of the motor finance
commissions.
Return on average tangible
equity
5
(%)
2025
2024
2023
Through our priorities of greater
simplification, improving operational
efficiency and driving sustainable
growth, we are focused on resuming
the delivery of a higher level of returns.
We are taking proactive steps to
ensure that the group is well
positioned to generate strong,
sustainable returns once the motor
finance commissions uncertainty has
been resolved.
Non-financial KPIs
Employee engagement (%)
2025
2024
2023
We are committed to fostering a
culture that attracts and retains
engaged and motivated employees.
Customer sentiment scores
Asset Finance
CSAT
Motor Finance
customer Net Ease
Savings online
CSAT
Invoice Finance
CSAT
Customers are at the heart of our
model, as we focus on delivering
high levels of service and sharing
our deep industry expertise to meet
their needs.
Total Scope 1 and 2
emissions (market-based)
(tonnes CO
2
e)
6
2025
2024
2023
We have made significant progress
on climate actions and remain
committed to achieving net zero
across our operations, our supply
chain and the activities we finance
by 2050 or sooner.
See pages 232 to 234 for the
full definitions of these key
performance indicators.
1. NIM, bad debt ratio, group E/I
ratio and adjusted earnings per
share calculations re-presented
to exclude rentals businesses in
2024.
2. Bad debt ratio including Novitas
and excluding rentals
businesses of 1.0% in 2025 and
1.0% in 2024.
3. Long-term average bad debt
ratio of 1.2% based on the
average bad debt ratio for FY08-
FY24 excluding Novitas, and
FY25 excluding Novitas and
rentals businesses.
4. Total funding as a percentage of
loan book includes £207.3
million (31 July 2024: £267.9
million) of operating lease assets
in the loan book figure, of which
£41.0 million for Close Brewery
Rentals Limited are classified as
held for sale as at 31 July 2025.
5. Return on average tangible
equity uses adjusted operating
profit after tax from continuing
operations, less AT1 coupons
(2025: £88.7 million, 2024:
£113.5 million). Average tangible
equity excludes discontinued
operations. Average tangible
equity is calculated based on
closing equity per the balance
sheet (2025: £1,735.5 million,
2024: £1,842.5 million), less AT1
(2025 and 2024: £197.6 million),
less intangibles (2025: £166.3
million, 2024: £266.0 million),
less CBAM and Wins tangible
equity (2025: £90.6 million,
2024: £155.9 million). 2023 as
reported.
6. The total Scope 1 and 2
emissions for 2024 have been
restated to exclude CBAM.
Please refer to page 38 for
moredetails.
13
0.0
0.0
67.5
78
83
86
1,882
2,351
2,384
92%
+65
82%
87%
7.1
9.3
5.9
Strategic report Governance report Financial statements

Investment case
1
Strong positions in
an attractive market
We operate in markets with
long-term demand, offering
sustainable growth
opportunities.
UK and Irish SMEs
Large addressable market
c.99.8% of UK businesses are SMEs
1
Strong unmet demand, underserved by
traditional banks
c.£22 billion funding gap
2
Actively supported by Government
policy and pro-growth agenda
UK's largest independent provider of Asset
and Invoice Finance
1. Source: Department for Business and Trade (2024), Business
Population Estimates for the UK and Regions: 2024 Statistical
Release, GOV.UK. Available at: https://www.gov.uk/
government/statistics/business-population-estimates-2024/
business-population-estimates-for-the-uk-and-regions-2024-
statistical-release
2. Source: Bank of England (2020), Open Data for SME Finance,
available at: https://www.bankofengland.co.uk/-/media/boe/
files/fintech/open-data-for-sme-finance.pdf
2
A focused specialist
bank and a valuable
customer franchise
Our specialist focus, deep
customer relationships, and
trusted brand allow us to
differentiate and win in markets
we serve.
Offering deposits and additional borrowing
capacity for SMEs and individuals.
High-touch service model drives strong
customer satisfaction scores and high
levels of repeat business.
Specialist teams with deep sector expertise
through both direct and intermediated
channels.
Valuable customer franchise supports
strong margins and returns.
Consistent approach and support through
the cycle.
Customer sentiment scores
Asset Finance
CSAT
1
92%
2024: 92%
Motor Finance
customer Net Ease
+65
2024: +72
Invoice Finance
CSAT
1
87%
2024: 86%
Savings online
CSAT
1
82%
2024: 75%
1. Customer satisfaction score (“CSAT”).
Close Brothers Group plc Annual Report 2025
14

Investment case
1
Strong positions in
an attractive market
We operate in markets with
long-term demand, offering
sustainable growth
opportunities.
UK and Irish SMEs
Large addressable market
c.99.8% of UK businesses are SMEs
1
Strong unmet demand, underserved by
traditional banks
c.£22 billion funding gap
2
Actively supported by Government
policy and pro-growth agenda
UK's largest independent provider of Asset
and Invoice Finance
1. Source: Department for Business and Trade (2024), Business
Population Estimates for the UK and Regions: 2024 Statistical
Release, GOV.UK. Available at: https://www.gov.uk/
government/statistics/business-population-estimates-2024/
business-population-estimates-for-the-uk-and-regions-2024-
statistical-release
2. Source: Bank of England (2020), Open Data for SME Finance,
available at: https://www.bankofengland.co.uk/-/media/boe/
files/fintech/open-data-for-sme-finance.pdf
2
A focused specialist
bank and a valuable
customer franchise
Our specialist focus, deep
customer relationships, and
trusted brand allow us to
differentiate and win in markets
we serve.
Offering deposits and additional borrowing
capacity for SMEs and individuals.
High-touch service model drives strong
customer satisfaction scores and high
levels of repeat business.
Specialist teams with deep sector expertise
through both direct and intermediated
channels.
Valuable customer franchise supports
strong margins and returns.
Consistent approach and support through
the cycle.
Customer sentiment scores
Asset Finance
CSAT
1
92%
2024: 92%
Motor Finance
customer Net Ease
+65
2024: +72
Invoice Finance
CSAT
1
87%
2024: 86%
Savings online
CSAT
1
82%
2024: 75%
1. Customer satisfaction score (“CSAT”).
Close Brothers Group plc Annual Report 2025
14
3
A clear strategy
to rebuild returns
In recent times, our returns have
fallen short of where they
should be. The combination of
historical complexity, elevated
costs, and recent events has
highlighted the need for change.
Our strategic priorities provide a clear
path back to stronger returns.
Simplify
Exit or restructure
underperforming, low
returning businesses
Optimise
Cost reduction and
a step-change in
profitability
Grow
Drive sustainable growth
across our chosen
markets
With a simpler, more
focused portfolio and
a leadership team
focused on execution,
we are well positioned
to reduce costs, drive
growth and improve
returns.
Double digit
RoTE by the 2028
financial year, rising
thereafter
15
Strategic report Governance report Financial statements

Our business model
What we do
We are a UK specialist banking
group providing lending, deposit
taking and securities trading
1
.
We focus on delivering excellent
service in specialist sectors we
know and understand.
Our Banking offering includes
specialist and secured lending,
and deposits for small
businesses and individuals.
Commercial: Hire purchase; leasing and loans for
capital assets; debt factoring; invoice discounting;
asset-based lending; and other specialist financing for
SMEs.
Retail: Used car, motorcycle and light commercial
vehicle financing; insurance premium financing; and
savings products for individuals and corporates.
Property: Development finance for residential
properties; funding for commercial properties;
refurbishment and bridging finance.
Read more about Banking on pages 61 to 67
1. On 25 July 2025, the group announced an agreement to sell our
securities business, Winterflood, to Marex.
Enabled by the distinctive
strengthsofourmodel
Deep expertise
See page 18
Consistent service
See page 26
Long-term relationships
See page 49
How we do it
Disciplined pricing
andunderwriting
We apply our lending criteria and pricing discipline
consistently at all stages of the cycle, with the net
interest margin we generate reflecting the
specialist expertise of our teams. Our lending is
predominantly secured or structurally protected,
with conservative loan-to-value ratios, small loan
sizes and short maturities.
Prudent management
offinancial resources
A fundamental part of our model is having a strong
capital position and taking a conservative
approach to liquidity management and funding, as
we focus on diversity of funding and a prudent
maturity profile.
Customer-centric approach
We listen to our customers, putting their needs at
the heart of our business. We are there for our
customers across all market conditions and seek
to build long-lasting relationships with them.
Close Brothers Group plc Annual Report 2025
16

Our business model
What we do
We are a UK specialist banking
group providing lending, deposit
taking and securities trading
1
.
We focus on delivering excellent
service in specialist sectors we
know and understand.
Our Banking offering includes
specialist and secured lending,
and deposits for small
businesses and individuals.
Commercial: Hire purchase; leasing and loans for
capital assets; debt factoring; invoice discounting;
asset-based lending; and other specialist financing for
SMEs.
Retail: Used car, motorcycle and light commercial
vehicle financing; insurance premium financing; and
savings products for individuals and corporates.
Property: Development finance for residential
properties; funding for commercial properties;
refurbishment and bridging finance.
Read more about Banking on pages 61 to 67
1. On 25 July 2025, the group announced an agreement to sell our
securities business, Winterflood, to Marex.
Enabled by the distinctive
strengthsofourmodel
Deep expertise
See page 18
Consistent service
See page 26
Long-term relationships
See page 49
How we do it
Disciplined pricing
andunderwriting
We apply our lending criteria and pricing discipline
consistently at all stages of the cycle, with the net
interest margin we generate reflecting the
specialist expertise of our teams. Our lending is
predominantly secured or structurally protected,
with conservative loan-to-value ratios, small loan
sizes and short maturities.
Prudent management
offinancial resources
A fundamental part of our model is having a strong
capital position and taking a conservative
approach to liquidity management and funding, as
we focus on diversity of funding and a prudent
maturity profile.
Customer-centric approach
We listen to our customers, putting their needs at
the heart of our business. We are there for our
customers across all market conditions and seek
to build long-lasting relationships with them.
Close Brothers Group plc Annual Report 2025
16
Conservative
approach to risk
Our prudent and conservative appetite to risk
remains unchanged throughout the cycle. We are
committed to sustaining high standards of
business conduct in line with regulatory,
governmental and legal expectations and strive, at
all times, to operate prudently within the laws and
regulations that apply to us.
Diversified portfolio of
banking businesses
We lend in a variety of sectors and locations
across a diverse range of assets including
transport, industrial equipment, renewable energy,
wholesale finance, broker finance, used cars, light
commercial vehicles and residential property.
Our distinctive culture
We see our distinctive culture as our most
valuable asset. Our culture, combined with our
long-term approach, is embodied by our values of
service, expertise, relationships, teamwork,
integrity and prudence. These values are
embedded at all levels across the organisation.
The value we create
Colleagues
78%
employee engagement
Customers and partners
92%
Asset Finance CSAT
82%
Savings online CSAT
Suppliers
100%
of our suppliers reported being “Very
Satisfied” or “Satisfied” with the support
from Close Brothers
Regulators and government
13.8%
CET1 capital ratio
Communities
£100,000
donated to charities aligned with our
ESGgoals
Environment
53%
Reduction in Scope 1 and 2 emissions
(market-based) since 2019
Investors
7.1%
return on average tangible equity
17
Strategic report Governance report Financial statements

Our deep expertise
“Deep expertise means
knowing the right questions
to ask and having the
confidence to act on
theanswers. It’s what
turnschallenges into
opportunities for our
customers.”
John Fawcett, Chief Executive Officer,
Close Brothers Asset Finance
John Fawcett, Chief Executive Officer, Close
Brothers Asset Finance, provides his insight
into our value of deep expertise and how it
helps us deliver for our customers every day.
At Close Brothers, our deep expertise means more than
knowledge. It means insight that drives action and
delivers real value.
Our long-standing presence in specialist sectors we
know and understand enables us to offer tailored finance
solutions. This allows us to deliver support that is truly
aligned with a customer’s long-term goals and ambitions.
By empowering our specialists to make these fast, firm
lending decisions, we give the businesses we serve the
opportunity to take the next step.
Supporting the growth of businesses through
our specialist sector knowledge and insight
Close Brothers Asset Finance has been providing funding
for the UK and Ireland’s SME community for nearly 40
years, funding a broad and diverse range of assets
including electric vehicles, CNC machines, hydrogen
power units and printing presses.
Our deep knowledge of the industry sectors and asset
classes we cover enables informed lending decisions to
be made by our specialist teams ranging from Transport
and Agriculture to Engineering, Print and Packaging.
Testimony to our success is the number of long-term
customers we have on our books, some of which have
been with us for decades.
Applying our deep expertise to empower an
entrepreneur
Cameron Dalrymple, a young agricultural contractor from
Fife, Scotland, transitioned to primary contractor with
support from Close Brothers Asset Finance.
Cameron wanted to start his own venture and purchase
his first tractor. Using our sector knowledge, we
identified a tailored asset finance solution that allowed
him to do just that. Through a hire purchase deal
Cameron acquired a CASE Puma 240 tractor and as his
contract grew and Cameron looked to expand his fleet,
we further supported through funding for a second
tractor with VAT deferral.
We had the expertise to match the pace of Cameron’s
growth and ambitions and, more importantly, Cameron
felt confident he had a financial partner who took the
time to understand him and his business.
“Close Brothers' understanding of
my needs and tailored financial
solutions have enabled me to
expand my fleet and take
on more work.
I am delighted with their support
and look forward to continuing our
partnership.”
Cameron Dalrymple
Owner, Dalrymple Agri
Close Brothers Group plc Annual Report 2025
18

Our deep expertise
“Deep expertise means
knowing the right questions
to ask and having the
confidence to act on
theanswers. It’s what
turnschallenges into
opportunities for our
customers.”
John Fawcett, Chief Executive Officer,
Close Brothers Asset Finance
John Fawcett, Chief Executive Officer, Close
Brothers Asset Finance, provides his insight
into our value of deep expertise and how it
helps us deliver for our customers every day.
At Close Brothers, our deep expertise means more than
knowledge. It means insight that drives action and
delivers real value.
Our long-standing presence in specialist sectors we
know and understand enables us to offer tailored finance
solutions. This allows us to deliver support that is truly
aligned with a customer’s long-term goals and ambitions.
By empowering our specialists to make these fast, firm
lending decisions, we give the businesses we serve the
opportunity to take the next step.
Supporting the growth of businesses through
our specialist sector knowledge and insight
Close Brothers Asset Finance has been providing funding
for the UK and Ireland’s SME community for nearly 40
years, funding a broad and diverse range of assets
including electric vehicles, CNC machines, hydrogen
power units and printing presses.
Our deep knowledge of the industry sectors and asset
classes we cover enables informed lending decisions to
be made by our specialist teams ranging from Transport
and Agriculture to Engineering, Print and Packaging.
Testimony to our success is the number of long-term
customers we have on our books, some of which have
been with us for decades.
Applying our deep expertise to empower an
entrepreneur
Cameron Dalrymple, a young agricultural contractor from
Fife, Scotland, transitioned to primary contractor with
support from Close Brothers Asset Finance.
Cameron wanted to start his own venture and purchase
his first tractor. Using our sector knowledge, we
identified a tailored asset finance solution that allowed
him to do just that. Through a hire purchase deal
Cameron acquired a CASE Puma 240 tractor and as his
contract grew and Cameron looked to expand his fleet,
we further supported through funding for a second
tractor with VAT deferral.
We had the expertise to match the pace of Cameron’s
growth and ambitions and, more importantly, Cameron
felt confident he had a financial partner who took the
time to understand him and his business.
“Close Brothers' understanding of
my needs and tailored financial
solutions have enabled me to
expand my fleet and take
on more work.
I am delighted with their support
and look forward to continuing our
partnership.”
Cameron Dalrymple
Owner, Dalrymple Agri
Close Brothers Group plc Annual Report 2025
18
Operating environment
Climate agenda
What we are seeing
• The climate agenda remains a key area of focus for
organisations. However, we have seen a shift in
focus globally this year, with some governments
and organisations de-prioritising the issue or
moving away from commitments and interventions.
• Our customers and businesses continue to look for
opportunities to transition to a lower carbon future
through their investments in green assets, including
electric vehicles, renewables, grid infrastructure
and energy efficiency.
• We need to support our stakeholders in making
decisions by providing sufficient information on our
climate strategy.
• Investors continue to take Environmental, Social
and Governance (“ESG”) factors into consideration
as part of their investment decisions and reporting
standards require us to align our climate reporting
to the recommendations of the Task Force on
Climate-related Financial Disclosures (“TCFD”).
How we are responding
• Our group climate strategy is driven by our
commitment to support our customers and clients
in their transition to a lower carbon future, and
continues to develop.
• We have made significant progress on climate
actions and remain committed to achieving net
zero across our operations, our supply chain and
the activities we finance by 2050 or sooner.
• We have achieved a reduction in operational
emissions of 53% since our 2019 baseline, with a
20% reduction of Scope 1 and 2 emissions in
2025.
• We are reducing our financed emissions by aligning
our financing activities with net zero commitments
and helping customers meet their transition targets.
• We are enabling the adoption of cleaner
technologies and business model adaptation
through our green growth lending strategy.
Read more about our climate commitments in our
TCFD report on pages 29 to 39.
Economic environment
What we are seeing
• The market backdrop has been mixed this year,
presenting uncertainty for both individuals and
SMEs.
• Consumer affordability has continued to be
challenged in the higher interest rate environment
and the resilience of SMEs has been tested by
market volatility and uncertainty from tariffs.
• Nevertheless, the UK economy has proved
resilient, with macroeconomic indicators relatively
stable over the year and unemployment remaining
at relatively low levels.
• Whilst the Bank of England has implemented
modest rate cuts during the year, the timing and
trajectory of further rate movements remains
uncertain in the current market backdrop.
How we are responding
• We recognise the challenges affecting our
customers and continue to monitor the potential
impact of ongoing uncertainty closely, prudently
assessing affordability across lending proposals
and offering additional support to customers where
needed.
• Our IFRS 9 models are regularly updated to reflect
current economic scenarios and forecasts from
Moody’s, with adjustments overlaid where needed
to recognise additional risk not captured in model
outputs.
• We pride ourselves on supporting customers
through economic cycles, and continue to do so,
lending to them on responsible terms and
consistently applying our prudent underwriting and
pricing discipline.
19
Strategic report Governance report Financial statements

Regulatory
environment
What we are seeing
• The UK regulatory environment continues to see
significant change as well as uncertainty arising
from the FCA's review in respect of historical motor
finance commission arrangements
1
.
• In light of this market uncertainty, operational and
financial resilience, and robust recovery and
resolution planning continue to be priorities for the
PRA. Regular prudential monitoring is being
conducted through information and data requests,
and reviews.
• The group continues to see an increase in
engagement with our regulators, for example in
respect of the FCA’s market-wide reviews into
historical motor finance commissions and the
premium finance market.
• The PRA has announced that the UK
implementation of the Basel 3.1 reforms will be
delayed by a year, until 1 January 2027. We expect
the implementation of Basel 3.1 to have a less
significant impact on the group’s capital headroom
position than initially anticipated.
• The FCA’s Consumer Duty expectations continue
to be embedded within the wider market and have
driven improvements in controls and arrangements
in firms as well as the nature and extent of support
available to vulnerable customers and those in
financial difficulty.
• The FCA and PRA continue to take steps to
promote growth within the UK and reduce the
administrative burdens placed on firms. They have
committed to consulting on streamlining existing
handbook requirements and legislation, including
the Consumer Credit Act 1974, as well as reducing
regulatory reporting requirements where possible.
How we are responding
• We continually monitor the landscape to stay
abreast of regulatory change.
• We maintain an open and cooperative relationship
with our regulators, including the FCA and PRA,
through regular engagements and meetings.
• We have been engaging constructively with our
regulators in respect of historical motor finance
commission arrangements.
• We continue to complete Annual Assessments of
Customer Outcomes, where the board is required
to review and approve the assessment of delivering
good customer outcomes.
• We have continued to engage with relevant
industry trade bodies and associations on key
matters impacting the sectors in which we operate.
1. Read more about historical motor finance commission
arrangements on pages 8 to 9.
Technology and
digitaladaption
What we are seeing
• Increased adoption of public cloud across
industries is enabling easier access to, and
integration with, external data sets for better
decision making, easier integration with partners
and intermediaries, and increased cost
transparency.
• Increased adoption of automation and Artificial
Intelligence capabilities for improved productivity
and efficiencies.
• Current cyber threat level in the UK remains
significant with ransomware remaining the foremost
threat.
How we are responding
• Migrating our services from data centres to Azure
cloud, and benefiting from increased service
resilience, improved security, pay-as-you-consume
commercial models, and better control of software
costs. Cloud migration is also enabling the
simplification and decommissioning of our legacy
infrastructure, leading to annual run-rate savings on
infrastructure costs.
• Adopting cloud-based virtual desktops for third-
party suppliers and cloud hosted contact centre
capabilities for service partners supports flexibility
of locations and regions for provision of some
services, enabling cost saving opportunities.
• We are taking a deliberate, disciplined, and
incremental approach to the adoption of AI
technologies. We have adopted an AI usage policy
underpinned by security and data privacy controls,
and have made careful but meaningful inroads into
AI adoption, applying appropriate guardrails. We
have launched our first large language model
based AI solution to handle unstructured
complaints data, partnered with a third party for an
AI solution for fraud detection and to enhance our
ability to identify suspicious activity, and are rolling
out Microsoft Copilot to colleagues for personal
productivity.
• We are developing internal capabilities through our
AI Centre of Excellence supported by strategic
partners, upskilling c.70 colleagues through an
intensive training programme, and providing
opportunities for colleagues to learn about safe AI
use and opportunities through interactive training
on Microsoft Copilot.
• We continue to invest in tuning and optimising our
defensive and protective capabilities with specific
focus on cloud security posture management and
evolving counter threats. Over the next 12 months
we will be bolstering eyes-on-glass security
operations by growing the team and adopting AI
capability to improve mean time to detect and
resolve events.
Operating environment continued
Close Brothers Group plc Annual Report 2025
20

Regulatory
environment
What we are seeing
• The UK regulatory environment continues to see
significant change as well as uncertainty arising
from the FCA's review in respect of historical motor
finance commission arrangements
1
.
• In light of this market uncertainty, operational and
financial resilience, and robust recovery and
resolution planning continue to be priorities for the
PRA. Regular prudential monitoring is being
conducted through information and data requests,
and reviews.
• The group continues to see an increase in
engagement with our regulators, for example in
respect of the FCA’s market-wide reviews into
historical motor finance commissions and the
premium finance market.
• The PRA has announced that the UK
implementation of the Basel 3.1 reforms will be
delayed by a year, until 1 January 2027. We expect
the implementation of Basel 3.1 to have a less
significant impact on the group’s capital headroom
position than initially anticipated.
• The FCA’s Consumer Duty expectations continue
to be embedded within the wider market and have
driven improvements in controls and arrangements
in firms as well as the nature and extent of support
available to vulnerable customers and those in
financial difficulty.
• The FCA and PRA continue to take steps to
promote growth within the UK and reduce the
administrative burdens placed on firms. They have
committed to consulting on streamlining existing
handbook requirements and legislation, including
the Consumer Credit Act 1974, as well as reducing
regulatory reporting requirements where possible.
How we are responding
• We continually monitor the landscape to stay
abreast of regulatory change.
• We maintain an open and cooperative relationship
with our regulators, including the FCA and PRA,
through regular engagements and meetings.
• We have been engaging constructively with our
regulators in respect of historical motor finance
commission arrangements.
• We continue to complete Annual Assessments of
Customer Outcomes, where the board is required
to review and approve the assessment of delivering
good customer outcomes.
• We have continued to engage with relevant
industry trade bodies and associations on key
matters impacting the sectors in which we operate.
1. Read more about historical motor finance commission
arrangements on pages 8 to 9.
Technology and
digitaladaption
What we are seeing
• Increased adoption of public cloud across
industries is enabling easier access to, and
integration with, external data sets for better
decision making, easier integration with partners
and intermediaries, and increased cost
transparency.
• Increased adoption of automation and Artificial
Intelligence capabilities for improved productivity
and efficiencies.
• Current cyber threat level in the UK remains
significant with ransomware remaining the foremost
threat.
How we are responding
• Migrating our services from data centres to Azure
cloud, and benefiting from increased service
resilience, improved security, pay-as-you-consume
commercial models, and better control of software
costs. Cloud migration is also enabling the
simplification and decommissioning of our legacy
infrastructure, leading to annual run-rate savings on
infrastructure costs.
• Adopting cloud-based virtual desktops for third-
party suppliers and cloud hosted contact centre
capabilities for service partners supports flexibility
of locations and regions for provision of some
services, enabling cost saving opportunities.
• We are taking a deliberate, disciplined, and
incremental approach to the adoption of AI
technologies. We have adopted an AI usage policy
underpinned by security and data privacy controls,
and have made careful but meaningful inroads into
AI adoption, applying appropriate guardrails. We
have launched our first large language model
based AI solution to handle unstructured
complaints data, partnered with a third party for an
AI solution for fraud detection and to enhance our
ability to identify suspicious activity, and are rolling
out Microsoft Copilot to colleagues for personal
productivity.
• We are developing internal capabilities through our
AI Centre of Excellence supported by strategic
partners, upskilling c.70 colleagues through an
intensive training programme, and providing
opportunities for colleagues to learn about safe AI
use and opportunities through interactive training
on Microsoft Copilot.
• We continue to invest in tuning and optimising our
defensive and protective capabilities with specific
focus on cloud security posture management and
evolving counter threats. Over the next 12 months
we will be bolstering eyes-on-glass security
operations by growing the team and adopting AI
capability to improve mean time to detect and
resolve events.
Operating environment continued
Close Brothers Group plc Annual Report 2025
20
Customer behaviour
What we are seeing
• Customer expectations continue to evolve as they
adapt to new market dynamics and advancing
technologies. Strong sector expertise and long-
term relationships remain key to building loyalty.
• Customer service, responsiveness, clarity of
communication, price and value of products, as
well as ease of doing business are key customer
requirements.
• Digital channels, alongside new technology and the
use of AI, are expected to provide a differentiated
offering and an improved customer experience.
However, the human element continues to add
value for customers and partners, strengthening
long-term relationships and providing additional
support.
• Customers continue to need support in financing
their transition to net zero, with growing demand
for green lending, SMEs are looking to reduce their
carbon footprint and motor customers are
considering alternative fuel vehicles.
How we are responding
• We have a range of products, routes to market
and customer segments across our businesses,
which are all underpinned by a focus on good
customer outcomes, providing excellent service
and building long-term relationships.
• Our Asset Finance business has broadened its
exposure in sustainability funding and is among the
first lenders to offer asset finance into the hydrogen
industry at scale, whilst also increasing its green
energy lending across wind farms, solar parks and
battery storage.
• Savings has launched key digital self-service
features, such as a document library and the ability
to amend contact details online, achieving 86%
digital adoption across its customer base. The use
of behavioural analytics tools further enables real-
time optimisation of the customer journey.
• The Premium Finance business is using internal
robotics capabilities to automate manual process
tasks, freeing up the Customer Service team’s time
to focus on supporting our customers.
• Motor Finance introduced a new online settlement
webform to provide a faster and clearer way for
customers to request settlement quotes.
Customers can now also understand what options
are available for financing a new vehicle and go
through a full finance application online. 67% of our
customers told us they wanted self-serve channels.
• Property Finance is supporting the All Party
Parliamentary Group (“APPG”) for SME
Housebuilders. We are not only backing our
customers with funding, but also standing
alongside them in advocating for meaningful
change across the industry. By engaging with
policymakers and supporting initiatives like the
APPG, we are helping to ensure that the voices of
SME developers are heard, and that the
environment they operate in continues to improve.
Competitive landscape
What we are seeing
• In Banking, borrower confidence remains mixed,
withhigher funding costs, inflationary pressures
andthe uncertain economic outlook weighing on
market sentiment.
• We have seen further consolidation across the
banking sector this year, albeit the specialist lending
market remains fragmented.
• The motor finance market continues to be impacted
in the short term by the ongoing review of historical
motor finance commission arrangements,
contributing to an uncertain outlook for lenders.
• The savings market remains highly competitive, with
a number of new entrants in recent years and more
interest being paid by high street banks, as a result of
rising interest rates and the FCA’s market activities
focusing on fair value.
How we are responding
• In Banking, we remain committed to our model of
maintaining margin and underwriting discipline,
notwithstanding competitor pricing. We continue to
focus on delivering excellent client service and
building deep relationships with our customers.
• We are actively evaluating our portfolio of specialist
businesses, prioritising capital allocation towards
those businesses that offer sustainable growth and
attractive risk-adjusted returns.
• We continue to see growth opportunities as we look
to extend our capabilities into new areas that fit with
our model, either through partnerships or bringing in
specialist teams to complement our expertise.
• Our Savings business actively sought to grow our
retail deposit base, which increased 20% during the
year. The introduction of the Easy Access Account in
the 2024 financial year has helped us to access a
larger proportion of the potential deposit pool. We
carefully monitor pricing and help maximise
opportunities, whilst ensuring fair outcomes for
customers.
Read more about the opportunities across our
businesses on pages 61 to 67.
21
Strategic report Governance report Financial statements

Stakeholder engagement
Delivering for our stakeholders
At Close Brothers, we have a long-term track record of
creating value and delivering positive outcomes for all of our
stakeholders.
We work hard to understand and meet the needs of our
different stakeholder groups, engaging with them and
adapting our service and offering to create value for them.
We undertake a comprehensive programme of stakeholder
engagement and consider the feedback provided,
embedding this in the decision-making process throughout
the group.
Section 172 Statement and Statement of
Engagement with Employees and Other
Stakeholders
Section 172(1) of the Companies Act 2006 requires the
directors of a company to act in a way that they consider, in
good faith, would be most likely to promote the success of
the company for the benefit of its members as a whole, and
in doing so have regard (amongst other factors) to various
other considerations and stakeholder interests:
• the likely consequences of any decision in the long term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships
with suppliers, customers and others;
• the impact of the company’s operations on the community
and the environment;
• the desirability of the company maintaining a reputation for
high standards of business conduct; and
• the need to act fairly as between members of the
company.
The Board is responsible for establishing and overseeing the
company’s values, strategy and purpose, all of which centre
around the interests of key stakeholders and other factors
set out in section 172(1).
The Directors are conscious that their decisions and actions
have an impact on stakeholders, including employees,
customers, suppliers, communities and investors, and they
have had regard to stakeholder considerations and other
factors in section 172(1) during the year.
Regular engagement with stakeholders, both directly and
indirectly via management, has continued to be an important
focus for the Board and has ensured that the Directors are
aware of and have effective regard to the matters set out in
section 172(1). Throughout the year, the Board received and
discussed stakeholder insight and feedback and it ensured
that stakeholder considerations were taken into account in
the Board’s deliberations and decision-making.
Whilst the Board acknowledges that, sometimes, it may have
to take decisions that affect one or more stakeholder groups
differently, it seeks to treat impacted groups fairly and with
regard to its duty to act in a way that it considers will be
most likely to promote the success of the company for the
benefit of its members as a whole, having regard to the
balance of factors set out in section 172(1).
Considerations relating to the factors in section 172(1) are an
important part of governance processes and decision-
making at both Board and executive level, and more widely
throughout the group. For example, the schedule of matters
reserved to the Board and the terms of reference for each of
the Board’s committees emphasise the importance of
decision-making with regard to relevant factors under
section 172(1) and broader stakeholder considerations.
Necessarily in a large and regulated group, some decisions
are taken by management or the directors of subsidiary
companies. These decisions are taken within parameters set
by the Board and there is a robust framework that ensures
ongoing oversight, monitoring and challenge by the Board
and its committees (including certain decisions and activities
that are always reserved to the Board or its committees). The
Board has regard to relevant factors set out in section 172(1)
in its activities in these areas, including considerations
relating to the potential impact of delegated decisions on the
long-term success of the group as a whole, the group’s
reputation for high standards of business conduct and the
consequences of local decisions on the group’s
stakeholders.
Detail on the Board’s engagement with, and consideration of,
the company’s stakeholders can be found on pages 132 and
133 of the Corporate Governance Report.
Close Brothers Group plc Annual Report 2025
22

Stakeholder engagement
Delivering for our stakeholders
At Close Brothers, we have a long-term track record of
creating value and delivering positive outcomes for all of our
stakeholders.
We work hard to understand and meet the needs of our
different stakeholder groups, engaging with them and
adapting our service and offering to create value for them.
We undertake a comprehensive programme of stakeholder
engagement and consider the feedback provided,
embedding this in the decision-making process throughout
the group.
Section 172 Statement and Statement of
Engagement with Employees and Other
Stakeholders
Section 172(1) of the Companies Act 2006 requires the
directors of a company to act in a way that they consider, in
good faith, would be most likely to promote the success of
the company for the benefit of its members as a whole, and
in doing so have regard (amongst other factors) to various
other considerations and stakeholder interests:
• the likely consequences of any decision in the long term;
• the interests of the company’s employees;
• the need to foster the company’s business relationships
with suppliers, customers and others;
• the impact of the company’s operations on the community
and the environment;
• the desirability of the company maintaining a reputation for
high standards of business conduct; and
• the need to act fairly as between members of the
company.
The Board is responsible for establishing and overseeing the
company’s values, strategy and purpose, all of which centre
around the interests of key stakeholders and other factors
set out in section 172(1).
The Directors are conscious that their decisions and actions
have an impact on stakeholders, including employees,
customers, suppliers, communities and investors, and they
have had regard to stakeholder considerations and other
factors in section 172(1) during the year.
Regular engagement with stakeholders, both directly and
indirectly via management, has continued to be an important
focus for the Board and has ensured that the Directors are
aware of and have effective regard to the matters set out in
section 172(1). Throughout the year, the Board received and
discussed stakeholder insight and feedback and it ensured
that stakeholder considerations were taken into account in
the Board’s deliberations and decision-making.
Whilst the Board acknowledges that, sometimes, it may have
to take decisions that affect one or more stakeholder groups
differently, it seeks to treat impacted groups fairly and with
regard to its duty to act in a way that it considers will be
most likely to promote the success of the company for the
benefit of its members as a whole, having regard to the
balance of factors set out in section 172(1).
Considerations relating to the factors in section 172(1) are an
important part of governance processes and decision-
making at both Board and executive level, and more widely
throughout the group. For example, the schedule of matters
reserved to the Board and the terms of reference for each of
the Board’s committees emphasise the importance of
decision-making with regard to relevant factors under
section 172(1) and broader stakeholder considerations.
Necessarily in a large and regulated group, some decisions
are taken by management or the directors of subsidiary
companies. These decisions are taken within parameters set
by the Board and there is a robust framework that ensures
ongoing oversight, monitoring and challenge by the Board
and its committees (including certain decisions and activities
that are always reserved to the Board or its committees). The
Board has regard to relevant factors set out in section 172(1)
in its activities in these areas, including considerations
relating to the potential impact of delegated decisions on the
long-term success of the group as a whole, the group’s
reputation for high standards of business conduct and the
consequences of local decisions on the group’s
stakeholders.
Detail on the Board’s engagement with, and consideration of,
the company’s stakeholders can be found on pages 132 and
133 of the Corporate Governance Report.
Close Brothers Group plc Annual Report 2025
22
Colleagues
With approximately 3,000 employees around the UK,
Ireland, the Channel Islands and Germany, we have a
diverse and motivated workforce which delivers the
highest levels of service to our customers and
partners. We are committed to the development of
our colleagues, ensuring they are supported and
engaged.
Listening to our colleagues enables us to build an
engaged workforce, allowing us to develop and retain
high levels of expertise. We are able to ensure we are
considering the views of all colleagues and making
sure everyone feels included.
Key priorities of our colleagues
• A safe working environment.
• A fair and inclusive culture where employee
feedback is valued.
• Being appropriately rewarded for their
contributions.
• Opportunities for training and development.
Our engagement during the year
• We conducted our latest employee opinion survey,
which closed in February 2025, to gather feedback
from our colleagues, anonymously. The results of
this survey gave us insight into key topics including
our customers and clients, leadership, culture, a
sense of belonging, and colleague wellbeing.
• Follow-up focus groups were conducted with
different teams to understand more around
colleague sentiment, with action plans created to
ensure we are focusing on the areas that matter
most to our colleagues, as well as ensuring we are
meeting the needs of other stakeholders.
• We held regular town halls, providing employees
with updates from across the business and the
opportunity to ask questions directly to senior
management.
• We continued to engage with colleagues at the
point of joining, when returning from parental leave
and celebrating work anniversaries, through
completing surveys to share their personal
experiences of working at Close Brothers.
• We have eight employee-led inclusion networks
which act as a voice for our colleagues.
Customers and
partners
Central to all decision-making is doing the right thing
for customers and partners, by helping them access
financial solutions to meet their needs across all
market conditions. We engage with customers
throughout their end-to-end journey and actively seek
their feedback in order to continually improve our
service and deliver good customer outcomes.
Key priorities of our customers
andpartners
• Excellent customer service: receiving consistent,
responsive and supportive service delivered with
clarity and ease.
• Price and value of products and services:
implementing customer-led propositions that meet
their individual requirements.
• Building and maintaining strong personal
relationships based on trust and specialist
expertise.
• Fair and equitable conduct of business.
• Meeting and adapting to their needs throughout
economic cycles, technological advances and
regulatory changes.
Our engagement during the year
• We delivered customer-focused training to further
enable a culture of continuous improvement to
streamline processes and enhance the customer
experience.
• We continued to hold regular customer forums,
with feedback proactively reviewed and areas of
improvement identified, as well as actions being
taken to meet our customers’ changing needs and
support better outcomes.
• We continue to invest in strengthening our
capability to capture, consolidate and act upon
customer and partner feedback by extending
experience measurement to more interaction
points.
• We are evolving as a business to be more agile and
offer easier access to our products and services.
We have strengthened digital capabilities in
response to customer needs and market dynamics.
• We have improved our customer service across
several businesses, increasing our responsiveness
to customers.
23
Strategic report Governance report Financial statements

Regulators and
government
We are committed to sustaining high standards of
business conduct in line with regulatory,
governmental and legal expectations and operate
prudently within the laws and regulations that apply
to us.
We foster an open, transparent and cooperative
relationship with regulators, government authorities
and trade associations in the jurisdictions in which we
operate. Active engagement helps to ensure we are
aware of and adapting to the evolving regulatory
framework.
Key priorities of our regulators
andgovernment
• Customer outcomes
• Operational and financial resilience
• Financial crime prevention
• Corporate social responsibility
• Digitisation, use of Artificial Intelligence and
enhanced data analytics
• Supporting growth and innovation in the UK
Our engagement during the year
• We have engaged constructively with our
regulators during this period. We have provided
information in support of the FCA’s vulnerable
customer and Retail Banking Business Models
(“R2B2”) thematic reviews and the Premium
Finance Market Study, as well as in connection with
the FCA’s review of historical motor finance
commission arrangements and the wider Supreme
Court Appeal.
• We continued to enhance and align our approach
with regulatory expectations and actively monitored
the FCA’s formal and informal guidance on
Consumer Duty as well as the results of the annual
Financial Lives Survey.
• We continued to engage actively with the PRA on
our IRB application and have provided information
in support of the PRA’s surveys in respect of
transforming data and operational resilience.
• We undertook reporting and analysis as requested,
and held regular meetings with our regulators,
enabling them to better understand our business
activities and how we are operating in a controlled
and prudent manner.
Suppliers
Our business is supported by a diverse and reliable
network of suppliers, which enables us to
consistently deliver high standards of service to our
customers and partners. We are committed to
maintaining transparent, sustainable, and mutually
beneficial relationships with our suppliers.
Over the past year, we have placed particular
emphasis on strengthening our engagement with key
strategic suppliers. This focused approach ensures
that we are aligned on strategic priorities and can
collaborate effectively to drive continuous
improvement across our front and back-office
operations.
Our supplier engagement is built on openness and
collaboration, with the shared goal of delivering
services that support our business objectives while
identifying opportunities for innovation and
enhancement.
Key priorities for our suppliers
• Building strong, sustainable relationships with
Close Brothers.
• Conducting business in a fair, ethical, and equitable
manner.
• Ensuring clear and efficient payment processes.
• Understanding and aligning with the group’s
purpose and strategic direction.
• Maintaining a robust and proactive risk
management framework.
• Achieving maximum commercial value for Close
Brothers.
Our engagement during the year
We conducted our annual supplier survey to engage
with our suppliers on topics such as how they feel
about doing business with us, how likely they would
be to recommend us as a client, and the
transparency of our strategies and priorities. This
year's survey has indicated that:
• 100% of our suppliers reported being “Very
Satisfied” or “Satisfied” with the support they
receive from Close Brothers.
• 83% of our suppliers described feeling “Very
Satisfied" or “Satisfied” with our approach to
Supplier Management.
• 83% of our suppliers described doing business
with us as “Easy” or “Very Easy”.
• 100% of our suppliers rated Close Brothers as a
“High Quality” or “Very High Quality” client
compared to others they work with.
We continue to prioritise supplier engagement and
transparency, and we are committed to building
strong, collaborative relationships that support mutual
success.
Stakeholder engagement continued
Close Brothers Group plc Annual Report 2025
24

Regulators and
government
We are committed to sustaining high standards of
business conduct in line with regulatory,
governmental and legal expectations and operate
prudently within the laws and regulations that apply
to us.
We foster an open, transparent and cooperative
relationship with regulators, government authorities
and trade associations in the jurisdictions in which we
operate. Active engagement helps to ensure we are
aware of and adapting to the evolving regulatory
framework.
Key priorities of our regulators
andgovernment
• Customer outcomes
• Operational and financial resilience
• Financial crime prevention
• Corporate social responsibility
• Digitisation, use of Artificial Intelligence and
enhanced data analytics
• Supporting growth and innovation in the UK
Our engagement during the year
• We have engaged constructively with our
regulators during this period. We have provided
information in support of the FCA’s vulnerable
customer and Retail Banking Business Models
(“R2B2”) thematic reviews and the Premium
Finance Market Study, as well as in connection with
the FCA’s review of historical motor finance
commission arrangements and the wider Supreme
Court Appeal.
• We continued to enhance and align our approach
with regulatory expectations and actively monitored
the FCA’s formal and informal guidance on
Consumer Duty as well as the results of the annual
Financial Lives Survey.
• We continued to engage actively with the PRA on
our IRB application and have provided information
in support of the PRA’s surveys in respect of
transforming data and operational resilience.
• We undertook reporting and analysis as requested,
and held regular meetings with our regulators,
enabling them to better understand our business
activities and how we are operating in a controlled
and prudent manner.
Suppliers
Our business is supported by a diverse and reliable
network of suppliers, which enables us to
consistently deliver high standards of service to our
customers and partners. We are committed to
maintaining transparent, sustainable, and mutually
beneficial relationships with our suppliers.
Over the past year, we have placed particular
emphasis on strengthening our engagement with key
strategic suppliers. This focused approach ensures
that we are aligned on strategic priorities and can
collaborate effectively to drive continuous
improvement across our front and back-office
operations.
Our supplier engagement is built on openness and
collaboration, with the shared goal of delivering
services that support our business objectives while
identifying opportunities for innovation and
enhancement.
Key priorities for our suppliers
• Building strong, sustainable relationships with
Close Brothers.
• Conducting business in a fair, ethical, and equitable
manner.
• Ensuring clear and efficient payment processes.
• Understanding and aligning with the group’s
purpose and strategic direction.
• Maintaining a robust and proactive risk
management framework.
• Achieving maximum commercial value for Close
Brothers.
Our engagement during the year
We conducted our annual supplier survey to engage
with our suppliers on topics such as how they feel
about doing business with us, how likely they would
be to recommend us as a client, and the
transparency of our strategies and priorities. This
year's survey has indicated that:
• 100% of our suppliers reported being “Very
Satisfied” or “Satisfied” with the support they
receive from Close Brothers.
• 83% of our suppliers described feeling “Very
Satisfied" or “Satisfied” with our approach to
Supplier Management.
• 83% of our suppliers described doing business
with us as “Easy” or “Very Easy”.
• 100% of our suppliers rated Close Brothers as a
“High Quality” or “Very High Quality” client
compared to others they work with.
We continue to prioritise supplier engagement and
transparency, and we are committed to building
strong, collaborative relationships that support mutual
success.
Stakeholder engagement continued
Close Brothers Group plc Annual Report 2025
24
Communities
andenvironment
Close Brothers is committed to contributing long-
term value and making a positive impact on the
communities in which we operate and the
environment more broadly. This underpins the
growing range of programmes and initiatives we
support that benefit society and the environment.
Engaging with local communities helps the Board and
our employees develop their understanding of our
customers and partners so that we can support them
and help them to achieve their ambitions, whilst also
building employee engagement. We firmly believe
that environmental considerations should form an
integral part of our business decisions, and
employees across the group are actively engaged on
responsible behaviours and environmental issues.
Key priorities of our communities and
theenvironment
• A suitable strategy for approaching sustainability
issues.
• Support for community initiatives.
• Take active steps to ensure equity of opportunity,
regardless of background or experience.
• A long-term focus on addressing the impacts of
climate change.
Our engagement during the year
• Colleagues completed numerous volunteering
activities to positively impact local communities,
including volunteering at food banks, animal
shelters and community gardening projects, and
supporting youth groups such as Guides, Scouts
and Cadet groups and children’s sports teams.
• Several colleagues, including members of our
Group Executive Committee, continue to fulfil
trustee roles for various charities to support local
communities.
• Maintained our partnership with the University of
Sheffield AMRC Training Centre. Our apprentices,
part funded through the Close Brothers SME
Apprentice Programme, have entered their third
year of training.
• Continued to support social mobility and ethnic
diversity programmes, hosting 32 interns across
the group in partnership with upReach and the
10,000 Interns Foundation.
Investors
Close Brothers has a proven and resilient business
model and is focused on generating long-term,
sustainable value for its investors, while also
maintaining a strong balance sheet.
Our investors are the providers of capital to our
business, so it is important that we engage actively
with them and listen and respond to their feedback
through an established and comprehensive
programme throughout the year.
Key priorities of our investors
• Strong returns and financial resilience through the
cycle.
• Managing the impact on the group following the
FCA’s review of historical motor finance
commission arrangements and the Supreme Court
appeals.
• Capital generation and distributions.
• Sustainable business model.
• Appropriate governance practices and regard for
environmental and social responsibility.
Our engagement during the year
• Continued our comprehensive programme of
communication throughout the year, providing
regular market updates and, in total, hosting c. 200
meetings in the year with current and prospective
equity and debt investors.
• We held two analyst presentations for the 2024
Preliminary Results and 2025 Half Year Results,
and attended multiple sales desk briefings and
conferences.
• Undertook investor roadshows covering the UK,
Europe and North America, meeting more than 80
existing and prospective shareholders.
• Held our annual corporate governance roadshow,
with our Chairman meeting with 12 of our largest
shareholders.
• Welcomed retail investors at our AGM where they
had the opportunity to engage with board
members.
• Regularly engaged with all of our sell-side analyst
followers, as well as our credit rating agencies.
25
Strategic report Governance report Financial statements

Consistent service
“We believe in putting our
customers first and placing
exceptional service at the
heart of everything we do.”
Allen Seldon, Director of Product,
Close Brothers Premium Finance
Allen Seldon, Director of Product, Close
Brothers Premium Finance, provides his
insight into our value of consistent service and
how we are committed to delivering excellent
and specialist service to our customers.
At Close Brothers, we pride ourselves on delivering the
highest levels of personal service and acting with
integrity, while providing straightforward products and
services.
We take the time to listen to our customers. Our focus on
personal approach gives us a deep understanding of our
customers' needs. It allows us to offer informed decision-
making through our specialist expertise, and flexible
financial solutions to support their ambitions.
Our commitment to customer excellence and our strong
culture build trust and collaboration, foster customer
loyalty and strengthen our long-term customer
relationships.
By supporting our customers through their entire journey,
they can focus on what matters most.
Meeting the evolving needs of our customers
and brokers
To support our broker partners, Close Brothers Premium
Finance created a new commission disclosure and
consent solution to improve how customers are told
about broker commission, all in just seven weeks.
The new service was built through working closely with
our brokers and customers, ensuring the customer
experience was at the heart of every decision.
As part of the development, we spoke to personal and
SME customers to learn how they felt about commission
and to understand what they needed to feel confident.
We also held sessions with brokers to gather feedback
on how the new service would integrate with their own
systems.
This collaboration helped improve aspects of the service
and built knowledge and trust in the solution being
provided.
This implementation highlights how we are adaptable to
change and can respond quickly to meet the needs of
our customers and brokers.
“It was the most gentle, friendly and hand-
holding experience online in the digital world
that I have ever used. Everything was
explained clearly. Information around the
broker role and Close Brothers’ role was
simple, not too wordy or complicated. The
openness of Close Brothers is refreshing,
other companies hide details in the jargon.”
Close Brothers Premium Finance customer
Close Brothers Group plc Annual Report 2025
26

Consistent service
“We believe in putting our
customers first and placing
exceptional service at the
heart of everything we do.”
Allen Seldon, Director of Product,
Close Brothers Premium Finance
Allen Seldon, Director of Product, Close
Brothers Premium Finance, provides his
insight into our value of consistent service and
how we are committed to delivering excellent
and specialist service to our customers.
At Close Brothers, we pride ourselves on delivering the
highest levels of personal service and acting with
integrity, while providing straightforward products and
services.
We take the time to listen to our customers. Our focus on
personal approach gives us a deep understanding of our
customers' needs. It allows us to offer informed decision-
making through our specialist expertise, and flexible
financial solutions to support their ambitions.
Our commitment to customer excellence and our strong
culture build trust and collaboration, foster customer
loyalty and strengthen our long-term customer
relationships.
By supporting our customers through their entire journey,
they can focus on what matters most.
Meeting the evolving needs of our customers
and brokers
To support our broker partners, Close Brothers Premium
Finance created a new commission disclosure and
consent solution to improve how customers are told
about broker commission, all in just seven weeks.
The new service was built through working closely with
our brokers and customers, ensuring the customer
experience was at the heart of every decision.
As part of the development, we spoke to personal and
SME customers to learn how they felt about commission
and to understand what they needed to feel confident.
We also held sessions with brokers to gather feedback
on how the new service would integrate with their own
systems.
This collaboration helped improve aspects of the service
and built knowledge and trust in the solution being
provided.
This implementation highlights how we are adaptable to
change and can respond quickly to meet the needs of
our customers and brokers.
“It was the most gentle, friendly and hand-
holding experience online in the digital world
that I have ever used. Everything was
explained clearly. Information around the
broker role and Close Brothers’ role was
simple, not too wordy or complicated. The
openness of Close Brothers is refreshing,
other companies hide details in the jargon.”
Close Brothers Premium Finance customer
Close Brothers Group plc Annual Report 2025
26
Sustainability report
“We are committed to supporting our
customers to achieve their climate
ambitions and to moving towards net
zero emissions by 2050. Our progress
during 2025 demonstrates our
continued commitment and ability to
deliver reductions in operating
emissions across our businesses and
to play a key role in supporting SMEs
in the energy transition.”
Mike Morgan, Chief Executive
Our group purpose is to help people and businesses thrive
over the long term. We recognise that as part of this, we
have a responsibility as a group to help address the social,
economic and environmental challenges facing our business,
employees and customers, now and into the future.
In our Sustainability report, we set out our strategy and the
progress that has been made across all aspects of
sustainability. We continue to place a strong emphasis on
supporting our people and customers to achieve the best
outcomes, while aiming to make a positive and lasting
impact on society and the environment.
Our climate approach is driven, above all, by our desire to
support our customers in their transition to a lower carbon
future, and we can play an important role in doing this. To
align with this focus, we have updated our approach this
year.
We remain committed to achieving net zero across our
operations, our supply chain and the activities we finance by
2050 or sooner. However, we have decided to move away
from intermediate emissions reduction targets. This decision
forms part of our efforts to align our climate positioning more
closely with our business-led strategy of supporting our
customers in their sustainability journeys. It enables us to
focus on providing support, finance and expertise to help our
customers decarbonise in ways that are practical and
aligned to their own pathways.
The energy market and battery electric vehicles remain
attractive growth areas with significant opportunities in green
financing. Going forward, growth in this area will be led by
customer demand rather than by specific group targets,
ensuring our ambitions align closely with our customers’
transition journeys.
Our climate strategy is focused on three key pillars. We have
made significant progress on climate actions, with
substantial strides made towards reducing our operational
emissions and achieving our broader climate ambition of
reaching net zero by 2050.
Our sustainability objectives
Supporting our customers and partners
in the transition towards more
sustainable practices.
Promoting an inclusive culture in
everything we do.
Reducing our impact on the environment
and responding to the threats and
opportunities of climate change.
Promoting financial inclusion, helping
borrowers that might be overlooked by
larger finance providers and enabling
savers to access financial markets.
During the 2025 financial year, we have made further
progress in line with the pillars.
1. Achieving zero emissions: Reduction in operational
emissions of 53% since our 2019 baseline, with a 20%
reduction of Scope 1 and 2 emissions in 2025.
2. Reducing our financed emissions: Refined our product
offering to capture customer demand, such as for
Alternative Fuel Vehicles (“AFVs”) in Motor Finance.
3. Financing the transition: We have expanded our lending
for green energy and battery electric vehicles, and our
Asset Finance and Leasing business launched a £20
million Green Asset Fund in 2025.
Central to all decision-making is doing the right thing for
customers and partners, by helping them access financial
solutions to meet their needs across all market conditions.
We engage with our customers throughout their end-to-end
journey and actively seek their feedback.
Our inclusive culture is a key enabler for our business
success, as we create an environment where colleagues can
thrive and, in turn, deliver excellent customer outcomes. We
continue to promote a range of diversity and inclusion
initiatives and are incredibly proud of the dedication and hard
work of our eight executive-sponsored group-wide employee
inclusion networks.
27
Strategic report Governance report Financial statements

What sustainability means at Close Brothers
At Close Brothers, we are here to help the people and businesses of
Britain thrive over the long term, working together to embrace change and
capitalise on the opportunities it presents. This means supporting our
colleagues and customers, as well as the communities and environment in
which we operate.
Our car fleet
Our car fleet is now
61.6%
battery electric with average stated emissions
now down to 14.7 gCO
2
/km (2024: 20.7 gCO
2
/km)
Our inclusivity
91%
of our colleagues feel included (2024: 90%).
Our green landing
£1 billion+
has been financed by our energy team across
multiple renewable energy projects over the
last10years.
£154.4 million
lending for zero emissions battery electric
vehicles achieved in this financial year
(2024: £152.4 million).
Our charitable giving
£100,000
donated to charities aligned with our ESG goals
(2024: £100,000).
Our communities
119
children have been supported by Close
Brothers colleagues volunteering for Bookmark
Reading Charity since the start of our
partnership in 2020.
Our emissions
53%
Scope 1 and 2 emissions (market-based)
reduction since 2019 (2024: 42%).
20%
Scope 1 and 2 emissions (market-based)
reductionin 2025.
Our social mobility
Last summer we welcomed 32 students
to complete six-week internships with
Close Brothers from the 10,000 Interns
Foundation and through our partnership
with upReach (2024: 35 students).
Our culture
90%
of employees believe they are treated with
respect (2023: 94%
1
).
Environmental Social Governance
1. 2023 score provided for comparison as this question was not included
in the 2024 employee opinion survey.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
28
14.7
20.7
23.6
32.9
57.3
76.6
2025
2024
2023
2022
2021
2020

What sustainability means at Close Brothers
At Close Brothers, we are here to help the people and businesses of
Britain thrive over the long term, working together to embrace change and
capitalise on the opportunities it presents. This means supporting our
colleagues and customers, as well as the communities and environment in
which we operate.
Our car fleet
Our car fleet is now
61.6%
battery electric with average stated emissions
now down to 14.7 gCO
2
/km (2024: 20.7 gCO
2
/km)
Our inclusivity
91%
of our colleagues feel included (2024: 90%).
Our green landing
£1 billion+
has been financed by our energy team across
multiple renewable energy projects over the
last10years.
£154.4 million
lending for zero emissions battery electric
vehicles achieved in this financial year
(2024: £152.4 million).
Our charitable giving
£100,000
donated to charities aligned with our ESG goals
(2024: £100,000).
Our communities
119
children have been supported by Close
Brothers colleagues volunteering for Bookmark
Reading Charity since the start of our
partnership in 2020.
Our emissions
53%
Scope 1 and 2 emissions (market-based)
reduction since 2019 (2024: 42%).
20%
Scope 1 and 2 emissions (market-based)
reductionin 2025.
Our social mobility
Last summer we welcomed 32 students
to complete six-week internships with
Close Brothers from the 10,000 Interns
Foundation and through our partnership
with upReach (2024: 35 students).
Our culture
90%
of employees believe they are treated with
respect (2023: 94%
1
).
Environmental Social Governance
1. 2023 score provided for comparison as this question was not included
in the 2024 employee opinion survey.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
28
14.7
20.7
23.6
32.9
57.3
76.6
2025
2024
2023
2022
2021
2020
We are pleased to present our fourth Task Force on Climate-related Financial Disclosures (“TCFD”) report. Our disclosures
comply with FCA Listing Rule 9.8.6R(8) and are consistent with the TCFD’s 2017 Recommendations. Where practicable, we
have also incorporated the 2021 Annex to the Implementing Guidance.
TCFD recommendations
Our progress
Future focus
Sustainability
andclimate
governance
• Board oversight of climate-related risks and
opportunities is supported by defined roles and
responsibilities across the Board and its
committees.
• The Group Chief Risk Officer (“GCRO”), under
the Senior Managers and Certification Regime, is
accountable for identifying and managing
financial risks linked to climate change.
• The climate risk governance framework
undergoes continuous review to ensure climate
risk remains fully embedded within the wider risk
management framework and aligned with
management decision-making forums.
• Members of the climate reporting team
completed the new Partnership for Carbon
Accounting Financials (“PCAF”) Academy
learning programme for signatories, enhancing
expertise in applying PCAF standards and
financed emissions accounting.
• Continue to strengthen climate
knowledge at Board and senior
management level.
• Advance climate skills and
competencies across our people
and stakeholders, with a focus on
rapidly evolving technologies and
their deployment in the UK market.
Describe the Board’s oversight
of climate-related risks and
opportunities.
Describe management’s role in
assessing and managing
climate-related risks and
opportunities.
See pages 30 to 31.
Climate
strategy
• Our new strategy is guided by three principles:
Simplify, Optimise and Grow.
• We have aligned our climate positioning more
closely with our business-led strategy,
supporting customers in their transition to a
lower-carbon future.
• Enhanced data availability within Asset Finance
and Leasing, embedding fuel-type information to
improve emissions analysis.
• Launched a £20 million Green Asset Fund to
build expertise in emerging sectors and
technologies, with c.£8 million deployed by year
end.
• Joined the Irish Growth and Sustainability Loan
Scheme to enable Irish customers to invest in
climate action and environmental sustainability.
• Continue to manage and reduce
operational emissions while
advancing our financed emissions
transition plan.
• Continue to advance climate data
capabilities to improve
measurement, reporting and
strategic decision-making.
• Respond proactively to evolving
regulation and emerging best
practice across the industry.
• Expand sustainable finance
activities, including alternatively
fuelled vehicles in Motor Finance,
eco-homes and renewable energy
projects.
• Enhance resilience by tightening
lending appetite (e.g. for high-
emission vehicles and poorly EPC
rated properties).
Describe the climate-related
risks and opportunities the
organisation has identified over
the short, medium and long
term.
Describe the impact of climate
risks and opportunities on the
organisation’s business strategy
and planning.
Describe the resilience of the
organisation’s strategy taking
into consideration different
climate-related scenarios,
including a 2ºC or lower
scenario.
See pages 32 to 33.
Risk
management
• Strengthened existing data, reporting and
oversight of climate-related risk exposures.
• Integrated climate risk assessment into principal
and emerging risk processes.
• Continued to report credit exposures relative to
climate risk and risk appetite.
• Updated policies, standards and the enterprise
risk framework to embed climate risk.
• Advanced climate risk culture with clear
corporate responsibility recognition.
• Updated due diligence questionnaires to collect
climate and ESG data from Tier 1 and Tier 2
suppliers and procurement processes that
incorporate environmental and climate-related
criteria alongside sustainability innovation and
performance.
• Further enhance data use to
support quantitative risk
measurement and strategy.
• Develop an approach to further
integrate climate analysis into group
stress testing, including the ICAAP
and resilience scenarios.
• Increase engagement with
customers, partners and suppliers
on climate impacts.
• Ongoing assessment of climate
impacts within resilience and risk
frameworks.
• Regular horizon scanning to identify
regulatory changes and
opportunities.
Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Describe the organisation’s
processes for managing
climate-related risks.
Describe how processes for
identifying, assessing and
managing climate-related risks
are integrated into the
organisation’s overall risk
management.
See pages 33 to 36.
Task Force on Climate-related FinancialDisclosures report
29
Strategic report Governance report Financial statements

TCFD recommendations
Our progress
Future focus
Metrics and
targets
• Our operational emissions have reduced by
more than 53% since our 2019 baseline.
• Enhanced measurement of our operational
carbon footprint, including expanded coverage
across Scope 3 categories.
• Consistently applied assessment of Scope 3
financed emissions, primarily within the loan
book, using evolving PCAF methodologies.
• Achieved strong external recognition, with a CDP
“B” rating, MSCI “AA” rating and Sustainalytics
ESG risk score of 21.5.
• Continued compliance with regulatory, legal and
industry-standard emissions reporting,
evidencing measurable progress.
• Continue to build on progress
towards our ambition of net zero by
2050.
• Strengthen customer climate data
capabilities to facilitate enhanced
financed emissions reporting, risk
assessment and portfolio strategy.
Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities in
line with its strategy and risk
management process.
Disclose Scope 1 and 2 and, if
appropriate, Scope 3
greenhouse gas emissions and
the related risks.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against
targets.
See pages 37 to 39.
Sustainability and
climategovernance
The integration of climate into our
governancestructure
As our climate risk framework has continued to mature, the
group’s governance structure has evolved to ensure clear
accountability for climate-related roles and responsibilities,
and to support a fully integrated approach to both risks and
opportunities.
Oversight is embedded across the Board, executive
committees, and the three lines of defence, supported by
regular updates to relevant committees and forums. This
ensures climate considerations are consistently reflected in
strategic planning, the setting of group-level risk appetites,
and the monitoring of divisional appetites.
Reporting and management information provide the insights
needed for informed decision-making, while alignment
between climate strategy and executive remuneration
reinforces accountability. Climate and environmental, social
and governance (“ESG”) objectives are embedded within the
Executive Committee’s scorecard and Long Term
IncentivePlan.
Board oversight
Board
The Board is responsible for the long-term success of the
group and for delivering sustainable value to shareholders
and wider stakeholders. It fulfils these responsibilities both
directly and through its subsidiary committees.
In overseeing the group’s long-term sustainability, the Board
is accountable for the overall delivery of our climate and ESG
strategy. It receives regular updates on implementation and
progress from the executive team, and approves the group’s
risk appetite statements, including those relating to climate
risk.
Board Risk Committee
Operating under authority delegated by the Board, the Board
Risk Committee (“BRC”) oversees risk management across
the group, including risks arising from climate change. The
BRC monitors the measures in place to manage climate risk
and receives regular updates on the embedding of climate
risk into the group’s wider risk framework. This includes
reviewing emerging portfolio information, tracking the
evolution of climate-related risk appetite, and considering
risks and opportunities.
Audit Committee
Operating under authority delegated by the Board, the Audit
Committee oversees financial and regulatory reporting
across the group, together with the effectiveness of internal
financial controls. The committee is also responsible for
ensuring the clarity and completeness of environmental,
sustainability, and climate-related disclosures within the
group’s Annual Report.
Executive
Chief Executive
The Chief Executive holds ultimate responsibility for climate-
related issues affecting the group and its customers, with
overall accountability to the Board and shareholders for
ensuring sustainable and responsible practices, including
environmental matters. Accountability for the group’s climate
and ESG strategy also rests with the Chief Executive, with
elements delegated to members of the executive team to
ensure effective delivery and integration into business
practices.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
30

TCFD recommendations
Our progress
Future focus
Metrics and
targets
• Our operational emissions have reduced by
more than 53% since our 2019 baseline.
• Enhanced measurement of our operational
carbon footprint, including expanded coverage
across Scope 3 categories.
• Consistently applied assessment of Scope 3
financed emissions, primarily within the loan
book, using evolving PCAF methodologies.
• Achieved strong external recognition, with a CDP
“B” rating, MSCI “AA” rating and Sustainalytics
ESG risk score of 21.5.
• Continued compliance with regulatory, legal and
industry-standard emissions reporting,
evidencing measurable progress.
• Continue to build on progress
towards our ambition of net zero by
2050.
• Strengthen customer climate data
capabilities to facilitate enhanced
financed emissions reporting, risk
assessment and portfolio strategy.
Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities in
line with its strategy and risk
management process.
Disclose Scope 1 and 2 and, if
appropriate, Scope 3
greenhouse gas emissions and
the related risks.
Describe the targets used by the
organisation to manage climate-
related risks and opportunities
and performance against
targets.
See pages 37 to 39.
Sustainability and
climategovernance
The integration of climate into our
governancestructure
As our climate risk framework has continued to mature, the
group’s governance structure has evolved to ensure clear
accountability for climate-related roles and responsibilities,
and to support a fully integrated approach to both risks and
opportunities.
Oversight is embedded across the Board, executive
committees, and the three lines of defence, supported by
regular updates to relevant committees and forums. This
ensures climate considerations are consistently reflected in
strategic planning, the setting of group-level risk appetites,
and the monitoring of divisional appetites.
Reporting and management information provide the insights
needed for informed decision-making, while alignment
between climate strategy and executive remuneration
reinforces accountability. Climate and environmental, social
and governance (“ESG”) objectives are embedded within the
Executive Committee’s scorecard and Long Term
IncentivePlan.
Board oversight
Board
The Board is responsible for the long-term success of the
group and for delivering sustainable value to shareholders
and wider stakeholders. It fulfils these responsibilities both
directly and through its subsidiary committees.
In overseeing the group’s long-term sustainability, the Board
is accountable for the overall delivery of our climate and ESG
strategy. It receives regular updates on implementation and
progress from the executive team, and approves the group’s
risk appetite statements, including those relating to climate
risk.
Board Risk Committee
Operating under authority delegated by the Board, the Board
Risk Committee (“BRC”) oversees risk management across
the group, including risks arising from climate change. The
BRC monitors the measures in place to manage climate risk
and receives regular updates on the embedding of climate
risk into the group’s wider risk framework. This includes
reviewing emerging portfolio information, tracking the
evolution of climate-related risk appetite, and considering
risks and opportunities.
Audit Committee
Operating under authority delegated by the Board, the Audit
Committee oversees financial and regulatory reporting
across the group, together with the effectiveness of internal
financial controls. The committee is also responsible for
ensuring the clarity and completeness of environmental,
sustainability, and climate-related disclosures within the
group’s Annual Report.
Executive
Chief Executive
The Chief Executive holds ultimate responsibility for climate-
related issues affecting the group and its customers, with
overall accountability to the Board and shareholders for
ensuring sustainable and responsible practices, including
environmental matters. Accountability for the group’s climate
and ESG strategy also rests with the Chief Executive, with
elements delegated to members of the executive team to
ensure effective delivery and integration into business
practices.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
30
Sustainability and climate governance
Strategy Disclosures Risk management
The Board
Group Executive
Committee
Audit Committee Risk Committee
Group Risk and
ComplianceCommittee
Credit Risk
ManagementCommittee
Local risk and
compliancecommittees
Group Chief Risk Officer
In Banking, and in line with the Senior Managers and
Certification Regime, the GCRO has specific responsibility
for climate risk management. This includes:
• Embedding climate risks within business planning and risk
appetite statements.
• Conducting climate-related scenario analysis across
different time horizons.
• Ensuring Board-level visibility with clear roles and
responsibilities.
• Considering climate risk materiality within the annual
Internal Capital Adequacy Assessment Process (“ICAAP”).
The GCRO is supported by the Board and executive team,
who collectively oversee delivery of the group’s climate risk
objectives and provide challenge and approval of the
broader climate and ESG strategy.
Group Executive Committee
The Executive Committee evaluates and implements
initiatives to ensure a sustainable business model that
incorporates all risks and opportunities, including ESG and
climate. At group level, it oversees the development of the
climate strategy, covering ambitions, operational and
financing activities, targets, and metrics. The committee also
coordinates divisional strategies and supports the Chief
Executive in making recommendations to the Board for
approval.
Group Risk and Compliance Committee
At executive level, climate risk management is overseen by
the Group Risk and Compliance Committee (“GRCC”), which
reviews and challenges the framework used to manage
financial risks from climate change. The committee receives
regular framework updates, with climate risk management
information embedded within established risk reporting
processes.
Credit Risk Management Committee
The Credit Risk Management Committee (“CRMC”) is
responsible for monitoring the group’s credit risk profile,
including climate-related credit risk considerations. Over the
past year, it has received regular updates on Banking's credit
risk assessment framework and associated management
information, which highlight the potential climate risk
sensitivity of different sectors and asset classes. The CRMC
has also reviewed and approved the integration of climate
considerations into credit risk policies and standards.
Training and competency
Both the Board and executive team are committed to
developing and embedding strong climate and ESG
competencies. Regular updates to the Board and
management committees over the past year have supported
this, raising awareness of the risks and opportunities
presented by climate change and tracking progress against
the group’s response.
Capability has been strengthened across the wider
organisation through additional training, including accredited
climate qualifications where relevant. This year, members of
the climate reporting team completed the new PCAF
Academy learning programme for signatories, enhancing
their expertise in applying PCAF standards and financed
emissions accounting.
31
Strategic report Governance report Financial statements

Climate strategy
As a group supporting many sectors of the UK economy, we
recognise our responsibility to enable the transition to a low-
carbon future and remain committed to the goals of the Paris
Agreement.
We have moved away from intermediate group-level climate
targets to focus instead on aligning our climate positioning
with our business-led strategy of supporting customers in
their transition. Our lending must evolve in step with our
customers’ transition pathways and as UK businesses adopt
clean technologies, greener assets and new business
models, we stand ready to provide the financing solutions
that facilitate change and drive the wider economic
transition.
Opportunities in the energy market and battery electric
vehicles remain strong, and future growth in these areas will
be led by customer demand rather than by top-down targets,
ensuring our ambitions reflect the real transition journeys of
our clients.
We recognise the urgency of tackling the environmental,
economic and social impacts of climate change, which affect
all stakeholder groups. Identifying and managing the risks
and opportunities of climate change to our business model
remains a key strategic focus for the Board and senior
management.
The three pillars of our climate strategy
1. Achieving net zero operations
We have made significant progress on our climate actions,
reducing operational emissions by 53% since our 2019
baseline and advancing towards our ambition of achieving
net zero by 2050. This significantly exceeds the level of
reduction typically required to align with science-based
emissions pathways consistent with a 1.5°C global warming
scenario. It reflects our dedication to, and progress in,
decarbonising our operations and demonstrates the
effectiveness of the actions we have taken to date.
To strengthen alignment with our business-led strategy, we
have moved away from intermediate group-level targets and
instead focused on supporting customers in their transition
to a lower-carbon future.
Reducing our own emissions remains a priority and
underpins our wider net zero ambition. Beyond meeting
mandatory SECR requirements, we provide enhanced
disclosure of our full operational footprint, covering Scope 1,
Scope 2 and all relevant Scope 3 categories.
Engaging our supply chain on climate action is delivering
benefits. We are working closely with major suppliers, while
also collaborating with business customers where we
represent part of their supply chain emissions, creating a
multiplier effect across the value chain.
We are strengthening the monitoring and calculation of our
operational impacts, with a focus on improving data quality
and availability. In 2025, reported Scope 1 and 2 emissions
were obtained for 43% of supplier spend, up from 31% in
2024, enhancing the accuracy of our Scope 3 Category 1
disclosures. Supply chain engagement is delivering
measurable benefits, both through collaboration with our
largest suppliers and with business customers for whom we
represent a share of their supply chain emissions.
Our workplace team continues to work with our facilities
management partner to reduce emissions across all
properties. Our success here is reflected in a 20.4%
reduction in total Scope 1 and 2 location-based operational
emissions in 2025 compared to 2024.
We remain committed to achieving a net zero car fleet. While
the pace of transition has been influenced by UK EV market
dynamics, our recognised leadership in battery electric
vehicle adoption has delivered strong progress: as of July
2025, 61.6% of our fleet is fully electric and 37.1% is plug-in
hybrid.
This transition has further reduced our fleet’s emissions,
withaverage CO₂ output now at 14.7 gCO₂/km
(2024:20.7gCO₂/km).
2. Reducing our financed emissions
We support the goals of the Paris Agreement by aligning our
financing activities with net zero commitments and helping
customers meet their transition targets. Understanding the
climate impacts of our lending portfolios, while identifying
green growth opportunities, is central to our climate plan.
In 2025, we continued to apply our climate assessment of
assets and businesses across our lending portfolios, with a
summary of Scope 3 financed emissions provided on page
39. Governance has been strengthened by transferring
ownership of financed emissions reporting from the central
team to the Risk function, embedding climate oversight
alongside credit risk management.
In Motor Finance, we continue to reduce our appetite for
high-emitting vehicles. We have enhanced data quality
across Asset Finance and Leasing, embedding fuel type
information to improve emissions measurement and portfolio
analysis. Scope 3 emissions fell, driven by a gradual
transition towards lower-emission vehicles, alongside loan
book reduction. This is evidenced by the drop in Scope 3
total financed emissions from 1,435,576 tCO
2
e in 2024 to
1,303,568 tCO
2
e in 2025.
As members of PCAF, we are working with peer banks to
further improve data sourcing and carbon accounting,
strengthening our understanding of portfolio impacts and
supporting the continued development of our climate
strategy.
3. Financing the transition
We are enabling the adoption of cleaner technologies and
business model adaptation through our green growth lending
strategy, leveraging our expertise while maintaining
alignment with our risk appetite.
We see significant growth opportunities in green asset
lending across both established and emerging asset classes.
As a specialist lender with deep customer insight, we are
well positioned to support clients in adopting cleaner
technologies and achieving their sustainability goals.
The energy market and BEVs remain key areas of
opportunity. Road transport is one of our largest lending
sectors and we are already supporting rapid deployment of
BEVs by fleet customers across passenger and goods
vehicles. In Motor Finance, we are expanding our BEV
offering to accelerate this transition.
In FY 2025, our Asset Finance and Leasing business
launched a £20 million Green Asset Fund to build expertise
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
32

Climate strategy
As a group supporting many sectors of the UK economy, we
recognise our responsibility to enable the transition to a low-
carbon future and remain committed to the goals of the Paris
Agreement.
We have moved away from intermediate group-level climate
targets to focus instead on aligning our climate positioning
with our business-led strategy of supporting customers in
their transition. Our lending must evolve in step with our
customers’ transition pathways and as UK businesses adopt
clean technologies, greener assets and new business
models, we stand ready to provide the financing solutions
that facilitate change and drive the wider economic
transition.
Opportunities in the energy market and battery electric
vehicles remain strong, and future growth in these areas will
be led by customer demand rather than by top-down targets,
ensuring our ambitions reflect the real transition journeys of
our clients.
We recognise the urgency of tackling the environmental,
economic and social impacts of climate change, which affect
all stakeholder groups. Identifying and managing the risks
and opportunities of climate change to our business model
remains a key strategic focus for the Board and senior
management.
The three pillars of our climate strategy
1. Achieving net zero operations
We have made significant progress on our climate actions,
reducing operational emissions by 53% since our 2019
baseline and advancing towards our ambition of achieving
net zero by 2050. This significantly exceeds the level of
reduction typically required to align with science-based
emissions pathways consistent with a 1.5°C global warming
scenario. It reflects our dedication to, and progress in,
decarbonising our operations and demonstrates the
effectiveness of the actions we have taken to date.
To strengthen alignment with our business-led strategy, we
have moved away from intermediate group-level targets and
instead focused on supporting customers in their transition
to a lower-carbon future.
Reducing our own emissions remains a priority and
underpins our wider net zero ambition. Beyond meeting
mandatory SECR requirements, we provide enhanced
disclosure of our full operational footprint, covering Scope 1,
Scope 2 and all relevant Scope 3 categories.
Engaging our supply chain on climate action is delivering
benefits. We are working closely with major suppliers, while
also collaborating with business customers where we
represent part of their supply chain emissions, creating a
multiplier effect across the value chain.
We are strengthening the monitoring and calculation of our
operational impacts, with a focus on improving data quality
and availability. In 2025, reported Scope 1 and 2 emissions
were obtained for 43% of supplier spend, up from 31% in
2024, enhancing the accuracy of our Scope 3 Category 1
disclosures. Supply chain engagement is delivering
measurable benefits, both through collaboration with our
largest suppliers and with business customers for whom we
represent a share of their supply chain emissions.
Our workplace team continues to work with our facilities
management partner to reduce emissions across all
properties. Our success here is reflected in a 20.4%
reduction in total Scope 1 and 2 location-based operational
emissions in 2025 compared to 2024.
We remain committed to achieving a net zero car fleet. While
the pace of transition has been influenced by UK EV market
dynamics, our recognised leadership in battery electric
vehicle adoption has delivered strong progress: as of July
2025, 61.6% of our fleet is fully electric and 37.1% is plug-in
hybrid.
This transition has further reduced our fleet’s emissions,
withaverage CO₂ output now at 14.7 gCO₂/km
(2024:20.7gCO₂/km).
2. Reducing our financed emissions
We support the goals of the Paris Agreement by aligning our
financing activities with net zero commitments and helping
customers meet their transition targets. Understanding the
climate impacts of our lending portfolios, while identifying
green growth opportunities, is central to our climate plan.
In 2025, we continued to apply our climate assessment of
assets and businesses across our lending portfolios, with a
summary of Scope 3 financed emissions provided on page
39. Governance has been strengthened by transferring
ownership of financed emissions reporting from the central
team to the Risk function, embedding climate oversight
alongside credit risk management.
In Motor Finance, we continue to reduce our appetite for
high-emitting vehicles. We have enhanced data quality
across Asset Finance and Leasing, embedding fuel type
information to improve emissions measurement and portfolio
analysis. Scope 3 emissions fell, driven by a gradual
transition towards lower-emission vehicles, alongside loan
book reduction. This is evidenced by the drop in Scope 3
total financed emissions from 1,435,576 tCO
2
e in 2024 to
1,303,568 tCO
2
e in 2025.
As members of PCAF, we are working with peer banks to
further improve data sourcing and carbon accounting,
strengthening our understanding of portfolio impacts and
supporting the continued development of our climate
strategy.
3. Financing the transition
We are enabling the adoption of cleaner technologies and
business model adaptation through our green growth lending
strategy, leveraging our expertise while maintaining
alignment with our risk appetite.
We see significant growth opportunities in green asset
lending across both established and emerging asset classes.
As a specialist lender with deep customer insight, we are
well positioned to support clients in adopting cleaner
technologies and achieving their sustainability goals.
The energy market and BEVs remain key areas of
opportunity. Road transport is one of our largest lending
sectors and we are already supporting rapid deployment of
BEVs by fleet customers across passenger and goods
vehicles. In Motor Finance, we are expanding our BEV
offering to accelerate this transition.
In FY 2025, our Asset Finance and Leasing business
launched a £20 million Green Asset Fund to build expertise
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
32
in emerging sectors and technologies, with c.£8 million
deployed by year end. We are also participating in the Irish
Growth and Sustainability Loan Scheme, enabling customers
in Ireland to invest in climate action and environmental
sustainability.
Beyond transport, we are financing eco-homes and
sustainable developments. While lending volumes in these
sectors are currently modest, we expect growth to increase
as customer demand rises and regulatory frameworks
strengthen.
Battery electric vehicles funding
2025
£million
2024
£million
Green
lending
Zero emissions battery
electric vehicles achieved in
financial year
154.4 152.4
Green
lending
Zero emissions battery
electric vehicles achieved
since 2023
470.8 316.4
Risk management
How we identify, assess and manage climate-
related risks
Our group Enterprise Risk Management Framework, outlined
on page 68 of the Risk Report, ensures a consistent
approach to managing climate-related risks across the
organisation.
Physical risks are treated as cross-cutting, with potential
impacts considered across our principal risks, while
transition risks are measured and monitored through our
emerging risk processes.
Physical and transitional climate impacts
Risk
Description
Timeline
Potential impacts
Physical climate impacts
Increasing frequency and
severity of extreme weather
events, such as persistent
heat and severe flooding,
together with long-term shifts
in climatic conditions.
Physical damage to customer assets and
disruption to sector productivity, including
labour impacts in construction and reduced
crop yields in agriculture.
Medium to
long term
Credit risk – counterparty and
collateral.
Disruption or damage to our properties and
those of suppliers or partners, including
critical sites such as data centres and call
centres.
Long term Supply chain risk. Business
continuity impacts and
disruption to customers.
Transitional climate impacts
Market disruption from the
transition to a low-carbon
economy, driven by new
regulation, evolving policy,
technological change and
shifting customer demand.
Significant technological shifts within key
sectors, such as impacts on existing
transport activities.
Medium to
long term
Credit risk – counterparty and
collateral. Uncertainty around
new and legacy asset values.
Uncertainty and change across UK sectors
where our SME customers operate, driven
by shifting customer expectations and
increasing focus on energy efficiency and
environmental performance.
Medium to
long term
Credit risk from counterparties
and collateral, with market
uncertainty potentially reducing
customer investment activity in
the short term.
Changing customer operating models and
higher investment in clean assets, such as
onsite renewable generation, energy
storage and EV charging, are creating
demand for new products and underwriting
approaches.
Medium term New business models. Need for
new skills and capabilities
across the bank.
Changing stakeholder climate
expectations.
Stakeholders, including investors,
customers and employees, are increasingly
invested in our climate plan, while market
appetites are shifting away from high-
carbon sectors such as fossil fuel
extraction and carbon-intensive transport.
Medium to
long term
Reputational risk affecting our
ability to attract and retain talent,
as well as our attractiveness to
investors and savers.
33
Strategic report Governance report Financial statements

Alignment of group-wide framework with
climate-related risks and opportunities
Aligning our risk management framework with climate-
related risks and opportunities remains a priority, with
ongoing assessment and monitoring of our banking book
and impacts across other principal risks. The continued
enhancement of standards and policies is strengthening the
maturity of climate risk within our end-to-end risk processes.
We recognise that this is a multi-year journey, with both
physical and transition risks, and the frameworks to assess
them, still evolving across the industry. The impacts of
climate change across different time horizons, and our
proportional response, will remain integral to our wider risk
assessment, financial planning and strategy development.
Our business planning
time horizons
Short term
(0-1year)
Time horizon for annual budgeting
and capital assessment.
Medium term
(1-3years)
Time horizon for business strategy
and financial planning. Also aligns
with typical ICAAP scenario analysis
horizon.
Long term
(morethan 3 years)
Time horizon beyond typical financial
planning cycle. Impacts primarily
assessed using long-term scenario
analysis noting most material climate
risks will crystallise in this horizon.
Risk culture and awareness
A strong risk culture is embedded across the group, aligned
with our purpose, strategy, cultural attributes and values. The
management of climate risks and opportunities is fully
integrated within this culture.
Internal controls
To support the ongoing integration of climate risk into our
control environment, recent enhancements have reinforced
climate considerations within policy documentation and
ensured that internal processes are complemented by the
activities of key suppliers and partners.
Governance
A key element of embedding climate risk into our group-wide
risk management framework is the application of a coherent
three lines of defence model, as outlined on page 72 in the
Risk report. As this embedding continues, our climate
governance structure continues to evolve, ensuring clear
roles and responsibilities and an integrated approach to both
risks and opportunities. Recent enhancements include
strategic accountability being placed more clearly with each
business divisional Chief Executive rolling up to the
Executive Committee at group level, with the Board retaining
overall accountability for the delivery of our climate and ESG
strategy. Risk reporting is via existing risk reporting
pathways into risk committees. This structure is detailed on
page 31.
Stress testing
Building on our long-horizon scenario analysis, recent work
has taken account of the short tenor of our loan book (15
months average) and the stability of risk exposures across
assets and counterparties. In the next financial year, our
focus will be on developing a considered approach to further
integrating climate analysis into group stress testing,
including the ICAAP and resilience scenarios.
Risk appetite
Climate risk is integrated into the group’s risk appetite
statements, aligning risk management with overall strategy.
At present, quantitative measures are primarily used for
monitoring; however, we are continuing to explore more
tailored and formal risk appetites by risk area. This is
particularly relevant in credit risk, where quantifiable metrics
can be measured against limits specific to business
considerations. We expect these to be based on sectoral
transition risk assessments, aligned to our ambition to reach
net zero by 2050.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
34

C
o
s
t
c
u
t
t
i
n
g
r
i
s
k
E
m
e
r
g
i
n
g
r
i
s
k
Climate risk
Alignment of group-wide framework with
climate-related risks and opportunities
Aligning our risk management framework with climate-
related risks and opportunities remains a priority, with
ongoing assessment and monitoring of our banking book
and impacts across other principal risks. The continued
enhancement of standards and policies is strengthening the
maturity of climate risk within our end-to-end risk processes.
We recognise that this is a multi-year journey, with both
physical and transition risks, and the frameworks to assess
them, still evolving across the industry. The impacts of
climate change across different time horizons, and our
proportional response, will remain integral to our wider risk
assessment, financial planning and strategy development.
Our business planning
time horizons
Short term
(0-1year)
Time horizon for annual budgeting
and capital assessment.
Medium term
(1-3years)
Time horizon for business strategy
and financial planning. Also aligns
with typical ICAAP scenario analysis
horizon.
Long term
(morethan 3 years)
Time horizon beyond typical financial
planning cycle. Impacts primarily
assessed using long-term scenario
analysis noting most material climate
risks will crystallise in this horizon.
Risk culture and awareness
A strong risk culture is embedded across the group, aligned
with our purpose, strategy, cultural attributes and values. The
management of climate risks and opportunities is fully
integrated within this culture.
Internal controls
To support the ongoing integration of climate risk into our
control environment, recent enhancements have reinforced
climate considerations within policy documentation and
ensured that internal processes are complemented by the
activities of key suppliers and partners.
Governance
A key element of embedding climate risk into our group-wide
risk management framework is the application of a coherent
three lines of defence model, as outlined on page 72 in the
Risk report. As this embedding continues, our climate
governance structure continues to evolve, ensuring clear
roles and responsibilities and an integrated approach to both
risks and opportunities. Recent enhancements include
strategic accountability being placed more clearly with each
business divisional Chief Executive rolling up to the
Executive Committee at group level, with the Board retaining
overall accountability for the delivery of our climate and ESG
strategy. Risk reporting is via existing risk reporting
pathways into risk committees. This structure is detailed on
page 31.
Stress testing
Building on our long-horizon scenario analysis, recent work
has taken account of the short tenor of our loan book (15
months average) and the stability of risk exposures across
assets and counterparties. In the next financial year, our
focus will be on developing a considered approach to further
integrating climate analysis into group stress testing,
including the ICAAP and resilience scenarios.
Risk appetite
Climate risk is integrated into the group’s risk appetite
statements, aligning risk management with overall strategy.
At present, quantitative measures are primarily used for
monitoring; however, we are continuing to explore more
tailored and formal risk appetites by risk area. This is
particularly relevant in credit risk, where quantifiable metrics
can be measured against limits specific to business
considerations. We expect these to be based on sectoral
transition risk assessments, aligned to our ambition to reach
net zero by 2050.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
34
Climate cross-cutting risks
The physical nature of climate change has the
potential to impact across the suite of our existing
principal risks.
Noting the longer time horizons for some transitional
climate impacts to crystallise (such as on policy
andreputation) we track transitional impacts of
climate risk as one of our core emerging risks.
Risks identified across the group with
potential climate-related impacts
Credit
Counterparty and collateral impacts
Operational
Premises, people and third-party partners
Third parties and suppliers
Traded market
Regulatory
Conduct
Reputational
Funding and liquidity
Climate-related data
A cross-cutting risk impacting across multiple
principal risks
In assessing both the risks and opportunities of climate
impacts, and in preparing our TCFD disclosures, we have
aimed to provide appropriate granularity, proportionate to
the materiality of the climate-related risks identified across
the group.
Our analysis of the risk universe indicates that we are not
materially exposed to loss or disruption in the short to
medium term.
Over the long term, however, increased risk is expected,
driven primarily by potential transition impacts. Severe
physical risks are also considered only likely to materialise
over the long term, although we recognise that acute events
are already occurring. These risks are mitigated by our
resilient business model, supported by an average loan tenor
of 15 months and a customer base concentrated in the UK
and Republic of Ireland.
The primary focus of our climate-related risk management is
on credit and operational risk, which we consider represent
the greatest potential impacts. We acknowledge that
transition developments over the medium to long term could
present additional exposures if not managed appropriately
and in a timely manner and we remain committed to actions
that preserve the resilience of our operating model. Further
details on our approach to emerging risks are provided on
page 79 of the Risk Report.
We are also working towards enhancements in assessment,
monitoring and reporting to strengthen the quantitative lens,
complementing the established qualitative approach already
embedded.
Credit risk
Our focus remains primarily on credit risk, given its
materiality to the Banking division and the wider group and
its sensitivity to potential climate impacts. Both physical and
transition risks have the potential to affect counterparties and
collateral.
Our current methodology, applied across £8.8 billion (91%)
of the Banking division loan book, identifies exposures most
sensitive to climate change. While the approach does not
account for the time horizons over which climate impacts
may crystallise, it is valuable in highlighting exposures with
greatest sensitivity:
• energy-consuming assets such as motor vehicles in our
Motor Finance and Asset Finance businesses; and
• non-renewable energy generation assets and general
business lending in high-impact sectors.
Sensitivity dashboards are presented regularly to risk
committees, ensuring climate risk is considered consistently
across the organisation. An overview of risk committees is
provided on page 70.
Operational risk
The group recognises that climate change presents both
physical and transition risks that may affect operational
resilience, including:
• the integrity of buildings;
• the continuity of services; and
• the reliability of third-party providers.
In line with the TCFD framework, we have taken steps to
identify, assess and manage these risks within our
operational risk management processes. As part of this
integration, we have reviewed and strengthened our
business continuity and crisis management frameworks to
35
Strategic report Governance report Financial statements

ensure climate-related disruptions, such as extreme weather
events or supply chain interruptions, are reflected in
preparedness planning. This work is focused on protecting
our people, customers and infrastructure.
Operational risk standards have been updated to capture
climate-related causal factors. We are embedding climate
considerations in assessments of operational resilience for
critical services and in change management risk
assessments, enhancing our ability to anticipate and mitigate
the impact of climate-related events on essential services.
Third parties and suppliers
We recognise that climate change may affect key third
parties and suppliers, creating potential operational
disruptions. To address this, we have enhanced our third-
party risk management framework. Updated due diligence
questionnaires now collect climate and ESG data from tier 1
and tier 2 suppliers, while procurement processes
incorporate environmental and climate-related criteria
alongside sustainability innovation and performance.
In support of our broader climate strategy, we are actively
engaging with suppliers to encourage alignment with our
climate goals.
Through these actions, the group is strengthening climate
resilience across its operations and supply chain, in line with
regulatory expectations and stakeholder priorities.
Other risks
We are integrating climate risk across all relevant risk areas,
ensuring it is embedded within our business strategy. This
includes ongoing assessment of our model’s resilience to
ensure we are prepared to manage climate-related risks.
Traded market
We continue to monitor traded market risk for Winterflood
Securities. The business’s role as a market maker inherently
limits long-term positions, providing a strong safeguard
against material risk exposures.
Regulatory risks
The evolving regulatory landscape presents ongoing risk and
we remain committed to full compliance with new and
emerging requirements. We have strengthened horizon
scanning to ensure changes are identified early and assigned
to the appropriate functions. In particular, the Prudential
Regulation Authority’s (“PRA”) Consultation Paper CP10/25,
expected to precede an update to Supervisory Statement
(SS) 3/19, is likely to reinforce expectations on managing
climate-related financial risks. We will assess, understand
and implement all impacts to maintain alignment as the
regulatory position develops.
Conduct
Climate impacts are embedded within our conduct
responsibilities, reflecting our commitment to delivering good
customer outcomes.
Reputational
The group recognises that reputational risk may arise over
the longer term if we fail to respond effectively to the
transitional impacts of climate change, including evolving
regulation, technological change and shifting stakeholder
expectations. Climate-related reputational risk is embedded
within our wider risk identification and assessment
processes, ensuring it is considered across principal risk
types.
To maintain trust and credibility, we proactively manage
these risks through continuous evaluation of our climate
strategy, disclosures and performance, ensuring alignment
with stakeholder expectations and emerging best practice.
Funding and liquidity
Funding and liquidity impacts are continually reassessed,
with regular updates to Treasury committees. Key focus
areas include debt capital market implications, potential
shifts in investor behaviour and reputational impacts,
particularly those linked to evolving disclosure requirements.
Climate-related data
Although we have demonstrated significant progress in
accessing supplier data, obtaining Scope 1 and 2 emissions
from suppliers representing 43% of spend, data quality
remains a challenge. We remain committed to enhancing
climate risk data to enable more accurate measurement and
monitoring. This will, in turn, support stronger risk mitigation
and closer strategic alignment.
We are also advancing our climate and broader sustainability
reporting and management information capabilities. These
improvements will deliver more decision-useful insights,
helping to shape the group’s strategy for managing risks and
opportunities and to inform the development of more tailored
risk appetites.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
36

ensure climate-related disruptions, such as extreme weather
events or supply chain interruptions, are reflected in
preparedness planning. This work is focused on protecting
our people, customers and infrastructure.
Operational risk standards have been updated to capture
climate-related causal factors. We are embedding climate
considerations in assessments of operational resilience for
critical services and in change management risk
assessments, enhancing our ability to anticipate and mitigate
the impact of climate-related events on essential services.
Third parties and suppliers
We recognise that climate change may affect key third
parties and suppliers, creating potential operational
disruptions. To address this, we have enhanced our third-
party risk management framework. Updated due diligence
questionnaires now collect climate and ESG data from tier 1
and tier 2 suppliers, while procurement processes
incorporate environmental and climate-related criteria
alongside sustainability innovation and performance.
In support of our broader climate strategy, we are actively
engaging with suppliers to encourage alignment with our
climate goals.
Through these actions, the group is strengthening climate
resilience across its operations and supply chain, in line with
regulatory expectations and stakeholder priorities.
Other risks
We are integrating climate risk across all relevant risk areas,
ensuring it is embedded within our business strategy. This
includes ongoing assessment of our model’s resilience to
ensure we are prepared to manage climate-related risks.
Traded market
We continue to monitor traded market risk for Winterflood
Securities. The business’s role as a market maker inherently
limits long-term positions, providing a strong safeguard
against material risk exposures.
Regulatory risks
The evolving regulatory landscape presents ongoing risk and
we remain committed to full compliance with new and
emerging requirements. We have strengthened horizon
scanning to ensure changes are identified early and assigned
to the appropriate functions. In particular, the Prudential
Regulation Authority’s (“PRA”) Consultation Paper CP10/25,
expected to precede an update to Supervisory Statement
(SS) 3/19, is likely to reinforce expectations on managing
climate-related financial risks. We will assess, understand
and implement all impacts to maintain alignment as the
regulatory position develops.
Conduct
Climate impacts are embedded within our conduct
responsibilities, reflecting our commitment to delivering good
customer outcomes.
Reputational
The group recognises that reputational risk may arise over
the longer term if we fail to respond effectively to the
transitional impacts of climate change, including evolving
regulation, technological change and shifting stakeholder
expectations. Climate-related reputational risk is embedded
within our wider risk identification and assessment
processes, ensuring it is considered across principal risk
types.
To maintain trust and credibility, we proactively manage
these risks through continuous evaluation of our climate
strategy, disclosures and performance, ensuring alignment
with stakeholder expectations and emerging best practice.
Funding and liquidity
Funding and liquidity impacts are continually reassessed,
with regular updates to Treasury committees. Key focus
areas include debt capital market implications, potential
shifts in investor behaviour and reputational impacts,
particularly those linked to evolving disclosure requirements.
Climate-related data
Although we have demonstrated significant progress in
accessing supplier data, obtaining Scope 1 and 2 emissions
from suppliers representing 43% of spend, data quality
remains a challenge. We remain committed to enhancing
climate risk data to enable more accurate measurement and
monitoring. This will, in turn, support stronger risk mitigation
and closer strategic alignment.
We are also advancing our climate and broader sustainability
reporting and management information capabilities. These
improvements will deliver more decision-useful insights,
helping to shape the group’s strategy for managing risks and
opportunities and to inform the development of more tailored
risk appetites.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
36
Metrics and targets
We have reduced operational emissions by 53% since 2019,
significantly ahead of the reductions typically required to
align with a 1.5°C science-based pathway. This progress
demonstrates the effectiveness of our actions and provides a
strong foundation for achieving our target of net zero by 2050.
Our climate strategy addresses three areas: operational
emissions, emissions from our lending portfolios, and supply
chain impacts. This section of the report outlines our
operational emissions targets, measurement and reductions
(see page 37), followed by our financed emissions
assessment and ambitions (see pages 38 to 39).
Operational emissions
Our methodology for calculating and disclosing greenhouse
gas (“GHG”) emissions and energy use follows the World
Resources Institute GHG Protocol Corporate Standard, the
GHG Protocol Corporate Value Chain (Scope 3) Standard
and the SECR requirements. We report all material Scope 1
and 2 emissions, alongside indirect Scope 3 operational
emissions where relevant. Scope 1 covers fuel emissions
from buildings and company vehicles, while Scope 2 covers
electricity use.
Building-related emissions
For building-related emissions, including industrial processes
at our Brewery Rentals sites, we continue to advance energy
efficiency plans in partnership with our facilities management
provider. These plans include measures such as energy-
efficient equipment, monitoring infrastructure, electrification
and renewable energy options. Energy use across office and
Brewery Rental sites is down 23.7%, from 5,615 MWh in
2024 to 4,284 MWh in 2025.
Close Brothers announced the sale of the Brewery Rentals
business on 15 July 2025 and the transaction completed on
31 August 2025.
Total energy usage across offices and Brewery Rentals
4,284 MWh
2024: 5,615 MWh
Renewable energy use across offices and Brewery Rentals (MWh)
2025
2024
Non-renewable energy use across offices and Brewery Rentals (MWh)
2025
2024
Fleet-related emissions
We have also continued the electrification of our company
car fleet (617 cars in total, down from 643 in 2024). At
31 July 2025, 61.6% of our fleet was fully electric. When
combined, fully electric and plug-in hybrid make up 98.7% of
our fleet.
Average stated emissions across company car fleet
14.7 gCO
2
/km
2024: 20.7 gCO
2
/km
% of car fleet that is battery electric
2025
2024
% of car fleet that is plug-in hybrid
2025
2024
% of car fleet that is petrol or diesel
2025
2024
In-house data
During the year, with support from external sustainability
experts and an emissions measurement and reporting
platform, we significantly enhanced our in-house climate
data capability. This has strengthened operational
footprinting across all Scope 1 and 2 categories, as well as
relevant Scope 3 categories. Carbon accounting processes
are embedded via close liaison with internal departments,
enabling provision of more frequent, decision-useful climate-
related management information across the group.
37
2,167
3,147
2,117
2,468
61.6%
49.8%
37.1%
48.5%
1.3%
1.7%
Strategic report Governance report Financial statements

Our operational impacts
Market-based Location-based
Greenhouse gas emissions
1,2,4,5
Emissions source
2025
tCO
2
e
2024
tCO
2
e
2025
tCO
2
e
2024
tCO
2
e
Scope 1
Buildings – fuel and refrigerants
3
176 273 261 301
Owned vehicles – fuel
3
1,347 1,690 1,347 1,690
Total Scope 1
1,523 1,963 1,608 1,991
Of which UK total Scope 1
1,365 1,939 1,449 1,967
Scope 2
Buildings – electricity
3
247 263 609 809
Owned vehicles – electricity
3
112 125 112 125
Total Scope 2
359 388 721 934
Of which UK total Scope 2
347 359 704 899
Total Scope 1 and 2 (Operational)
1,882 2,351 2,329 2,925
Of which UK total Scope 1 and 2
1,712 2,298 2,153 2,866
Scope 3 (Operational)
Category 1 – Purchased goods and services
3
22,119 21,337
Category 2 – Capital goods
3
5,064 8,750
Category 3 – Fuel and energy-related emissions
3
306 386
Category 4 – Upstream transportation and distribution
3
528 587
Category 5 – Waste generated in operations
3
54 24
Category 6 – Business travel
859 649
Category 7 – Employee commuting
3
3,622 3,776
Category 9 – Downstream transport and distribution
3
367 391
Total Scope 3 (Operational)
32,919 35,900
Total Scope 1, 2 and 3 (Operational)
35,248 38,825
Energy use
2025
GWh
2024
GWh
Total energy use
11.17 14.33
Of which UK total energy use
10.76 13.64
Market-based tCO
2
e per
employee
Location-based tCO
2
e
per employee
Emissions intensity
2025 2024 2025 2024
Operational Scope 1 and 2 emissions intensity
0.61 0.75 0.75 0.94
Operational Scope 1, 2 and 3 emissions intensity
11.37 11.32
Calculated using: Average number of employees in year
3,101 3,124 3,101 3,124
1. We have reported on all emission sources required under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018. Our reporting year runs from August 2024 to July 2025. The emissions reporting boundary is defined as all entities and
facilities either owned or under our operational control.
2. Emissions have been calculated using the Greenhouse Gas Protocol Corporate Standard and cover all greenhouse gases (converted to tCO
2
e). We
have used emissions factors published by the UK Department for Business, Energy & Industrial Strategy and the International Energy Agency.
3. During the year-end process for carbon accounting, we identified some adjustments needed to our 2024 comparable Scope 1, 2 and 3 emissions. The
2024 Scope 1, 2 and 3 emissions above have been restated to ensure consistency with this year’s disclosed emissions methodologies as well as to
address some issues with the quality of the data collected last year for 2024.
4. 2019 (the baseline year), 2024 and 2025 have been recalculated to exclude the sale of Close Brothers Asset Management but do include emissions
associated with Winterflood Securities and Brewery Rentals.
5. These reported emissions have not been audited by a third party.
Operational efficiencies
In FY 2025, total Scope 1 and 2 market-based GHG
emissions fell from 2,351 tCO
2
e in 2024 to 1,882 tCO
2
e,
equivalent of falling from 0.75 tCO
2
e to 0.61 tCO
2
e per
employee and a 20% reduction.
Across the year, our premises continued to source
renewable energy wherever under our control, resulting in
market-based building electricity emissions lower in 2025
than 2024, at just 247 tCO
2
e.
During the year, several structural changes to optimise our
estate and associated energy usage, supported reductions in
our operational footprint, including the closure of buildings
such as 101 Wigmore Street, Olympic Court and Wimbledon
Bridge House.
We also implemented a series of targeted energy efficiency
measures across our estate. At 10 Crown Place, we
introduced a number of boiler efficiency initiatives, including
isolating back-end valves on units out of operation, using
outside air temperature hold-off during the summer to stop
boiler operation, reducing the boiler return setpoint from
70°C to 60°C, reintroducing boiler sequencing and refining
time schedules to remove unnecessary weekend operation.
Time schedules were also added to variable refrigerant flows
(“VRFs”) to optimise performance.
Elsewhere, at Roman House and Spinner Point, the
communications room setpoint was increased to 21°C to
improve efficiency, while at Spinner Point, air conditioning
and lighting were isolated in office areas not in use.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
38

Our operational impacts
Market-based Location-based
Greenhouse gas emissions
1,2,4,5
Emissions source
2025
tCO
2
e
2024
tCO
2
e
2025
tCO
2
e
2024
tCO
2
e
Scope 1
Buildings – fuel and refrigerants
3
176 273 261 301
Owned vehicles – fuel
3
1,347 1,690 1,347 1,690
Total Scope 1
1,523 1,963 1,608 1,991
Of which UK total Scope 1
1,365 1,939 1,449 1,967
Scope 2
Buildings – electricity
3
247 263 609 809
Owned vehicles – electricity
3
112 125 112 125
Total Scope 2
359 388 721 934
Of which UK total Scope 2
347 359 704 899
Total Scope 1 and 2 (Operational)
1,882 2,351 2,329 2,925
Of which UK total Scope 1 and 2
1,712 2,298 2,153 2,866
Scope 3 (Operational)
Category 1 – Purchased goods and services
3
22,119 21,337
Category 2 – Capital goods
3
5,064 8,750
Category 3 – Fuel and energy-related emissions
3
306 386
Category 4 – Upstream transportation and distribution
3
528 587
Category 5 – Waste generated in operations
3
54 24
Category 6 – Business travel
859 649
Category 7 – Employee commuting
3
3,622 3,776
Category 9 – Downstream transport and distribution
3
367 391
Total Scope 3 (Operational)
32,919 35,900
Total Scope 1, 2 and 3 (Operational)
35,248 38,825
Energy use
2025
GWh
2024
GWh
Total energy use
11.17 14.33
Of which UK total energy use
10.76 13.64
Market-based tCO
2
e per
employee
Location-based tCO
2
e
per employee
Emissions intensity
2025 2024 2025 2024
Operational Scope 1 and 2 emissions intensity
0.61 0.75 0.75 0.94
Operational Scope 1, 2 and 3 emissions intensity
11.37 11.32
Calculated using: Average number of employees in year
3,101 3,124 3,101 3,124
1. We have reported on all emission sources required under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon
Report) Regulations 2018. Our reporting year runs from August 2024 to July 2025. The emissions reporting boundary is defined as all entities and
facilities either owned or under our operational control.
2. Emissions have been calculated using the Greenhouse Gas Protocol Corporate Standard and cover all greenhouse gases (converted to tCO
2
e). We
have used emissions factors published by the UK Department for Business, Energy & Industrial Strategy and the International Energy Agency.
3. During the year-end process for carbon accounting, we identified some adjustments needed to our 2024 comparable Scope 1, 2 and 3 emissions. The
2024 Scope 1, 2 and 3 emissions above have been restated to ensure consistency with this year’s disclosed emissions methodologies as well as to
address some issues with the quality of the data collected last year for 2024.
4. 2019 (the baseline year), 2024 and 2025 have been recalculated to exclude the sale of Close Brothers Asset Management but do include emissions
associated with Winterflood Securities and Brewery Rentals.
5. These reported emissions have not been audited by a third party.
Operational efficiencies
In FY 2025, total Scope 1 and 2 market-based GHG
emissions fell from 2,351 tCO
2
e in 2024 to 1,882 tCO
2
e,
equivalent of falling from 0.75 tCO
2
e to 0.61 tCO
2
e per
employee and a 20% reduction.
Across the year, our premises continued to source
renewable energy wherever under our control, resulting in
market-based building electricity emissions lower in 2025
than 2024, at just 247 tCO
2
e.
During the year, several structural changes to optimise our
estate and associated energy usage, supported reductions in
our operational footprint, including the closure of buildings
such as 101 Wigmore Street, Olympic Court and Wimbledon
Bridge House.
We also implemented a series of targeted energy efficiency
measures across our estate. At 10 Crown Place, we
introduced a number of boiler efficiency initiatives, including
isolating back-end valves on units out of operation, using
outside air temperature hold-off during the summer to stop
boiler operation, reducing the boiler return setpoint from
70°C to 60°C, reintroducing boiler sequencing and refining
time schedules to remove unnecessary weekend operation.
Time schedules were also added to variable refrigerant flows
(“VRFs”) to optimise performance.
Elsewhere, at Roman House and Spinner Point, the
communications room setpoint was increased to 21°C to
improve efficiency, while at Spinner Point, air conditioning
and lighting were isolated in office areas not in use.
Sustainability report continued | Task Force on Climate-related Financial Disclosures report
Close Brothers Group plc Annual Report 2025
38
Financed emissions: Banking
Our greatest opportunity, and the focus of our strategy, to
reduce greenhouse gas emissions lies in supporting our
customers’ transition to a low-carbon economy, helping
them adopt energy-efficient and low-carbon technologies.
Measuring progress requires us to quantify the emissions
attributable to the assets and businesses in our loan book,
providing the foundation for meeting the targets and
ambitions set out in our climate strategy.
We have refined our financed emissions reporting, continuing
to enhance our framework and supporting data. Set out
below is our assessment of financed emissions relating to
our loan book on 31 July 2025.
We have continued to refine our financed emissions
assessment by combining loan book data with external
sources, working alongside peers in PCAF to refine
methodologies, particularly for carbon-intensive sectors such
as transport.
Our 2025 assessment applied the latest PCAF Financed
Emissions Standard (2nd edition), using methodologies for
business loans, project finance and motor vehicle loans. In
total, 95.9% of our loan book is now in scope of GHG
assessment. Of this:
• 57.1% was assessed under the business loans
methodology, with emissions apportioned in line with
financed value;
• 2.8% under the project finance methodology, accounting
for our share of project emissions; and
• 36.0% under the motor vehicle loans methodology,
covering annual in-use emissions of financed vehicles.
Our financed impacts: Banking
2,4
2025 2024
Financed emissions in loan
book – Bank
PCAF methodology
Proportion
of loan
book
Financed
emissions
1,2
tCO
2
e
PCAF data
quality
score
Economic
emissions
intensity
ktCO
2
e/
£ million
Proportion
of loan
book
Financed
emissions
1,2
tCO
2
e
PCAF data
quality score
Economic
emissions
intensity
ktCO
2
e/
£ million
Scope 3 (category 15
– loan book only)
Motor vehicle
loans
36.0% 550,321 2.9 0.16 35.8% 595,124 2.8 0.17
Business loans
57.1% 336,738 5.0 0.06 56.1% 326,655 5.0 0.06
Project finance
2.8% 228,267 5.0 0.85 2.7% 242,849 5.0 0.91
Not assessed/
out of scope
3
4.1% 5.4%
Financed
emissions
1,2
tCO
2
e
PCAF data
quality
score
Financed
emissions
1,2
tCO
2
e
PCAF data
quality score
Scope 3 (category 13
– downstream leased
assets)
Related to
Vehicle Hire
188,242 1.0 270,948 1.0
Total emissions tCO
2
e 1,303,568 1,435,576
1. Currently, our financed emissions calculations only include the customer or asset’s Scope 1 and 2 emissions. In the future, we will consider the wider
emissions related to financed assets and businesses. Initial sectors are likely to include (i) motor vehicles (upstream embedded emissions of
manufacture) and (ii) property construction finance (embedded emissions from materials and in-use emissions of housing).
2. PCAF data quality score takes values from 1 (high) to 5 (low). Our first assessment in 2022 was around 5. We have made significant improvements to
our data sourcing from both internal systems and third-party sources. For motor vehicles, we have sourced vehicle-specific emissions and actual
mileage from UK government agencies.
3. A small proportion of our loan book has not been assessed this year (or is out of scope) due to lack of market-agreed carbon accounting
methodologies. We continue to work with PCAF and other banks to consider these areas.
4. These reported emissions have not been audited by a third party.
5. Total baseline carbon consumption (excluding CBAM) in 2019 – 4,019 tCO
2
e.
39
Strategic report Governance report Financial statements

Sustainability across our businesses
The distinctive strengths of our business model are enabled by the deep expertise we have in specialist markets, the
consistent and personalised service we provide to customers, and the long-term relationships we build across markets. These
same strengths drive our approach to financing the climate transition, through our deep market knowledge, expertise in green
asset classes and strong customer relationships. Our flexible and prudent approach is focused on striking the right balance
between risk and commercial viability.
Sustainability in action
Retail
There are currently around 4-4.5 million
UK drivers who own/use an Alternative
Fuelled Vehicle (“AFV”). To capitalise on
this market opportunity, Close Brothers
Motor Finance recently developed a new
Personal Contract Purchase (“PCP”)
product for electric vehicles. In addition,
we also expanded the existing
parameters for hybrid vehicles on PCP,
and electric vehicles on our conditional
sale and hire purchase products. This
product evolution demonstrates how we
are supporting customers in their energy
transition.
Commercial
The Close Brothers Energy team has been
established for over 10 years, successfully
funding multiple renewable energy projects
totalling over £3 billion. This equates to 1,202MW
of installed generation. Typical funding projects
focus on traditional renewables, solar farms and
onshore wind farms, and also a range of reserve
energy assets, including battery energy storage
systems, peaking power plants, as well as
combined heat and power plants and hydro
schemes.
The team recently announced the provision of
funding for 8 Minute Energy's Ilton solar farm.
The plant, located in Somerset, has a capacity
ofjust under 2MWp and will provide clean,
renewable energy direct to the local grid,
improving energy security. It will also support
biodiversity by maintaining a wildlife-friendly
design while using low-grade farmland.
Property
Close Brothers Property Finance is proud to be
supporting Stonehouse Wood Homes, an SME
housebuilder currently delivering two spacious,
low-energy homes in Dorking, Surrey.
One of the homes is designed in a traditional
style to replace an existing dwelling and the
second property is alarge family home with a
contemporary design. Both homes are being
built to fully green credentials, aiming for an EPC
rating of A, and designed to meet the growing
demand for low-carbon living.
As a lender, we recognise the importance of
supporting sustainable development. Funding
homes that reduce environmental impact is not
only vital for the future of the housing market,
but also increasingly valued by buyers and
communities. We are committed to helping SME
housebuilders deliver high-quality, energy-
efficient homes, and proud to be working with
Stonehouse Wood on this forward-thinking
project.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
40

Sustainability across our businesses
The distinctive strengths of our business model are enabled by the deep expertise we have in specialist markets, the
consistent and personalised service we provide to customers, and the long-term relationships we build across markets. These
same strengths drive our approach to financing the climate transition, through our deep market knowledge, expertise in green
asset classes and strong customer relationships. Our flexible and prudent approach is focused on striking the right balance
between risk and commercial viability.
Sustainability in action
Retail
There are currently around 4-4.5 million
UK drivers who own/use an Alternative
Fuelled Vehicle (“AFV”). To capitalise on
this market opportunity, Close Brothers
Motor Finance recently developed a new
Personal Contract Purchase (“PCP”)
product for electric vehicles. In addition,
we also expanded the existing
parameters for hybrid vehicles on PCP,
and electric vehicles on our conditional
sale and hire purchase products. This
product evolution demonstrates how we
are supporting customers in their energy
transition.
Commercial
The Close Brothers Energy team has been
established for over 10 years, successfully
funding multiple renewable energy projects
totalling over £3 billion. This equates to 1,202MW
of installed generation. Typical funding projects
focus on traditional renewables, solar farms and
onshore wind farms, and also a range of reserve
energy assets, including battery energy storage
systems, peaking power plants, as well as
combined heat and power plants and hydro
schemes.
The team recently announced the provision of
funding for 8 Minute Energy's Ilton solar farm.
The plant, located in Somerset, has a capacity
ofjust under 2MWp and will provide clean,
renewable energy direct to the local grid,
improving energy security. It will also support
biodiversity by maintaining a wildlife-friendly
design while using low-grade farmland.
Property
Close Brothers Property Finance is proud to be
supporting Stonehouse Wood Homes, an SME
housebuilder currently delivering two spacious,
low-energy homes in Dorking, Surrey.
One of the homes is designed in a traditional
style to replace an existing dwelling and the
second property is alarge family home with a
contemporary design. Both homes are being
built to fully green credentials, aiming for an EPC
rating of A, and designed to meet the growing
demand for low-carbon living.
As a lender, we recognise the importance of
supporting sustainable development. Funding
homes that reduce environmental impact is not
only vital for the future of the housing market,
but also increasingly valued by buyers and
communities. We are committed to helping SME
housebuilders deliver high-quality, energy-
efficient homes, and proud to be working with
Stonehouse Wood on this forward-thinking
project.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
40
Our policies
We are committed to acting responsibly through all our ways
of working, and have a number of group-wide policies and
procedures in place to ensure we continue to operate in a
socially responsible and compliant manner. Below is a list of
group policies which are relevant to the sustainability report.
Dignity at Work Policy
Our Dignity at Work Policy outlines the type of behaviour that
the company considers to be unacceptable and explains
what solutions there are if any employee has experienced or
believes someone else has experienced any discrimination,
harassment or bullying at work.
We ensure equal opportunities for all, including having a
commitment as part of our Dignity at Work Policy to ensure
no employee is subject to discrimination. This applies to all
work contexts, as well as all employee life cycle events, for
example in recruitment, training, promotion and flexible
working requests.
We strive to create an environment where employees feel
safe and supported to self-identify whether they consider
that they have a disability, to have open conversations with
their managers, raise issues and discuss their specific
workplace adjustment needs, and for the company to
provide the appropriate support to assess and implement
any reasonable adjustments. We also partner with Hidden
Disabilities and Inclusive Employers to support our inclusive
approach to hiring, retention, training, career development
and promotion of employees with disabilities.
Whistleblowing Policy
We provide a simple, transparent and secure environment for
our employees, shareholders and other stakeholders to raise
concerns about any potential wrongdoing within the
company.
We encourage our employees to report any activity that may
constitute a violation of laws, regulations or internal policy,
and reporting channels are provided to staff for this purpose
within the framework of a Whistleblowing Policy.
Employee Health and Safety Policy
Our Health and Safety Policy demonstrates our commitment
to ensuring our employees and visitors are safe and sets the
framework for our safety culture. We continue to provide a
safe and healthy working environment for our employees and
visitors in accordance with the Health and Safety at Work
etc. Act 1974 and the Management of Health and Safety at
Work Regulations 1999.
The Health and Safety Committee continues to meet on a
quarterly basis, and we are proud of the ongoing progress in
successfully raising the profile of health and safety across
the business. This year we recorded 23 incidents across all
our sites. We continue to use an online risk assessment tool
to manage site-specific risks as appropriate and our Display
Screen Equipment risk assessment programme. We also
carry out annual audits of all premises and monitor findings
through a live dashboard.
Data Protection Policy
Our Data Protection Policy codifies our approach to protecting
personal data, in line with all relevant Data Protection
legislation where we operate. It sets out our core principles
on how personal data can be processed, and is supported
by a number of Standards which detail controls to ensure
compliant processing of personal data through its life cycle.
We have a nominated Data Protection Officer who is
accountable for the firm’s approach to data protection
management, a Chief Information Security Officer
accountable for our approach to cyber security, and a
broader operating model in which the data protection and
security requirements are embedded in operations
throughout the organisation.
Financial Crime Policy
Our policies and standards are intended to prevent the
group, employees, customers and any other associations or
representatives from being used for the purposes of financial
crime, including, but not limited to, money laundering,
terrorist financing, facilitation of tax evasion and
circumvention of financial sanctions.
We are committed to carrying out business fairly, honestly
and openly, operating a zero-tolerance approach to bribery
and corruption. We are dedicated to ensuring full compliance
with all applicable anti-bribery and corruption laws and
regulations, including the UK Bribery Act 2010.
Board Diversity and Inclusion Policy
The Board is committed to ensuring it collectively possesses
the right balance of skills and diversity to ensure the success
of the group. Our Board Diversity and Inclusion Policy, which
applies to both the Board and its committees, sets out
specific objectives with regard to diversity and inclusion in
the boardroom, the recruitment of new directors, and longer-
term targets, as well as corresponding governance
responsibilities.
The Board fosters an inclusive culture which allows views
from all perspectives to be given due consideration and
enables the Board to consider the needs and expectations of
all its stakeholders.
Human Rights and Modern Slavery Act
The Board gives due regard to human rights considerations,
as defined under the European Convention on Human Rights
and the UK Human Rights Act 1998. We are aware of our
responsibilities and obligations under the Modern Slavery
Act, with the appropriate policies and training in place to
enable compliance across the organisation.
The Banking division has also committed to the CIPS Ethical
Code of Conduct, which supports our commitment to
preventing modern slavery from existing within our supply
chain. Further details of our compliance with the Modern
Slavery Act can be found on our website.
Tax Strategy
We are committed to complying with our tax obligations and
doing so in a manner consistent with the spirit as well as the
letter of tax laws. This includes a transparent and
cooperative relationship with the tax authorities. Our tax
obligations arise mainly in the UK, where our operations and
customers are predominantly based. Our straightforward
business model reduces the complexity of our tax affairs and
helps us maintain a lower risk tax profile. Further details of
our approach to tax can be found on our website.
41
Strategic report Governance report Financial statements

Our people
Valuing our people
We are committed to creating an environment where our
colleagues feel motivated, proud to work for us and can
reach their full potential. A key enabler for our overall
business success is our inclusive culture. We are proud to
create an environment where colleagues can thrive and, in
turn, deliver excellent outcomes for our customers and
partners.
The “Close Brothers Way” Code of Conduct sets out the
values and behaviours we expect from our people. Our
culture is defined through our cultural attributes. These are
displayed by our senior leadership teams, setting the tone
from the top by which we operate. We continue to run
inclusive leadership training sessions for our managers,
senior managers and group executives, highlighting how
actions and behaviours can shape our inclusive culture.
We recognise that the behaviours of line managers and
leaders, and their role modelling of our values, directly
influence psychological safety, employee engagement,
motivation and satisfaction. This in turn impacts productivity,
retention and customer outcomes. The 2025 financial year
saw the introduction of a mandatory Diversity and Inclusion
(“D&I”) objective for all line managers, encouraging authentic
inclusion and practical acts of allyship throughout the
employee life cycle.
We are committed to attracting, developing and retaining the
best talent, and we actively seek diversity – it applies to all of
us and goes beyond visible or demographic characteristics.
It includes diversity of thought, working styles, skills and
experience. We continue to champion inclusive recruitment
practices and aim to attract a diverse group of candidates for
every open job role.
Portraying a genuine, authentic view of our culture externally
remains a key focus to support talent attraction. Following its
success last year, in January 2025, we relaunched our
Employee Brand Ambassador programme with over 25
delegates attending a series of sessions over a six-month
period. The aim of the programme was to promote and
enhance our employer brand, generating positive awareness
and engagement, and encouraging others to do the same.
We are signatories to a wide range of charters and
commitments across a broad spectrum of inclusion themes,
including: the Women in Finance Charter, Race at Work
Charter, The Valuable 500, Mental Health at Work
Commitment, Disability Confident Employer Scheme and the
Armed Forces Covenant. We partner with leading
organisations and participate in wider membership bodies,
including Stonewall, Hidden Disabilities and Inclusive
Employers, to help inform our thinking and subsequent
actions.
We are proud of the enthusiasm, passion and hard work of
our eight group-wide employee inclusion networks, two
working groups and multiple local D&I forums. These include
our newly launched Intergenerational Network and our
Wellbeing Network, which combines our previous
Accessibility and Mental Wellbeing Networks. Ongoing
collaboration across our networks helps create a deeper
level of understanding and supports our commitment to
intersectionality. Each of our networks is supported by an
Executive Sponsor, and in 2024, we formalised the
expectations and commitments of these roles. The Group
Executive Committee members are committed to role
modelling inclusive behaviours by sponsoring events and
promoting D&I across their business areas.
We celebrate National Inclusion Week group-wide, as well as
culture weeks locally in our business areas. Our employee
networks, groups and forums further deliver excellent
sessions and employee engagement opportunities
throughout the year. Examples include Black History Month,
Social Mobility Day, Mental Health Awareness Week, book
and film clubs and bring your child to work days.
Throughout the year, we have been recognised for our
efforts through a number of awards. In relation to D&I, we
were awarded the “Most Open Culture” award at the
Menopause Friendly Employer Awards in September 2024,
and were subsequently accredited as a “Menopause Friendly
Employer” in February 2025. We were also recognised as
one of The Times Top 50 employers for gender equity and
have received a “Silver Award” from the Defence Employer
Recognition Scheme of the Ministry of Defence in support of
our efforts for veterans. More broadly, we were a “Gold
Award” winner for Culture and Inclusion at the Collaboration
Network Awards in October 2024 and were listed in the top
500 companies in the Financial Times UK's Best Employers
index. We have also been shortlisted for a “Best Practice
Award” and “Best Employee Support Network” at the
Employers’ Excellence Awards.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
42

Our people
Valuing our people
We are committed to creating an environment where our
colleagues feel motivated, proud to work for us and can
reach their full potential. A key enabler for our overall
business success is our inclusive culture. We are proud to
create an environment where colleagues can thrive and, in
turn, deliver excellent outcomes for our customers and
partners.
The “Close Brothers Way” Code of Conduct sets out the
values and behaviours we expect from our people. Our
culture is defined through our cultural attributes. These are
displayed by our senior leadership teams, setting the tone
from the top by which we operate. We continue to run
inclusive leadership training sessions for our managers,
senior managers and group executives, highlighting how
actions and behaviours can shape our inclusive culture.
We recognise that the behaviours of line managers and
leaders, and their role modelling of our values, directly
influence psychological safety, employee engagement,
motivation and satisfaction. This in turn impacts productivity,
retention and customer outcomes. The 2025 financial year
saw the introduction of a mandatory Diversity and Inclusion
(“D&I”) objective for all line managers, encouraging authentic
inclusion and practical acts of allyship throughout the
employee life cycle.
We are committed to attracting, developing and retaining the
best talent, and we actively seek diversity – it applies to all of
us and goes beyond visible or demographic characteristics.
It includes diversity of thought, working styles, skills and
experience. We continue to champion inclusive recruitment
practices and aim to attract a diverse group of candidates for
every open job role.
Portraying a genuine, authentic view of our culture externally
remains a key focus to support talent attraction. Following its
success last year, in January 2025, we relaunched our
Employee Brand Ambassador programme with over 25
delegates attending a series of sessions over a six-month
period. The aim of the programme was to promote and
enhance our employer brand, generating positive awareness
and engagement, and encouraging others to do the same.
We are signatories to a wide range of charters and
commitments across a broad spectrum of inclusion themes,
including: the Women in Finance Charter, Race at Work
Charter, The Valuable 500, Mental Health at Work
Commitment, Disability Confident Employer Scheme and the
Armed Forces Covenant. We partner with leading
organisations and participate in wider membership bodies,
including Stonewall, Hidden Disabilities and Inclusive
Employers, to help inform our thinking and subsequent
actions.
We are proud of the enthusiasm, passion and hard work of
our eight group-wide employee inclusion networks, two
working groups and multiple local D&I forums. These include
our newly launched Intergenerational Network and our
Wellbeing Network, which combines our previous
Accessibility and Mental Wellbeing Networks. Ongoing
collaboration across our networks helps create a deeper
level of understanding and supports our commitment to
intersectionality. Each of our networks is supported by an
Executive Sponsor, and in 2024, we formalised the
expectations and commitments of these roles. The Group
Executive Committee members are committed to role
modelling inclusive behaviours by sponsoring events and
promoting D&I across their business areas.
We celebrate National Inclusion Week group-wide, as well as
culture weeks locally in our business areas. Our employee
networks, groups and forums further deliver excellent
sessions and employee engagement opportunities
throughout the year. Examples include Black History Month,
Social Mobility Day, Mental Health Awareness Week, book
and film clubs and bring your child to work days.
Throughout the year, we have been recognised for our
efforts through a number of awards. In relation to D&I, we
were awarded the “Most Open Culture” award at the
Menopause Friendly Employer Awards in September 2024,
and were subsequently accredited as a “Menopause Friendly
Employer” in February 2025. We were also recognised as
one of The Times Top 50 employers for gender equity and
have received a “Silver Award” from the Defence Employer
Recognition Scheme of the Ministry of Defence in support of
our efforts for veterans. More broadly, we were a “Gold
Award” winner for Culture and Inclusion at the Collaboration
Network Awards in October 2024 and were listed in the top
500 companies in the Financial Times UK's Best Employers
index. We have also been shortlisted for a “Best Practice
Award” and “Best Employee Support Network” at the
Employers’ Excellence Awards.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
42
Our Executive-sponsored inclusionnetworks
Wellbeing Network
Ian Cowie
Recognises the importance of
addressing the needs of all our
colleagues and making our
workplace accessible for all.
Unity Network and
VeteransNetwork
Rebekah Etherington
Veterans Network: Aims to help
with attraction and recruitment of
those leaving the Armed Forces.
Unity Network: Committed to
creating an LGBTQ+ inclusive
environment at work.
Gender Balance Network
Phil Hooper
Committed to identifying and
challenging imbalances to improve
gender equality at every level.
Cultural Heritage Network
Naz Kazi
Aims to improve cultural awareness
and understanding so that
regardless of background all
colleagues feel a sense of belonging
and are empowered to be allies to
each other.
Working Parents and
CarersNetwork
Sarah Peazer-Davies
Formed to ensure that all colleagues
feel supported and aware of the
resources and tools available to help
them find a work-life balance.
Social Mobility Network
Matt Roper
Aims to support the business in
attracting, developing and retaining
employees from all socio-economic
backgrounds so that the company
can reflect the communities that we
serve.
Intergenerational Network
Robert Sack
Connects colleagues across multiple
age brackets and helps unlock the
collective wisdom of generations to
drive innovation, success and
growth across the organisation.
Diversity and Inclusion strategy update
We recognise that, to help the people and businesses we
work with thrive over the long term, we have a responsibility
to help address the social, economic and environmental
challenges facing our business, employees and customers.
Diversity and Inclusion (“D&I”) are embedded into our values
and culture internally, and we also know that in a changing
external environment, embedding inclusion into our ways of
working with customers and external partners is becoming
increasingly important. In 2024, we designed a three-year
D&I strategy and action plan.
Our D&I strategy has three focus areas:
1. Attracting and recruiting more diverse talent and
supporting colleagues throughout their careers.
As part of our strategy commitments, in 2024 we completed
an end-to-end review of our recruitment process through an
inclusion lens. We are now implementing key actions
including emphasising accessibility for candidates during
onboarding.
All of our job advertisements are carefully assessed for
inclusive language and we remove unnecessary criteria such
as degree, qualifications or experience requirements where
not essential. We now advertise our roles with flexible
working arrangements, including part time and job share
options.
We aim for balanced shortlists in both direct recruitment and
through partner agencies and ensure interview panels are
diverse and gender-balanced where possible.
Additionally, we recently updated the content of our “Licence
to Recruit” training, emphasising inclusive hiring practices
and reinforcing our commitment to embedding D&I
throughout our recruitment process.
2. Increasing psychological safety to maintain our strong
inclusive culture.
We take pride in the dedication and hard work of our eight
group-wide employee inclusion networks. Our networks
provide valuable insights and focus groups, complementing
our annual employee opinion survey in capturing colleague
feedback. Demographic analysis of both quantitative and
qualitative data informs initiatives to enhance our culture.
In our most recent employee opinion survey, 90% of
colleagues stated that they feel safe to speak up in their
teams and 93% feel comfortable to contribute in meetings.
We promote awareness through National Inclusion Week and
local culture weeks, emphasising psychological safety, a key
pillar of our strategy.
3. Delivering good, sustainable outcomes for our
customers, and embedding inclusion in our
interactions with customers, suppliers, charities and
corporate partners.
Our lending businesses lead ongoing efforts to support
vulnerable customers and integrate inclusion into daily
operations, exemplifying how we embed our D&I strategy
with both colleagues and customers.
Early in the 2025 financial year, we aligned our corporate
sponsored charities with our inclusion networks to better
synchronise corporate social responsibility with our Diversity
& Inclusion strategic objectives and amplify community
impact. Broader corporate sponsorship decisions are also
evaluated through a Diversity & Inclusion lens to ensure they
are equitable and inclusive.
43
Strategic report Governance report Financial statements

Gender diversity
31 July 2025
Male Female
Number of Board Directors
1
4 4
Number of Subsidiary Directors
2
36 6
Number of Senior Managers other than
Board Directors
3
38 32
Number of employees other than Board
Directors and senior employees
1,610 1,351
Total
1,688 1,393
1. Includes non-executive directors, excluded from group headcount
calculations.
2. Includes subsidiary directors who are excluded from group headcount
calculations.
3. Following a recent review, we redefined senior management as the
Group Executive Committee and their direct reports, excluding
Executive Assistants. This definition is aligned with our diversity
representation targets for 2025-2027 and industry practice, and reflects
level of seniority and influence across the organisation.
Engagement
Listening to the views of our colleagues is essential to drive
and maintain employee engagement, ensuring our culture is
one where everyone feels like they belong, can thrive and is
proud to work for us.
Our latest employee opinion survey closed in February 2025
with an excellent response rate of 89% (2024: 72%) giving us
the confidence that our results are reflective of the views of
our colleagues. Our engagement score dropped slightly to
78% (2024: 83%) but overall, we retained a strong set of
results, particularly around our customers, and our
colleagues feeling a sense of belonging. 96% (2024: 94%) of
colleagues believe our culture encourages them to treat
customers and clients fairly and 91% (2024: 90%) of
colleagues feel included.
This year, we worked with a new provider to host our
employee opinion survey. This gave us the ability to assess
our scores against external benchmarks, demonstrating
positive comparisons with other UK financial services firms.
In addition to our group-wide survey, we have continued to
gather data at different stages of the employee life cycle in
support of our ongoing employee listening strategy. Our
employee experience team engages directly with colleagues
at the point of joining, returning from parental leave and
when celebrating work anniversaries. Colleagues are asked
to complete short surveys to share their views on company
culture and their personal experiences of working at Close
Brothers. “Inclusive”, “friendly”, “collaborative”, “people-
orientated”, “open” and “supportive” were some of the most
commonly used words to describe our culture.
Supporting our people
All employees have access to our 24/7 Employee Assistance
Programme, mental health first aiders and the Thrive app
that offers techniques for meditation and cognitive
behavioural therapy. Employees can also book one
additional day a year off to focus on their mental health and
wellbeing. Our Wellbeing Network further supports us with
education and awareness-raising initiatives.
Our benefits are regularly reviewed and publicised. We
support everyday flexible working – empowering colleagues
to achieve an optimal work/life balance. We are seeking to
enhance Close Brothers’ reputation as a family-friendly
workplace through the provision of benefits such as
emergency care cover and paid time off for fertility treatment
for both partners.
The group continues to pay all staff at or above the national
living wage. For members of the group’s pension plans, we
contribute between 6% and 10% towards colleagues’
pensions, which is above required levels. We offer both a
Save As You Earn scheme as well as a Buy As You Earn
share incentive plan, which allow employees to acquire
shares on a monthly basis out of pre-tax earnings.
Participation rates in our long-term ownership schemes
remain strong at 43% of all permanent and fixed term
employees who are eligible.
Development programmes
We run two internship programmes in partnership with
10,000 Interns Foundation and upReach. These aim to
increase social mobility and ethnic diversity in our industry
and organisation. Externally, we partner with Moving Ahead
on mentorship programmes for women and all under-
represented groups.
Over the past 10 years the Close Brothers SME Apprentice
Programme has helped to part fund over 100
apprenticeships by partnering with the AMRC Training
Centre, Make UK, the Manufacturing Technologies
Association, and the Road Haulage Association. As part of
our responsibility to help address the social and economic
challenges facing businesses today, the programme helps
SMEs to fill skills gaps, develop their future workforce and
improve long-term growth prospects, while providing a vital
opportunity to invest in local talent.
Developing our people
We provide a full range of training and development for our
people irrespective of where they are in their careers. We
work with our colleagues from induction through to
management, leadership, talent development programmes
and supporting professional development qualifications as
well as utilising the apprenticeship levy where appropriate.
Our workforce remains diverse, with 45% (2024: 46%)
female employees, and we have a broad age range of
employees, with 16% (2024: 21%) of our employees being
under 30 years old and 18% (2024: 22%) over 50.
All colleagues have access to our learning portal where they
can access a broad range of learning offerings including
virtual workshops, e-learning modules and practical tools on
a wide variety of topics. The average number of training
hours across the group was 16 per employee during the year.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
44

Gender diversity
31 July 2025
Male Female
Number of Board Directors
1
4 4
Number of Subsidiary Directors
2
36 6
Number of Senior Managers other than
Board Directors
3
38 32
Number of employees other than Board
Directors and senior employees
1,610 1,351
Total
1,688 1,393
1. Includes non-executive directors, excluded from group headcount
calculations.
2. Includes subsidiary directors who are excluded from group headcount
calculations.
3. Following a recent review, we redefined senior management as the
Group Executive Committee and their direct reports, excluding
Executive Assistants. This definition is aligned with our diversity
representation targets for 2025-2027 and industry practice, and reflects
level of seniority and influence across the organisation.
Engagement
Listening to the views of our colleagues is essential to drive
and maintain employee engagement, ensuring our culture is
one where everyone feels like they belong, can thrive and is
proud to work for us.
Our latest employee opinion survey closed in February 2025
with an excellent response rate of 89% (2024: 72%) giving us
the confidence that our results are reflective of the views of
our colleagues. Our engagement score dropped slightly to
78% (2024: 83%) but overall, we retained a strong set of
results, particularly around our customers, and our
colleagues feeling a sense of belonging. 96% (2024: 94%) of
colleagues believe our culture encourages them to treat
customers and clients fairly and 91% (2024: 90%) of
colleagues feel included.
This year, we worked with a new provider to host our
employee opinion survey. This gave us the ability to assess
our scores against external benchmarks, demonstrating
positive comparisons with other UK financial services firms.
In addition to our group-wide survey, we have continued to
gather data at different stages of the employee life cycle in
support of our ongoing employee listening strategy. Our
employee experience team engages directly with colleagues
at the point of joining, returning from parental leave and
when celebrating work anniversaries. Colleagues are asked
to complete short surveys to share their views on company
culture and their personal experiences of working at Close
Brothers. “Inclusive”, “friendly”, “collaborative”, “people-
orientated”, “open” and “supportive” were some of the most
commonly used words to describe our culture.
Supporting our people
All employees have access to our 24/7 Employee Assistance
Programme, mental health first aiders and the Thrive app
that offers techniques for meditation and cognitive
behavioural therapy. Employees can also book one
additional day a year off to focus on their mental health and
wellbeing. Our Wellbeing Network further supports us with
education and awareness-raising initiatives.
Our benefits are regularly reviewed and publicised. We
support everyday flexible working – empowering colleagues
to achieve an optimal work/life balance. We are seeking to
enhance Close Brothers’ reputation as a family-friendly
workplace through the provision of benefits such as
emergency care cover and paid time off for fertility treatment
for both partners.
The group continues to pay all staff at or above the national
living wage. For members of the group’s pension plans, we
contribute between 6% and 10% towards colleagues’
pensions, which is above required levels. We offer both a
Save As You Earn scheme as well as a Buy As You Earn
share incentive plan, which allow employees to acquire
shares on a monthly basis out of pre-tax earnings.
Participation rates in our long-term ownership schemes
remain strong at 43% of all permanent and fixed term
employees who are eligible.
Development programmes
We run two internship programmes in partnership with
10,000 Interns Foundation and upReach. These aim to
increase social mobility and ethnic diversity in our industry
and organisation. Externally, we partner with Moving Ahead
on mentorship programmes for women and all under-
represented groups.
Over the past 10 years the Close Brothers SME Apprentice
Programme has helped to part fund over 100
apprenticeships by partnering with the AMRC Training
Centre, Make UK, the Manufacturing Technologies
Association, and the Road Haulage Association. As part of
our responsibility to help address the social and economic
challenges facing businesses today, the programme helps
SMEs to fill skills gaps, develop their future workforce and
improve long-term growth prospects, while providing a vital
opportunity to invest in local talent.
Developing our people
We provide a full range of training and development for our
people irrespective of where they are in their careers. We
work with our colleagues from induction through to
management, leadership, talent development programmes
and supporting professional development qualifications as
well as utilising the apprenticeship levy where appropriate.
Our workforce remains diverse, with 45% (2024: 46%)
female employees, and we have a broad age range of
employees, with 16% (2024: 21%) of our employees being
under 30 years old and 18% (2024: 22%) over 50.
All colleagues have access to our learning portal where they
can access a broad range of learning offerings including
virtual workshops, e-learning modules and practical tools on
a wide variety of topics. The average number of training
hours across the group was 16 per employee during the year.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
44
We require all employees to complete relevant regulatory
training on an annual basis with further training offered when
required. This year, we maintained our 100% completion rate
of mandatory training by the last working day of the financial
year.
We continue to run open application processes for cross-
company mentoring schemes that are delivered in
partnership with Moving Ahead; these include both Mission
Include, supporting those who identify as being from a
minority background, and Gender Equity, with a focus on
supporting women in progressing to senior roles. In 2025, we
received the runner-up award for the most Dynamic
Mentoring Organisation of the year in the Inspired by
Mentoring Awards for the Mission Include programme.
The formal development of our talent pipeline remains a key
focus. We continue to support those nearing completion of
our school leaver and graduate programmes where cohorts
seek permanent roles across the group. To support our high
potential colleagues, our emerging leaders programme from
the 2024 financial year saw 19 individuals across the group
take part. 47% of the cohort have received a promotion,
secondment opportunity or moved internally following
completion of the programme.
To support our inclusive culture through further embedding
our Code of Conduct, we continue to ensure all colleagues
receive our “Close Brothers Way” e-learning module,
focusing on our cultural attributes and expected behaviours.
We worked with members of our employee inclusion
networks to update the content this year.
Employees in the community
Creating long-term, lasting value in the communities where
we operate, remains a key priority for the group. We
understand that volunteers are often the driving force behind
many community and charity activities and we are
committed to supporting our employees to get involved in
these wherever possible.
As part of the relationships we have with our charity partners,
we encourage employee engagement through involvement in
the volunteering initiatives offered. For every hour of
volunteered time, we donate £13.85 directly to the charity
under our Matched Giving Scheme, and we also encourage
people to take advantage of one paid volunteering day each
year through our Employee Volunteering Policy.
In the 2025 financial year, over 100 colleagues made use of
their volunteering day to positively impact local communities,
including volunteering at food banks, animal shelters and
community gardening projects. Many colleagues continue to
claim through our matched giving scheme to volunteer with
charitable youth groups including Guides, Scouts and Cadet
groups and children’s sports teams.
Our partnership with the children’s literacy charity, Bookmark
Reading, continues and last year we reached the milestone
of being the first corporate volunteering partner to deliver
over 1,000 reading sessions for the charity. This relationship
is managed by our Working Parents and Carers Network
which enthusiastically raises awareness of volunteering
opportunities with colleagues through internal
communications and webinars to encourage more people to
sign up as virtual reading volunteers.
Our relationship with Smart Works, a charity supporting
women to get into employment, is proactively managed by
our Gender Balance Network. As well as supporting
fundraising efforts, they have also collaborated through
hosting a roundtable to discuss the future strategy of the
charity.
Our colleagues have also volunteered with our other
corporate charities, including carrying out “Wild at Work”
days with The Wildlife Trusts.
Charity
Our two main corporate charity partners are chosen by our
colleagues as part of our employee opinion survey and these
remain Make-A-Wish Foundation, who grant wishes for
children with life-threatening illnesses, and Cancer Research
UK, which we have now supported for 12 consecutive years.
To date, we are delighted to have raised over £695,000 for
Cancer Research UK as well as donating clothing and items
to be sold across their 600 shops, nationwide.
Over the last five years, we have raised over £270,000 for
Make-A-Wish Foundation, enabling them to grant over 135
magical wishes for critically ill children and their families.
We have a dedicated committee for charitable and
community activities chaired by our Group Head of Human
Resources and supported by employees from across the
group. This committee meets regularly to discuss and
propose new initiatives with input from our control functions
when required. We also have several local committees which
plan and run initiatives to raise funds for local charities.
Alongside our group-wide charity week in May, we also ran
many other events throughout the year to raise funds for
other charitable causes. We supported “Bring your dog to
work day” raising money for Dogs for Good and we ran a
Christmas jumper day to raise money for Save the Children.
Several of our employee-led networks have encouraged
charitable giving alongside their events, with our Unity
Network raising money for the Terrence Higgins Trust and
our Wellbeing Network fundraising for Guide Dogs through
celebrating World Sight Day, and the Motor Neurone Disease
Association through Disability Pride Month and a sponsored
charity walk.
We had 65 colleagues sign up to donate blood as part of an
annual campaign, raising £650 for ASSET, the “Adrian
Sudbury School's Education Trust”, through Close Brothers
donating an amount for every colleague who signed up.
We match 50% of funds that our colleagues raise for
charities under the Close Brothers Matched Giving Scheme.
We also encourage our employees to collaborate on raising
money for causes that are most meaningful to them by
matching funds raised through locally organised fundraising
events and activities.
This year we have continued to support
additional charities that align with our ESG
goals, donating a total of £100,000 to
Bookmark Reading, Smart Works, Stop Hate
UK and The Wildlife Trusts. In response to the
earthquake in Myanmar we also donated over
£1,500 to date, including matching 100% of
colleague donations, to the British Red Cross in
support of their politically neutral Disaster Fund.
Our Payroll Giving Scheme matches charitable contributions
while allowing employee donations to be made directly from
pre-tax salary. In our 15th consecutive year of recognition
from Payroll Giving, this year we have received a Diamond
Quality Mark for the first time. This is the highest level award
available and is only given to employers with at least 30%
participation across their employee base.
45
Strategic report Governance report Financial statements

Our customer commitment
The needs and expectations of our customers and partners
are evolving. At Close Brothers we continue to adapt and
enhance our specialist expertise to meet these needs and
expectations, whilst ensuring fairness and helping our
customers thrive.
Our customer principles keep the customer at the heart of
all we do: we do the right thing for customers and partners;
we are flexible, responsive and execute with speed; we make
decisions informed by our specialist expertise; and we build
relationships based on quality and trust.
This is supported by our Customer Commitment Framework,
which sets out how we want our customers and our
colleagues to feel: valued, happy, understood, confident,
and that it is easy to do business with us.
This commitment embeds our customer-centric approach
across the group by developing our customer experience
skills, focusing on customer metrics, providing recognition
for delivering good customer experience and ensuring strong
governance. We are committed to designing and delivering
products, services and experiences which deliver good
outcomes for our customers.
Voice of the customer
Effective customer experience measurement is a key priority
across all of our businesses so that we listen, learn and act.
We have been running customer forums in a number of
businesses for over 10 years and in that time we have been
developing our capabilities and governance to bring the
voice of the customer into our day-to-day decision-making
processes.
At Close Brothers, we use feedback from our forums and
monitoring metrics to improve processes, collaborate
and innovate on opportunities to enhance
the
customer experience. For example, we have extended our
“language line” to support Motor Finance customers. This
functionality, which is already available in Premium Finance,
is designed for customers where English is not their first
language.
Changes have also been made so that we can identify
vulnerable customers through automated processes and
additional training is provided to contact centre colleagues.
In Savings, a dedicated Extra Support Group and forum
supports better understanding and ability to respond to the
needs of vulnerable customers. This includes offering
alternative communication formats and developing a new
Extra Support hub to signpost available services.
We continue to monitor customer sentiment across each of
our business areas by gathering feedback regularly. We are
pleased with the strong responses from across our diverse
customer groups and our customer forums continue to
review and act on customer sentiment.
Customer sentiment scores
Asset Finance CSAT
2025
2024
Invoice Finance CSAT
2025
2024
Motor Finance Customer Net Ease
2025
2024
Motor Finance Dealer NPS
2025
2024
Savings online CSAT
2025
2024
There are four key pillars to our
CustomerCommitment
Communication and learning
Developing and strengthening the
customer experience skills within our
teams, and continually demonstrating
how the Customer Commitment
supports our purpose to help the
people and businesses of Britain
thrive over the long term.
Rewards and recognition
Our colleagues drive our success and
delivering good customer experience
is embedded within their objectives to
help support this.
Metrics
Evolving our customer metrics to
better identify where and how we can
enhance our customers’ experience
and earn their brand loyalty.
Governance
Anchoring the voice of the customer
within the heart of our structures,
critical decisions and forums to
ensure we listen, act, and learn to
continue to deliver for our customers.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
46
92%
92%
87%
86%
+65
+72
+72
+67
82%
75%

Our customer commitment
The needs and expectations of our customers and partners
are evolving. At Close Brothers we continue to adapt and
enhance our specialist expertise to meet these needs and
expectations, whilst ensuring fairness and helping our
customers thrive.
Our customer principles keep the customer at the heart of
all we do: we do the right thing for customers and partners;
we are flexible, responsive and execute with speed; we make
decisions informed by our specialist expertise; and we build
relationships based on quality and trust.
This is supported by our Customer Commitment Framework,
which sets out how we want our customers and our
colleagues to feel: valued, happy, understood, confident,
and that it is easy to do business with us.
This commitment embeds our customer-centric approach
across the group by developing our customer experience
skills, focusing on customer metrics, providing recognition
for delivering good customer experience and ensuring strong
governance. We are committed to designing and delivering
products, services and experiences which deliver good
outcomes for our customers.
Voice of the customer
Effective customer experience measurement is a key priority
across all of our businesses so that we listen, learn and act.
We have been running customer forums in a number of
businesses for over 10 years and in that time we have been
developing our capabilities and governance to bring the
voice of the customer into our day-to-day decision-making
processes.
At Close Brothers, we use feedback from our forums and
monitoring metrics to improve processes, collaborate
and innovate on opportunities to enhance
the
customer experience. For example, we have extended our
“language line” to support Motor Finance customers. This
functionality, which is already available in Premium Finance,
is designed for customers where English is not their first
language.
Changes have also been made so that we can identify
vulnerable customers through automated processes and
additional training is provided to contact centre colleagues.
In Savings, a dedicated Extra Support Group and forum
supports better understanding and ability to respond to the
needs of vulnerable customers. This includes offering
alternative communication formats and developing a new
Extra Support hub to signpost available services.
We continue to monitor customer sentiment across each of
our business areas by gathering feedback regularly. We are
pleased with the strong responses from across our diverse
customer groups and our customer forums continue to
review and act on customer sentiment.
Customer sentiment scores
Asset Finance CSAT
2025
2024
Invoice Finance CSAT
2025
2024
Motor Finance Customer Net Ease
2025
2024
Motor Finance Dealer NPS
2025
2024
Savings online CSAT
2025
2024
There are four key pillars to our
CustomerCommitment
Communication and learning
Developing and strengthening the
customer experience skills within our
teams, and continually demonstrating
how the Customer Commitment
supports our purpose to help the
people and businesses of Britain
thrive over the long term.
Rewards and recognition
Our colleagues drive our success and
delivering good customer experience
is embedded within their objectives to
help support this.
Metrics
Evolving our customer metrics to
better identify where and how we can
enhance our customers’ experience
and earn their brand loyalty.
Governance
Anchoring the voice of the customer
within the heart of our structures,
critical decisions and forums to
ensure we listen, act, and learn to
continue to deliver for our customers.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
46
92%
92%
87%
86%
+65
+72
+72
+67
82%
75%
Focusing on continuously improving the
customerexperience
Across the group we are focused on continuous
improvement, supported by colleagues in each business
as well as our central Operational Excellence team.
We have enabled a culture of continuous improvement so
that opportunities to improve the customer experience are
identified and delivered. Our Operational Excellence team
diagnose where service can be improved and efficiencies
generated. They work closely with subject matter experts
in each area to balance process and colleague benefits with
enhanced customer, client and partner experiences.
This approach to continuous improvement shows how we
are delivering on our customer principles across all
businesses.
• Asset Finance: The journey for customers in financial
difficulty was enhanced by identifying pain points,
streamlining process, enhancing communications,
implementing a consistent contact strategy and
collaborating with specialist debt advisers to ensure timely
and appropriate support delivering good customer
outcomes.
• Invoice Finance: The implementation of customer insights
tooling has played a role in strengthening our approach to
customer experience, enabling more responsive service
delivery and a customer-centric experience across our
channels. In parallel, the rollout of Salesforce is underway,
helping teams collaborate more effectively and deliver
faster, more personalised support. These initiatives reflect
our commitment to leveraging technology, not only to drive
operational efficiency but also to enhance the customer
experience.
• Motor Finance: Average time to resolve a complaint has
reduced from 22 days to 19 days following identification of
unnecessary lag points that could be resolved by
streamlining and tightening the intermediary contact
processes.
• Premium Finance: A customer-focused approach,
including behavioural design features to help customers
understand information more readily, establish trust and
drive informed decisions, was applied to our delivery of a
Commission Disclosure and Consent (“CDC”) journey. In
addition, end-to-end walkthroughs were held with our
broker partners to gather feedback on the customer
experience and improve supporting processes.
• Property Finance: The use of AI and property technology
is helping to standardise and simplify processes, freeing
up our team to focus on delivering the personal service our
clients expect. For example, automation has cut the time it
takes to produce a credit paper from a full day to just an
hour, while new workflow tools give full visibility of every
loan application - allowing us to manage more loans
efficiently, without compromising on quality or oversight.
• Savings: We introduced an analytics tool, to provide
deeper insights into customer behaviour, enabling data-
driven decisions to enhance customer experience,
increase engagement, and drive conversions. Analytics will
help us reduce friction, improve accessibility, and
personalise experiences, resulting in higher customer
satisfaction and retention.
The way ahead
• Looking forward, we are committed to continuously
improving our ability to capture, consolidate and act
upon customer and partner sentiment across all end-to-end
journeys that will help us to deliver a differentiated
experience and earn customer loyalty.
• We recognise the challenges facing our customers and
partners, and will continue to support them through high
standards of service, strong relationships and our
recognised expertise.
• We regularly measure and track customer
performance via several key customer metrics a
nd will
continue to enhance these metrics so that we deliver good
customer experience and outcomes.
OpenAI to handle complaints
In response to a rise in commission-related
complaints in Motor Finance, we are leveraging
OpenAI to automate our complaints handling
process, in turn reducing operational efforts and
improving the speed of response. The solution uses
OpenAI’s natural language processing capability,
accessible through a secure pattern, to automatically
read, interpret and process complaints raised by
customers and complaint management companies.
The solution has helped automate the processing of
circa 98% of commission-related complaints,
creating circa 18 FTE of capacity.
Following its success, the group has invested in AI
Engineering capability that will allow us to scale the
use of solutions such as OpenAI across our back
office and customer facing teams, expected to deliver
operational efficiency and service improvements
throughout FY 2026.
Resistant AI to prevent fraud
Resistant AI was introduced to support with validating
documents provided for finance applications in Motor
Finance. This tool assesses the meta data within a
given document, using machine learning to validate
what a genuine document should look like and
flagging where there are anomalies within the data.
The tool has been extremely effective, both by
reducing time taken by our underwriting team, who
were previously completing naked eye reviews of
these documents, and also through the savings
resulted from prevented fraud. To date these total
over £1.1 million in value of frauds prevented. The
fraud team are now supporting with a roll out across
more business areas including Premium, Savings,
Ireland and Invoice Finance.
Premium Finance: Transforming broker
insight
Our broker insight portal, Focus 360, has developed
its functionality over the year, supporting improved
loading speeds, enhanced filters, and unique peer
benchmarking insight. Following collaborative
learning and user feedback, Focus 360 is now being
made available for our broker partners to use direct.
This enhances our long-term relationships, supports
informed decision making, and gives brokers the
information they need to more effectively manage
their live portfolio and identify opportunities to
expand into new customer segments.
47
Strategic report Governance report Financial statements

Our distinctive culture and long-term approach are embedded
throughout the organisation and embody our values
We promote teamwork in a fair
and open environment, where
individuals and their contributions
are valued and respected.
We are committed to fostering a
culture that attracts and retains
talent, whilst also growing and
building the expertise of our
people.
We insist on trustworthy
behaviour and always acting with
integrity – “doing the right thing”,
internally and externally.
We take the time to understand
our customers and clients, and
build strong long-term
relationships with them.
We always take a prudent, robust
and transparent approach to risk
management.
We pride ourselves on our
excellent level of service and on
encouraging thinking that is both
entrepreneurial and disciplined.
Responses are taken from our latest employee opinion survey, which closed in February 2025, and provide an insight into employee views on
eachofour cultural attributes.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
48
Deep expertise
92%
of colleagues believe Close
Brothers puts customers and clients
at the centre of business decisions
Long-term
relationships
91%
feel included by their colleagues
Consistent
service
96%
of colleagues believe they
have the skills and knowledge
to do their job well
Teamwork
94%
of colleagues feel their
immediate team supports
each other
Integrity
94%
feel their colleagues
act with integrity
Prudence
90%
of colleagues feel confident in
the ability of people in their
area to identify risks

Our distinctive culture and long-term approach are embedded
throughout the organisation and embody our values
We promote teamwork in a fair
and open environment, where
individuals and their contributions
are valued and respected.
We are committed to fostering a
culture that attracts and retains
talent, whilst also growing and
building the expertise of our
people.
We insist on trustworthy
behaviour and always acting with
integrity – “doing the right thing”,
internally and externally.
We take the time to understand
our customers and clients, and
build strong long-term
relationships with them.
We always take a prudent, robust
and transparent approach to risk
management.
We pride ourselves on our
excellent level of service and on
encouraging thinking that is both
entrepreneurial and disciplined.
Responses are taken from our latest employee opinion survey, which closed in February 2025, and provide an insight into employee views on
eachofour cultural attributes.
Sustainability report continued
Close Brothers Group plc Annual Report 2025
48
Deep expertise
92%
of colleagues believe Close
Brothers puts customers and clients
at the centre of business decisions
Long-term
relationships
91%
feel included by their colleagues
Consistent
service
96%
of colleagues believe they
have the skills and knowledge
to do their job well
Teamwork
94%
of colleagues feel their
immediate team supports
each other
Integrity
94%
feel their colleagues
act with integrity
Prudence
90%
of colleagues feel confident in
the ability of people in their
area to identify risks
Long-term
relationships
“We take the time to
understand and build strong
long-term relationships with
our customers.”
Chiara Caldwell, Managing Director – Structured Finance,
Close Brothers Property Finance
Chiara Caldwell, Managing Director of our
new Structured Finance offering in Close
Brothers Property Finance, provides her
insight into our value of long-term
relationships.
At Close Brothers we recognise the value and importance
of building strong long-term relationships with our
customers, many of which span decades and
generations.
We build and maintain these strong relationships based
on quality and trust. Our in-depth knowledge, specialist
expertise and understanding of our customers and their
businesses, enable us to deliver support aligned to their
long-term goals and aspirations.
We strive to be a trusted strategic partner who is
invested in a customer’s success, not just for today but
for years to come.
Building on long-term relationships to expand
sector expertise
Close Brothers Property Finance has been lending to
borrowers for 50 years and is building on the strength of
its long-term customer relationships to expand its
capabilities and deepen its commitment to supporting
SME developers across the property sector.
The launch of our Structured Finance team marks a
significant milestone in Close Brothers Property
Finance’s evolution and brings fresh expertise and
strategic thinking to help us better serve the property
sector, particularly SME developers navigating today’s
economic challenges.
Our commitment to supporting these developers remains
unwavering, as it has over many years. We understand
the importance of being both consistent and innovative in
our lending approach. A prime example is our new
revolving facility for Fernham Homes, which secures
funding for their pipeline over the next three years, all
within a single, efficient structure. This reflects our ability
to stay flexible and responsive to our clients’ needs.
Structured Finance also enables us to support customers
diversifying into high-growth rental sectors such as build-
to-rent and purpose-built student accommodation. These
sectors are driven by strong rental demand, favourable
demographics, and limited supply, offering attractive
long-term exits to institutional investors.
This expansion not only diversifies our portfolio into more
defensive, counter-cyclical sectors, but also strengthens
our long-term relationships across the industry. Our
adaptability drives our culture, fostering a growth
mindset and maximising potential across our teams.
It’s incredibly rewarding to lead a team that’s driving
innovation while staying true to the relationship-led
values that define Close Brothers.
“We have worked successfully with Close
Brothers on numerous developments over the
last 10 years. Close Brothers has a
straightforward, easy to communicate, can-
do attitude. When some deals have been
complicated or under time pressure, Close
Brothers has always delivered.”
Andrew Kamm
Founder, Bourne Homes
49
Strategic report Governance report Financial statements

Non-financial and sustainability
information statement
In line with the non-financial reporting requirements contained in sections 414CA and 414CB of the
Companies Act 2006, the table below contains references to non-financial information intended to
help our stakeholders understand the impact of our policies and activities.
Reporting requirement
Policies and standards
Information necessary to understand our impact and
outcomes
Environmental
Matters
• Group Credit Risk Policy and Bank Credit Risk
Standards
• Environmental Policy
• Operating environment, pages 19 to 21
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Climate-related disclosures, pages 29 to 39
Employees
• Health and Safety Policy
• Whistleblowing Policy
• Key Customer Principles
• Equal Opportunity and Dignity at Work Policy
• Business model, pages 16 to 17
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Corporate governance report, pages 124 to 133
Social Matters
• Key Customer Principles
• Group Credit Risk Policy and Bank Credit
RiskStandards
• Volunteering Standards
• Matched Giving Guidelines
• Dignity at Work Policy
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Corporate governance report, pages 124 to 133
Respect for
Human Rights
• Human Rights and Modern Slavery Act
• Data Protection Policy
• Cyber Security Policy
• Information Security Policy
• Third Party Management Policy
• Sustainability report, page 27 to 48
• Risk Report, pages 68 to 112
Anti-Corruption
and Anti-Bribery
• Financial Crime Compliance Policy
• Anti-Bribery and Corruption Policy Statement
• External and Internal Fraud Policy Statement
• Cyber Security Policy
• Sustainability report, pages 27 to 48
Stakeholders
• Environmental Policy
• Key Customer Principles
• Third Party Management Policy
• Stakeholder engagement, pages 22 to 25
• Sustainability report, pages 27 to 48
Description of the
Business Model
• At a glance, pages 2 to 3
• Our strategy, pages 10 to 11
• Investment case, pages 14 to 15
• Business model, pages 16 to 17
Description of
Principal Risks
and Impact of
Business Activity
• Enterprise Risk Management Framework • Principal risks, pages 76 to 78
• Emerging risks and uncertainties, page 79
• Risk Committee report, pages 144 to 146
Non-Financial Key
Performance
Indicators
• Our strategy, pages 10 to 11
• Key Performance Indicators, pages 12 to 13
• Sustainability report, pages 27 to 48
Climate-related
Disclosures
• Enterprise Risk Management Policy • TCFD – Climate-related disclosures, pages 29
to 39
Close Brothers Group plc Annual Report 2025
50

Non-financial and sustainability
information statement
In line with the non-financial reporting requirements contained in sections 414CA and 414CB of the
Companies Act 2006, the table below contains references to non-financial information intended to
help our stakeholders understand the impact of our policies and activities.
Reporting requirement
Policies and standards
Information necessary to understand our impact and
outcomes
Environmental
Matters
• Group Credit Risk Policy and Bank Credit Risk
Standards
• Environmental Policy
• Operating environment, pages 19 to 21
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Climate-related disclosures, pages 29 to 39
Employees
• Health and Safety Policy
• Whistleblowing Policy
• Key Customer Principles
• Equal Opportunity and Dignity at Work Policy
• Business model, pages 16 to 17
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Corporate governance report, pages 124 to 133
Social Matters
• Key Customer Principles
• Group Credit Risk Policy and Bank Credit
RiskStandards
• Volunteering Standards
• Matched Giving Guidelines
• Dignity at Work Policy
• Stakeholder engagement, pages 22 to 25
• Our strategy, pages 10 to 11
• Sustainability report, pages 27 to 48
• Corporate governance report, pages 124 to 133
Respect for
Human Rights
• Human Rights and Modern Slavery Act
• Data Protection Policy
• Cyber Security Policy
• Information Security Policy
• Third Party Management Policy
• Sustainability report, page 27 to 48
• Risk Report, pages 68 to 112
Anti-Corruption
and Anti-Bribery
• Financial Crime Compliance Policy
• Anti-Bribery and Corruption Policy Statement
• External and Internal Fraud Policy Statement
• Cyber Security Policy
• Sustainability report, pages 27 to 48
Stakeholders
• Environmental Policy
• Key Customer Principles
• Third Party Management Policy
• Stakeholder engagement, pages 22 to 25
• Sustainability report, pages 27 to 48
Description of the
Business Model
• At a glance, pages 2 to 3
• Our strategy, pages 10 to 11
• Investment case, pages 14 to 15
• Business model, pages 16 to 17
Description of
Principal Risks
and Impact of
Business Activity
• Enterprise Risk Management Framework • Principal risks, pages 76 to 78
• Emerging risks and uncertainties, page 79
• Risk Committee report, pages 144 to 146
Non-Financial Key
Performance
Indicators
• Our strategy, pages 10 to 11
• Key Performance Indicators, pages 12 to 13
• Sustainability report, pages 27 to 48
Climate-related
Disclosures
• Enterprise Risk Management Policy • TCFD – Climate-related disclosures, pages 29
to 39
Close Brothers Group plc Annual Report 2025
50
Financial overview
Summary group income statement
1
Continuing operations
2025
£ million
2024
£ million
Change
%
Adjusted operating income
681.2 698.4
(2)
Adjusted operating expenses
(445.1) (433.5) 3
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
144.3 167.6 (14)
Banking 198.3 212.9 (7)
Commercial 112.2 97.0 16
Retail 18.9 37.9 (50)
Property 67.2 78.0 (14)
Group (central functions) (54.0) (45.3) 19
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation
to motor finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
2
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
3
(43.4) (5.4) n/a
Operating (loss)/profit before tax
(122.4) 132.7 (192)
Tax
(4.7) (37.4) (87)
(Loss)/profit after tax from continuing operations
(127.1) 95.3 (233)
Discontinued operations
4
:
Close Brothers Asset Management
63.9 7.4 n/a
Winterflood
(14.7) (2.3) n/a
(Loss)/profit after tax (continuing and discontinued operations)
(77.9) 100.4 (178)
Attributable to
Shareholders
(100.2) 89.3 (212)
Other equity owners
22.3 11.1 101
(Loss)/profit after tax attributable to shareholders and other equity
owners
(77.9) 100.4 (178)
Adjusted basic earnings per share (continuing operations)
5
59.3p 75.8p
Basic (loss)/earnings per share (continuing operations)
5
(99.8)p 56.2p
Basic (loss)/earnings per share (continuing and discontinued operations)
4,5
(66.9)p 59.7p
Ordinary dividend per share
— —
Return on opening equity
6
6.2% 7.9%
Return on average tangible equity
6
7.1% 9.3%
1. Income Statement presented includes continuing and discontinued operations. Adjusted measures are presented on a basis consistent with prior
periods and exclude any exceptional and adjusting items which do not reflect underlying trading performance. Current exceptional and adjusting items
include; customer remediation provisions, operational or legal costs incurred in relation to an event that is deemed to be adjusting, businesses that are
held for sale, the Vehicle Hire business which is in wind-down, restructuring costs and amortisation of intangible assets on acquisition. Please refer to
the Basis of Presentation on page 52 for further information.
2. Close Brewery Rentals Limited which is held for sale as at 31 July 2025. Please refer to page 61 for more detail.
3. Close Brothers Vehicle Hire business is being exited. Please refer to pages 61 to 62 for more detail.
4. Discontinued operations relate to Close Brothers Asset Management and Winterflood, which have been classified as "Discontinued Operations" in the
group’s income statement for the 2024 and 2025 financial years in line with the requirements of IFRS 5. The related assets and liabilities are classified
as held for sale on the group’s balance sheet as at 31 July 2025.
5. Refer to Note 7 “Earnings per Share” for the calculation of basic and adjusted earnings per share.
6. Return on opening equity and return on average tangible equity have been restated for financial year 2024 to exclude discontinued operations.
51
Strategic report Governance report Financial statements

Basis of presentation
Results are presented both on a statutory and an adjusted
basis to aid comparability between periods. Adjusted
measures are presented on a basis consistent with prior
periods and exclude any exceptional and adjusting items
which do not reflect underlying trading performance. Current
exceptional and adjusting items include customer
remediation provisions, operational or legal costs incurred in
relation to an event that is deemed to be adjusting,
businesses that are held for sale, the Vehicle Hire business
which is in wind-down, restructuring costs and amortisation
of intangible assets on acquisition.
Discontinued operations relate to Close Brothers Asset
Management and Winterflood, which have been classified as
a discontinued operation in the group’s income statement for
the 2025 financial year and total £49.2 million profit after tax.
Figures in the 2024 financial year have been restated on the
same basis. Winterflood’s assets and liabilities are classified
as held for sale on the group balance sheet at 31 July 2025.
CBAM's assets and liabilities are not included on the group
balance sheet at 31 July 2025, as the sale of the business
completed on 28 February 2025. In addition, Close Brewery
Rentals Limited's assets and liabilities are also classified as
held for sale on the group balance sheet at 31 July 2025, as
the sale completed on 31 August 2025.
Reconciliation from adjusted to statutory income statement
Adjusting items reconciling adjusted to statutory performance
Summary
income
statement for
the year ended
31 July 2025
Adjusted
£ million
Provision in
relation to
motor finance
commissions
£ million
Complaints
handling and
other
operational
and legal
costs related
to motor
finance
commissions
£ million
Provision in
relation to
the BiFD
review
£ million
Provision in
relation to
early
settlements
in Motor
Finance
£ million
Restructuring
costs
£ million
Amortisation
of intangible
assets on
acquisition
£ million
Close
Brewery
Rentals
Limited
loss
(held for
sale)
£ million
Close
Brothers
Vehicle
Hire loss
(in wind
down)
£ million
Total
adjusting
items
£ million
Statutory
£ million
Operating
income
681.2 — — — — — — 5.9 (27.6) (21.7) 659.5
Operating
expenses
(445.1) (165.0) (18.7) — (33.0) (2.3) (0.2) (9.8) (15.0) (244.0) (689.1)
Impairment
losses on
financial
assets
(91.8) — — — — — — (0.2) (0.8) (1.0) (92.8)
Operating
profit/(loss)
before tax
144.3 (165.0) (18.7) — (33.0) (2.3) (0.2) (4.1) (43.4) (266.7) (122.4)
Adjusting items reconciling adjusted to statutory performance
Summary
income
statement for
the year ended
31 July 2024
Adjusted
£ million
Provision in
relation to
motor finance
commissions
£ million
Complaints
handling and
other
operational
and legal
costs related
to motor
finance
commissions
£ million
Provision in
relation to
the BiFD
review
£ million
Provision in
relation to
early
settlements
in Motor
Finance
£ million
Restructuring
costs
£ million
Amortisation
of intangible
assets on
acquisition
£ million
Close
Brewery
Rentals
Limited
loss
(held for
sale)
£ million
Close
Brothers
Vehicle
Hire loss
(in wind
down)
£ million
Total
adjusting
items
£ million
Statutory
£ million
Operating
income
698.4 — — — — — — 6.6 8.4 15.0 713.4
Operating
expenses
(433.5) — (6.9) (17.2) — (3.1) (0.2) (8.0) (12.9) (48.3) (481.8)
Impairment
losses on
financial
assets
(97.3) — — — — — — (0.7) (0.9) (1.6) (98.9)
Operating
profit/(loss)
before tax
167.6 — (6.9) (17.2) — (3.1) (0.2) (2.1) (5.4) (34.9) 132.7
Financial overview continued
Close Brothers Group plc Annual Report 2025
52

Basis of presentation
Results are presented both on a statutory and an adjusted
basis to aid comparability between periods. Adjusted
measures are presented on a basis consistent with prior
periods and exclude any exceptional and adjusting items
which do not reflect underlying trading performance. Current
exceptional and adjusting items include customer
remediation provisions, operational or legal costs incurred in
relation to an event that is deemed to be adjusting,
businesses that are held for sale, the Vehicle Hire business
which is in wind-down, restructuring costs and amortisation
of intangible assets on acquisition.
Discontinued operations relate to Close Brothers Asset
Management and Winterflood, which have been classified as
a discontinued operation in the group’s income statement for
the 2025 financial year and total £49.2 million profit after tax.
Figures in the 2024 financial year have been restated on the
same basis. Winterflood’s assets and liabilities are classified
as held for sale on the group balance sheet at 31 July 2025.
CBAM's assets and liabilities are not included on the group
balance sheet at 31 July 2025, as the sale of the business
completed on 28 February 2025. In addition, Close Brewery
Rentals Limited's assets and liabilities are also classified as
held for sale on the group balance sheet at 31 July 2025, as
the sale completed on 31 August 2025.
Reconciliation from adjusted to statutory income statement
Adjusting items reconciling adjusted to statutory performance
Summary
income
statement for
the year ended
31 July 2025
Adjusted
£ million
Provision in
relation to
motor finance
commissions
£ million
Complaints
handling and
other
operational
and legal
costs related
to motor
finance
commissions
£ million
Provision in
relation to
the BiFD
review
£ million
Provision in
relation to
early
settlements
in Motor
Finance
£ million
Restructuring
costs
£ million
Amortisation
of intangible
assets on
acquisition
£ million
Close
Brewery
Rentals
Limited
loss
(held for
sale)
£ million
Close
Brothers
Vehicle
Hire loss
(in wind
down)
£ million
Total
adjusting
items
£ million
Statutory
£ million
Operating
income
681.2 — — — — — — 5.9 (27.6) (21.7) 659.5
Operating
expenses
(445.1) (165.0) (18.7) — (33.0) (2.3) (0.2) (9.8) (15.0) (244.0) (689.1)
Impairment
losses on
financial
assets
(91.8) — — — — — — (0.2) (0.8) (1.0) (92.8)
Operating
profit/(loss)
before tax
144.3 (165.0) (18.7) — (33.0) (2.3) (0.2) (4.1) (43.4) (266.7) (122.4)
Adjusting items reconciling adjusted to statutory performance
Summary
income
statement for
the year ended
31 July 2024
Adjusted
£ million
Provision in
relation to
motor finance
commissions
£ million
Complaints
handling and
other
operational
and legal
costs related
to motor
finance
commissions
£ million
Provision in
relation to
the BiFD
review
£ million
Provision in
relation to
early
settlements
in Motor
Finance
£ million
Restructuring
costs
£ million
Amortisation
of intangible
assets on
acquisition
£ million
Close
Brewery
Rentals
Limited
loss
(held for
sale)
£ million
Close
Brothers
Vehicle
Hire loss
(in wind
down)
£ million
Total
adjusting
items
£ million
Statutory
£ million
Operating
income
698.4 — — — — — — 6.6 8.4 15.0 713.4
Operating
expenses
(433.5) — (6.9) (17.2) — (3.1) (0.2) (8.0) (12.9) (48.3) (481.8)
Impairment
losses on
financial
assets
(97.3) — — — — — — (0.7) (0.9) (1.6) (98.9)
Operating
profit/(loss)
before tax
167.6 — (6.9) (17.2) — (3.1) (0.2) (2.1) (5.4) (34.9) 132.7
Financial overview continued
Close Brothers Group plc Annual Report 2025
52
Statutory operating profit
The group reported a statutory operating loss before tax of
£122.4 million (2024: statutory operating profit before tax of
£132.7 million). Underlying operating profit was more than
offset by a number of adjusting items. These included a
£165.0 million provision charge in relation to motor finance
commissions and £18.7 million of costs in relation to
complaints handling and other operational and legal costs
incurred in relation to motor finance commissions. The group
also recorded operating losses before tax from its rentals
businesses totalling £47.5 million, as well as a separate
£33.0 million provision for a proactive customer remediation
programme following the identification of historical
deficiencies in certain operational processes related to early
settlement of loans in the Motor Finance business.
Adjusted operating profit
Adjusted operating profit decreased 14% to £144.3 million
(2024: £167.6 million), driven by a decline in income and
higher costs, partly offset by lower impairment charges.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in expenses partially offset by a
reduction in impairment losses. The operating loss in Group
(central functions), which includes the central functions such
as finance, legal and compliance, risk and human resources,
increased to £54.0 million (2024: £45.3 million) below
guidance of between £55 million and £60 million. The
increase in the operating loss in Group (central functions)
was primarily due to increased legal and professional fees
associated with the impact of the FCA’s ongoing review and
the Supreme Court appeal.
We expect the operating loss from Group (central functions)
to be c.£50 million in the 2026 financial year, reflecting a
reduction in legal and professional fees.
Return on opening equity reduced to 6.2% (2024: 7.9%) and
return on average tangible equity decreased to 7.1% (2024:
9.3%).
Adjusted operating income
Adjusted operating income decreased 2% to £681.2 million
(2024: £698.4 million), primarily reflecting lower income in
Banking.
Income in the Banking division decreased 2%, primarily
reflecting lower loan book balances as a result of the
management actions to moderate loan book growth in the
earlier part of the year. Group (central functions) income
decreased 2% to £(11.7) million (2024: £(11.5) million),
reflecting lower cash balances and lower interest rates.
Adjusted operating expenses
Adjusted operating expenses increased to £445.1 million
(2024: £433.5 million), primarily reflecting higher Group
(central functions) expenses.
In the Banking division, adjusted operating expenses
increased 1% to £402.8 million (2024: £399.7 million) as £15
million of cost savings were broadly offset by wage inflation
and spend on technology and expansion of capabilities
across the business. Expenses in the Group (central
functions) rose to £42.3 million (2024: £33.8 million), primarily
driven by an increase in legal and professional fees
associated with the impact of the FCA’s ongoing review and
the Supreme Court appeals.
Overall, the group’s expense/income ratio increased to 65%
(2024: 62%), whilst the compensation ratio remained flat at
34% (2024: 34%).
Impairment charges and IFRS 9 provisioning
Impairment charges decreased to £91.8 million (2024: £97.3
million), corresponding to a bad debt ratio of 1.0% (2024:
1.0%). Excluding Novitas, impairment charges rose to £98.6
million (2024: £90.9 million), equivalent to a bad debt ratio of
1.0% (2024: 1.0%). The increase in underlying impairment
charges excluding Novitas was mainly driven by the ongoing
review of provisions and coverage across our portfolio,
including single name provisions in Property. This was
partially offset by generally favourable performance across
other businesses. Credit quality remains resilient and the bad
debt ratio remains comfortably below our long-term average
of 1.2%. Overall, provision coverage reduced to 2.6% (31
July 2024: 4.3%), driven by the recovery of outstanding
balances in relation to Novitas. Excluding Novitas, the
coverage ratio increased slightly to 2.5% (31 July 2024:
2.3%) reflecting the above-mentioned provision increases
against the backdrop of a lower total loan book.
Since the 2024 financial year end, we have updated the
macroeconomic scenarios we source from Moody’s
Analytics to reflect the latest available information regarding
the macroeconomic environment and outlook, with the
weightings assigned to them remaining unchanged. At 31
July 2025, there was a 30% weighting to the upside, 32.5%
weighting to the baseline, 20% weighting to the mild
downside, 10.5% weighting to the moderate downside and
7% weighting to the protracted downside.
Whilst we have not seen a significant impact on credit
performance, we continue to monitor closely the evolving
impacts of inflation and cost of living on our customers. We
remain confident in the quality of our loan book, which is
predominantly secured or structurally protected, prudently
underwritten, diverse, and supported by the deep expertise
of our people. Looking forward, we expect the bad debt ratio
for the 2026 financial year to remain below our long-term
average of 1.2%.
Adjusting items
We recognised £266.7 million of adjusting items in the 2025
financial year (2024: £34.9 million), including the £165.0
million provision charge relating to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited (“CBRL”) and
Close Brothers Vehicle Hire (“CBVH”); a separate £33.0
million provision related to early settlement of loans in the
Motor Finance business; £18.7 million reflecting complaints
handling and other operational and legal costs incurred in
relation to motor finance commissions; £2.3 million of
restructuring costs and £0.2 million of amortisation of
intangible assets on acquisition.
As outlined above, the group recorded operating losses
before tax from our rentals businesses. Close Brewery
Rentals Limited, sold in July 2025 (with completion occurring
after the end of the financial year), reported an operating loss
before tax of £4.1 million. The group’s Vehicle Hire business,
which the group has decided to exit, reported an operating
loss before tax of £43.4 million, including an impairment
charge against assets of £30.0 million. Any future profit or
loss impact of this business will be subject to, amongst other
factors, market conditions and any movement in asset prices
over the wind down period.
We incurred £18.7 million (2024: £6.9 million) of complaints
handling expenses and other operational and legal costs in
relation to motor finance commissions. This included
increased resourcing to manage complaints and legal
expenses, notably those related to the Supreme Court
53
Strategic report Governance report Financial statements

appeal, as well as the unwinding of the time value discount in
relation to the motor finance commissions provision. This
was lower than the guidance provided at the half year 2025
results of c.£22 million as we successfully deployed
automation and artificial intelligence to enhance accuracy
and speed in complaints handling. We expect these costs
will be in the single-digit millions in the 2026 financial year.
We also incurred £2.3 million (2024: £3.1 million) of
restructuring costs in the 2025 financial year, in line with
guidance of £2-3 million. This primarily related to redundancy
and associated costs. We have continued to make good
progress on streamlining the workforce through the
consolidation of roles across our businesses and functions,
as well as through the management of vacancies. We expect
to incur c.£5-10 million of restructuring costs in the 2026
financial year as we implement further cost management
actions.
Discontinued operations
During the year, in line with the group’s strategic priorities to
simplify the portfolio, enhance operational efficiency and
drive sustainable growth, we made announcements
regarding the disposal of the following businesses:
• On 19 September 2024, we announced the sale of Close
Brothers Asset Management (“CBAM”) to funds managed
by Oaktree Capital Management, L.P. (“Oaktree”) for an
equity value of up to £200 million. The transaction
completed on 28 February 2025.
• On 25 July 2025, we announced the sale of Winterflood to
Marex Group plc (“Marex”) for a consideration amount of
approximately £103.9 million in cash payable by Marex to
Close Brothers on completion, based on 30 April 2025
financials, subject to a £ for £ adjustment for movements
in the tangible net asset value of Winterflood between 30
April 2025 and completion. The transaction is expected to
complete in early 2026, subject to regulatory approval.
Performance of these businesses has been presented as
discontinued operations, with related assets and liabilities
classified as held for sale on the balance sheet. Accordingly,
the group’s adjusted results are presented on the basis of
continuing operations for 2025 with the figures restated on a
comparable basis for 2024.
The profit from discontinued operations, net of tax was £49.2
million (2024: £5.1 million).
CBAM generated adjusted operating profit of £5.3 million for
the seven-month period up to the completion of the
transaction, less £0.7 million amortisation of intangible
assets on acquisition, and a £60.8 million gain on disposal
resulting in an overall operating profit before tax of £65.4
million, and a profit after tax of £63.9 million (2024: £7.4
million).
Winterflood delivered a full year operating profit of £0.3
million (2024: loss of £1.7 million). The first half was impacted
by a volatile macroeconomic environment, which was offset
by a stronger performance in the second half. A goodwill
impairment loss on disposal of £14.5 million was recognised
on classification as held for sale, with the total loss after tax
of £14.7 million (2024: loss after tax of £2.3 million). No
further loss on disposal is expected to be recognised on
completion of the sale in the full year 2026 financial
statements.
For further information on the discontinued operations, refer
to Note 29 “Discontinued operations and assets and
liabilities classified as held for sale”.
Tax expense
The tax expense was £4.7 million (2024: £37.4 million). The
effective tax rate for the period was (3.8)% (2024: 28.2%),
including the £165.0 million provision charge (£155.7 million
net of tax) in relation to motor finance commissions and the
£33.0 million (£30.3 million net of tax) provision for the
proactive customer remediation programme in relation to
early settlement of loans in Motor Finance recognised in the
financial year. Excluding the provisions, the effective tax rate
would have been approximately 22%.
The effective tax rate, excluding the provisions, was below
the 25.0% UK corporation tax rate for the 2025 financial year
(2024: 25.0%), primarily due to tax relief on coupons on
other equity instruments. Please refer to Note 6 “Taxation”
for further details on the group’s taxation.
Earnings per share
Adjusted basic earnings per share (“AEPS”) for continuing
operations decreased to 59.3p (2024: 75.8p) and basic
earnings per share (“EPS”) for continuing operations
decreased to (99.8)p (2024: 56.2p).
Basic earnings per share for continuing and discontinued
operations reduced to (66.9)p (2024: 59.7p).
Both the adjusted and basic EPS calculations include the
payment of the coupon related to the Fixed Rate Resetting
Additional Tier 1 Perpetual Subordinated Contingent
Convertible Securities (“AT1”), at an annual rate of 11.125%,
in November 2024 and May 2025, amounting to £22.3
million. The associated coupon is due semi-annually, with
any AT1 coupons paid deducted from retained earnings,
reducing the profit attributable to ordinary shareholders.
Dividend
Given the continued uncertainty regarding the outcome of
the FCA’s review of motor finance commission arrangements
and any potential financial impact, the group will not pay a
final dividend on its ordinary shares for the 2025 financial
year.
As previously stated, the decision to reinstate dividends will
be reviewed by the Board once there is further clarity on the
financial impact of the FCA review of motor finance
commissions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
54

appeal, as well as the unwinding of the time value discount in
relation to the motor finance commissions provision. This
was lower than the guidance provided at the half year 2025
results of c.£22 million as we successfully deployed
automation and artificial intelligence to enhance accuracy
and speed in complaints handling. We expect these costs
will be in the single-digit millions in the 2026 financial year.
We also incurred £2.3 million (2024: £3.1 million) of
restructuring costs in the 2025 financial year, in line with
guidance of £2-3 million. This primarily related to redundancy
and associated costs. We have continued to make good
progress on streamlining the workforce through the
consolidation of roles across our businesses and functions,
as well as through the management of vacancies. We expect
to incur c.£5-10 million of restructuring costs in the 2026
financial year as we implement further cost management
actions.
Discontinued operations
During the year, in line with the group’s strategic priorities to
simplify the portfolio, enhance operational efficiency and
drive sustainable growth, we made announcements
regarding the disposal of the following businesses:
• On 19 September 2024, we announced the sale of Close
Brothers Asset Management (“CBAM”) to funds managed
by Oaktree Capital Management, L.P. (“Oaktree”) for an
equity value of up to £200 million. The transaction
completed on 28 February 2025.
• On 25 July 2025, we announced the sale of Winterflood to
Marex Group plc (“Marex”) for a consideration amount of
approximately £103.9 million in cash payable by Marex to
Close Brothers on completion, based on 30 April 2025
financials, subject to a £ for £ adjustment for movements
in the tangible net asset value of Winterflood between 30
April 2025 and completion. The transaction is expected to
complete in early 2026, subject to regulatory approval.
Performance of these businesses has been presented as
discontinued operations, with related assets and liabilities
classified as held for sale on the balance sheet. Accordingly,
the group’s adjusted results are presented on the basis of
continuing operations for 2025 with the figures restated on a
comparable basis for 2024.
The profit from discontinued operations, net of tax was £49.2
million (2024: £5.1 million).
CBAM generated adjusted operating profit of £5.3 million for
the seven-month period up to the completion of the
transaction, less £0.7 million amortisation of intangible
assets on acquisition, and a £60.8 million gain on disposal
resulting in an overall operating profit before tax of £65.4
million, and a profit after tax of £63.9 million (2024: £7.4
million).
Winterflood delivered a full year operating profit of £0.3
million (2024: loss of £1.7 million). The first half was impacted
by a volatile macroeconomic environment, which was offset
by a stronger performance in the second half. A goodwill
impairment loss on disposal of £14.5 million was recognised
on classification as held for sale, with the total loss after tax
of £14.7 million (2024: loss after tax of £2.3 million). No
further loss on disposal is expected to be recognised on
completion of the sale in the full year 2026 financial
statements.
For further information on the discontinued operations, refer
to Note 29 “Discontinued operations and assets and
liabilities classified as held for sale”.
Tax expense
The tax expense was £4.7 million (2024: £37.4 million). The
effective tax rate for the period was (3.8)% (2024: 28.2%),
including the £165.0 million provision charge (£155.7 million
net of tax) in relation to motor finance commissions and the
£33.0 million (£30.3 million net of tax) provision for the
proactive customer remediation programme in relation to
early settlement of loans in Motor Finance recognised in the
financial year. Excluding the provisions, the effective tax rate
would have been approximately 22%.
The effective tax rate, excluding the provisions, was below
the 25.0% UK corporation tax rate for the 2025 financial year
(2024: 25.0%), primarily due to tax relief on coupons on
other equity instruments. Please refer to Note 6 “Taxation”
for further details on the group’s taxation.
Earnings per share
Adjusted basic earnings per share (“AEPS”) for continuing
operations decreased to 59.3p (2024: 75.8p) and basic
earnings per share (“EPS”) for continuing operations
decreased to (99.8)p (2024: 56.2p).
Basic earnings per share for continuing and discontinued
operations reduced to (66.9)p (2024: 59.7p).
Both the adjusted and basic EPS calculations include the
payment of the coupon related to the Fixed Rate Resetting
Additional Tier 1 Perpetual Subordinated Contingent
Convertible Securities (“AT1”), at an annual rate of 11.125%,
in November 2024 and May 2025, amounting to £22.3
million. The associated coupon is due semi-annually, with
any AT1 coupons paid deducted from retained earnings,
reducing the profit attributable to ordinary shareholders.
Dividend
Given the continued uncertainty regarding the outcome of
the FCA’s review of motor finance commission arrangements
and any potential financial impact, the group will not pay a
final dividend on its ordinary shares for the 2025 financial
year.
As previously stated, the decision to reinstate dividends will
be reviewed by the Board once there is further clarity on the
financial impact of the FCA review of motor finance
commissions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
54
Summary group balance sheet
31 July 2025
£ million
31 July 2024
£ million
Loans and advances to customers and operating lease assets
1
9,625.7 10,098.7
Treasury assets
2
2,770.4 2,300.9
Market-making assets
3
— 691.8
Assets classified as held for sale
4
934.0 —
Other assets
741.8 989.4
Total assets
14,071.9 14,080.8
Deposits by customers
8,799.3 8,693.6
Borrowings
5
2,188.3 2,339.2
Market-making liabilities
3
— 631.6
Liabilities classified as held for sale
4
773.4 —
Other liabilities
575.4 573.9
Total liabilities
12,336.4 12,238.3
Equity
6
1,735.5 1,842.5
Total liabilities and equity
14,071.9 14,080.8
1. Includes operating lease assets of £166.3 million (31 July 2024: £267.9 million).
2. Treasury assets comprise cash and balances at central banks and debt securities held to support the Banking division.
3. Market-making assets and liabilities comprise settlement balances, long and short trading positions and loans to or from money brokers.
4. Assets and liabilities relating to CBRL and discontinued operation Winterflood have been classified as held for sale on the group's balance sheet at 31
July 2025. Please refer to Note 29 “Discontinued operations and assets and liabilities classified as held for sale”.
5. Borrowings comprise debt securities in issue, loans and overdrafts from banks and subordinated loan capital.
6. Equity includes the group’s £200.0 million Fixed Rate Reset Perpetual Subordinated Contingent Convertible Securities (AT1 securities), net of £2.4
million transaction costs, which are classified as an equity instrument under IAS 32.
The group maintained a strong balance sheet and continues
to take a prudent approach to managing its financial
resources. The fundamental structure of the balance sheet
remains unchanged, with most of the assets and liabilities
relating to our Banking activities. Loans and advances to
customers and operating lease assets make up the majority
of assets. Other items on the group's balance sheet include
treasury assets and settlement balances in Winterflood
which have been classified as held for sale as at 31 July
2025. Intangibles, property, plant and equipment, and
prepayments are included as other assets. Liabilities are
predominantly made up of customer deposits and both
secured and unsecured borrowings to fund the loan book.
Total assets remained broadly stable at £14.1 billion (31 July
2024: £14.1 billion), with increases in market-making assets,
classified as held for sale, and treasury assets held for
liquidity purposes offset by a 5% reduction in loans and
advances to customers and operating lease assets and a
reduction in other assets.
Total liabilities were 1% higher at £12.3 billion (31 July 2024:
£12.2 billion). The increase was primarily driven by higher
customer deposits and market-making liabilities, classified
as held for sale, which was mostly offset by a decrease in
borrowings.
Both market-making assets and liabilities, which relate to
trading activity at Winterflood, were higher due to an
increase in value traded at the year end.
Assets and liabilities classified as held for sale relate to Close
Brewery Rentals Limited and Winterflood.
Total equity decreased 6% to £1.7 billion as at 31 July 2025
(31 July 2024: £1.8 billion), reflecting the statutory operating
loss after tax of £77.9 million (2024: statutory operating profit
after tax of £100.4 million).
The group’s return on assets excluding discontinued
operations decreased to 0.7% (2024: 0.9% excluding
discontinued operations).
Movements in capital and other
regulatorymetrics
The CET1 capital ratio increased from 12.8% to 13.8%,
mainly driven by the sale of CBAM (c.155bps), recognition of
other profits attributable to shareholders (c.90bps), a
reduction in loan book RWAs (c.70bps) and other
movements (c.10bps). These benefits were partly offset by
the provision in relation to motor finance commissions
(-c.145bps), a provision for a proactive customer remediation
programme related to early settlement of loans in the Motor
Finance business (-c.30bps), operating losses after tax in the
group’s Vehicle Hire business (-c.30bps), and AT1 coupon
payments in the year (-c.20bps).
CET1 capital decreased 2% to £1,348.1 million (31 July
2024: £1,374.8 million), primarily driven by the £155.7 million
provision (net of tax) in relation to motor finance
commissions, a provision related to early settlement of loans
in Motor Finance of £30.3 million (net of tax), £30.8 million
operating losses after tax in the Vehicle Hire business, and
AT1 coupon payments of £22.3 million. These impacts were
partly offset by the recognition of the group’s other profits
attributable to shareholders in the year of £92.7 million, a
£60.8 million gain on disposal for CBAM together with the
associated reduction in intangible assets deducted from
capital of £56.9 million, and a net increase in other CET1
capital resources of £2.0 million.
Tier 1 capital and total capital both decreased 2% to
£1,548.1 million and £1,748.1 million respectively (31 July
2024: £1,574.8 million and £1,774.8 million respectively),
reflecting the same movements in relation to CET1 capital.
RWAs decreased 8% to £9.8 billion (31 July 2024: £10.7
billion), driven by a reduction in credit risk RWAs (£676.6
million) and operational risk RWAs (£224.4 million).
55
Strategic report Governance report Financial statements

Group capital
31 July 2025
£ million
31 July 2024
£ million
Common Equity Tier 1 capital
1,348.1 1,374.8
Tier 1 capital
1,548.1 1,574.8
Total capital
1,748.1 1,774.8
Risk weighted assets
9,798.5 10,701.2
Common Equity Tier 1 capital ratio (transitional)
13.8% 12.8%
Tier 1 capital ratio (transitional)
15.8% 14.7%
Total capital ratio (transitional)
17.8% 16.6%
Leverage ratio
1
12.9% 12.7%
1. The leverage ratio is calculated as tier 1 capital as a percentage of total balance sheet assets excluding central bank claims, adjusting for certain capital
deductions, including intangible assets, and off-balance sheet exposures, in line with the UK leverage framework under the UK Capital Requirements
Regulation.
The decline in credit risk RWAs was driven by a reduction in
loan book RWAs (£520.9 million) across each of the Banking
businesses mainly due to lower loan book balances and also
reflecting the benefit of the ENABLE Guarantee Scheme
within the Commercial business. There was also a decrease
in other credit risk RWAs (£155.7 million) which was partly in
respect of the CBAM disposal (£74.4 million).
The reduction in operational risk RWAs was primarily driven
by the CBAM disposal (£225.3 million), following approval
from the Prudential Regulation Authority (“PRA”) for a full
release of its associated operational risk RWAs.
As a result, CET1, tier 1 and total capital ratios were 13.8%
(31 July 2024: 12.8%), 15.8% (31 July 2024: 14.7%) and
17.8% (31 July 2024: 16.6%), respectively.
The sale of Winterflood, announced on 25 July 2025, is
expected to increase the group's CET1 capital ratio by c.55
basis points on a pro-forma basis at 31 July 2025, from
13.8% to c.14.3%, of which c.30 basis points will be
recognised upon completion, with a further c.25 basis points
expected in due course from the reduction in operational risk
weighted assets. The transaction is expected to complete in
early 2026, subject to regulatory approval.
The applicable CET1, tier 1 and total capital ratio
requirements, including Capital Requirements Directive
(“CRD”) buffers but excluding any applicable PRA buffer,
were 9.7%, 11.4% and 13.7%, respectively, at 31 July 2025.
Accordingly, our CET1 capital ratio headroom of c.410bps is
significantly above the applicable requirements, despite the
impact from the £165.0 million provision charge in relation to
motor finance commissions.
The group applies IFRS 9 regulatory transitional
arrangements which allow banks to add back to their capital
base a proportion of the IFRS 9 impairment charges during
the transitional period. Our capital ratios are presented on a
transitional basis after the application of these arrangements.
On a fully loaded basis, without their application, the CET1,
tier 1 and total capital ratios would be 13.7%, 15.7% and
17.8%, respectively.
The leverage ratio, which is a transparent measure of capital
strength not affected by risk weightings, increased to 12.9%
(31 July 2024: 12.7%).
The PRA Policy Statement PS 9/24 Implementation of the
Basel 3.1 standards near-final part 2 was published on 12
September 2024 with an implementation date of 1 January
2026. In January 2025, the PRA announced a one-year delay
to Basel 3.1 implementation moving the effective date to 1
January 2027. The majority of rules applicable to the group
remain unchanged, including the removal of the Small and
Medium-sized Enterprises (“SME”) supporting factor. We
currently estimate that implementation will result in an
increase of up to 10% in the group’s RWAs calculated under
the standardised approach. The group expects to receive a
full offset in Pillar 2a requirements at total capital level for the
removal of the Pillar 1 RWA SME support factor. As such, we
expect the UK implementation of Basel 3.1 to have a less
significant impact on the group’s overall capital headroom
position than initially anticipated.
As reported in our Half Year 2025 results, following our initial
application to the PRA in December 2020 to transition to the
Internal Ratings Based (“IRB”) approach, the application
remains in Phase 2, with engagement continuing with the
regulator. Our Motor Finance, Property Finance, and Energy
portfolios, where model development is most advanced,
were included in the original submission.
Capital outlook
In the near-term, we expect to maintain our CET1 capital
ratio above the top end of our medium-term target range of
12% to 13%, based on our current assessment of the
provision in respect of motor finance commissions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
56

Group capital
31 July 2025
£ million
31 July 2024
£ million
Common Equity Tier 1 capital
1,348.1 1,374.8
Tier 1 capital
1,548.1 1,574.8
Total capital
1,748.1 1,774.8
Risk weighted assets
9,798.5 10,701.2
Common Equity Tier 1 capital ratio (transitional)
13.8% 12.8%
Tier 1 capital ratio (transitional)
15.8% 14.7%
Total capital ratio (transitional)
17.8% 16.6%
Leverage ratio
1
12.9% 12.7%
1. The leverage ratio is calculated as tier 1 capital as a percentage of total balance sheet assets excluding central bank claims, adjusting for certain capital
deductions, including intangible assets, and off-balance sheet exposures, in line with the UK leverage framework under the UK Capital Requirements
Regulation.
The decline in credit risk RWAs was driven by a reduction in
loan book RWAs (£520.9 million) across each of the Banking
businesses mainly due to lower loan book balances and also
reflecting the benefit of the ENABLE Guarantee Scheme
within the Commercial business. There was also a decrease
in other credit risk RWAs (£155.7 million) which was partly in
respect of the CBAM disposal (£74.4 million).
The reduction in operational risk RWAs was primarily driven
by the CBAM disposal (£225.3 million), following approval
from the Prudential Regulation Authority (“PRA”) for a full
release of its associated operational risk RWAs.
As a result, CET1, tier 1 and total capital ratios were 13.8%
(31 July 2024: 12.8%), 15.8% (31 July 2024: 14.7%) and
17.8% (31 July 2024: 16.6%), respectively.
The sale of Winterflood, announced on 25 July 2025, is
expected to increase the group's CET1 capital ratio by c.55
basis points on a pro-forma basis at 31 July 2025, from
13.8% to c.14.3%, of which c.30 basis points will be
recognised upon completion, with a further c.25 basis points
expected in due course from the reduction in operational risk
weighted assets. The transaction is expected to complete in
early 2026, subject to regulatory approval.
The applicable CET1, tier 1 and total capital ratio
requirements, including Capital Requirements Directive
(“CRD”) buffers but excluding any applicable PRA buffer,
were 9.7%, 11.4% and 13.7%, respectively, at 31 July 2025.
Accordingly, our CET1 capital ratio headroom of c.410bps is
significantly above the applicable requirements, despite the
impact from the £165.0 million provision charge in relation to
motor finance commissions.
The group applies IFRS 9 regulatory transitional
arrangements which allow banks to add back to their capital
base a proportion of the IFRS 9 impairment charges during
the transitional period. Our capital ratios are presented on a
transitional basis after the application of these arrangements.
On a fully loaded basis, without their application, the CET1,
tier 1 and total capital ratios would be 13.7%, 15.7% and
17.8%, respectively.
The leverage ratio, which is a transparent measure of capital
strength not affected by risk weightings, increased to 12.9%
(31 July 2024: 12.7%).
The PRA Policy Statement PS 9/24 Implementation of the
Basel 3.1 standards near-final part 2 was published on 12
September 2024 with an implementation date of 1 January
2026. In January 2025, the PRA announced a one-year delay
to Basel 3.1 implementation moving the effective date to 1
January 2027. The majority of rules applicable to the group
remain unchanged, including the removal of the Small and
Medium-sized Enterprises (“SME”) supporting factor. We
currently estimate that implementation will result in an
increase of up to 10% in the group’s RWAs calculated under
the standardised approach. The group expects to receive a
full offset in Pillar 2a requirements at total capital level for the
removal of the Pillar 1 RWA SME support factor. As such, we
expect the UK implementation of Basel 3.1 to have a less
significant impact on the group’s overall capital headroom
position than initially anticipated.
As reported in our Half Year 2025 results, following our initial
application to the PRA in December 2020 to transition to the
Internal Ratings Based (“IRB”) approach, the application
remains in Phase 2, with engagement continuing with the
regulator. Our Motor Finance, Property Finance, and Energy
portfolios, where model development is most advanced,
were included in the original submission.
Capital outlook
In the near-term, we expect to maintain our CET1 capital
ratio above the top end of our medium-term target range of
12% to 13%, based on our current assessment of the
provision in respect of motor finance commissions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
56
Group funding
1
31 July 2025
£ million
31 July 2024
£ million
Customer deposits
8,799.3 8,693.6
Secured funding
1,077.4 1,205.1
Unsecured funding
2
1,109.4 1,219.1
Equity
1,735.5 1,842.5
Total available funding
3
12,721.6 12,960.3
Total available funding as a percentage of loan book
4
132% 128%
Average maturity of funding allocated to loan book
5
18 months 20 months
1. Numbers relate to core funding and exclude working capital facilities at the business level.
2. Unsecured funding excludes £1.5 million (31 July 2024: £55.1 million) of non-facility overdrafts included in borrowings and includes £nil (31 July 2024:
£140.0 million) of undrawn facilities.
3. Includes £250.0 million of funds raised via a senior unsecured bond with a five-year tenor by Close Brothers Group plc, the group’s holding company,
in June 2023, with proceeds currently used for general corporate purposes.
4. Total funding as a percentage of loan book includes £207.3 million (31 July 2024: £267.9 million) of operating lease assets in the loan book figure, of
which £41.0 million for Close Brewery Rentals Limited are classified as held for sale as at 31 July 2025.
5. Simple weighted average of the applicable funding allocated to the loan book. The applicable funding excludes equity (except AT1 instruments) and
deducts funding held for liquidity purposes.
Our Treasury function is focused on managing funding and
liquidity to support the Banking businesses, as well as
managing interest rate risk. Our Savings business, which was
integrated into the Retail business in the 2024 financial year,
provides simple and straightforward savings products to
both individuals and businesses, whilst being committed to
providing the highest level of customer service.
Our funding draws on a wide range of wholesale and deposit
markets including several public debt securities at both group
and operating company level, as well as public and private
secured funding programmes and a diverse mix of customer
deposits. This broad funding base reduces concentration risk
and ensures we can adapt our position through the cycle.
We have maintained a prudent maturity profile, with the
average maturity of funding allocated to the loan book at 18
months (31 July 2024: 20 months), ahead of the average loan
book maturity at 15 months (31 July 2024: 16 months).
Total funding decreased 2% to £12.7 billion (31 July 2024:
£13.0 billion), which accounted for 132% (31 July 2024:
128%) of the loan book at the balance sheet date. The
average cost of funding
1
in Banking reduced marginally to
5.4% (2024: 5.6%) and we remain well positioned to
continue benefiting from our diverse funding base and the
strength of our Savings franchise.
While customer deposits increased 1% to £8.8 billion (31 July
2024: £8.7 billion), we saw a change in the mix as we have
actively sought to grow our retail deposit base. Retail customer
deposits increased 20% to £6.8 billion (31 July 2024: £5.7
billion), with non-retail deposits reducing 34% to £2.0 billion
(31 July 2024: £3.0 billion), in line with our funding plan for the
year. In accordance with our prudent and conservative
approach to funding, only 13% of total deposits are available
on demand and 57% have at least three months to maturity. At
31 July 2025, approximately 87% of retail deposits were
protected by the Financial Services Compensation Scheme.
Secured funding decreased 11% to £1.1 billion (31 July
2024: £1.2 billion) as the group fully repaid its final drawings
of £110 million under the Term Funding Scheme for Small
and Medium-sized Enterprises (“TFSME”), with no remaining
borrowings under the scheme. In addition, the group raised
£300 million through a private motor warehouse
securitisation in June 2025, which was offset by scheduled
repayments for our existing Motor Finance securitisations.
Unsecured funding, which includes senior unsecured and
subordinated bonds, decreased 9% to £1.1 billion (31 July
2024: £1.2 billion), primarily driven by the maturity of
undrawn revolving credit facilities.
We continue to leverage the benefits from the previous
investment in our customer deposit platform, which has
provided us with scalability and enabled us to diversify our
product offering. Deposits held through this platform now
stand at over £6.6 billion. The introduction of Easy Access
has provided us access to a large potential deposit pool,
with balances of over £800 million (at 31 July 2025) since
launching in 2023. We remain focused on growing our retail
funding base through a broad range of deposit products,
further optimising our cost of funding and maturity profile.
Moody’s ratings for the group and CBL (Bank deposit rating)
are Baa1/P2 and A2/P1 respectively (at 27 March 2025) and
both remain under ‘review for downgrade’ following the
Supreme Court judgment. Fitch Ratings (“Fitch”) ratings for
both the group and CBL are BBB/F3 (at 6 August 2025) with
a negative outlook. This follows a one notch downgrade for
both the group and CBL from BBB+ to BBB. Notwithstanding
recent downgrades, our credit ratings remain robust, and we
retain strong access to funding markets.
Group liquidity
The group continues to adopt a conservative stance on
liquidity, ensuring it is comfortably ahead of both internal risk
appetite and regulatory requirements.
In light of the significant uncertainty regarding the outcome
of the FCA’s review of historical motor finance commission
arrangements, we have consciously maintained an elevated
level of liquidity, with the majority of our treasury assets held
in cash and government bonds. During the year, treasury
assets increased 20% to £2.8 billion (31 July 2024: £2.3
billion) and were predominantly held on deposit with the
Bank of England.
We regularly assess and stress test the group’s liquidity
requirements and continue to materially exceed the liquidity
coverage ratio (“LCR”) regulatory requirements, with a 12-
month average LCR to 31 July 2025 of 1,012% (31 July
2024: 1,034%). In addition to internal measures, we monitor
funding risk based on the CRR rules for the net stable
funding ratio (“NSFR”). The four-quarter average NSFR to 31
July 2025 was 145.9% (31 July 2024: 134.4%) driven by
increased retail deposits.
1. Banking cost of funding interest expense (excluding relevant allocations to Close Brothers Vehicle Hire and Close Brewery Rentals Limited) £520.8
million (2024: £531.6 million).
57
Strategic report Governance report Financial statements

Group liquidity
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central banks
1,917.0 1,584.0
Sovereign and central bank debt
601.6 383.7
Supranational, sub-sovereigns and agency (“SSA”) bonds
146.2 145.5
Covered bonds
105.6 187.7
Treasury assets
2,770.4 2,300.9
Banking
Key financials
2025
£ million
2024
£ million
Change
%
Adjusted operating income
692.9 709.9 (2)
Adjusted operating expenses
(402.8) (399.7) 1
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
198.3 212.9 (7)
Adjusted operating profit, pre provisions for impairment losses
290.1 310.2 (6)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
(43.4) (5.4) n/a
Statutory operating (loss)/profit
(68.4) 178.0 (138)
Net interest margin
7.2% 7.4%
Expense/income ratio
58% 56%
Bad debt ratio
1.0% 1.0%
Return on net loan book
2.1% 2.2%
Return on opening equity
8.6% 11.0%
Closing loan book and operating lease assets
9,460.7 9,831.8 (4)
Solid underlying performance with attractive
growth opportunities across our businesses
Unless otherwise stated, all metrics exclude adjusting items.
The Banking division has navigated a challenging market
backdrop during the year, with SMEs continuing to show
resilience amid evolving conditions, with economic
uncertainty and consumer affordability remaining a key
focus. Whilst the regulatory environment has also introduced
significant uncertainty, the strength of our businesses and
the commitment of our people have underpinned a solid
performance. We remain confident in the long-term
opportunities ahead for our businesses.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in operating expenses.
On a statutory basis, we delivered an operating loss of £68.4
million (2024: operating profit of £178.0 million), including the
provision charge of £165.0 million in relation to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited, which has been
sold, and Vehicle Hire, which is being exited. The group also
recognised a separate £33.0 million provision for a proactive
customer remediation programme following the identification
of historical deficiencies in certain operational processes
related to early settlement of loans in the Motor Finance
business, £18.7 million reflecting complaints handling and
other operational and legal costs incurred in relation to motor
finance commissions, £2.3 million of restructuring costs and
£0.2 million of amortisation of intangible assets on
acquisition.
Financial overview continued
Close Brothers Group plc Annual Report 2025
58
Group liquidity
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central banks
1,917.0 1,584.0
Sovereign and central bank debt
601.6 383.7
Supranational, sub-sovereigns and agency (“SSA”) bonds
146.2 145.5
Covered bonds
105.6 187.7
Treasury assets
2,770.4 2,300.9
Banking
Key financials
2025
£ million
2024
£ million
Change
%
Adjusted operating income
692.9 709.9 (2)
Adjusted operating expenses
(402.8) (399.7) 1
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
198.3 212.9 (7)
Adjusted operating profit, pre provisions for impairment losses
290.1 310.2 (6)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
(43.4) (5.4) n/a
Statutory operating (loss)/profit
(68.4) 178.0 (138)
Net interest margin
7.2% 7.4%
Expense/income ratio
58% 56%
Bad debt ratio
1.0% 1.0%
Return on net loan book
2.1% 2.2%
Return on opening equity
8.6% 11.0%
Closing loan book and operating lease assets
9,460.7 9,831.8 (4)
Solid underlying performance with attractive
growth opportunities across our businesses
Unless otherwise stated, all metrics exclude adjusting items.
The Banking division has navigated a challenging market
backdrop during the year, with SMEs continuing to show
resilience amid evolving conditions, with economic
uncertainty and consumer affordability remaining a key
focus. Whilst the regulatory environment has also introduced
significant uncertainty, the strength of our businesses and
the commitment of our people have underpinned a solid
performance. We remain confident in the long-term
opportunities ahead for our businesses.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in operating expenses.
On a statutory basis, we delivered an operating loss of £68.4
million (2024: operating profit of £178.0 million), including the
provision charge of £165.0 million in relation to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited, which has been
sold, and Vehicle Hire, which is being exited. The group also
recognised a separate £33.0 million provision for a proactive
customer remediation programme following the identification
of historical deficiencies in certain operational processes
related to early settlement of loans in the Motor Finance
business, £18.7 million reflecting complaints handling and
other operational and legal costs incurred in relation to motor
finance commissions, £2.3 million of restructuring costs and
£0.2 million of amortisation of intangible assets on
acquisition.
Financial overview continued
Close Brothers Group plc Annual Report 2025
58
Group liquidity
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central banks
1,917.0 1,584.0
Sovereign and central bank debt
601.6 383.7
Supranational, sub-sovereigns and agency (“SSA”) bonds
146.2 145.5
Covered bonds
105.6 187.7
Treasury assets
2,770.4 2,300.9
Banking
Key financials
2025
£ million
2024
£ million
Change
%
Adjusted operating income
692.9 709.9 (2)
Adjusted operating expenses
(402.8) (399.7) 1
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
198.3 212.9 (7)
Adjusted operating profit, pre provisions for impairment losses
290.1 310.2 (6)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
(43.4) (5.4) n/a
Statutory operating (loss)/profit
(68.4) 178.0 (138)
Net interest margin
7.2% 7.4%
Expense/income ratio
58% 56%
Bad debt ratio
1.0% 1.0%
Return on net loan book
2.1% 2.2%
Return on opening equity
8.6% 11.0%
Closing loan book and operating lease assets
9,460.7 9,831.8 (4)
Solid underlying performance with attractive
growth opportunities across our businesses
Unless otherwise stated, all metrics exclude adjusting items.
The Banking division has navigated a challenging market
backdrop during the year, with SMEs continuing to show
resilience amid evolving conditions, with economic
uncertainty and consumer affordability remaining a key
focus. Whilst the regulatory environment has also introduced
significant uncertainty, the strength of our businesses and
the commitment of our people have underpinned a solid
performance. We remain confident in the long-term
opportunities ahead for our businesses.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in operating expenses.
On a statutory basis, we delivered an operating loss of £68.4
million (2024: operating profit of £178.0 million), including the
provision charge of £165.0 million in relation to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited, which has been
sold, and Vehicle Hire, which is being exited. The group also
recognised a separate £33.0 million provision for a proactive
customer remediation programme following the identification
of historical deficiencies in certain operational processes
related to early settlement of loans in the Motor Finance
business, £18.7 million reflecting complaints handling and
other operational and legal costs incurred in relation to motor
finance commissions, £2.3 million of restructuring costs and
£0.2 million of amortisation of intangible assets on
acquisition.
Financial overview continued
Close Brothers Group plc Annual Report 2025
58

Group liquidity
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central banks
1,917.0 1,584.0
Sovereign and central bank debt
601.6 383.7
Supranational, sub-sovereigns and agency (“SSA”) bonds
146.2 145.5
Covered bonds
105.6 187.7
Treasury assets
2,770.4 2,300.9
Banking
Key financials
2025
£ million
2024
£ million
Change
%
Adjusted operating income
692.9 709.9 (2)
Adjusted operating expenses
(402.8) (399.7) 1
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
198.3 212.9 (7)
Adjusted operating profit, pre provisions for impairment losses
290.1 310.2 (6)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
(43.4) (5.4) n/a
Statutory operating (loss)/profit
(68.4) 178.0 (138)
Net interest margin
7.2% 7.4%
Expense/income ratio
58% 56%
Bad debt ratio
1.0% 1.0%
Return on net loan book
2.1% 2.2%
Return on opening equity
8.6% 11.0%
Closing loan book and operating lease assets
9,460.7 9,831.8 (4)
Solid underlying performance with attractive
growth opportunities across our businesses
Unless otherwise stated, all metrics exclude adjusting items.
The Banking division has navigated a challenging market
backdrop during the year, with SMEs continuing to show
resilience amid evolving conditions, with economic
uncertainty and consumer affordability remaining a key
focus. Whilst the regulatory environment has also introduced
significant uncertainty, the strength of our businesses and
the commitment of our people have underpinned a solid
performance. We remain confident in the long-term
opportunities ahead for our businesses.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in operating expenses.
On a statutory basis, we delivered an operating loss of £68.4
million (2024: operating profit of £178.0 million), including the
provision charge of £165.0 million in relation to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited, which has been
sold, and Vehicle Hire, which is being exited. The group also
recognised a separate £33.0 million provision for a proactive
customer remediation programme following the identification
of historical deficiencies in certain operational processes
related to early settlement of loans in the Motor Finance
business, £18.7 million reflecting complaints handling and
other operational and legal costs incurred in relation to motor
finance commissions, £2.3 million of restructuring costs and
£0.2 million of amortisation of intangible assets on
acquisition.
Financial overview continued
Close Brothers Group plc Annual Report 2025
58
The loan book reduced 4% during the year to £9.5 billion (31
July 2024: £9.8 billion), primarily driven by the temporary
pause in UK motor lending following the Court of Appeal's
judgment in October 2024, loan book moderation measures,
and lower activity in some of our markets in the second half.
Adjusted operating income decreased 2% to £692.9 million
(2024: £709.9 million), mainly driven by loan book
moderation measures, as well as the run-off of the legacy
Republic of Ireland Motor Finance business.
The net interest margin remained strong at 7.2% (2024:
7.4%), as we maintained our focus on pricing discipline, in
line with the guidance provided during the half-year results.
On an underlying basis, excluding an increase in Novitas
income and favourable movements in derivatives, the net
interest margin reduced to 7.1% (2024: 7.4%). This reflected
continued pressure on new business margins from elevated
SME funding costs in a higher rate environment, together
with the impact of the resulting changes in lending mix, with
larger, lower NIM, loans accounting for a greater share of
new business. In the 2026 financial year, we expect the net
interest margin to be slightly lower than 7%, reflecting loan
book mix impacts.
Adjusted operating expenses increased 1% to £402.8 million
(2024: £399.7 million), as cost savings were broadly offset by
wage inflation and spend on technology and expansion of
capabilities across the business. The expense/income ratio
increased to 58% (2024: 56%), while the compensation ratio
reduced marginally to 30% (2024: 31%).
Cost savings
Since March 2024, we have delivered £25 million of
annualised cost savings through streamlining of our
technology, suppliers and property, and workforce, of which
c.£15 million were recognised in the 2025 financial year
2
.
We continued to build on the progress from our technology
transformation, initiated in 2023, focused on simplifying and
modernising our technology estate, and consolidating and
increasing our use of strategic partners. This has helped
create a more digitally enabled and agile IT environment that
is secure, resilient and sustainable. To date, we have
reduced our technology headcount by c.30%, removed
approximately 146 IT applications and decommissioned over
40% of servers from our technology estate. Our migration to
the Cloud is progressing at pace, reducing costs and
increasing flexibility.
We have exited two of our London premises and rationalised
five Manchester sites into two new hub locations. This has
resulted in the removal of c.800 desks, and the reduction of
the property footprint of the Banking division by
approximately one third. With regard to our suppliers, we are
achieving improved commercial outcomes with our strategic
partners, rationalising our supplier base, and prudently
developing our use of offshore services. These actions
resulted in approximately £9 million annualised savings by
the end of the 2025 financial year.
We have made good progress on streamlining the workforce
through the consolidation of roles across our businesses and
functions, as well as through the management of vacancies,
resulting in annualised savings of approximately £16 million
by the end of the 2025 financial year.
We incurred £2.3 million of restructuring costs this year,
classified as an adjusting item. These costs primarily relate
to redundancy and associated expenses resulting from the
cost management actions announced in March 2024 and
completed by the end of the 2025 financial year.
As outlined, the group is committed to maintaining cost
momentum to deliver a step change in operating profitability.
We will deliver at least c.£20 million of additional annualised
savings per annum at group level in each of the next three
years, through further consolidation of centrally provided
functions, outsourcing and offshoring, and the simplification
and rationalisation of technology, including automation and
the use of artificial intelligence. As a result, we expect the
group's adjusted operating expenses to be within the
£410-430 million range by the 2028 financial year.
In the 2026 financial year, we expect to deliver c.£20 million
of annualised savings through a reduction in legal and
professional expenses related to motor commissions, the
initial benefits of Premium Finance repositioning and cost
base optimisation, as well as other initiatives. As a result, we
expect the group's adjusted operating expenses to be within
the £440-460 million range. Banking adjusted operating
expenses are expected to be marginally higher than the prior
year as wage inflation and investment spend, including in
technology and expansion of capabilities across the
business, are expected to be largely offset by cost savings.
We expect to incur c.£5-10 million of restructuring costs in
the 2026 financial year, which are expected to continue to be
classified as adjusting items.
Adjusted impairment charges decreased to £91.8 million
(2024: £97.3 million), corresponding to a bad debt ratio of
1.0% (2024: 1.0%). Excluding Novitas, impairment charges
rose to £98.6 million (2024: £90.9 million), equivalent to a bad
debt ratio of 1.0% (2024: 1.0%). The rise in underlying
impairment charges excluding Novitas was mainly driven by
provision increases on existing names in the Property
business. This was partially offset by generally favourable
performance across other businesses.
Since the 2024 financial year end, we have updated the
macroeconomic scenarios to reflect the latest available
information regarding the macroeconomic environment and
outlook. The weightings assigned to these scenarios remain
unchanged, although we have seen some improvements to
the underlying assumptions.
Credit quality remains resilient and the bad debt ratio
remains comfortably below our long-term average of 1.2%.
Overall, provision coverage reduced to 2.6% (31 July 2024:
4.3%), driven by the recovery of outstanding balances in
relation to Novitas. Excluding Novitas, the coverage ratio
increased slightly to 2.5% (31 July 2024: 2.3%) reflecting the
above-mentioned provision increases against the backdrop
of a lower total loan book.
2. Delivered c.£25 million of annualised savings since March 2024 and by the end of the 2025 financial year. Of this, c.£3 million benefit was recognised in
the 2024 financial year and a further c.£15 million in the 2025 financial year, resulting in a cumulative benefit of c.£18 million in the 2025 financial year. A
remaining benefit of £7 million will be recognised in the 2026 financial year. Excludes costs to achieve.
59
Group liquidity
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central banks
1,917.0 1,584.0
Sovereign and central bank debt
601.6 383.7
Supranational, sub-sovereigns and agency (“SSA”) bonds
146.2 145.5
Covered bonds
105.6 187.7
Treasury assets
2,770.4 2,300.9
Banking
Key financials
2025
£ million
2024
£ million
Change
%
Adjusted operating income
692.9 709.9 (2)
Adjusted operating expenses
(402.8) (399.7) 1
Adjusted impairment losses on financial assets
(91.8) (97.3) (6)
Adjusted operating profit
198.3 212.9 (7)
Adjusted operating profit, pre provisions for impairment losses
290.1 310.2 (6)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (17.2) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(2.3) (3.1) (26)
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Operating loss from Close Brewery Rentals Limited
(4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire
(43.4) (5.4) n/a
Statutory operating (loss)/profit
(68.4) 178.0 (138)
Net interest margin
7.2% 7.4%
Expense/income ratio
58% 56%
Bad debt ratio
1.0% 1.0%
Return on net loan book
2.1% 2.2%
Return on opening equity
8.6% 11.0%
Closing loan book and operating lease assets
9,460.7 9,831.8 (4)
Solid underlying performance with attractive
growth opportunities across our businesses
Unless otherwise stated, all metrics exclude adjusting items.
The Banking division has navigated a challenging market
backdrop during the year, with SMEs continuing to show
resilience amid evolving conditions, with economic
uncertainty and consumer affordability remaining a key
focus. Whilst the regulatory environment has also introduced
significant uncertainty, the strength of our businesses and
the commitment of our people have underpinned a solid
performance. We remain confident in the long-term
opportunities ahead for our businesses.
Banking adjusted operating profit reduced 7% to £198.3
million (2024: £212.9 million), due to a decline in income and
a marginal increase in operating expenses.
On a statutory basis, we delivered an operating loss of £68.4
million (2024: operating profit of £178.0 million), including the
provision charge of £165.0 million in relation to motor finance
commissions. We also recognised £101.7 million of other
adjusting items. These included the total operating losses
before tax of £47.5 million from the group’s rentals
businesses, Close Brewery Rentals Limited, which has been
sold, and Vehicle Hire, which is being exited. The group also
recognised a separate £33.0 million provision for a proactive
customer remediation programme following the identification
of historical deficiencies in certain operational processes
related to early settlement of loans in the Motor Finance
business, £18.7 million reflecting complaints handling and
other operational and legal costs incurred in relation to motor
finance commissions, £2.3 million of restructuring costs and
£0.2 million of amortisation of intangible assets on
acquisition.
Financial overview continued
Close Brothers Group plc Annual Report 2025
58
Strategic report Governance report Financial statements

Whilst we have not seen a significant impact on credit
performance, we continue to monitor closely the evolving
impacts of inflation and cost of living on our customers. We
remain confident in the quality of our loan book, which is
predominantly secured or structurally protected, prudently
underwritten, diverse, and supported by the deep expertise
of our people. Looking forward, we expect the bad debt ratio
for the 2026 financial year to remain below our long-term
average of 1.2%.
Resolution of Novitas legacy issue
The decision was made to wind down Novitas and withdraw
from the legal services financing market following a strategic
review in July 2021, which concluded that the overall risk
profile of the business was no longer compatible with our
long-term strategy and risk appetite. As announced in 2023,
we accelerated our efforts to resolve the issues surrounding
this business and were pursuing formal legal action against
two After the Event (“ATE”) insurers in the litigation funding
arrangements.
We are pleased to now have settled the disputes with both
ATE insurers. The two claims were settled in June 2025 and
July 2025 respectively.
Taken together, the outcomes were favourable to the
provisions held at the point of settlement. Overall, the
Novitas business contributed £16.1 million to adjusted
operating profit in the 2025 financial year (2024: £0.2 million
operating loss including an impairment credit of £6.8 million
(2024: impairment charge of £6.4 million), primarily as a
result of the settlement with the insurers. We expect minimal
income and operating expenses will be recognised in respect
of Novitas going forward. The settlements draw a line under
a legacy issue and enable the group to move forward and
complete its exit from this business.
Loan book growth impacted by moderation
measures; attractive opportunities across our
businesses
The loan book decreased 4% over the year to £9.5 billion (31
July 2024: £9.8 billion), driven by the temporary pause in UK
motor lending following the Court of Appeal's judgment in
October 2024, loan book moderation measures, and lower
activity in some of our markets in the second half.
The Commercial loan book decreased 2% to £4.7 billion (31
July 2024: £4.8 billion). Asset Finance decreased 3%,
primarily due to lower volumes and large terminations in the
Industrial Equipment Division. Invoice and Speciality Finance
decreased 1% over the year, including a £62.4 million
reduction in net loans related to Novitas, which fell to £nil
following the settlement of long-standing litigation in this
business. Excluding Novitas, the Invoice and Speciality
Finance loan book was up 4%.
The Retail loan book decreased 5% to £2.9 billion (31 July
2024: £3.0 billion). Notwithstanding continued robust
underlying demand, the Motor Finance loan book decreased
1% reflecting loan book moderation measures and a
temporary pause in UK motor lending following the Court of
Appeal's judgment in Hopcraft. We have seen good growth
in our recently acquired business, Close Brothers Motor
Finance Ireland, which partly offset the continued run-off of
the legacy Republic of Ireland motor loan book. The
Premium Finance loan book reduced by 14%, due to the
competitive market environment and reduced demand for
Premium Finance from some of our broker partners.
At 31 July 2025, the legacy Republic of Ireland Motor
Finance business was £32.1m and accounted for 2% of the
Motor Finance loan book (31 July 2024: 5%).
The Property loan book decreased 5% to £1.9 billion (31 July
2024: £2.0 billion), due to higher repayments, lower
drawdowns, as well as lower balances in Commercial
Acceptances, reflecting a more challenging economic
environment which is particularly impacting the SME
developer market.
Loan book outlook
We have repositioned the business to focus on segments
where we see mid to high single-digit growth potential
through the cycle, leaving us well positioned to benefit as the
economy and demand recover.
The Commercial business is well positioned for future
organic growth and to extend our lending offering to SMEs.
There is potential to grow our market share in the Invoice
Finance market building on our expertise and competitive
positioning. We also see opportunities within specific sectors
of Asset Finance where we are increasing our lending
footprint, such as energy, agriculture and materials handling,
as well as expanding into new markets, such as commercial
mortgages, which we entered last year. Our new proposition
for the broker market is expected to deliver further growth
and we will actively pursue participation in relevant
government-backed schemes which support lending to
SMEs.
The UK’s used car market is showing renewed strength with
growth projected in the coming years. Our new product
offering for Alternative Fuel Vehicles positions us well to
capitalise on the fast-growing market of used Electric
Vehicles. We also expect Motor Finance Ireland to continue
its strong performance from 2025. To capture these
opportunities, we are expanding distribution in Motor
Finance through growth in the Irish market, and with larger
partners and brokers.
Our repositioned Premium Finance business will focus on
commercial lines, where we see strongest risk-adjusted
returns and long-term growth potential. We will focus on
increasing our share of business with existing broker
partners, developing new broker relationships and applying
our underwriting capability to support higher-value cases.
A renewed strategy in the Property business will expand our
products and asset classes in order to access future growth.
Whilst the Build-to-Sell market remains our core business,
we also see significant opportunities in Build-to-Rent and
Purpose-Built Student Accommodation, and will continue to
build our market position in these sectors. We are
successfully expanding our presence in new regional
markets, particularly in the north of England, and have the
capacity to extend our facility size to be able to fund larger
projects, to support existing and new clients.
Financial overview continued
Close Brothers Group plc Annual Report 2025
60

Whilst we have not seen a significant impact on credit
performance, we continue to monitor closely the evolving
impacts of inflation and cost of living on our customers. We
remain confident in the quality of our loan book, which is
predominantly secured or structurally protected, prudently
underwritten, diverse, and supported by the deep expertise
of our people. Looking forward, we expect the bad debt ratio
for the 2026 financial year to remain below our long-term
average of 1.2%.
Resolution of Novitas legacy issue
The decision was made to wind down Novitas and withdraw
from the legal services financing market following a strategic
review in July 2021, which concluded that the overall risk
profile of the business was no longer compatible with our
long-term strategy and risk appetite. As announced in 2023,
we accelerated our efforts to resolve the issues surrounding
this business and were pursuing formal legal action against
two After the Event (“ATE”) insurers in the litigation funding
arrangements.
We are pleased to now have settled the disputes with both
ATE insurers. The two claims were settled in June 2025 and
July 2025 respectively.
Taken together, the outcomes were favourable to the
provisions held at the point of settlement. Overall, the
Novitas business contributed £16.1 million to adjusted
operating profit in the 2025 financial year (2024: £0.2 million
operating loss including an impairment credit of £6.8 million
(2024: impairment charge of £6.4 million), primarily as a
result of the settlement with the insurers. We expect minimal
income and operating expenses will be recognised in respect
of Novitas going forward. The settlements draw a line under
a legacy issue and enable the group to move forward and
complete its exit from this business.
Loan book growth impacted by moderation
measures; attractive opportunities across our
businesses
The loan book decreased 4% over the year to £9.5 billion (31
July 2024: £9.8 billion), driven by the temporary pause in UK
motor lending following the Court of Appeal's judgment in
October 2024, loan book moderation measures, and lower
activity in some of our markets in the second half.
The Commercial loan book decreased 2% to £4.7 billion (31
July 2024: £4.8 billion). Asset Finance decreased 3%,
primarily due to lower volumes and large terminations in the
Industrial Equipment Division. Invoice and Speciality Finance
decreased 1% over the year, including a £62.4 million
reduction in net loans related to Novitas, which fell to £nil
following the settlement of long-standing litigation in this
business. Excluding Novitas, the Invoice and Speciality
Finance loan book was up 4%.
The Retail loan book decreased 5% to £2.9 billion (31 July
2024: £3.0 billion). Notwithstanding continued robust
underlying demand, the Motor Finance loan book decreased
1% reflecting loan book moderation measures and a
temporary pause in UK motor lending following the Court of
Appeal's judgment in Hopcraft. We have seen good growth
in our recently acquired business, Close Brothers Motor
Finance Ireland, which partly offset the continued run-off of
the legacy Republic of Ireland motor loan book. The
Premium Finance loan book reduced by 14%, due to the
competitive market environment and reduced demand for
Premium Finance from some of our broker partners.
At 31 July 2025, the legacy Republic of Ireland Motor
Finance business was £32.1m and accounted for 2% of the
Motor Finance loan book (31 July 2024: 5%).
The Property loan book decreased 5% to £1.9 billion (31 July
2024: £2.0 billion), due to higher repayments, lower
drawdowns, as well as lower balances in Commercial
Acceptances, reflecting a more challenging economic
environment which is particularly impacting the SME
developer market.
Loan book outlook
We have repositioned the business to focus on segments
where we see mid to high single-digit growth potential
through the cycle, leaving us well positioned to benefit as the
economy and demand recover.
The Commercial business is well positioned for future
organic growth and to extend our lending offering to SMEs.
There is potential to grow our market share in the Invoice
Finance market building on our expertise and competitive
positioning. We also see opportunities within specific sectors
of Asset Finance where we are increasing our lending
footprint, such as energy, agriculture and materials handling,
as well as expanding into new markets, such as commercial
mortgages, which we entered last year. Our new proposition
for the broker market is expected to deliver further growth
and we will actively pursue participation in relevant
government-backed schemes which support lending to
SMEs.
The UK’s used car market is showing renewed strength with
growth projected in the coming years. Our new product
offering for Alternative Fuel Vehicles positions us well to
capitalise on the fast-growing market of used Electric
Vehicles. We also expect Motor Finance Ireland to continue
its strong performance from 2025. To capture these
opportunities, we are expanding distribution in Motor
Finance through growth in the Irish market, and with larger
partners and brokers.
Our repositioned Premium Finance business will focus on
commercial lines, where we see strongest risk-adjusted
returns and long-term growth potential. We will focus on
increasing our share of business with existing broker
partners, developing new broker relationships and applying
our underwriting capability to support higher-value cases.
A renewed strategy in the Property business will expand our
products and asset classes in order to access future growth.
Whilst the Build-to-Sell market remains our core business,
we also see significant opportunities in Build-to-Rent and
Purpose-Built Student Accommodation, and will continue to
build our market position in these sectors. We are
successfully expanding our presence in new regional
markets, particularly in the north of England, and have the
capacity to extend our facility size to be able to fund larger
projects, to support existing and new clients.
Financial overview continued
Close Brothers Group plc Annual Report 2025
60
Loan book analysis
31 July 2025
£ million
31 July 2024
£ million
Change
%
Commercial
4,729.3 4,834.7 (2)
Asset Finance
1
3,291.0 3,388.5 (3)
Invoice and Speciality Finance 1,438.3 1,446.2 (1)
Retail
2,878.9 3,041.9 (5)
Motor Finance
2
1,993.5 2,016.0 (1)
Premium Finance 885.4 1,025.9 (14)
Property
1,852.5 1,955.2 (5)
Closing loan book and operating lease assets
3
9,460.7 9,831.8 (4)
1. Asset Finance totals exclude £165.0 million (31 July 2024: £222.4 million) of operating lease assets related to Close Brothers Vehicle Hire, which is in
wind-down, and £41.0 million of operating lease assets related to Close Brewery Rentals Limited (31 July 2024: £44.5 million) which has been classified
as held for sale on the group's balance sheet as at 31 July 2025.
2. The Motor Finance loan book includes £32.1 million (31 July 2024: £92.8 million) relating to the Republic of Ireland Motor Finance business, which is in
run-off following the cessation of our previous partnership in the Republic of Ireland from 30 June 2022.
3. Includes operating lease assets of £1.3 million (31 July 2024: £1.0 million).
Banking: Commercial
Matt Roper
Chief Executive Officer Commercial
“The Commercial business is
wellpositioned for future growth
andto extend our lending offering
toSMEs.”
Commercial lends to more than 28,000 small and medium-
sized enterprises through our in-house teams, where loans
are originated via our direct sales force or introduced by
third-party distribution channels. Asset Finance provides
commercial asset financing, hire purchase and leasing
solutions for a diverse range of assets and sectors. Invoice
Finance works with small businesses to provide debt
factoring, invoice discounting and asset based lending.
Robust performance, benefitting from
growthinitiatives
Customer demand remained relatively robust in 2025 against
the backdrop of a competitive marketplace and challenging
environment for SMEs. In Asset Finance, the marketplace
has remained competitive, with pressure on new business
margins. In the Invoice Finance market, we have seen some
changes in the competitive environment and our strong
offering and service has enabled us to win new clients.
Our growth initiatives continued to progress well, as the
Materials Handling team delivered healthy new business
volumes. We broadened our product range with a
commercial mortgage offering, enhancing our overall
proposition. Our restructured Broker and Professional
Solutions has led to increased activity with its newly
launched proposition for the broker market. In July 2025, we
agreed a transaction with the British Business Bank of up to
£300 million under the ENABLE Guarantees programme to
unlock lending capacity for SMEs within Asset Finance.
As part of our simplification agenda, on 15 July 2025 Close
Brothers announced the sale of Close Brewery Rentals
Limited (“CBRL”) to MML Keystone, a fund managed by
MML Capital. The transaction completed on 31 August 2025.
CBRL reported an operating loss before tax of £4.1 million,
presented as an adjusting item in the 2025 financial
statements. Whilst the group will no longer offer brewery
container rental solutions, we will remain a key specialist
lender in the beverage finance market and will continue to
provide finance solutions for brewery and distillery
equipment. The group sees attractive growth opportunities in
this sector and will continue to support it through Close
Brothers Beverage Finance, a lending business with a loan
book of £34.6 million at 31 July 2025.
In addition, we have decided to exit the group's Vehicle Hire
business. Performance in this business has been impacted
by a challenging market backdrop, particularly post-Covid,
and there is limited opportunity to deliver enhanced returns.
61
Strategic report Governance report Financial statements

To realise maximum value and ensure we continue to
support our customers in line with contractual terms, the exit
will be phased over time, with the business being managed
down over the next three to five years. As a result of this
decision and the recent decline in asset values in this sector,
we recognised an impairment charge of £30.0 million. The
Vehicle Hire business reported an operating loss before tax
of £43.4 million, presented as an adjusting item in the 2025
financial statements. This includes the £30.0 million asset
impairment charge, a £10.9 million underlying loss and £2.5
million impairment of intangible assets. Any future profit or
loss impact of this business will be subject to, amongst other
factors, market conditions and any movement in asset prices
over the wind down period.
Adjusted operating profit for Commercial increased to £112.2
million (2024: £97.0 million), mainly driven by Novitas.
Excluding Novitas, adjusted operating profit decreased 1%
to £96.1 million (2024: £97.2 million), reflecting a stable
income and modest reduction in costs, offset by marginally
higher impairment charges. Before impairment charges,
adjusted operating profit was broadly unchanged at £120.7
million (2024: £120.9 million).
We saw an increase in adjusted operating profit in Novitas to
£16.1 million (2024: £0.2 million operating loss), following
final settlements with the insurers which led to an impairment
credit.
On a statutory basis, operating profit decreased to £63.3
million (2024: £86.7 million), reflecting £1.4 million of
restructuring costs and the total operating loss before tax of
the rentals businesses of £47.5 million.
Adjusted operating income increased to £315.6 million (2024:
£314.6 million) supported by a 2% uplift in the average loan
balance over 12 months.
Higher Novitas income was partially offset by a reduction in
Asset Finance due to the impact of higher funding costs and
competitive dynamics on new business margins, as well as
changes in the lending mix, with larger, lower NIM, loans
accounting for a greater share of new business. The net
interest margin was slightly lower at 6.6% (2024: 6.7%).
Excluding Novitas, the net interest margin decreased to
6.4% (2024: 6.6%).
Adjusted operating expenses decreased to £185.6 million
(2024: £187.5 million), mainly driven by the benefits of cost
savings initiatives, including workforce rationalisation in
Asset Finance, partially offset by higher IT spend and
depreciation. The Commercial expense/income ratio
decreased slightly to 59% (2024: 60%).
Asset Finance
Loan book
£3.3 billion
Average loan size
c.£52,000
Typical loan maturity
3-4 years
Invoice and Speciality Finance
1
Loan book
£1.4 billion
Average loan size
2
c.£612,000
Typical loan maturity
4 months
1. Invoice and Speciality Finance comprises Invoice UK and
GmbH, Asset Ireland and Novitas.
2. This figure represents Invoice Finance only.
We continue to realise the benefits of our investment in the
Asset Finance transformation programme, which concluded
in the 2024 financial year. The implementation of a single
technology platform has enhanced visibility of customer data
across our specialist teams, leading to improved
collaboration, streamlined decision-making, and further
improved our strong service capabilities.
Adjusted impairment charges decreased to £17.8 million
(2024: £30.1 million) driven largely by a reduction in
provisions against Novitas. Excluding Novitas, impairment
charges were marginally higher at £24.6 million (2024: £23.7
million). This corresponded to a bad debt ratio of 0.5%
(2024: 0.5%) and a broadly stable coverage ratio (excluding
Novitas) of 1.5% (31 July 2024: 1.4%).
Financial overview continued
Close Brothers Group plc Annual Report 2025
62

To realise maximum value and ensure we continue to
support our customers in line with contractual terms, the exit
will be phased over time, with the business being managed
down over the next three to five years. As a result of this
decision and the recent decline in asset values in this sector,
we recognised an impairment charge of £30.0 million. The
Vehicle Hire business reported an operating loss before tax
of £43.4 million, presented as an adjusting item in the 2025
financial statements. This includes the £30.0 million asset
impairment charge, a £10.9 million underlying loss and £2.5
million impairment of intangible assets. Any future profit or
loss impact of this business will be subject to, amongst other
factors, market conditions and any movement in asset prices
over the wind down period.
Adjusted operating profit for Commercial increased to £112.2
million (2024: £97.0 million), mainly driven by Novitas.
Excluding Novitas, adjusted operating profit decreased 1%
to £96.1 million (2024: £97.2 million), reflecting a stable
income and modest reduction in costs, offset by marginally
higher impairment charges. Before impairment charges,
adjusted operating profit was broadly unchanged at £120.7
million (2024: £120.9 million).
We saw an increase in adjusted operating profit in Novitas to
£16.1 million (2024: £0.2 million operating loss), following
final settlements with the insurers which led to an impairment
credit.
On a statutory basis, operating profit decreased to £63.3
million (2024: £86.7 million), reflecting £1.4 million of
restructuring costs and the total operating loss before tax of
the rentals businesses of £47.5 million.
Adjusted operating income increased to £315.6 million (2024:
£314.6 million) supported by a 2% uplift in the average loan
balance over 12 months.
Higher Novitas income was partially offset by a reduction in
Asset Finance due to the impact of higher funding costs and
competitive dynamics on new business margins, as well as
changes in the lending mix, with larger, lower NIM, loans
accounting for a greater share of new business. The net
interest margin was slightly lower at 6.6% (2024: 6.7%).
Excluding Novitas, the net interest margin decreased to
6.4% (2024: 6.6%).
Adjusted operating expenses decreased to £185.6 million
(2024: £187.5 million), mainly driven by the benefits of cost
savings initiatives, including workforce rationalisation in
Asset Finance, partially offset by higher IT spend and
depreciation. The Commercial expense/income ratio
decreased slightly to 59% (2024: 60%).
Asset Finance
Loan book
£3.3 billion
Average loan size
c.£52,000
Typical loan maturity
3-4 years
Invoice and Speciality Finance
1
Loan book
£1.4 billion
Average loan size
2
c.£612,000
Typical loan maturity
4 months
1. Invoice and Speciality Finance comprises Invoice UK and
GmbH, Asset Ireland and Novitas.
2. This figure represents Invoice Finance only.
We continue to realise the benefits of our investment in the
Asset Finance transformation programme, which concluded
in the 2024 financial year. The implementation of a single
technology platform has enhanced visibility of customer data
across our specialist teams, leading to improved
collaboration, streamlined decision-making, and further
improved our strong service capabilities.
Adjusted impairment charges decreased to £17.8 million
(2024: £30.1 million) driven largely by a reduction in
provisions against Novitas. Excluding Novitas, impairment
charges were marginally higher at £24.6 million (2024: £23.7
million). This corresponded to a bad debt ratio of 0.5%
(2024: 0.5%) and a broadly stable coverage ratio (excluding
Novitas) of 1.5% (31 July 2024: 1.4%).
Financial overview continued
Close Brothers Group plc Annual Report 2025
62
Banking: Commercial
2025
£ million
2024
£ million
Change
%
Adjusted operating income
315.6 314.6 —
Adjusted operating expenses
(185.6) (187.5) (1)
Adjusted impairment losses on financial assets
(17.8) (30.1) (41)
Adjusted operating profit
112.2 97.0 16
Adjusted operating profit, pre provisions for impairment losses
130.0 127.1 2
Adjusting items:
Provision in relation to the BiFD review — (0.6) (100)
Restructuring costs (1.4) (2.2) (36)
Operating loss from Close Brewery Rentals Limited (4.1) (2.1) 95
Operating loss from Close Brothers Vehicle Hire (43.4) (5.4) n/a
Statutory operating profit
63.3 86.7 (27)
Net interest margin
6.6% 6.7%
Expense/income ratio
59% 60%
Bad debt ratio
0.4% 0.6%
Closing loan book and operating lease assets
1
4,729.3 4,834.7 (2)
Commercial key metrics excluding Novitas
2025
£ million
2024
£ million
Change
%
Adjusted operating income
302.3 303.6 —
Adjusted operating expenses
(181.6) (182.7) (1)
Adjusted impairment losses on financial assets
(24.6) (23.7) 4
Adjusted operating profit
96.1 97.2 (1)
Adjusted operating profit, pre provisions for impairment losses
120.7 120.9 —
Net interest margin
6.4% 6.6%
Expense/income ratio
60% 60%
Bad debt ratio
0.5% 0.5%
Closing loan book and operating lease assets
1
4,729.3 4,772.3 (1)
1. Operating lease assets of £1.3 million (31 July 2024: £1.0 million).
Customer: We Are Footprint, recruiter
We Are Footprint has been using invoice
finance with Close Brothers for over a decade
as a tool to bridge the gap between paying
candidates’ wages and receiving payments
from their clients.
With the business looking to expand, our team
of experts tailored a top-up facility through the
Growth Guarantee Scheme, a government
backed loan which supports access to finance
for UK small businesses.
63
Strategic report Governance report Financial statements

Banking: Retail
Ian Cowie
Chief Executive Officer Retail
“We remain focused on providing
excellent service to our customers
and partners.”
Retail provides finance to individuals and businesses through
a network of intermediaries. Motor Finance provides several
products at point of sale in a dealership, or online via a
broker, which allow consumers to buy vehicles from over
4,250 retailers in the UK and 650 retailers in Ireland. Premium
Finance works with c.1,300 insurance brokers in the UK and
Ireland and helps make insurance payments more
manageable for people and businesses, by allowing them to
spread the cost over fixed instalments.
Continued demand in Motor and a re-focused
Premium business
The market backdrop continued to present challenges during
the year, with significant uncertainty in relation to the FCA’s
motor finance work, the Court of Appeal’s judgment in
October 2024 and the subsequent Supreme Court judgment
in August 2025. Although the Motor Finance business was
impacted by the pause in lending in October 2024, we have
remained focused on providing excellent service to our
customers and partners, with all of our lending channels live
from January 2025.
Our Motor Finance business has seen strong growth in new
business flows in the fourth quarter, alongside increased
satisfaction metrics from dealer partners. This comes against
a backdrop of modest growth in the UK used car market. We
have also seen strong growth in Ireland, following the
acquisition of Bluestone Motor Finance DAC in October
2023. Throughout the year, there has been a focus on cost
saving initiatives, such as enhancements to our complaints
handling process, moving our contact centre offshore and
increased automation of processes. The Motor business has
enhanced its UK product offering, including the launch of
PCP for electric vehicles and the integration of our Decision
in Principle (DiP) technology with Motor Finance partners.
Motor Finance
Loan book
£2.0 billion
Average loan size
c.£7,000
Typical loan maturity
4 years
Premium Finance
Loan book
£0.9 billion
Average loan size
c.£600
Typical loan maturity
11 months
The Premium Finance business operates in a mature market
where we have seen some softening in demand and the
impacts of insurance premium costs declining. On 9 July
2025, we announced a strategic repositioning to focus the
growth of our Premium Finance business towards
commercial lines insurance premium finance where we see
strongest risk-adjusted returns and long-term growth
potential, and to reduce our emphasis on personal lines
insurance premium finance. To support this strategic
repositioning, we will optimise the cost base across the
whole Premium Finance business through modernisation of
our technology platforms, digitising more of the onboarding
journey and streamlining our operating model. We estimate a
steady state cost reduction of c.£20 million by the 2030
financial year on an underlying basis (excluding the impact of
inflation and business growth).
We integrated our Savings business, which provides simple
and straightforward savings products to businesses and
individuals, into Retail in 2024. Retail customer deposits
increased 20% to £6.8 billion (31 July 2024: £5.7 billion), with
non-retail deposits reducing 34% to £2.0 billion (31 July
2024: £3.0 billion), in line with our funding plan for the year.
Overall, our customer deposits increased 1% to £8.8 billion
(31 July 2024: £8.7 billion).
Adjusted operating profit for Retail reduced to £18.9 million
(2024: £37.9 million) driven by lower income in both Motor
and Premium Finance as well as higher costs in Motor
Finance. Before provisions for impairment losses, adjusted
operating profit decreased 25% to £63.4 million (2024: £85.1
million).
Financial overview continued
Close Brothers Group plc Annual Report 2025
64

Banking: Retail
Ian Cowie
Chief Executive Officer Retail
“We remain focused on providing
excellent service to our customers
and partners.”
Retail provides finance to individuals and businesses through
a network of intermediaries. Motor Finance provides several
products at point of sale in a dealership, or online via a
broker, which allow consumers to buy vehicles from over
4,250 retailers in the UK and 650 retailers in Ireland. Premium
Finance works with c.1,300 insurance brokers in the UK and
Ireland and helps make insurance payments more
manageable for people and businesses, by allowing them to
spread the cost over fixed instalments.
Continued demand in Motor and a re-focused
Premium business
The market backdrop continued to present challenges during
the year, with significant uncertainty in relation to the FCA’s
motor finance work, the Court of Appeal’s judgment in
October 2024 and the subsequent Supreme Court judgment
in August 2025. Although the Motor Finance business was
impacted by the pause in lending in October 2024, we have
remained focused on providing excellent service to our
customers and partners, with all of our lending channels live
from January 2025.
Our Motor Finance business has seen strong growth in new
business flows in the fourth quarter, alongside increased
satisfaction metrics from dealer partners. This comes against
a backdrop of modest growth in the UK used car market. We
have also seen strong growth in Ireland, following the
acquisition of Bluestone Motor Finance DAC in October
2023. Throughout the year, there has been a focus on cost
saving initiatives, such as enhancements to our complaints
handling process, moving our contact centre offshore and
increased automation of processes. The Motor business has
enhanced its UK product offering, including the launch of
PCP for electric vehicles and the integration of our Decision
in Principle (DiP) technology with Motor Finance partners.
Motor Finance
Loan book
£2.0 billion
Average loan size
c.£7,000
Typical loan maturity
4 years
Premium Finance
Loan book
£0.9 billion
Average loan size
c.£600
Typical loan maturity
11 months
The Premium Finance business operates in a mature market
where we have seen some softening in demand and the
impacts of insurance premium costs declining. On 9 July
2025, we announced a strategic repositioning to focus the
growth of our Premium Finance business towards
commercial lines insurance premium finance where we see
strongest risk-adjusted returns and long-term growth
potential, and to reduce our emphasis on personal lines
insurance premium finance. To support this strategic
repositioning, we will optimise the cost base across the
whole Premium Finance business through modernisation of
our technology platforms, digitising more of the onboarding
journey and streamlining our operating model. We estimate a
steady state cost reduction of c.£20 million by the 2030
financial year on an underlying basis (excluding the impact of
inflation and business growth).
We integrated our Savings business, which provides simple
and straightforward savings products to businesses and
individuals, into Retail in 2024. Retail customer deposits
increased 20% to £6.8 billion (31 July 2024: £5.7 billion), with
non-retail deposits reducing 34% to £2.0 billion (31 July
2024: £3.0 billion), in line with our funding plan for the year.
Overall, our customer deposits increased 1% to £8.8 billion
(31 July 2024: £8.7 billion).
Adjusted operating profit for Retail reduced to £18.9 million
(2024: £37.9 million) driven by lower income in both Motor
and Premium Finance as well as higher costs in Motor
Finance. Before provisions for impairment losses, adjusted
operating profit decreased 25% to £63.4 million (2024: £85.1
million).
Financial overview continued
Close Brothers Group plc Annual Report 2025
64
Banking: Retail
2025
£ million
2024
£ million
Change
%
Operating income
246.7 262.4 (6)
Adjusted operating expenses
(183.3) (177.3) 3
Impairment losses on financial assets
(44.5) (47.2) (6)
Adjusted operating profit
18.9 37.9 (50)
Adjusted operating profit, pre provisions for impairment losses
63.4 85.1 (25)
Adjusting items:
Provision in relation to motor finance commissions
(165.0) — n/a
Complaints handling and other operational and legal costs incurred in
relation to motor finance commissions
(18.7) (6.9) 171
Provision in relation to BiFD review
— (16.6) (100)
Provision in relation to early settlements in Motor Finance
(33.0) — n/a
Restructuring costs
(0.6) (0.6) —
Amortisation of intangible assets on acquisition
(0.2) (0.2) —
Statutory operating (loss)/profit
(198.6) 13.6 n/a
Net interest margin
8.3% 8.7%
Expense/income ratio
74% 68%
Bad debt ratio
1.5% 1.6%
Closing loan book
1
2,878.9 3,041.9 (5)
1. The Motor Finance loan book includes £32.1 million (31 July 2024: £92.8 million) relating to the legacy Republic of Ireland Motor Finance business,
which is in run-off following the cessation of our previous partnership in the Republic of Ireland from 30 June 2022.
The provision charge in respect of motor commissions
recognised at the half year of £165.0 million has been
reassessed in light of all available information and recent
developments and remains unchanged. The ultimate cost to
the group could be materially higher or lower than the
provision taken and remains subject to further clarity from the
FCA on the scope and design of a redress scheme. Please
refer to Note 16 “Other Assets and Liabilities” for further
details on the group’s provisioning assessment of this matter.
The Retail business also incurred £18.7 million of complaints
handling and other operational and legal costs in relation to
motor finance commissions.
Following the identification of historical deficiencies in certain
operational processes related to early settlement of loans in
the Motor Finance business, we recognised a separate
provision of £33.0 million in relation to a proactive customer
remediation programme to be implemented by the group.
The provision reflects our best estimate based on the
information currently available and remains subject to
refinement as the scope and design of the remediation
programme are finalised. Since identification of the issue, we
have acted quickly to amend the relevant processes and
implemented additional controls to prevent recurrence. The
group is fully committed to ensuring that affected customers
are appropriately compensated and expects to contact
customers in early 2026.
On a statutory basis, Retail delivered an operating loss of
£198.6 million (2024: £13.6 million operating profit) mainly
reflecting the adjusting items described above.
Operating income decreased 6% to £246.7 million (2024:
£262.4 million), driven by lower loan books in both Motor and
Premium finance. The net interest margin decreased to 8.3%
(2024: 8.7%) driven by Motor Finance with reduced fee
income and a competitive rate environment.
Adjusted operating expenses increased 3% to £183.3 million
(2024: £177.3 million), driven by Motor Finance due to higher
Ireland trading costs and inflationary pressures, partially
offset by a modest reduction in Premium, from lower
property, technology and volume related costs. As a result,
the expense/income ratio increased to 74% (2024: 68%).
Impairment charges decreased to £44.5 million (2024: £47.2
million), driven by the benefit of the improved
macroeconomic outlook in both Motor and Premium. The
bad debt ratio reduced to 1.5% (2024: 1.6%), with the
provision coverage ratio increasing slightly to 3.2% (31 July
2024: 3.0%), driven by the reduction in the overall loan book.
Dealer partner: Riverside Autos
Specialist Automotive Finance (“SAF”)
accreditation became mandatory in January
2025. Close Brothers Motor Finance supported
over 5,000 dealer partners, including Riverside
Autos, to achieve this. SAF raises industry
standards by improving consumer confidence
in information and advice about finance
products. That’s why 87% of our dealer
partners rated our SAF support positively
1
.
1. Source: Dealer Satisfaction Survey, March 2025.
65
Strategic report Governance report Financial statements

Banking: Property
Phil Hooper
Chief Executive Officer Property
“Our strong customer relationships
and targeting of new growth
opportunities ensure we maintain our
competitive position in the market.”
Property provides residential development finance, bridging
finance and commercial development loans to experienced
property developers and investors across mainland UK and
Northern Ireland, through its two brands, Close Brothers
Property Finance and Commercial Acceptances. It lends to
c.700 professional property developers with a focus on small
to medium-sized residential developments.
The Property loan book is conservatively underwritten. We
work with experienced, professional developers,
predominantly SMEs with a focus on delivering mid-priced
family housing, and have minimal exposure to the prime
central London market, with our regional loan book making
up 49% of the Property Finance portfolio. Our long track
record, expertise and quality of service ensure the business
remains resilient to competition and continues to generate
high levels of repeat business.
Stable performance in a challenging market,
well positioned for growth
The Property business delivered a stable performance
against the challenging market conditions for SME
developers, with a slow-down experienced in core markets.
Our strong customer relationships and targeting of new
growth opportunities maintained our competitive position in
the market. We have successfully expanded our offering into
additional residential markets, such as Build-to-Rent and
student accommodation, and are actively targeting new
regional markets. We have also expanded our capability to
offer larger transaction sizes and a broader product range to
further enhance our customer proposition.
Adjusted operating profit declined 14% to £67.2 million
(2024: £78.0 million), due to a decline in income and an
increase in impairments. Before provisions for impairment
losses, adjusted operating profit reduced 1% to £96.7 million
(2024: £98.0 million).
On a statutory basis, operating profit decreased to £66.9
million (2024: £77.7 million) and included £0.3 million of
restructuring costs.
Loan book
£1.9 billion
Average loan size
c.£2.1 million
Typical development loan maturity
12 - 24 months
Operating income declined 2% to £130.6 million (2024:
£132.9 million), driven by a lower loan book, with the net
interest margin down to 6.9% (2024: 7.3%). This primarily
reflected lower interest yield, driven by the lower Bank of
England rate, lower fee yield due to increasing facility
utilisation, and changes in the lending mix, with larger loans
accounting for a greater share of new business.
Adjusted operating expenses decreased 3% to £33.9 million
(2024: £34.9 million), reflecting lower staff costs. The
expense/income ratio was stable at 26% (2024: 26%).
Impairment charges increased to £29.5 million (2024: £20.0
million), corresponding to a higher bad debt ratio of 1.5%
(2024: 1.1%). This was driven primarily by increased
individual provisions on a small number of developments,
driven by build cost inflation, slower unit sales and lower
realised values. The provision coverage ratio increased to
4.2% (31 July 2024: 3.0%), driven by elevated Stage 3
provisions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
66

Banking: Property
Phil Hooper
Chief Executive Officer Property
“Our strong customer relationships
and targeting of new growth
opportunities ensure we maintain our
competitive position in the market.”
Property provides residential development finance, bridging
finance and commercial development loans to experienced
property developers and investors across mainland UK and
Northern Ireland, through its two brands, Close Brothers
Property Finance and Commercial Acceptances. It lends to
c.700 professional property developers with a focus on small
to medium-sized residential developments.
The Property loan book is conservatively underwritten. We
work with experienced, professional developers,
predominantly SMEs with a focus on delivering mid-priced
family housing, and have minimal exposure to the prime
central London market, with our regional loan book making
up 49% of the Property Finance portfolio. Our long track
record, expertise and quality of service ensure the business
remains resilient to competition and continues to generate
high levels of repeat business.
Stable performance in a challenging market,
well positioned for growth
The Property business delivered a stable performance
against the challenging market conditions for SME
developers, with a slow-down experienced in core markets.
Our strong customer relationships and targeting of new
growth opportunities maintained our competitive position in
the market. We have successfully expanded our offering into
additional residential markets, such as Build-to-Rent and
student accommodation, and are actively targeting new
regional markets. We have also expanded our capability to
offer larger transaction sizes and a broader product range to
further enhance our customer proposition.
Adjusted operating profit declined 14% to £67.2 million
(2024: £78.0 million), due to a decline in income and an
increase in impairments. Before provisions for impairment
losses, adjusted operating profit reduced 1% to £96.7 million
(2024: £98.0 million).
On a statutory basis, operating profit decreased to £66.9
million (2024: £77.7 million) and included £0.3 million of
restructuring costs.
Loan book
£1.9 billion
Average loan size
c.£2.1 million
Typical development loan maturity
12 - 24 months
Operating income declined 2% to £130.6 million (2024:
£132.9 million), driven by a lower loan book, with the net
interest margin down to 6.9% (2024: 7.3%). This primarily
reflected lower interest yield, driven by the lower Bank of
England rate, lower fee yield due to increasing facility
utilisation, and changes in the lending mix, with larger loans
accounting for a greater share of new business.
Adjusted operating expenses decreased 3% to £33.9 million
(2024: £34.9 million), reflecting lower staff costs. The
expense/income ratio was stable at 26% (2024: 26%).
Impairment charges increased to £29.5 million (2024: £20.0
million), corresponding to a higher bad debt ratio of 1.5%
(2024: 1.1%). This was driven primarily by increased
individual provisions on a small number of developments,
driven by build cost inflation, slower unit sales and lower
realised values. The provision coverage ratio increased to
4.2% (31 July 2024: 3.0%), driven by elevated Stage 3
provisions.
Financial overview continued
Close Brothers Group plc Annual Report 2025
66
Banking: Property
2025
£ million
2024
£ million
Change
%
Operating income
130.6 132.9 (2)
Adjusted operating expenses
(33.9) (34.9) (3)
Impairment losses on financial assets
(29.5) (20.0) 48
Adjusted operating profit
67.2 78.0 (14)
Adjusted operating profit, pre provisions for impairment losses
96.7 98.0 (1)
Adjusting items:
Restructuring costs (0.3) (0.3) —
Statutory operating profit
66.9 77.7 (14)
Net interest margin
6.9% 7.3%
Expense/income ratio
26% 26%
Bad debt ratio
1.5% 1.1%
Closing loan book
1,852.5 1,955.2 (5)
Customer: Anderson Development
Group
Close Brothers Property Finance, a long-
standing partner to Anderson Development
Group since 2017, has supported the delivery
of over 800 homes through loan facilities
totalling £120 million.
Fitzroy Place is the latest milestone in this
relationship, with Close Brothers providing
funding for the scheme and recognising its
exemplary community engagement model.
Watch our video case study
with Anderson Development
Group.
67
Strategic report Governance report Financial statements

Risk report
Effective management of the risks we face is
central to everything we do
The group faces a number of risks in the normal course of its
business providing lending, deposit taking and securities
trading. To manage these effectively, a consistent approach
is adopted based on a set of overarching principles, namely:
• adhering to our established and proven business model,
as outlined on pages 16 to 17;
• implementing an integrated risk management approach
based on the concept of three lines of defence; and
• setting and operating within clearly defined risk appetites,
monitored with defined metrics and limits.
This risk report provides a summary of our approach to risk
management, covering each of the key aspects of the
group’s Enterprise Risk Management Framework.
Information on each of the group’s principal risks, including
an overview of the frameworks in place to manage them, is
also included, together with an overview of current emerging
risks and uncertainties.
All disclosures in the risk report are unaudited unless
otherwise stated.
Enterprise risk management
An enterprise-wide framework designed to
provide the Board and senior management with
oversight of the group’s financial position as well
as the risks that might adversely affect it.
The framework details the core risk management
components and structures used across the group,
and defines a consistent and measurable approach to
identifying, assessing, controlling and mitigating,
reviewing and monitoring, and reporting risk – the risk
process life cycle.
This sets out the activities, tools, techniques and
organisational arrangements designed to identify the
principal and emerging risks facing the group; and
that appropriate responses are in place to mitigate
these risks and prevent detriment to its customers
and colleagues. Thisis an enabler for the group to
meet its goals and enhance its ability to respond to
new opportunities.
The framework is purposely designed to allow the
capture of business opportunities whilst maintaining
an appropriate balance of risk and reward within the
group’s agreed risk appetite.
Enterprise Risk Management Framework
Close Brothers Group plc Annual Report 2025
68
Principal and
emerging risks
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Risk report
Effective management of the risks we face is
central to everything we do
The group faces a number of risks in the normal course of its
business providing lending, deposit taking and securities
trading. To manage these effectively, a consistent approach
is adopted based on a set of overarching principles, namely:
• adhering to our established and proven business model,
as outlined on pages 16 to 17;
• implementing an integrated risk management approach
based on the concept of three lines of defence; and
• setting and operating within clearly defined risk appetites,
monitored with defined metrics and limits.
This risk report provides a summary of our approach to risk
management, covering each of the key aspects of the
group’s Enterprise Risk Management Framework.
Information on each of the group’s principal risks, including
an overview of the frameworks in place to manage them, is
also included, together with an overview of current emerging
risks and uncertainties.
All disclosures in the risk report are unaudited unless
otherwise stated.
Enterprise risk management
An enterprise-wide framework designed to
provide the Board and senior management with
oversight of the group’s financial position as well
as the risks that might adversely affect it.
The framework details the core risk management
components and structures used across the group,
and defines a consistent and measurable approach to
identifying, assessing, controlling and mitigating,
reviewing and monitoring, and reporting risk – the risk
process life cycle.
This sets out the activities, tools, techniques and
organisational arrangements designed to identify the
principal and emerging risks facing the group; and
that appropriate responses are in place to mitigate
these risks and prevent detriment to its customers
and colleagues. Thisis an enabler for the group to
meet its goals and enhance its ability to respond to
new opportunities.
The framework is purposely designed to allow the
capture of business opportunities whilst maintaining
an appropriate balance of risk and reward within the
group’s agreed risk appetite.
Enterprise Risk Management Framework
Close Brothers Group plc Annual Report 2025
68
Risk culture and awareness
An effective risk culture is embedded throughout
thegroup.
Maintenance of an effective risk management culture is
integral to the group in meeting its regulatory conduct
requirements and assisting the accomplishment of key
strategic goals.
The risk culture:
• supports the group and its Directors in meeting their legal
and regulatory obligations, particularly with respect to the
identification and management of risks and the need for a
robust control environment;
• underpins the group’s purpose, strategy, cultural attributes
and values;
• provides enhanced awareness of risk in business
operations by highlighting strengths and weaknesses and
their materiality to the business and, in turn, facilitating
informed decision-making;
• optimises business performance by facilitating challenge
of ineffective controls and improving the allocation of
resources;
• improves the group’s control environment; and
• assists in the planning and prioritisation of key projects
and initiatives.
While risk management is led centrally, it is embedded
locally within our businesses. Managers actively promote a
culture in which risks are identified, assessed, managed and
reported in an open, transparent and objective manner, and
staff conduct is viewed as critical.
All members of staff are responsible for risk identification and
reporting within their area of responsibility and are
encouraged to escalate risks and concerns where necessary,
either through line or business management or by following
the provisions of the group Whistleblowing Policy.
The group risk management function operates independently
of the business, providing oversight and advice on the
operation of the risk framework, assurance that agreed
processes operate effectively and that a risk and conduct
culture is embedded within the business.
The relationship between risk and reward is also a key
priority with all staff evaluated against both agreed objectives
(the “what”) and desired behaviours (the “how”). This
encourages long-term stewardship behaviours together with
a strong and appropriate risk and conduct culture.
For further information on our approach to remuneration for
the group’s Directors see pages 147 to 163.
Risk culture
Locally embedded
Risks managed in an open, transparent and
objective manner.
Independent second line
Providing oversight, advice and assurance.
Open escalation channels
Escalation of risks and concerns encouraged, driving
individual accountability.
Risk and reward
Regular evaluations encourage long-term
stewardship behaviours.
69
Locally
embedded
Open
escalation
channels
Independent
second line
Risk and
reward
Strategic report Governance report Financial statements

Risk governance
Role of the Board
The Board retains overall responsibility for overseeing the
maintenance of a system of internal control, to ensure that
an effective risk management framework and oversight
process operate across the group. The risk management
framework and associated governance arrangements are
designed to ensure a clear organisational structure with
distinct, transparent and consistent lines of responsibility and
effective processes to identify, manage, monitor and report
the risks to which the group is, or may become, exposed. On
an annual basis, the Board reviews the effectiveness of the
group’s risk management and internal control systems.
Further details on the Board review of risk management and
internal controls is provided on pages 124 to 126.
Risk management across the group is overseen by the
RiskCommittee. The committee is responsible for reviewing
risk appetite, monitoring the group’s risk profile against this
and reviewing the day-to-day effectiveness of the risk
management framework. In addition, the committee is
responsible for overseeing the maintenance and
development of an appropriate and supportive risk culture
and for providing risk input into the alignment of
remuneration with performance against risk appetite.
The committee’s key areas of focus over the last financial
year are set out on pages 144 to 146.
The group closely monitors its risk profile to ensure that it
continues to align with its strategic objectives as
documented on pages 10 to 11. The Board considers that
the group’s current risk profile remains consistent with its
strategic objectives.
Together, these committees facilitate an effective flow of key
risk information, as well as functioning to support
appropriate risk management at each stage of the risk
process life cycle. They also provide an escalation channel
for any risks or concerns, supporting the maintenance of an
effective risk culture. The group’s risk governance framework
is designed to enable the group to respond to changes in the
risk and the broader regulatory environment in a considered
and effective manner, with oversight from the Board, and
during the year the committees have operated where needed
in an agile manner, convening on an ad hoc basis if required
in addition to regular scheduled sessions. During the year the
effectiveness of these committees and their terms of
reference were reviewed to ensure they remain fit for
purpose and all committees continue to work efficiently and
effectively.
Risk committee structure
The Board
Risk Committee
Executive committees
Group Risk and
ComplianceCommittee
Model Governance Committee
Capital Adequacy Committee
Bank Asset and
Liability Committee
Group Asset and
Liability Committee
Risk-specific committees
Credit Risk Management
Committee
Group Credit Committee
Impairment Adequacy Committee
Operations and Technology
RiskCommittee
Divisional committees
Divisional risk and
compliancecommittees
Risk report continued
Close Brothers Group plc Annual Report 2025
70

Risk governance
Role of the Board
The Board retains overall responsibility for overseeing the
maintenance of a system of internal control, to ensure that
an effective risk management framework and oversight
process operate across the group. The risk management
framework and associated governance arrangements are
designed to ensure a clear organisational structure with
distinct, transparent and consistent lines of responsibility and
effective processes to identify, manage, monitor and report
the risks to which the group is, or may become, exposed. On
an annual basis, the Board reviews the effectiveness of the
group’s risk management and internal control systems.
Further details on the Board review of risk management and
internal controls is provided on pages 124 to 126.
Risk management across the group is overseen by the
RiskCommittee. The committee is responsible for reviewing
risk appetite, monitoring the group’s risk profile against this
and reviewing the day-to-day effectiveness of the risk
management framework. In addition, the committee is
responsible for overseeing the maintenance and
development of an appropriate and supportive risk culture
and for providing risk input into the alignment of
remuneration with performance against risk appetite.
The committee’s key areas of focus over the last financial
year are set out on pages 144 to 146.
The group closely monitors its risk profile to ensure that it
continues to align with its strategic objectives as
documented on pages 10 to 11. The Board considers that
the group’s current risk profile remains consistent with its
strategic objectives.
Together, these committees facilitate an effective flow of key
risk information, as well as functioning to support
appropriate risk management at each stage of the risk
process life cycle. They also provide an escalation channel
for any risks or concerns, supporting the maintenance of an
effective risk culture. The group’s risk governance framework
is designed to enable the group to respond to changes in the
risk and the broader regulatory environment in a considered
and effective manner, with oversight from the Board, and
during the year the committees have operated where needed
in an agile manner, convening on an ad hoc basis if required
in addition to regular scheduled sessions. During the year the
effectiveness of these committees and their terms of
reference were reviewed to ensure they remain fit for
purpose and all committees continue to work efficiently and
effectively.
Risk committee structure
The Board
Risk Committee
Executive committees
Group Risk and
ComplianceCommittee
Model Governance Committee
Capital Adequacy Committee
Bank Asset and
Liability Committee
Group Asset and
Liability Committee
Risk-specific committees
Credit Risk Management
Committee
Group Credit Committee
Impairment Adequacy Committee
Operations and Technology
RiskCommittee
Divisional committees
Divisional risk and
compliancecommittees
Risk report continued
Close Brothers Group plc Annual Report 2025
70
Risk committee overview
Aligned to these core principles, the governance framework operates through various delegations of authority from the Board
downwards, with a number of committees focused on risk management. The delegations of authority cover both individual
authorities as well as authorities exercised via the group’s risk committee structure.
Group Risk and Compliance
Committee
Provides oversight of the group’s risk profile, alignment to risk appetite and effectiveness of
the risk management and compliance framework.
Model Governance
Committee
Provides oversight of the group’s exposure to model risk through the review, approval and
monitoring of all high-materiality models.
Capital Adequacy
Committee
Monitors group and bank capital adequacy, incorporating capital planning, stress testing,
governance, processes and controls.
Bank Asset and Liability
Committee
Provides oversight of the Banking division’s risk management and internal controls and its
subsidiaries across liquidity, funding and non-traded market risk.
Group Asset and Liability
Committee
Provides oversight of the company and wider group’s risk management and internal controls
across liquidity, funding and market risk.
Credit Risk Management
Committee
Monitors the group’s credit risk profile, examining current performance and key portfolio
trends, ensuring compliance with risk appetite.
Group Credit Committee
Reviews material credit transactions and exposures from a credit, reputational, funding
structure and business risk perspective.
Impairment Adequacy
Committee
Governs the Banking division’s impairment process, reviewing the financial position relating
to impairment and ensuring adequate coverage is held across the portfolio.
Operations and Technology
Risk Committee
Monitors and oversees group-wide operational resilience, including technology, security,
supplier and operational risk appetite, examining industry, regulatory and technical risks.
Divisional risk and
compliance committees
Provide oversight of risk profile, alignment to risk appetite and effectiveness of the risk
management and compliance framework at a divisional or business level.
Three lines of defence
The group’s risk management approach is underpinned by a strong governance framework founded on a three lines of defence
model.
The governance framework is considered appropriate to both the size and strategic intentions of the group. The key principles
underlying this approach are that:
• business management owns all the risks assumed throughout the group and is responsible for their day-to-day management
to ensure that risk and reward are balanced;
• the Board and business management together promote a culture in which risks are identified, assessed and reported in an
open, transparent and objective manner;
• the overriding priority is to protect the group’s long-term viability and produce sustainable medium to long-term revenue
streams;
• risk functions are independent of the businesses and provide oversight of and advice on the management of risk across the
group;
• risk management activities across the group are proportionate to the scale and complexity of the group’s individual
businesses;
• risk mitigation and control activities are commensurate with the degree of risk; and
• risk management and control supports decision-making.
71
Strategic report Governance report Financial statements

Three lines of defence
First line of defence
Key features
The businesses
Group Risk and Compliance Committee
(reportstotheRisk Committee)
The Chief Executive delegates to divisional and operating
business Chief Executives the day-to-day responsibility for
risk management, regulatory compliance, internal control
and conduct in running their divisions or businesses.
Business management has day-to-day ownership,
responsibility and accountability for:
• identifying and assessing risks;
• managing and controlling risks;
• measuring risk (key risk indicators / early warning
indicators);
• mitigating risks, including controls framework and
effectiveness;
• reporting risks;
• committee structure and reporting; and
• management and self-assessment of operational
resilience capabilities.
• Promotes a strong risk culture and focus on
sustainable risk-adjusted returns.
• Implements the risk framework.
• Promotes a culture of adhering to limits and
managing risk exposures and ongoing self-
assessment.
• Promotes a culture of focus on good customer
outcomes.
• Promotes responsibility for ongoing monitoring of
positions and management and control of risks
and controls effectiveness, including testing of
controls, alongside portfolio optimisation.
Second line of defence
Key features
Risk and compliance
Risk Committee (reports to the Board)
The Risk Committee delegates day-to-day responsibility for
oversight and challenge on risk-related issues to the Group
Chief Risk Officer.
Risk functions (including compliance) provide support,
assurance and independent challenge on:
• the design and operation of the risk framework and
methodologies;
• risk assessment;
• risk appetite and strategy;
• risk reporting;
• adequacy of mitigation plans and effectiveness of risk
decisions taken by business management;
• group risk profile; and
• committee governance and challenge.
• Oversees embedding of the risk framework and
supporting methodologies, taking an integrated
approach to risk and compliance (qualitative and
quantitative).
• Promotes a strong and effective risk and control
culture across the group.
• Undertakes compliance monitoring and risk
assurance activities.
• Supports through developing and advising on
risk and compliance strategies.
• Facilitates constructive check and challenge.
• Oversight of business conduct and customer
outcomes.
Third line of defence
Key features
Internal audit
Audit Committee (reports to the Board)
The Audit Committee mandates the Group Head of Internal
Audit with day-to-day responsibility for independent
assurance.
Internal audit provides independent assurance on:
• first and second lines of defence;
• appropriateness/effectiveness of internal controls; and
• effectiveness of policy implementation.
• Draws on deep knowledge of the group and its
businesses.
• Provides independent assurance on the activities
of the group, including the risk management
framework.
• Assesses the appropriateness and effectiveness
of internal controls.
• Incorporates review of culture, conduct and
customer outcomes.
Risk report continued
Close Brothers Group plc Annual Report 2025
72

Three lines of defence
First line of defence
Key features
The businesses
Group Risk and Compliance Committee
(reportstotheRisk Committee)
The Chief Executive delegates to divisional and operating
business Chief Executives the day-to-day responsibility for
risk management, regulatory compliance, internal control
and conduct in running their divisions or businesses.
Business management has day-to-day ownership,
responsibility and accountability for:
• identifying and assessing risks;
• managing and controlling risks;
• measuring risk (key risk indicators / early warning
indicators);
• mitigating risks, including controls framework and
effectiveness;
• reporting risks;
• committee structure and reporting; and
• management and self-assessment of operational
resilience capabilities.
• Promotes a strong risk culture and focus on
sustainable risk-adjusted returns.
• Implements the risk framework.
• Promotes a culture of adhering to limits and
managing risk exposures and ongoing self-
assessment.
• Promotes a culture of focus on good customer
outcomes.
• Promotes responsibility for ongoing monitoring of
positions and management and control of risks
and controls effectiveness, including testing of
controls, alongside portfolio optimisation.
Second line of defence
Key features
Risk and compliance
Risk Committee (reports to the Board)
The Risk Committee delegates day-to-day responsibility for
oversight and challenge on risk-related issues to the Group
Chief Risk Officer.
Risk functions (including compliance) provide support,
assurance and independent challenge on:
• the design and operation of the risk framework and
methodologies;
• risk assessment;
• risk appetite and strategy;
• risk reporting;
• adequacy of mitigation plans and effectiveness of risk
decisions taken by business management;
• group risk profile; and
• committee governance and challenge.
• Oversees embedding of the risk framework and
supporting methodologies, taking an integrated
approach to risk and compliance (qualitative and
quantitative).
• Promotes a strong and effective risk and control
culture across the group.
• Undertakes compliance monitoring and risk
assurance activities.
• Supports through developing and advising on
risk and compliance strategies.
• Facilitates constructive check and challenge.
• Oversight of business conduct and customer
outcomes.
Third line of defence
Key features
Internal audit
Audit Committee (reports to the Board)
The Audit Committee mandates the Group Head of Internal
Audit with day-to-day responsibility for independent
assurance.
Internal audit provides independent assurance on:
• first and second lines of defence;
• appropriateness/effectiveness of internal controls; and
• effectiveness of policy implementation.
• Draws on deep knowledge of the group and its
businesses.
• Provides independent assurance on the activities
of the group, including the risk management
framework.
• Assesses the appropriateness and effectiveness
of internal controls.
• Incorporates review of culture, conduct and
customer outcomes.
Risk report continued
Close Brothers Group plc Annual Report 2025
72
Risk management and internal controls
Supporting the foundation of a strong risk management
structure
Aligned to the risk governance framework, oversight across
the group is supported by the maintenance of a range of
internal controls. These cover risk, compliance, and financial
management and reporting, and control processes. The
controls are designed to ensure the accuracy and reliability
of the group’s financial information and financial and
regulatory reporting.
The main features of these controls with respect to financial
reporting include consistently applied accounting policies,
clearly defined lines of responsibility and processes for the
review and oversight of disclosures within the Annual Report.
These controls are overseen by the Audit Committee.
The group policy framework, overseen by the Board, is a key
component of the group’s Enterprise Risk Management
Framework, supporting the foundation of a strong risk
management structure. Group policies are supported by
group standards, and by divisional/business-level policies
and procedures which, together, outline the way in which
policy is implemented and detail the process controls in
place to ensure compliance. The accounting policies form
part of this broader policy framework, alongside policies and
standards relating to the group’s principal risks.
This structure establishes a link between group strategy and
day-to-day operations in a manner consistent with agreed
risk appetite. Simultaneously they facilitate Board and
executive-level oversight and assurance as to the application
of the strategy via conformance with underlying policy and
standard requirements.
Review of effectiveness of risk management and
internal control systems
Throughout the year, the Board, assisted by the Risk
Committee and the Audit Committee, actively monitors the
group’s risk management and internal control systems and
reviews their effectiveness to seek to ensure the
maintenance of an effective risk management and internal
control framework. A review of the effectiveness has been
performed, covering all material controls, including financial,
operational and compliance controls. Further detail on the
Board review of the risk management and internal controls is
provided on page 124.
Group policy framework
Enterprise Risk Management Framework
Group policies
Group standards
Divisional and business policies
Procedures
Risk appetite
Enabling key risk decisions in delivering the group’s
strategic objectives
Risk appetite forms a key component of the group’s risk
management framework and refers to the sources and levels
of risk that the group is willing to assume in order to achieve
its strategic objectives and business plan. It is managed via
an established framework that facilitates ongoing
communication between the Board and management with
respect to the group’s evolving risk profile. This enables key
decisions concerning the allocation of group resources to be
made on an informed basis.
Risk appetite is set on a top-down basis by the Board with
consideration to business requests and executive
recommendation. Appetite measures, both qualitative and
quantitative, are applied to inform both decision-making and
monitoring and reporting processes. Early-warning triggers
are also employed to drive required corrective action before
overall tolerance levels are reached.
The group conducts a formal review of its risk appetites
annually to align risk-taking with the achievement of strategic
objectives. Adherence is monitored through the group’s risk
committees on an ongoing basis, with interim updates to
individual risk appetites considered as appropriate through
the year.
Stress testing
Assessing and understanding future levels of risk
Stress testing represents another core component of the risk
management framework and is employed, alongside
scenario analysis, to support assessment and understanding
of the risks to which the group might be exposed in the
future. As such, it provides valuable insight to the Board and
senior management, playing an important role in the
formulation and pursuit of the group’s strategic objectives.
All stress testing activities are overseen by the Scenario
Planning Forum, which considers the various risks impacting
the business and recommends actions required to enhance
the group’s stress testing ability.
Stress testing activity within the group is designed to meet
three principal objectives:
1. inform capital and liquidity planning – including liquidity
and funding risk assessment, contingency planning and
recovery and resolution planning;
2. support ongoing risk and portfolio management –
including risk appetite calibration, strategic decisioning
and planning, risk and reward optimisation and business
resilience planning; and
3. provide a check on the outputs and accuracy of risk
models – including the identification of non-linear effects
when aggregating risks.
To support these objectives, stress testing is designed to
cover the group’s most material risks, with activity
conducted at various levels, ranging from extensive group-
wide scenario analysis to simple portfolio sensitivity analysis.
Stress testing also represents a critical component of both
the group’s Internal Capital Adequacy Assessment Process
(“ICAAP”) and Internal Liquidity Adequacy Assessment
Process (“ILAAP”), with scenario analysis additionally
employed as part of the group’s Recovery Plan.
73
Strategic report Governance report Financial statements

Principal and emerging risks
Principal risks
At the core of the Enterprise Risk Management Framework
and risk process life cycle sits the group’s suite of principal
risks.
These are the risks which have been identified as those most
material in the delivery of the group’s strategic objectives.
This suite is subject to ongoing review to ensure that the
framework remains aligned to the prevailing risk
environment.
Following review and challenge, it has been determined that
the existing suite of principal risks detailed in our prior year’s
report remains broadly reflective of those faced currently.
However, as part of our continual review of the prevailing risk
landscape, it is recognised that underlying risk drivers may
have changed and our approach to managing them has in
turn evolved in step with them. For example, these activities
have also resulted in the promotion during the financial year
of cyber risk to a principal risk, having been previously
captured as a key risk under operational risk. Similarly,
reflective of the breadth and depth of change and
transformation programmes under way and the inherent risk
associated with execution of this strategic shift, change
execution risk has been elevated to a principal risk from
within our previous suite of emerging risks.
The table on pages 76 to 78 gives an overview of these
principal risks and possible impacts, as well as the outlook
pertaining to these. More detailed information on each of
these follows on pages 80 to 112 which set out the
frameworks in place to manage these risks.
This should not be regarded as a complete and
comprehensive statement of all potential risks faced by the
group but reflects those which the group currently believes
could have a significant impact on its future performance.
Climate risk
Running alongside the suite of principal risks is climate risk,
which the group categorises as a cross-cutting risk, as the
impacts arising from climate change have the ability to
impact across the spectrum of principal risks. In addition,
transitional risks from climate change which may have a
medium to longer-term impact on the group’s product
offering, operations and strategic direction are captured in
the group’s emerging risks. For further information on the
group’s climate risk response, see the group Sustainability
Report on pages 27 to 48.
Climate risk represents a continued area of focus, and the
group continues to closely monitor government and
regulatory developments in parallel to managing its own
carbon footprint and supporting its customers to manage
their climate risk impacts. The short-dated tenor of the
lending book and strong business model resilience
capabilities mitigate current risk exposure while the
continued embedding of the climate risk framework will
enable the group to review the evolution of the risk
landscape on an ongoing basis.
Emerging risks
The group’s suite of principal risks is accompanied by a
portfolio of emerging risks reflecting broader market
uncertainties. The group defines an emerging risk as a risk
that may potentially become material in the delivery of the
group’s strategic objectives but the risk and its applicability
to the group may not yet be fully understood or assessed.
This incorporates input and insight from both a top-down
and bottom-up perspective:
Top-down: identified by Directors and executives at a group
level via the Group Risk and Compliance Committee
(“GRCC”) and the Board.
Bottom-up: identified at a business level and escalated,
where appropriate, via risk updates to the GRCC.
This year, as explained above, an existing emerging risk
(change execution risk) has moved into our suite of principal
risks, reflecting our ongoing monitoring and assessment
activities.
The established framework for monitoring these risks
supports the group’s organisational readiness to respond.
Group-level emerging risks are monitored by the GRCC and
Risk Committee on an ongoing basis, with agreed mitigating
actions in place to ensure the group’s preparedness should a
risk crystallise. Ongoing monitoring also tracks several sub-
risks to support identification of key themes and within the
year the sub-risks covered has evolved accordingly in line
with the perceived risk landscape.
Emerging risks are considered on both an internal and
external basis with careful consideration given to likely
emergence periods. Additionally, active monitoring of the
correlation impacts across emerging risks, uncertainties and
principal risks is undertaken.
Risk report continued
Close Brothers Group plc Annual Report 2025
74

E1
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Cyber
Funding and liquidity
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Operational
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Principal and emerging risks
Principal risks
At the core of the Enterprise Risk Management Framework
and risk process life cycle sits the group’s suite of principal
risks.
These are the risks which have been identified as those most
material in the delivery of the group’s strategic objectives.
This suite is subject to ongoing review to ensure that the
framework remains aligned to the prevailing risk
environment.
Following review and challenge, it has been determined that
the existing suite of principal risks detailed in our prior year’s
report remains broadly reflective of those faced currently.
However, as part of our continual review of the prevailing risk
landscape, it is recognised that underlying risk drivers may
have changed and our approach to managing them has in
turn evolved in step with them. For example, these activities
have also resulted in the promotion during the financial year
of cyber risk to a principal risk, having been previously
captured as a key risk under operational risk. Similarly,
reflective of the breadth and depth of change and
transformation programmes under way and the inherent risk
associated with execution of this strategic shift, change
execution risk has been elevated to a principal risk from
within our previous suite of emerging risks.
The table on pages 76 to 78 gives an overview of these
principal risks and possible impacts, as well as the outlook
pertaining to these. More detailed information on each of
these follows on pages 80 to 112 which set out the
frameworks in place to manage these risks.
This should not be regarded as a complete and
comprehensive statement of all potential risks faced by the
group but reflects those which the group currently believes
could have a significant impact on its future performance.
Climate risk
Running alongside the suite of principal risks is climate risk,
which the group categorises as a cross-cutting risk, as the
impacts arising from climate change have the ability to
impact across the spectrum of principal risks. In addition,
transitional risks from climate change which may have a
medium to longer-term impact on the group’s product
offering, operations and strategic direction are captured in
the group’s emerging risks. For further information on the
group’s climate risk response, see the group Sustainability
Report on pages 27 to 48.
Climate risk represents a continued area of focus, and the
group continues to closely monitor government and
regulatory developments in parallel to managing its own
carbon footprint and supporting its customers to manage
their climate risk impacts. The short-dated tenor of the
lending book and strong business model resilience
capabilities mitigate current risk exposure while the
continued embedding of the climate risk framework will
enable the group to review the evolution of the risk
landscape on an ongoing basis.
Emerging risks
The group’s suite of principal risks is accompanied by a
portfolio of emerging risks reflecting broader market
uncertainties. The group defines an emerging risk as a risk
that may potentially become material in the delivery of the
group’s strategic objectives but the risk and its applicability
to the group may not yet be fully understood or assessed.
This incorporates input and insight from both a top-down
and bottom-up perspective:
Top-down: identified by Directors and executives at a group
level via the Group Risk and Compliance Committee
(“GRCC”) and the Board.
Bottom-up: identified at a business level and escalated,
where appropriate, via risk updates to the GRCC.
This year, as explained above, an existing emerging risk
(change execution risk) has moved into our suite of principal
risks, reflecting our ongoing monitoring and assessment
activities.
The established framework for monitoring these risks
supports the group’s organisational readiness to respond.
Group-level emerging risks are monitored by the GRCC and
Risk Committee on an ongoing basis, with agreed mitigating
actions in place to ensure the group’s preparedness should a
risk crystallise. Ongoing monitoring also tracks several sub-
risks to support identification of key themes and within the
year the sub-risks covered has evolved accordingly in line
with the perceived risk landscape.
Emerging risks are considered on both an internal and
external basis with careful consideration given to likely
emergence periods. Additionally, active monitoring of the
correlation impacts across emerging risks, uncertainties and
principal risks is undertaken.
Risk report continued
Close Brothers Group plc Annual Report 2025
74
Principal and emerging risks
Emerging risks Risk emergence time frame
E1: Economic uncertainty Short term
E2: Geopolitical uncertainty Medium term
E3: Medium to long-term transitional climate risks Long term
E4: Strategic disruption
75
Strategic report Governance report Financial statements

Business and strategic risk
The risk of realising lower than
anticipated profits or experiencing a
loss rather than a profit due to failure
to adapt to changing market
conditions, pursuing an ineffective
strategy or ineffective
implementation of strategy.
See page 80.
• We continue to focus on supporting our customers, and on maintaining
underwriting standards and operational resilience, while we invest to support
future income generation, operational efficiency and cost savings.
• The business and strategic risk has stabilised in recent months following the
successful delivery of a number of management actions to strengthen our
capital position and ensure the group is well placed to navigate the current
uncertainty. However, business risk may increase in FY 2026 as the group
continues to progress a number of key strategic initiatives and change
programmes.
• We are committed to delivering against our three strategic priorities of
Simplify, Optimise, and Grow. By simplifying our diverse portfolio of
businesses and improving the efficiency of our operations we are building a
more scalable platform to support future growth and deliver enhanced risk-
adjusted returns.
• The group remains prepared for a range of different economic and business
scenarios to help ensure it has the resources and operational capability to
perform effectively.
Capital risk
The risk that the group has
insufficient regulatory capital
(including equity and other loss-
absorbing debt instruments) to
operate effectively, including
meeting minimum regulatory
requirements, and to operate within
Board-approved risk appetite and
support its strategic goals. 
See page 81.
• In response to motor commissions uncertainty, we have strengthened our
capital position and maintained high levels of liquidity, substantially above
regulatory requirements. The group's CET1 capital ratio was 13.8% at 31
July 2025, reflecting significant progress on our capital actions. These
measures, which included the cancellation of the dividend, loan book
moderation, cost-saving initiatives, organic capital generation, and the sale of
CBAM (announced in September 2024 and completed in February 2025)
have been successfully implemented. This resulted in over £400 million of
CET1 capital generated or preserved as of 31 July 2025.
• The PRA Policy Statement PS9/24 (“Implementation of the Basel 3.1
standards near-final part 2”) will have a negative impact on the group’s CET1
capital ratio from January 2027 given expected increases in credit risk
RWAs, however the group expects to receive a full offset in Pillar 2a
requirements at total capital level for the removal of the Pillar 1 RWA SME
support factor. As such, we expect the UK implementation of Basel 3.1 to
have a less significant impact on the group’s overall capital headroom
position than initially anticipated.
Change execution risk
Strategic, reputational, regulatory or
financial risk as a result of failure to
execute, embed and deliver
theoutcomes of change successfully.
See page 84.
• Change delivery capacity and capability continue to be areas of
management focus, to enable safe delivery of the significant change
programmes planned and under way to support the group’s
transformation.
• Delivery capacity and capability remain key areas of management focus
to ensure the safe execution of the significant change programmes
bothplanned and in progress to support the group’s transformation.
Additional management oversight required may place further strain on
existing resources.
Conduct risk
The risk that the group’s behaviours, or
those ofits colleagues, whether
intentional or unintentional, result in
poor outcomes for customers or the
markets in which it operates. Itis
rooted in the importance of delivering
good customer outcomes at every
stage of the customer journey.
See page 85.
• The group will continue to invest in keeping abreast of regulatory
guidance and developments to maintain a strong focus on regulatory
expectations in relation to the delivery of good customer outcomes.
• This includes adapting to the need for revised market strategies due to
the impact of regulatory change on product design and distribution.
• The external macroeconomic environment continues toincrease financial
pressure on consumers with an ongoing regulatory expectation to evolve
the effectiveness of the support remedies offered to customers with
vulnerabilities and those in financial difficulty.
Credit risk
The risk of a reduction in earnings and/
or value due to the failure of a
counterparty or associated party, with
whom the group has contracted, to
meet its obligations as they fall due.
See page 86.
• Despite signs of resilience in the UK economy over the past 12 months,
uncertainty continues to affect both individuals and SMEs.
• If current macroeconomic conditions persist, there is a risk of increased
credit losses in the future.
• Nonetheless, the credit quality of the loan book remains robust,
underpinned by the consistent application of prudent lending criteria and
risk appetite.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
76

Business and strategic risk
The risk of realising lower than
anticipated profits or experiencing a
loss rather than a profit due to failure
to adapt to changing market
conditions, pursuing an ineffective
strategy or ineffective
implementation of strategy.
See page 80.
• We continue to focus on supporting our customers, and on maintaining
underwriting standards and operational resilience, while we invest to support
future income generation, operational efficiency and cost savings.
• The business and strategic risk has stabilised in recent months following the
successful delivery of a number of management actions to strengthen our
capital position and ensure the group is well placed to navigate the current
uncertainty. However, business risk may increase in FY 2026 as the group
continues to progress a number of key strategic initiatives and change
programmes.
• We are committed to delivering against our three strategic priorities of
Simplify, Optimise, and Grow. By simplifying our diverse portfolio of
businesses and improving the efficiency of our operations we are building a
more scalable platform to support future growth and deliver enhanced risk-
adjusted returns.
• The group remains prepared for a range of different economic and business
scenarios to help ensure it has the resources and operational capability to
perform effectively.
Capital risk
The risk that the group has
insufficient regulatory capital
(including equity and other loss-
absorbing debt instruments) to
operate effectively, including
meeting minimum regulatory
requirements, and to operate within
Board-approved risk appetite and
support its strategic goals. 
See page 81.
• In response to motor commissions uncertainty, we have strengthened our
capital position and maintained high levels of liquidity, substantially above
regulatory requirements. The group's CET1 capital ratio was 13.8% at 31
July 2025, reflecting significant progress on our capital actions. These
measures, which included the cancellation of the dividend, loan book
moderation, cost-saving initiatives, organic capital generation, and the sale of
CBAM (announced in September 2024 and completed in February 2025)
have been successfully implemented. This resulted in over £400 million of
CET1 capital generated or preserved as of 31 July 2025.
• The PRA Policy Statement PS9/24 (“Implementation of the Basel 3.1
standards near-final part 2”) will have a negative impact on the group’s CET1
capital ratio from January 2027 given expected increases in credit risk
RWAs, however the group expects to receive a full offset in Pillar 2a
requirements at total capital level for the removal of the Pillar 1 RWA SME
support factor. As such, we expect the UK implementation of Basel 3.1 to
have a less significant impact on the group’s overall capital headroom
position than initially anticipated.
Change execution risk
Strategic, reputational, regulatory or
financial risk as a result of failure to
execute, embed and deliver
theoutcomes of change successfully.
See page 84.
• Change delivery capacity and capability continue to be areas of
management focus, to enable safe delivery of the significant change
programmes planned and under way to support the group’s
transformation.
• Delivery capacity and capability remain key areas of management focus
to ensure the safe execution of the significant change programmes
bothplanned and in progress to support the group’s transformation.
Additional management oversight required may place further strain on
existing resources.
Conduct risk
The risk that the group’s behaviours, or
those ofits colleagues, whether
intentional or unintentional, result in
poor outcomes for customers or the
markets in which it operates. Itis
rooted in the importance of delivering
good customer outcomes at every
stage of the customer journey.
See page 85.
• The group will continue to invest in keeping abreast of regulatory
guidance and developments to maintain a strong focus on regulatory
expectations in relation to the delivery of good customer outcomes.
• This includes adapting to the need for revised market strategies due to
the impact of regulatory change on product design and distribution.
• The external macroeconomic environment continues toincrease financial
pressure on consumers with an ongoing regulatory expectation to evolve
the effectiveness of the support remedies offered to customers with
vulnerabilities and those in financial difficulty.
Credit risk
The risk of a reduction in earnings and/
or value due to the failure of a
counterparty or associated party, with
whom the group has contracted, to
meet its obligations as they fall due.
See page 86.
• Despite signs of resilience in the UK economy over the past 12 months,
uncertainty continues to affect both individuals and SMEs.
• If current macroeconomic conditions persist, there is a risk of increased
credit losses in the future.
• Nonetheless, the credit quality of the loan book remains robust,
underpinned by the consistent application of prudent lending criteria and
risk appetite.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
76
Cyber risk
The risks arising from inadequate
internal and external information and
cyber security, where failures impact
the confidentiality, integrity and
availability of electronic data or
critical technology services.
See page 100.
• The threat landscape is evolving at pace with ransomware, phishing and
sophisticated supply chain attack being more prevalent and increasing owing
to use of AI by threat actors.
• Cyber risk remains central to financial stability with significant emphasis
being placed on resilience through scenario testing, recovery planning and
integration of cyber into enterprise risk management frameworks.
• Systemic risk from critical third parties and service providers are shaping
how we manage third-party risk.
• Our journey to cloud will result in partnerships with cloud providers and third
parties which will ultimately require regulatory oversight with the aim to
reduce systemic vulnerabilities.
• Cyber risk management, as highlighted in the Bank of England July 2025
Financial Stability Report, remains a core component of operational resilience.
Funding and liquidity risk
Funding risk is the risk of loss
caused by the inability to raise funds
at an acceptable price orto access
markets in a timely manner or
anydecrease in the stability of the
current funding base.
Liquidity risk is defined as the risk
that the group, or any of its entities,
do not have sufficient liquid assets
to meet liabilities as they come due
during normal and disrupted
markets.
See page 101.
• The group has a long-standing approach based on the principle
of“borrow long, lend short” that provides significant funding resilience.
The group also continues to benefit from its diverse funding mix and
prudent maturity profile.
• Consistent with the funding plan, the bank expects to continue to lose a
number of rate-sensitive corporate customers and the expected attrition
from this segment to continue to be met through growth in retail
deposits.
Legal and regulatory risk
The risk of non-compliance with
laws and regulations which could
give rise to fines, litigation, sanctions
and/or direct claims by customers
and the potential for material
adverse impact upon the group. 
See page 103.
• We are operating in an environment of notably elevated legal and regulatory
risks, including particularly regarding historical motor finance commissions.
• Legal risk with respect to the commissions matter has somewhat reduced
through the clarity provided by the recent Supreme Court judgment in
Johnson, Wrench and Hopcraft. However, a level of legal risk remains,
arising from possible actions of claims management companies and claimant
law firms. Notable regulatory uncertainty will also persist until the scope and
nature of the FCA’s forthcoming motor commission redress scheme are
established following the expected consultation period.
• Regulatory risk remains elevated more broadly, including with the possibility
that further developments from the FCA’s ongoing Premium Finance Market
Study could impact our premium finance business or the markets in which
we operate.
Non-traded market risk
The current or prospective risk to the
group’s capital or earnings, arising
from changes ininterest rates, credit
spreads and foreign exchange rates
applied to the group’s non-trading
book. 
See page 104.
• The group expects exposure to interest rate risk, credit spread risk and
foreign exchange (“FX”) risk to remain broadly stable.
Principal risk
Outlook
77
Strategic report Governance report Financial statements

Operational risk
The risk of loss or customer harm
resulting from inadequate or failed
internal processes, people and
systems or external events. This
includes the risk of being unable
torecover systems quickly and
maintain criticalservices.
See page 106.
• The established group-wide operational risk framework is currently being
enhanced as part of the group's investment in improved capability. This
includes transitioning to a new Governance, Risk and Compliance
system which will further enhance monitoring and oversight as well as
the provision of group-wide operational risk training. The group is also
undertaking a review of its Risk Target Operating Model to further
enhance risk management capability, capacity and embedment of risk
management across the group.
• Following the Supreme Court’s ruling on motor finance commissions, we
await the FCA's redress proposals once the consultation phase
completes. Arrangements have been undertaken to ensure the group
can respond appropriately and at pace.
Reputational risk
The risk of detriment to stakeholder
perception of the group, leading to
impairment of its reputation and
future goals, due to any action or
inaction of the company, its
employees or associated third
parties.
See page 109.
• Established group-wide and employee-level focus on responsibility and
sustainability enables an approach in all businesses that aligns to a
range of stakeholder expectations, which is supported by group-level
oversight.
• Increased media attention, including in relation to any possible redress
schemes such as that associated with the FCA’s review of historical
motor finance commission arrangements, may lead to an adverse
perception of the group.
Traded market risk
The risk that a change in the value of
an underlying market variable will
give rise to an adverse movement in
the value of the group’s trading
assets and liabilities.
See page 111.
• The external macroeconomic environment may continue to impact
trading volumes and security valuations.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
78

Operational risk
The risk of loss or customer harm
resulting from inadequate or failed
internal processes, people and
systems or external events. This
includes the risk of being unable
torecover systems quickly and
maintain criticalservices.
See page 106.
• The established group-wide operational risk framework is currently being
enhanced as part of the group's investment in improved capability. This
includes transitioning to a new Governance, Risk and Compliance
system which will further enhance monitoring and oversight as well as
the provision of group-wide operational risk training. The group is also
undertaking a review of its Risk Target Operating Model to further
enhance risk management capability, capacity and embedment of risk
management across the group.
• Following the Supreme Court’s ruling on motor finance commissions, we
await the FCA's redress proposals once the consultation phase
completes. Arrangements have been undertaken to ensure the group
can respond appropriately and at pace.
Reputational risk
The risk of detriment to stakeholder
perception of the group, leading to
impairment of its reputation and
future goals, due to any action or
inaction of the company, its
employees or associated third
parties.
See page 109.
• Established group-wide and employee-level focus on responsibility and
sustainability enables an approach in all businesses that aligns to a
range of stakeholder expectations, which is supported by group-level
oversight.
• Increased media attention, including in relation to any possible redress
schemes such as that associated with the FCA’s review of historical
motor finance commission arrangements, may lead to an adverse
perception of the group.
Traded market risk
The risk that a change in the value of
an underlying market variable will
give rise to an adverse movement in
the value of the group’s trading
assets and liabilities.
See page 111.
• The external macroeconomic environment may continue to impact
trading volumes and security valuations.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
78
Cross-cutting risks
Geopolitical uncertainty
The risk that UK or global
political events result in
disruption to the business or
negatively impact business
performance or prospects.
• The group operates predominantly in the UK and Republic of Ireland, covering
approximately 98% of the loan book exposure. Nevertheless, geopolitical developments
(including international conflicts and any change in tariff regimes) have the potential to
directly or indirectly impact the group’s customers, operations or supply chain.
• The group has a strong financial position, maintaining capital and liquidity levels in excess
ofregulatory minima.
• Regular stress testing is undertaken on performance and financial position in the event
ofvarious adverse conditions to test the robustness and resilience of the group.
• Risk appetite is regularly reviewed to ensure it remains appropriate in the prevailing
geopolitical and macroeconomic environment.
Medium to long-term
transitional climate risks
The risk that the move to a
low carbon economy impacts
demand for the group’s
products and services.
• Transitional climate risks across the medium to long term may potentially impact the
group’s product offering, operations and strategic direction. Monitoring is in place to
continually identify and assess climate risks and opportunities.
• Regular updates are provided to the Group Risk and Compliance Committee and Risk
Committee, which retains oversight responsibility, while senior management responsibility
is assigned to the Group Chief Risk Officer.
• The group remains focused on supporting its customers in their transitions to a low carbon
economy.
Financial risks
Economic uncertainty
The risk that changes in the
external macroeconomic
environment or consumer
sentiment negatively impact
on the group’s performance
or prospects.
• Persisting national or international macroeconomic uncertainty (for example, from financial
volatility or changes to macroeconomic policies) can impact business, customer and
broader market confidence. Specifically, elevated interest rates, inflation, and/or a rise in
unemployment has the potential to impact credit performance or demand for the group’s
products and services.
• The group’s business model aims to enable it to trade successfully and support clients in
awide range of economic conditions. By maintaining a strong financial and capital position,
the group aims to be able to absorb short-term economic downturns, respond to any
change in activity or market demand, and in so doing build long-term relationships by
supporting clients when it really matters.
• The group focuses on credit quality and returns rather than overall growth or market share
and continues to invest in the business for the long term, to support customers and clients
through the cycle.
• Risk appetite is regularly reviewed to ensure it remains appropriate in the prevailing
macroeconomic environment. Regular stress testing is undertaken on performance and
financial position in the event of various adverse conditions to test the robustness and
resilience of the group.
Strategic risks
Strategic disruption
The risk that changes in
competition, technology,
competitor business models
or client expectations
negatively impact on demand
for the group’s products and
services.
• Strategic disruption may arise from technological change or new business models that may
impact the group’s market position and future profitability.
• While regulation remains a barrier to entry for many potential competitors, consumer
expectations continue to evolve, challenging existing capabilities and traditional
approaches.
• Competitors are adapting in response, while new financial technology companies develop
alternative business models. For example, cloud-delivered solutions reduce barriers to
entry and new product time to market, allowing new competitors and start-ups to compete
in themarketplace more rapidly.
• The growing adoption of AI by our competitors to improve their service offerings poses a
risk. The group acknowledges the benefits of investment in this technology and has started
the adoption and exploitation of strategic capabilities such as cloud and AI solutions in a
considered and incremental manner in line with our investment appetite.
• Market developments are closely monitored through horizon scanning to identify emerging
dynamics as well as evolving preferences of the group’s customers. The group prides itself
on its knowledge of its customers, clients and the industries and sectors in which they
operate.
Emerging risks/uncertainty
Mitigating actions and key developments
Risk report continued | Emerging risks
79
Strategic report Governance report Financial statements

Business and strategic risk
Business and strategic risk is the risk of realising
lower than anticipated profits or experiencing a
loss rather than a profit, due to failure to adapt to
changing market conditions, pursuing an
ineffective strategy or ineffective implementation
of strategy.
Exposure
The group operates in an environment where it is exposed to
various independent influencing factors. Its profitability can
be impacted by: the broader UK economic climate; changes
in technology, regulation and customer behaviour;
competition from traditional and new players; front-line sales
performance; cost movements; and strategic changes. All of
these can vary in both nature and extent across its divisions.
Changes in these factors could result in additional
investment requirements or higher costs and affect the
group’s ability to continue to advance loans or products at
its desired risk and reward criteria, which could in turn
contribute to a loss of market confidence.
Risk appetite
The group seeks to address business and strategic risk
through executing a sustainable business model focused on:
• specialist markets where the group can build leading
market positions based on service, expertise and
relationships;
• credit quality and returns rather than loan book growth or
market share;
• investing in the business for the long term;
• maintaining a strong balance sheet and prudently
managing the group’s financial resources;
• consistently supporting our customers and clients; and
• acting sustainably and responsibly, considering the
interests of all stakeholders and growing demand for
sustainable products and services.
Measurement
Business and strategic risk is measured through a number of
key performance metrics (including those set out on pages
12 and 13) and risk indicators at a business, divisional and
group level which provide transparency on progress and
execution against strategy. These indicators are typically
reported monthly via relevant committees, with oversight via
the Board, most notably through its review of key financial
metrics and underlying performance trends.
The status of key group initiatives and projects is also
tracked and discussed, noting the importance of their
successful delivery to the group’s strategic trajectory.
Mitigation
To support the management of its strategy, and help mitigate
potential business and strategic risk, the group maintains a
comprehensive and rigorous framework of consideration and
approval covering the design and endorsement of strategy,
and the ongoing monitoring of its implementation.
Over the past year, the group’s strategic priority has been on
further strengthening the capital position, while protecting
the business franchise. Looking forward, the group has
introduced three new key strategic pillars – Simplify,
Optimise, Grow – that will support the business model and
enable the group to adapt to changes in the operating
environment more efficiently.
The group's long track record of supporting customers
throughout the financial cycle is underpinned by a consistent
and disciplined approach to pricing and credit quality. The
group builds and maintains long-term relationships with its
clients and intermediaries based on:
• speed and flexibility of services;
• its local presence and personal approach;
• the experience and expertise of its people; and
• an offering of tailored and client-driven product solutions.
This differentiated approach results in strong customer
engagement and high levels of repeat business. The group is
further protected by the diversity of its banking businesses
and products, which provides resilience against competitive
pressure or market weakness in any of the sectors it
operates in.
Monitoring
On an ongoing basis, strategy is formulated and managed at
an individual business level through local executive
committees with top-down oversight maintained through the
group’s Executive Committee, which holds dedicated
strategy offsite meetings periodically through the year.
Outputs also feed into the group’s annual budgeting and
planning process which typically operates on a three-year
time horizon. The group’s budget and plan are subject to
review and challenge, initially at a business level and
subsequently by the group’s Executive Committee, ahead of
submission to the Board, which reviews, challenges and
agrees the group’s budget for the following year.
The ongoing strategic planning process is supplemented by
an annual Board strategy day, which takes a thematic
approach to the review and challenge of group and
business-level strategic priorities. This includes a review of
our portfolio of specialist businesses, with a disciplined
approach to exiting or restructuring any business that no
longer fits our strategy, risk appetite or return requirements.
New growth initiatives and potential acquisitions are
assessed against the group’s strategic objectives and its
Model Fit Assessment Framework, to ensure consistency
with the group’s strategic priorities and the key attributes of
its business model.
Capital and liquidity adequacy planning conducted as part of
both the annual ICAAP and ILAAP is used to assess the
resilience of the group’s current strategy and business model
in the event of different stress scenarios. Although not
formally linked, outputs and analysis from both exercises are
used to guide strategic planning.
The annual risk appetite statement review also ensures the
group’s risk appetite and supporting key risk indicators are
aligned with the financial and strategic plan. Agreed appetite
is communicated throughout the group through the review
and approval of divisional risk appetite statements and
business-level key risk indicators.
The group conducts monitoring focused on the external
environment (for example, key market indices, and growth of
sustainable products and services). Within credit risk, all
Banking businesses monitor agreed external early warning
Risk report continued | Principle risks
Close Brothers Group plc Annual Report 2025
80
Operational risk
The risk of loss or customer harm
resulting from inadequate or failed
internal processes, people and
systems or external events. This
includes the risk of being unable
torecover systems quickly and
maintain criticalservices.
See page 106.
• The established group-wide operational risk framework is currently being
enhanced as part of the group's investment in improved capability. This
includes transitioning to a new Governance, Risk and Compliance
system which will further enhance monitoring and oversight as well as
the provision of group-wide operational risk training. The group is also
undertaking a review of its Risk Target Operating Model to further
enhance risk management capability, capacity and embedment of risk
management across the group.
• Following the Supreme Court’s ruling on motor finance commissions, we
await the FCA's redress proposals once the consultation phase
completes. Arrangements have been undertaken to ensure the group
can respond appropriately and at pace.
Reputational risk
The risk of detriment to stakeholder
perception of the group, leading to
impairment of its reputation and
future goals, due to any action or
inaction of the company, its
employees or associated third
parties.
See page 109.
• Established group-wide and employee-level focus on responsibility and
sustainability enables an approach in all businesses that aligns to a
range of stakeholder expectations, which is supported by group-level
oversight.
• Increased media attention, including in relation to any possible redress
schemes such as that associated with the FCA’s review of historical
motor finance commission arrangements, may lead to an adverse
perception of the group.
Traded market risk
The risk that a change in the value of
an underlying market variable will
give rise to an adverse movement in
the value of the group’s trading
assets and liabilities.
See page 111.
• The external macroeconomic environment may continue to impact
trading volumes and security valuations.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
78

Business and strategic risk
Business and strategic risk is the risk of realising
lower than anticipated profits or experiencing a
loss rather than a profit, due to failure to adapt to
changing market conditions, pursuing an
ineffective strategy or ineffective implementation
of strategy.
Exposure
The group operates in an environment where it is exposed to
various independent influencing factors. Its profitability can
be impacted by: the broader UK economic climate; changes
in technology, regulation and customer behaviour;
competition from traditional and new players; front-line sales
performance; cost movements; and strategic changes. All of
these can vary in both nature and extent across its divisions.
Changes in these factors could result in additional
investment requirements or higher costs and affect the
group’s ability to continue to advance loans or products at
its desired risk and reward criteria, which could in turn
contribute to a loss of market confidence.
Risk appetite
The group seeks to address business and strategic risk
through executing a sustainable business model focused on:
• specialist markets where the group can build leading
market positions based on service, expertise and
relationships;
• credit quality and returns rather than loan book growth or
market share;
• investing in the business for the long term;
• maintaining a strong balance sheet and prudently
managing the group’s financial resources;
• consistently supporting our customers and clients; and
• acting sustainably and responsibly, considering the
interests of all stakeholders and growing demand for
sustainable products and services.
Measurement
Business and strategic risk is measured through a number of
key performance metrics (including those set out on pages
12 and 13) and risk indicators at a business, divisional and
group level which provide transparency on progress and
execution against strategy. These indicators are typically
reported monthly via relevant committees, with oversight via
the Board, most notably through its review of key financial
metrics and underlying performance trends.
The status of key group initiatives and projects is also
tracked and discussed, noting the importance of their
successful delivery to the group’s strategic trajectory.
Mitigation
To support the management of its strategy, and help mitigate
potential business and strategic risk, the group maintains a
comprehensive and rigorous framework of consideration and
approval covering the design and endorsement of strategy,
and the ongoing monitoring of its implementation.
Over the past year, the group’s strategic priority has been on
further strengthening the capital position, while protecting
the business franchise. Looking forward, the group has
introduced three new key strategic pillars – Simplify,
Optimise, Grow – that will support the business model and
enable the group to adapt to changes in the operating
environment more efficiently.
The group's long track record of supporting customers
throughout the financial cycle is underpinned by a consistent
and disciplined approach to pricing and credit quality. The
group builds and maintains long-term relationships with its
clients and intermediaries based on:
• speed and flexibility of services;
• its local presence and personal approach;
• the experience and expertise of its people; and
• an offering of tailored and client-driven product solutions.
This differentiated approach results in strong customer
engagement and high levels of repeat business. The group is
further protected by the diversity of its banking businesses
and products, which provides resilience against competitive
pressure or market weakness in any of the sectors it
operates in.
Monitoring
On an ongoing basis, strategy is formulated and managed at
an individual business level through local executive
committees with top-down oversight maintained through the
group’s Executive Committee, which holds dedicated
strategy offsite meetings periodically through the year.
Outputs also feed into the group’s annual budgeting and
planning process which typically operates on a three-year
time horizon. The group’s budget and plan are subject to
review and challenge, initially at a business level and
subsequently by the group’s Executive Committee, ahead of
submission to the Board, which reviews, challenges and
agrees the group’s budget for the following year.
The ongoing strategic planning process is supplemented by
an annual Board strategy day, which takes a thematic
approach to the review and challenge of group and
business-level strategic priorities. This includes a review of
our portfolio of specialist businesses, with a disciplined
approach to exiting or restructuring any business that no
longer fits our strategy, risk appetite or return requirements.
New growth initiatives and potential acquisitions are
assessed against the group’s strategic objectives and its
Model Fit Assessment Framework, to ensure consistency
with the group’s strategic priorities and the key attributes of
its business model.
Capital and liquidity adequacy planning conducted as part of
both the annual ICAAP and ILAAP is used to assess the
resilience of the group’s current strategy and business model
in the event of different stress scenarios. Although not
formally linked, outputs and analysis from both exercises are
used to guide strategic planning.
The annual risk appetite statement review also ensures the
group’s risk appetite and supporting key risk indicators are
aligned with the financial and strategic plan. Agreed appetite
is communicated throughout the group through the review
and approval of divisional risk appetite statements and
business-level key risk indicators.
The group conducts monitoring focused on the external
environment (for example, key market indices, and growth of
sustainable products and services). Within credit risk, all
Banking businesses monitor agreed external early warning
Risk report continued | Principle risks
Close Brothers Group plc Annual Report 2025
80
indicators (for example, movement in housing indices) with a
view to supporting the early identification of negative trends,
and enhancing the group’s ability to respond appropriately,
minimising potential impact on performance.
In addition, emerging risks are also monitored and debated
on an ongoing basis at all levels of the group and across all
functions. These include developments in areas such as
technology, regulation and sustainability, which could
present both opportunities and threats. Within the risk
function, reporting capabilities continue to be enhanced to
further support the group’s ability to identify and respond
effectively to changes in the external environment and in
customer behaviours with a view to mitigating any potential
impact on business performance.
Outlook
Following the recent Supreme Court ruling in respect of
historical motor finance commissions, there remains elevated
uncertainty while we await further details of the FCA's
proposed industry-wide redress scheme. We continue to
focus on supporting our customers, and on maintaining
underwriting standards and operational resilience, while we
invest to support future income generation, operational
efficiency and cost savings.
The business and strategic risk has stabilised in recent
months following the successful delivery of a number of
management actions to strengthen our capital position and
ensure the group is well placed to navigate the current
uncertainty. However, business risk may increase in FY 2026
as the group continues to progress a number of key strategic
initiatives and change programmes, all of which come with
execution risk attached.
We continue to see good growth prospects in our core
banking businesses, as we focus on resuming our track
record of earnings growth and delivering sustainable risk-
adjusted returns. The group remains prepared for a range of
different economic and business scenarios to help ensure it
has the resources and operational capability to perform
effectively. For further details on emerging risks and
uncertainties see page 79. In addition, further commentary
on the market environment and its impact on the group is
outlined on pages 51 to 67.
Capital risk
Capital risk is the risk that the group has
insufficient regulatory capital (including equity
and other loss-absorbing debt instruments) to
operate effectively, including meeting minimum
regulatory requirements, operating within Board-
approved risk appetite and supporting its
strategic goals.
Exposure
The group’s exposure to capital risk principally arises from
its requirement to meet minimum regulatory requirements set
out in the Capital Requirements Regulation (“CRR”) and PRA
requirements and guidelines, and is usually specified in
terms of minimum capital ratios which assess the level of
regulatory capital and RWAs. The group operates a prudent
business model which results in comparatively low levels of
leverage and so risk-based capital requirements are, and are
likely to remain, the group’s binding constraint.
The PRA supervises the group on a consolidated basis and
receives information on the capital adequacy of, and sets
capital requirements for, the group as a whole. In addition, a
number of subsidiaries are regulated for prudential purposes
by either the PRA or the FCA. The group’s Pillar 1
information is presented in the first table of the
“Measurement” section. Under Pillar 2, the group completes
an annual self-assessment of risks known as the ICAAP. The
ICAAP is reviewed by the PRA, which culminates in the PRA
setting a Total Capital Requirement (“TCR”) that the group
and its regulated subsidiaries are required to hold at all
times.
The group’s TCR is set at 9.3%, of which 5.2% needs to be
met with Common Equity Tier 1 (“CET1”) capital. This
includes the Pillar 1 requirements (4.5% and 8% respectively
for CET1 and total capital) and a Pillar 2a component of
1.3% of which 0.7% needs to be met with CET1 capital.
There are no planned increases to the UK countercyclical
buffer (“CCyB”) at this time, and the rate remains at 2%, with
the group’s overall CCyB remaining at 1.9%.
Pillar 3 requires firms to publish a set of disclosures which
allow market participants to assess information on the firm’s
capital, risk exposures and risk assessment process. The
group’s Pillar 3 disclosures, which are unaudited, can be
found on the group’s website at www.closebrothers.com/
investor-relations/investor-information/results-reports-and-
presentations.
Risk appetite
The group maintains a strong base level and composition of
capital, sufficient to support the development and growth of
the business, continue to meet Pillar 1 requirements, TCR,
additional Capital Requirements Directive (“CRD”) buffers
and leverage ratio requirements, and be able to withstand a
severe but plausible stress scenario with satisfactory capital
and leverage ratios.
The group’s policy is to be well capitalised and its approach
to capital management is driven by strategic and
organisational requirements, while also taking into account
the regulatory and commercial environments in which it
operates. Accordingly, a prudent capital position is a core
part of the group’s business model, allowing it to grow and
invest in the business, support paying dividends to
shareholders and meet regulatory requirements.
Capital triggers and limits are maintained within the risk
appetite framework and are approved by the Board at least
annually.
The group has set a management target for the CET1 capital
ratio to operate in a range between 12.0% and 13.0% in the
medium term, which provides for a significant surplus
amount of capital to support the group’s capital risk policy.
Given the capital headwinds the group is facing, actions
have been taken to build and preserve capital strength with
the FY 2025 capital position above the target range.
Risk report continued | Principle risks
81
Operational risk
The risk of loss or customer harm
resulting from inadequate or failed
internal processes, people and
systems or external events. This
includes the risk of being unable
torecover systems quickly and
maintain criticalservices.
See page 106.
• The established group-wide operational risk framework is currently being
enhanced as part of the group's investment in improved capability. This
includes transitioning to a new Governance, Risk and Compliance
system which will further enhance monitoring and oversight as well as
the provision of group-wide operational risk training. The group is also
undertaking a review of its Risk Target Operating Model to further
enhance risk management capability, capacity and embedment of risk
management across the group.
• Following the Supreme Court’s ruling on motor finance commissions, we
await the FCA's redress proposals once the consultation phase
completes. Arrangements have been undertaken to ensure the group
can respond appropriately and at pace.
Reputational risk
The risk of detriment to stakeholder
perception of the group, leading to
impairment of its reputation and
future goals, due to any action or
inaction of the company, its
employees or associated third
parties.
See page 109.
• Established group-wide and employee-level focus on responsibility and
sustainability enables an approach in all businesses that aligns to a
range of stakeholder expectations, which is supported by group-level
oversight.
• Increased media attention, including in relation to any possible redress
schemes such as that associated with the FCA’s review of historical
motor finance commission arrangements, may lead to an adverse
perception of the group.
Traded market risk
The risk that a change in the value of
an underlying market variable will
give rise to an adverse movement in
the value of the group’s trading
assets and liabilities.
See page 111.
• The external macroeconomic environment may continue to impact
trading volumes and security valuations.
Principal risk
Outlook
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
78
Strategic report Governance report Financial statements

Measurement
The group maintains a strong capital base to support the
development of the business and to ensure the group meets
the TCR and additional regulatory buffers at all times. As a
result, the group maintains capital adequacy ratios above
minimum regulatory requirements, which are currently set at
a minimum CET1 capital ratio of 9.7% and a minimum total
capital ratio of 13.7%. The minimum CET1 capital
requirements are inclusive of the capital conservation buffer
(2.5% of RWAs) and the CCyB (currently 1.9% of RWAs),
and exclusive of any applicable PRA buffer.
Analysis of the composition of regulatory capital and Pillar 1
RWAs and a table showing the movement in CET1 capital
during the year are shown on the following pages. A
comprehensive analysis of the composition of regulatory
capital and RWAs is provided in the group’s Pillar 3 disclosures.
The CET1 capital ratio increased from 12.8% to 13.8%,
mainly driven by the sale of CBAM (c.155bps), recognition of
other profits attributable to shareholders (c.90bps), a
reduction in loan book RWAs (c.70bps) and other
movements (c.10bps). These benefits were partly offset
bythe provision in relation to motor finance commissions
(-c.145bps), a provision for a proactive customer remediation
programme related to early settlement of loans in the Motor
Finance business (-c.30bps), operating losses after tax in the
group’s Vehicle Hire business (-c.30bps), and AT1 coupon
payments in the year (-c.20bps).
CET1 capital decreased 2% to £1,348.1 million (31 July
2024: £1,374.8 million), primarily driven by the £155.7 million
provision (net of tax) in relation to motor finance
commissions, a provision related to early settlement of loans
in Motor Finance of £30.3 million (net of tax), £30.8 million
operating losses after tax in the Vehicle Hire business, and
AT1 coupon payments of £22.3 million. These impacts were
partly offset by the recognition of the group’s other profit
attributable to shareholders in the year of £92.7 million, a
£60.8 million gain on disposal for CBAM together with the
associated reduction in intangible assets deducted from
capital of £56.9 million, and a net increase in other CET
resources of £2.0 million.
Tier 1 capital and total capital both decreased 2% to
£1,548.1 million and £1,748.1 million respectively (31 July
2024: £1,574.8 million and £1,774.8 million respectively),
reflecting the same movements in relation to CET1 capital.
RWAs decreased 8% to £9.8 billion (31 July 2024: £10.7
billion), driven by a reduction in credit risk RWAs (£676.6
million) and operational risk RWAs (£224.4 million).
The decline in credit risk RWAs was driven by a reduction in
loan book RWAs (£520.9 million) across each of the Banking
businesses mainly due to lower loan book balances and also
reflecting the benefit of the ENABLE Guarantee Scheme
within the Commercial business. There was also a decrease
in other credit risk RWAs (£155.7 million) which was partly in
respect of the CBAM disposal (£74.4 million).
The reduction in operational risk RWAs was primarily driven
by the CBAM disposal (£225.3 million), following the
approval from the Prudential Regulation Authority (“PRA”) for
a full release of its associated operational risk RWAs.
As a result, CET1, tier 1 and total capital ratios were 13.8%
(31 July 2024: 12.8%), 15.8% (31 July 2024: 14.7%) and
17.8% (31 July 2024: 16.6%), respectively.
Mitigation
In response to motor commissions uncertainty, we have
strengthened our capital position and maintained high levels
of liquidity, substantially above regulatory requirements. The
group's CET1 capital ratio was 13.8% at 31 July 2025,
reflecting significant progress on our capital actions. These
measures, which included no payment of the dividend, loan
book moderation, cost-saving initiatives, organic capital
generation, and the sale of CBAM (announced in September
2024 and completed in February 2025) have been
successfully implemented. This resulted in over £400 million
of CET1 capital generated or preserved as of 31 July 2025.
In addition, the sale of Winterflood, announced on 25 July
2025, is expected to increase the group's CET1 capital ratio
by c.55 basis points on a pro-forma basis, from 13.8% to
c.14.3%, of which c.30 basis points will be recognised upon
completion, and a further c.25 basis points is expected in
due course from the reduction in operational risk weighted
assets. The transaction is expected to complete in early
2026 and is conditional upon receipt of customary regulatory
approvals.
The decision to reinstate dividends will be reviewed by the
Board once there is further clarity on the financial impact of
the FCA's review of motor finance commissions .
Monitoring
Both actual and forecast capital adequacy, including the
potential impact of capital headwinds, are reported monthly
through the group’s governance framework, with oversight
from the Capital Adequacy Committee (“CAC”), GRCC and
the Risk Committee. Annually, as part of the ICAAP, the
group also undertakes its own assessment of its capital
requirements against its principal risks (Pillar 2a) together
with an assessment of how capital adequacy could be
impacted in a range of stress scenarios (Pillar 2b). Under
both assessments, the group ensures that it maintains
sufficient levels of capital adequacy.
The CAC is responsible for the management of capital risk
and for the allocation of capital across the group, which
includes the setting of the group’s capital strategy and the
setting and monitoring of a comprehensive capital risk
appetite framework. These are managed through a series of
group policies, standards and methodology documents and
supported by capital reporting and planning control
frameworks. The CAC, whose membership consists of
finance, business and risk executives, is responsible for
measuring and monitoring the actual and forecast capital
position on a monthly basis. Key capital metrics are reported
to the Board on a regular basis, with any changes to the
capital structure of the group reserved for the group Board.
The CAC also monitors actual, forecast and stressed capital
metrics using an IRB approach in order to prepare for
anticipated future transition to this approach.
Outlook
In the near term, we expect to maintain our CET1 capital
ratios above the top end of our medium-term target range of
12% to 13%, based on our current assessment of the
provision in respect of motor finance commissions.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
82

Measurement
The group maintains a strong capital base to support the
development of the business and to ensure the group meets
the TCR and additional regulatory buffers at all times. As a
result, the group maintains capital adequacy ratios above
minimum regulatory requirements, which are currently set at
a minimum CET1 capital ratio of 9.7% and a minimum total
capital ratio of 13.7%. The minimum CET1 capital
requirements are inclusive of the capital conservation buffer
(2.5% of RWAs) and the CCyB (currently 1.9% of RWAs),
and exclusive of any applicable PRA buffer.
Analysis of the composition of regulatory capital and Pillar 1
RWAs and a table showing the movement in CET1 capital
during the year are shown on the following pages. A
comprehensive analysis of the composition of regulatory
capital and RWAs is provided in the group’s Pillar 3 disclosures.
The CET1 capital ratio increased from 12.8% to 13.8%,
mainly driven by the sale of CBAM (c.155bps), recognition of
other profits attributable to shareholders (c.90bps), a
reduction in loan book RWAs (c.70bps) and other
movements (c.10bps). These benefits were partly offset
bythe provision in relation to motor finance commissions
(-c.145bps), a provision for a proactive customer remediation
programme related to early settlement of loans in the Motor
Finance business (-c.30bps), operating losses after tax in the
group’s Vehicle Hire business (-c.30bps), and AT1 coupon
payments in the year (-c.20bps).
CET1 capital decreased 2% to £1,348.1 million (31 July
2024: £1,374.8 million), primarily driven by the £155.7 million
provision (net of tax) in relation to motor finance
commissions, a provision related to early settlement of loans
in Motor Finance of £30.3 million (net of tax), £30.8 million
operating losses after tax in the Vehicle Hire business, and
AT1 coupon payments of £22.3 million. These impacts were
partly offset by the recognition of the group’s other profit
attributable to shareholders in the year of £92.7 million, a
£60.8 million gain on disposal for CBAM together with the
associated reduction in intangible assets deducted from
capital of £56.9 million, and a net increase in other CET
resources of £2.0 million.
Tier 1 capital and total capital both decreased 2% to
£1,548.1 million and £1,748.1 million respectively (31 July
2024: £1,574.8 million and £1,774.8 million respectively),
reflecting the same movements in relation to CET1 capital.
RWAs decreased 8% to £9.8 billion (31 July 2024: £10.7
billion), driven by a reduction in credit risk RWAs (£676.6
million) and operational risk RWAs (£224.4 million).
The decline in credit risk RWAs was driven by a reduction in
loan book RWAs (£520.9 million) across each of the Banking
businesses mainly due to lower loan book balances and also
reflecting the benefit of the ENABLE Guarantee Scheme
within the Commercial business. There was also a decrease
in other credit risk RWAs (£155.7 million) which was partly in
respect of the CBAM disposal (£74.4 million).
The reduction in operational risk RWAs was primarily driven
by the CBAM disposal (£225.3 million), following the
approval from the Prudential Regulation Authority (“PRA”) for
a full release of its associated operational risk RWAs.
As a result, CET1, tier 1 and total capital ratios were 13.8%
(31 July 2024: 12.8%), 15.8% (31 July 2024: 14.7%) and
17.8% (31 July 2024: 16.6%), respectively.
Mitigation
In response to motor commissions uncertainty, we have
strengthened our capital position and maintained high levels
of liquidity, substantially above regulatory requirements. The
group's CET1 capital ratio was 13.8% at 31 July 2025,
reflecting significant progress on our capital actions. These
measures, which included no payment of the dividend, loan
book moderation, cost-saving initiatives, organic capital
generation, and the sale of CBAM (announced in September
2024 and completed in February 2025) have been
successfully implemented. This resulted in over £400 million
of CET1 capital generated or preserved as of 31 July 2025.
In addition, the sale of Winterflood, announced on 25 July
2025, is expected to increase the group's CET1 capital ratio
by c.55 basis points on a pro-forma basis, from 13.8% to
c.14.3%, of which c.30 basis points will be recognised upon
completion, and a further c.25 basis points is expected in
due course from the reduction in operational risk weighted
assets. The transaction is expected to complete in early
2026 and is conditional upon receipt of customary regulatory
approvals.
The decision to reinstate dividends will be reviewed by the
Board once there is further clarity on the financial impact of
the FCA's review of motor finance commissions .
Monitoring
Both actual and forecast capital adequacy, including the
potential impact of capital headwinds, are reported monthly
through the group’s governance framework, with oversight
from the Capital Adequacy Committee (“CAC”), GRCC and
the Risk Committee. Annually, as part of the ICAAP, the
group also undertakes its own assessment of its capital
requirements against its principal risks (Pillar 2a) together
with an assessment of how capital adequacy could be
impacted in a range of stress scenarios (Pillar 2b). Under
both assessments, the group ensures that it maintains
sufficient levels of capital adequacy.
The CAC is responsible for the management of capital risk
and for the allocation of capital across the group, which
includes the setting of the group’s capital strategy and the
setting and monitoring of a comprehensive capital risk
appetite framework. These are managed through a series of
group policies, standards and methodology documents and
supported by capital reporting and planning control
frameworks. The CAC, whose membership consists of
finance, business and risk executives, is responsible for
measuring and monitoring the actual and forecast capital
position on a monthly basis. Key capital metrics are reported
to the Board on a regular basis, with any changes to the
capital structure of the group reserved for the group Board.
The CAC also monitors actual, forecast and stressed capital
metrics using an IRB approach in order to prepare for
anticipated future transition to this approach.
Outlook
In the near term, we expect to maintain our CET1 capital
ratios above the top end of our medium-term target range of
12% to 13%, based on our current assessment of the
provision in respect of motor finance commissions.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
82
The PRA Policy Statement PS9/24 Implementation of the
Basel 3.1 standards near-final part 2 was published on
12 September 2024 with an implementation date of 1
January 2026. In January 2025, the PRA announced a one-
year delay to Basel 3.1 implementation, moving the effective
date to 1 January 2027. The majority of rules applicable to
the group remain unchanged in the final rules, including the
removal of the small and medium-sized enterprises (“SME”)
supporting factor. We currently estimate that the
implementation will result in an increase of up to 10% in the
group’s RWAs calculated under the standardised approach.
The group expects to receive a full offset in Pillar 2a
requirements at total capital level for the removal of the Pillar
1 RWA SME support factor. As such, we expect the UK
implementation of Basel 3.1 to have a less significant impact
on the group’s overall capital headroom position than initially
anticipated.
Composition of regulatory capital and Pillar 1 RWAs
31 July 2025
£ million
31 July 2024
£ million
CET1 capital
Shareholders’ equity per balance sheet
1,735.5 1,842.5
Regulatory adjustments to CET1 capital
Contingent convertible securities recognised as AT1 capital
1
(197.6) (197.6)
Intangible assets, net of associated deferred tax liabilities
(176.1) (264.0)
Foreseeable AT1 coupon charges
2
(3.8) (3.8)
Cash flow hedging reserve
(3.8) (13.0)
Pension asset, net of associated deferred tax liabilities
(0.1) (0.6)
Prudent valuation adjustment
(1.0) (0.8)
Securitisation positions which can alternatively be subject to a 1,250% risk weight
3
(11.3) –
IFRS 9 transitional arrangements
4
6.3 12.1
CET1 capital
5
1,348.1 1,374.8
Additional Tier 1 capital
200.0 200.0
Total Tier 1 capital
5
1,548.1 1,574.8
Tier 2 capital – subordinated debt
200.0 200.0
Total regulatory capital
5
(audited) 1,748.1 1,774.8
RWAs
Credit and counterparty credit risk
8,864.4 9,548.4
Operational risk
820.1 1,044.5
Market risk
114.0 108.3
9,798.5 10,701.2
CET1 capital ratio
5
13.8% 12.8%
Tier 1 capital ratio
5
15.8% 14.7%
Total capital ratio
5
17.8% 16.6%
1. The contingent convertible securities are classified as an equity instrument for accounting but treated as AT1 for regulatory capital purposes; see note
20 to the financial statements.
2. Under CRR Article 26, a deduction for foreseeable charges has been recognised at 31 July 2025 and 31 July 2024. The deduction at 31July 2025
reflects charges for the coupon on the group’s contingent convertible securities.
3. Under CRR Article 36, a deduction for securitisations positions, which are subject to a 1,250% risk weight, but alternatively are allowed to be deducted
from CET1, has been recognised at 31 July 2025. For more information on this securitisation with the British Business Bank, refer to the Banking
Commercial section of the Financial Overview. The deduction is applicable from 31 July 2025 (31 July 2024: £nil).
4. The group has elected to apply IFRS 9 transitional arrangements for 31 July 2025, which allow the capital impact of expected credit losses to be
phased in over the transitional period.
5. Shown after applying IFRS 9 transitional arrangements and the CRR transitional and qualifying own funds arrangements in force at the time. Without
their application, at 31 July 2025 the CET1 capital ratio would be 13.7%, tier 1 capital ratio 15.7% and total capital ratio 17.8% (31 July 2024: CET1
capital ratio 12.7%, tier 1 capital ratio 14.6% and total capital ratio 16.5%).
Movement in CET1 capital during the year
2025
£ million
2024
£ million
CET1 capital at 1 August
1,374.8 1,310.8
(Loss)/profit in the period attributable to shareholders
(77.9) 100.4
AT1 coupon charges (audited)
(22.3) (15.0)
IFRS 9 transitional arrangements
(5.8) (19.7)
Decrease/(increase) in intangible assets, net of associated deferred tax liabilities
87.8 (1.2)
Other movements in reserves recognised for CET1 capital
2.4 (0.8)
Other movements in adjustments from CET1 capital
(10.9) 0.3
CET1 capital at 31 July
1,348.1 1,374.8
83
Strategic report Governance report Financial statements

Change execution risk
Change execution risk is the strategic,
reputation, regulatory or financial risk that can
occur as a result of failure to execute, embed
and deliver the outcomes of change successfully.
Exposure
As the group undertakes multiple strategic initiatives and
change programmes driven by an evolving regulatory
landscape and cost optimisation agenda, it faces increased
exposure to associated risks.
Failure to effectively deliver business and technology change
may hinder our ability to achieve strategic objectives and
meet the expectations of customers, regulators, colleagues,
and shareholders — both at the group level and within
individual businesses.
Depending on the nature of the change, delays or failures in
implementation could also impact financial performance. In
addition, there is potential for regulatory and reputational
consequences.
Risk appetite
Acknowledging that change initiatives carry an inherent level
of risk, the group has limited appetite for risks with
significant residual exposure.
The group seeks to avoid entering into change programmes
that would incur a disproportionate level of risk exposure, as
well as risks that, should they crystallise, would trigger
secondary impacts, especially those that run counter to its
ethical stance and could either cause customer harm or have
reputational impacts.
Measurement
Change execution risk is measured via reporting undertaken
by a multi-faceted approach governing group-wide change
initiatives. Change initiatives follow a designated governance
path which is managed via an established governance
structure subject to governance standards and reporting
requirements. Where appropriate, confidentiality and project
list considerations are implemented in full. The group’s
enterprise-wide change team and designated business
change functions includes a body of project professionals
who are experienced in running and managing change and
also ensuring that governance requirements are fully met.
The group’s extensive measurement capabilities deployed to
monitor wider operational risk includes indicators which
enable losses associated with execution, delivery and
process management to be identified. For more information
on this, please see the operational risk section on page 106.
Mitigation
The group’s Enterprise Risk Management Framework —
comprising a comprehensive suite of policies, standards,
and the three lines of defence operating model —
establishes consistent control objectives across all risk
disciplines.
This unified approach to defining and embedding control
expectations helps reduce both the likelihood and impact of
events that could lead to change execution risk.
Processes and procedures are in place to govern all levels of
change management, ensuring effective prioritisation,
oversight, and decision-making across the investment
portfolio. Senior management receives regular updates on
the change portfolio and individual projects, supporting
strong governance and oversight of execution risks, while
ensuring that resources are appropriately allocated to enable
successful delivery.
The Enterprise PMO function conducts periodic reviews of
change delivery progress, associated risks, and resource
deployment across the portfolio. These reviews help identify
and mitigate potential delivery and capacity risks.
This structured approach ensures that risks are effectively
managed and that investment and capacity are aligned with
the group’s risk appetite, thereby minimising overall
exposure.
Monitoring
The business change function holds a monthly Enterprise
Change Portfolio Review Board, which provides
management with updates on the progress and costs of
change programmes. During these sessions, key milestone
approvals are sought based on the latest available
management information. The Review Board also serves as a
gateway to the Bank Investment Committee, whose approval
is required for any investment-related expenditure.
Upon completion of a project, a formal review is conducted
prior to closure. This process serves as a valuable learning
opportunity, helping to inform and improve future projects
and change initiatives.
In addition, the risk function maintains oversight of the
group’s business planning process. This includes analysing
industry trends and identifying forward-looking threats that
could materially impact the delivery of strategic objectives or
significantly influence the assessment of operational risk
capital.
Outlook
The outlook pertaining to change execution risk is
considered increasing in the prevailing environment.
Delivery capacity and capability remain key areas of
management focus to ensure the safe execution of the
significant change programmes both planned and in
progress to support the group’s transformation. Additional
management oversight required may place further strain on
existing resources.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
84

Change execution risk
Change execution risk is the strategic,
reputation, regulatory or financial risk that can
occur as a result of failure to execute, embed
and deliver the outcomes of change successfully.
Exposure
As the group undertakes multiple strategic initiatives and
change programmes driven by an evolving regulatory
landscape and cost optimisation agenda, it faces increased
exposure to associated risks.
Failure to effectively deliver business and technology change
may hinder our ability to achieve strategic objectives and
meet the expectations of customers, regulators, colleagues,
and shareholders — both at the group level and within
individual businesses.
Depending on the nature of the change, delays or failures in
implementation could also impact financial performance. In
addition, there is potential for regulatory and reputational
consequences.
Risk appetite
Acknowledging that change initiatives carry an inherent level
of risk, the group has limited appetite for risks with
significant residual exposure.
The group seeks to avoid entering into change programmes
that would incur a disproportionate level of risk exposure, as
well as risks that, should they crystallise, would trigger
secondary impacts, especially those that run counter to its
ethical stance and could either cause customer harm or have
reputational impacts.
Measurement
Change execution risk is measured via reporting undertaken
by a multi-faceted approach governing group-wide change
initiatives. Change initiatives follow a designated governance
path which is managed via an established governance
structure subject to governance standards and reporting
requirements. Where appropriate, confidentiality and project
list considerations are implemented in full. The group’s
enterprise-wide change team and designated business
change functions includes a body of project professionals
who are experienced in running and managing change and
also ensuring that governance requirements are fully met.
The group’s extensive measurement capabilities deployed to
monitor wider operational risk includes indicators which
enable losses associated with execution, delivery and
process management to be identified. For more information
on this, please see the operational risk section on page 106.
Mitigation
The group’s Enterprise Risk Management Framework —
comprising a comprehensive suite of policies, standards,
and the three lines of defence operating model —
establishes consistent control objectives across all risk
disciplines.
This unified approach to defining and embedding control
expectations helps reduce both the likelihood and impact of
events that could lead to change execution risk.
Processes and procedures are in place to govern all levels of
change management, ensuring effective prioritisation,
oversight, and decision-making across the investment
portfolio. Senior management receives regular updates on
the change portfolio and individual projects, supporting
strong governance and oversight of execution risks, while
ensuring that resources are appropriately allocated to enable
successful delivery.
The Enterprise PMO function conducts periodic reviews of
change delivery progress, associated risks, and resource
deployment across the portfolio. These reviews help identify
and mitigate potential delivery and capacity risks.
This structured approach ensures that risks are effectively
managed and that investment and capacity are aligned with
the group’s risk appetite, thereby minimising overall
exposure.
Monitoring
The business change function holds a monthly Enterprise
Change Portfolio Review Board, which provides
management with updates on the progress and costs of
change programmes. During these sessions, key milestone
approvals are sought based on the latest available
management information. The Review Board also serves as a
gateway to the Bank Investment Committee, whose approval
is required for any investment-related expenditure.
Upon completion of a project, a formal review is conducted
prior to closure. This process serves as a valuable learning
opportunity, helping to inform and improve future projects
and change initiatives.
In addition, the risk function maintains oversight of the
group’s business planning process. This includes analysing
industry trends and identifying forward-looking threats that
could materially impact the delivery of strategic objectives or
significantly influence the assessment of operational risk
capital.
Outlook
The outlook pertaining to change execution risk is
considered increasing in the prevailing environment.
Delivery capacity and capability remain key areas of
management focus to ensure the safe execution of the
significant change programmes both planned and in
progress to support the group’s transformation. Additional
management oversight required may place further strain on
existing resources.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
84
Conduct risk
Conduct risk is the risk that the group’s
behaviours, or those of its colleagues, whether
intentional or unintentional, result in poor
outcomes for customers or the markets in which
it operates. It is rooted in the importance of
delivering good customer outcomes at every
stage of the customer journey.
Exposure
The group is exposed to conduct risk in its provision of
products and services to customers either directly or via its
distributors, and through other business activities that enable
delivery. This can relate to existing and legacy matters. The
regulatory change agenda continues at pace and is expected
in the near term to continue to enhance consumer protection
given the macroeconomic environment. Regulatory
expectations, including with respect to retail customer
savings and borrowing and trading activities continue to
evolve, with impact on the group’s businesses in each of
these markets.
Risk appetite
The group recognises the importance of delivering good
customer outcomes and seeks to reasonably avoid customer
detriment or foreseeable harm resulting from inappropriate
judgements or behaviours in the creation and execution of
business activities. To support this, it strives to maintain a
culture aligned to its values which places the customer at the
heart of the business model and remains dedicated to
addressing customer dissatisfaction or detriment in a timely
and fair manner to ensure good customer outcomes.
The group is committed to maintaining the integrity of the
markets in which it operates, avoiding any abusive or anti-
competitive behaviour.
Measurement
Conduct risk is measured throughout the Enterprise Risk
Management Framework by management information and
risk indicators. A number of quantitative and qualitative key
risk indicators are determined at an individual business level,
with reporting to, and oversight via, the relevant divisional
Risk and Compliance Committee (“RCC”). Performance
against the key risk indicators is reported to the GRCC and
the Risk Committee.
Customer outcome monitoring metrics are key contributors
to conduct risk monitoring. Customer outcome monitoring
metrics are designed to identify potential or actual poor
customer outcomes. Where potential or actual customer
harm is identified via outcome monitoring, businesses are
required to consider and deploy, where appropriate, remedial
actions.
For businesses with products in scope of the FCA’s
Consumer Duty, indicators feed into the local and group
reporting (RCCs/GRCC) and into the quarterly Customer
Outcomes Report which is shared with the Board.
The aforementioned report supports the annual assessment
of customer outcomes where the Board is required to review
and approve an assessment of whether the firm is delivering
good customer outcomes.
The Board report has been revised and updated in line with
FCA best practice guidance to evidence good customer
outcomes.
Mitigation
The following controls and procedures are in place to help
mitigate conduct risk:
• The group takes steps to proactively identify conduct risks
and encourages all individuals across the organisation to
feel responsible for managing conduct risks within their
business area and/or function.
• The group provides support to colleagues to enable them
to improve the conduct of their business or function,
including group-wide and specialist training where
required.
• The group’s remuneration strategy seeks to incentivise
good behaviours and due consideration is given to
individual conduct as part of any remuneration.
• Policies and standards set out expectations of employees
and key controls to ensure conduct risk is managed within
the agreed risk appetite, including for essential areas such
as dealing with clients, dealing with markets, complaint
handling, vulnerable customers and conflicts of interest.
Mandatory staff training on key conduct areas is provided
on a regular basis.
• All products are subject to a robust risk-based product
development and review process.
During the year, implementation activities for Consumer Duty
continued with further embedding and enhancements for
open book products. Completion of work with respect to
closed book products was also achieved during 2024.
The Board has actively engaged with the Consumer Duty
journey of each division in the light of each unique market
and considers the distinct conduct risks that present across
the business lines. The Board has oversight of each
regulated entity and their own annual assessment of
customer outcomes.
Monitoring Consumer Duty has transitioned to business as
usual and is expected to evolve with further regulatory
change expectations.
On an ongoing basis, the Board actively oversees Consumer
Duty, including through engagement with regular
management information to identify risks to these outcomes,
and through monitoring the status of work to improve
outcomes where necessary. This included oversight of
identification and resolution of any customer harms, such as
that which arose out of historical deficiencies in early
settlement processes in Motor Finance.
85
Strategic report Governance report Financial statements

Conduct Risk Framework
Monitoring
Risk identification and timely action are undertaken by
management and employees as the first line of defence. The
risk and compliance functions seek to ensure conduct risk
reporting is robust, remains fit for purpose, and agreed
management actions appropriately mitigate the identified
risks.
The compliance monitoring function undertakes regular
reviews of key areas, such as complaint handling, vulnerable
customer processes and customer communications, to
confirm customers are experiencing good outcomes. Group
internal audit provides independent assurance on the
adequacy, completeness and control effectiveness of key
areas using a risk-based approach. Compliance monitoring
and audit findings assist with detection of potential conduct
risk or poor customer outcomes in order that appropriate
action plans can be put in place.
All RCCs are required to review conduct risk reporting and
outputs and consider any required action. Where
appropriate, issues may be escalated to both the GRCC and
the Risk Committee.
With the introduction of the enhanced regulatory
requirements of the FCA’s Consumer Duty for retail
customers, reporting continues to evolve and metrics will be
evaluated with the introduction of new regulatory
requirements.
Outlook
Conduct risk remains elevated as the macroeconomic
environment continues to place financial pressure on
customers as a result of the cost of living and interest rates.
The importance of appropriate support for customers in
financial difficulty, including vulnerable customers, is
expected to remain elevated. The group is focused on
maintaining its culture which enables tailoring its approach to
supporting customers to drive good consumer outcomes.
With the strategic repositioning of the Premium Finance
business to increase its focus on commercial lines products,
management attention remains focused on sustaining good
customer outcomes for customers with finance through
impacted personal lines brokers.
The group’s regulators continue to evolve market-wide
expectations for firms to deliver good customer outcomes.
The group continues to engage with its regulators in an open
and cooperative manner, including with respect to historical
motor finance commissions matters. Where it becomes
evident that good customer outcomes may not have been
achieved, the group takes steps to support affected
customers and to prevent recurrence.
Credit risk
Credit risk is the risk of a reduction in earnings
and/or value, as a result of the failure of a
counterparty or associated party, with whom the
group has contracted, to meet its obligations as
they fall due. Across the group, credit risk arises
primarily from the lending and treasury activities
of the Banking division.
The Banking division applies consistent and prudent lending
criteria to mitigate credit risk. Its lending activities are
predominantly secured across a diverse range of asset
classes. This ensures concentration risk is controlled in both
the loan book and associated collateral. Credit risk appetites
are set around unsecured and structurally protected lending
to ensure portfolios remain predominantly secured. At
31 July 2025, secured lending accounts for 92.5% (31 July
2024: 90.0%) of the loan book.
The group has established limits for all financial
counterparties with whom it places deposits, enters into
derivative contracts or whose debt securities are held, and
the credit quality of the counterparties is monitored. While
these amounts may be material, the counterparties are all
regulated institutions with investment grade credit ratings
assigned by international credit rating agencies and are
monitored in accordance with the regulatory large exposures
framework.
The group’s principal credit risk exposure is to the loan book,
which is the focus of the credit risk part of the Risk Report.
Managing credit risk
Exposure
As a lender to businesses and individuals, the group is
exposed to credit losses if customers are unable to repay
loans and outstanding interest and fees. At 31 July 2025,
gross loans and advances to customers was £9.7 billion
(31 July 2024: £10.3 billion).
Further details on loans and advances to customers and
debt securities held are in Notes 10 and 11 to the Financial
Statements. Further commentary on the credit quality of the
loan book is outlined on pages 90 to 99.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
86
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Conduct Risk Framework
Monitoring
Risk identification and timely action are undertaken by
management and employees as the first line of defence. The
risk and compliance functions seek to ensure conduct risk
reporting is robust, remains fit for purpose, and agreed
management actions appropriately mitigate the identified
risks.
The compliance monitoring function undertakes regular
reviews of key areas, such as complaint handling, vulnerable
customer processes and customer communications, to
confirm customers are experiencing good outcomes. Group
internal audit provides independent assurance on the
adequacy, completeness and control effectiveness of key
areas using a risk-based approach. Compliance monitoring
and audit findings assist with detection of potential conduct
risk or poor customer outcomes in order that appropriate
action plans can be put in place.
All RCCs are required to review conduct risk reporting and
outputs and consider any required action. Where
appropriate, issues may be escalated to both the GRCC and
the Risk Committee.
With the introduction of the enhanced regulatory
requirements of the FCA’s Consumer Duty for retail
customers, reporting continues to evolve and metrics will be
evaluated with the introduction of new regulatory
requirements.
Outlook
Conduct risk remains elevated as the macroeconomic
environment continues to place financial pressure on
customers as a result of the cost of living and interest rates.
The importance of appropriate support for customers in
financial difficulty, including vulnerable customers, is
expected to remain elevated. The group is focused on
maintaining its culture which enables tailoring its approach to
supporting customers to drive good consumer outcomes.
With the strategic repositioning of the Premium Finance
business to increase its focus on commercial lines products,
management attention remains focused on sustaining good
customer outcomes for customers with finance through
impacted personal lines brokers.
The group’s regulators continue to evolve market-wide
expectations for firms to deliver good customer outcomes.
The group continues to engage with its regulators in an open
and cooperative manner, including with respect to historical
motor finance commissions matters. Where it becomes
evident that good customer outcomes may not have been
achieved, the group takes steps to support affected
customers and to prevent recurrence.
Credit risk
Credit risk is the risk of a reduction in earnings
and/or value, as a result of the failure of a
counterparty or associated party, with whom the
group has contracted, to meet its obligations as
they fall due. Across the group, credit risk arises
primarily from the lending and treasury activities
of the Banking division.
The Banking division applies consistent and prudent lending
criteria to mitigate credit risk. Its lending activities are
predominantly secured across a diverse range of asset
classes. This ensures concentration risk is controlled in both
the loan book and associated collateral. Credit risk appetites
are set around unsecured and structurally protected lending
to ensure portfolios remain predominantly secured. At
31 July 2025, secured lending accounts for 92.5% (31 July
2024: 90.0%) of the loan book.
The group has established limits for all financial
counterparties with whom it places deposits, enters into
derivative contracts or whose debt securities are held, and
the credit quality of the counterparties is monitored. While
these amounts may be material, the counterparties are all
regulated institutions with investment grade credit ratings
assigned by international credit rating agencies and are
monitored in accordance with the regulatory large exposures
framework.
The group’s principal credit risk exposure is to the loan book,
which is the focus of the credit risk part of the Risk Report.
Managing credit risk
Exposure
As a lender to businesses and individuals, the group is
exposed to credit losses if customers are unable to repay
loans and outstanding interest and fees. At 31 July 2025,
gross loans and advances to customers was £9.7 billion
(31 July 2024: £10.3 billion).
Further details on loans and advances to customers and
debt securities held are in Notes 10 and 11 to the Financial
Statements. Further commentary on the credit quality of the
loan book is outlined on pages 90 to 99.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
86
Risk appetite
The group seeks to maintain the discipline of its lending
criteria, both to preserve its business model and to maintain
an acceptable return that appropriately balances risk and
reward. This is underpinned by a strong customer focus and
credit culture that extend across people, structures, policies
and principles. This in turn provides an environment for long-
term sustainable growth and low, predictable loan losses.
To support this approach, the group maintains a credit risk
appetite framework to define and align credit risk strategy
with its overall appetite for risk and business strategies, as
defined by the Board.
The group Credit Risk Appetite Statement (“CRAS”) outlines
the specific level of credit risk that the group is willing to
assume, utilising defined quantitative limits and triggers
against agreed measures, and covers both credit
concentration and portfolio performance measures.
The measures supporting the group CRAS are based on the
following key principles:
• To lend within familiar asset classes, in well-known and
understood markets.
• To operate as a predominantly secured, or structurally
protected, lender against identifiable and accessible
assets, and maintain conservative loan-to-value (“LTV”)
ratios across the Banking division’s portfolios.
• To maintain a diversified loan portfolio (by business, asset
class and UK geography), as well as a short average tenor
and low average loan size.
• To rely on local underwriting expertise, with authority
delegated from the Risk Committee, and ongoing central
oversight.
• To maintain rigorous and timely collections and arrears
management processes.
• To operate strong control and governance within the
lending businesses, overseen by a central group credit risk
team.
Ultimate responsibility for the approval and governance of
the group CRAS lies with the Board, on recommendation
from the GRCC, with support from the Credit Risk
Management Committee (“CRMC”). Performance is
monitored against agreed appetites on a monthly basis.
The CRAS is embedded into business unit credit risk
management through a hierarchy of local triggers and limits,
which are approved by the Chief Credit Officer (“CCO”) and
noted at CRMC. Performance is also monitored monthly via
divisional RCCs. Material breaches are escalated via
established governance channels.
CRAS metrics are closely aligned with the group’s overall
strategy to facilitate monitoring of the composition and
quality of the loan book to ensure it remains within defined
appetite.
Measurement
A consolidated central credit reporting framework is in place
and facilitates effective credit risk management and
measurement by the central group credit risk team. The
framework enables the identification, measurement,
monitoring and control of all material credit risks within the
lending portfolios, setting clear credit risk appetite within
which all lending is originated and ensuring that asset
portfolios are grown responsibly and profitably.
A centralised framework incorporates:
• the use of common data definitions across all businesses;
• consistent and controlled extraction and housing of credit
data from the group’s core business systems;
• dynamic credit risk management to improve strategic
policy decision-making;
• oversight and control of the profile of the lending book to
manage credit risk appetite; and
• identification, monitoring and control of material credit
risks against a clear and communicated CRAS.
Mitigation (audited)
Credit assessment and lending criteria
The Banking division’s general approach to credit mitigation
is based on the provision of affordable lending on a secured
or structurally protected basis, against assets that are known
and understood. These assets are typically easily realisable
with strong secondary markets and predictable values, and
spread across a broad range of classes within established
sectors.
Whilst diverse, the businesses adhere to a set of common
lending principles resulting in stable portfolio credit quality
and consistently low loss rates through the cycle.
Credit risk governance framework
Risk Committee
Group internal audit
Risk-specific committees
Third-line oversight
Impairment
Adequacy
Committee
Credit Risk
Management
Committee
Group Risk and
Compliance
Committee
Group Credit
Committee
Model
Governance
Committee
Policy and governance
Credit risk appetite statements/
early warning indicators
Exceptions and large deals
Divisional risk committees
87
Strategic report Governance report Financial statements

The common lending principles are as follows:
• Predominantly secured lending: 97.3% of loan book
secured or structurally protected.
• Short average tenor: portfolio residual maturity of 15
months.
• Small average loan size and low single-name
concentration risk: balance for the top 10 facility limits
represents 6.4% of book.
• Further diversification by sector, asset class and UK
geography.
• Local underwriting expertise with central oversight and
focus on assets that are known and understood.
All lending criteria and assessment procedures are
thoroughly documented in robust credit policies and
standards, at both a bank and business level.
Expertise
Across the various businesses, credit risk employees are
specialists in their area and can support loan book growth in
a manner that is consistent with both risk strategy and
appetite. This business-level distribution allows the formation
of strong relationships with customers and intermediaries
based on a deep understanding of their needs and the
markets in which they operate. Consistent underwriting
discipline and lending against assets that are known and
understood benefits customers through the cycle and allows
maintenance of a track record of strong margins and
profitability.
Governance framework and oversight
Lending is underpinned by a strong control and governance
framework both within the lending businesses and through
oversight via a central group credit risk team.
Credit underwriting is undertaken either centrally or through
regional office networks, depending on the nature of the
business and the size and complexity of the transaction.
Underwriting authority is delegated from the Risk Committee,
with lending businesses approving lower-risk exposures
locally subject to compliance with credit policy and risk
appetite.
Local risk directors assure the quality of underwriting
decisions for all facilities within the business’ delegated
sanctioning authority level via a quality assurance
programme. This programme samples new business
underwritten, with a particular focus on lending hotspots: for
example, long-tenor agreements, new asset classes or high
LTVs. Outputs are reported biannually with consolidated
summaries presented to the CRMC.
These underwriting approaches are reinforced by timely
collections and arrears management, working in conjunction
with the customer to ensure the best possible outcome for
customers.
The local model is supported by central oversight and
control. An independent central group credit risk team
provides ongoing monitoring of material credit risks through
regular reviews of appetite and policy.
Monitoring
High-level requirements are outlined in documented
standards covering the identification, monitoring and
management of customers in financial difficulty, with detailed
credit policy and guidance formalised within local credit
policies, including guidelines on the identification and
treatment of vulnerable customers.
Documented policy includes business-specific definitions for
identifying customers in, or likely to experience, financial
difficulty. There are accompanying courses of action outlined
that protect the group’s position, taking account of the
terms/covenants of facilities, security enforcement options,
legal remedies and third-party intervention (for example,
brokers).
This process is owned by the risk directors, ensuring that
prompt action is taken to review the financial conditions of
customers when warning signs indicate deterioration in
financial health, credit quality, covenant compliance or asset
strength/coverage. Where possible, credit limits are
amended where there is evidence of delinquency or
deteriorating financial condition/capacity to repay.
The credit risk framework aligns with the broader three lines
of defence approach, with a governance structure flowing
from local first-line business teams up to second-line risk
directors (and key oversight committees such as credit
committees, divisional RCCs, the CRMC, the Model
Governance Committee (“MGC”) and the Risk Committee)
overlaid with a third line formed by the group internal audit
function.
First line of defence: Credit risk management
The lending businesses have primary responsibility for
ensuring that a robust risk and control environment is
established as part of day-to-day operations, and that good-
quality credit applications are brought forward for
consideration.
They are also responsible for ensuring that their activities are
compliant with the rules and guidance set out in local credit
policies and processes. Each business unit has its own
formalised credit risk appetite and policy documents,
approved by divisional RCCs. This risk culture is facilitated
by local profit and loss ownership, ensuring a long-term
approach is taken, with an understanding of how loans will
be repaid.
Second line of defence: Risk oversight and control
The second line of defence has three tiers: business-aligned
risk directors and their teams, the central group credit risk
team, and oversight committees. The risk directors, who
report to the CCO, are responsible for setting and
communicating credit risk strategy, identifying exceptions
and ensuring local compliance.
Similarly, the risk heads in the Securities divisions, and the
asset and liability management function, ensure that their
respective operations are performed in line with the group
financial institution and non-banking financial institution
credit risk standards and also report up through their
divisional RCCs.
The central group credit risk team provides a further layer of
oversight and approval, supported by credit committees, and
the CRMC, MGC, GRCC and Risk Committee. Together, the
second line of defence provides a clear tactical and strategic
understanding of credit risk, proposing enhancements to the
credit risk framework for ongoing effective management and
control.
Third line of defence: Internal audit
The third line of defence is the group internal audit function.
This team uses both a risk-based approach and a rolling
programme of reviews to ensure that the first and second
lines of defence are working effectively.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
88

The common lending principles are as follows:
• Predominantly secured lending: 97.3% of loan book
secured or structurally protected.
• Short average tenor: portfolio residual maturity of 15
months.
• Small average loan size and low single-name
concentration risk: balance for the top 10 facility limits
represents 6.4% of book.
• Further diversification by sector, asset class and UK
geography.
• Local underwriting expertise with central oversight and
focus on assets that are known and understood.
All lending criteria and assessment procedures are
thoroughly documented in robust credit policies and
standards, at both a bank and business level.
Expertise
Across the various businesses, credit risk employees are
specialists in their area and can support loan book growth in
a manner that is consistent with both risk strategy and
appetite. This business-level distribution allows the formation
of strong relationships with customers and intermediaries
based on a deep understanding of their needs and the
markets in which they operate. Consistent underwriting
discipline and lending against assets that are known and
understood benefits customers through the cycle and allows
maintenance of a track record of strong margins and
profitability.
Governance framework and oversight
Lending is underpinned by a strong control and governance
framework both within the lending businesses and through
oversight via a central group credit risk team.
Credit underwriting is undertaken either centrally or through
regional office networks, depending on the nature of the
business and the size and complexity of the transaction.
Underwriting authority is delegated from the Risk Committee,
with lending businesses approving lower-risk exposures
locally subject to compliance with credit policy and risk
appetite.
Local risk directors assure the quality of underwriting
decisions for all facilities within the business’ delegated
sanctioning authority level via a quality assurance
programme. This programme samples new business
underwritten, with a particular focus on lending hotspots: for
example, long-tenor agreements, new asset classes or high
LTVs. Outputs are reported biannually with consolidated
summaries presented to the CRMC.
These underwriting approaches are reinforced by timely
collections and arrears management, working in conjunction
with the customer to ensure the best possible outcome for
customers.
The local model is supported by central oversight and
control. An independent central group credit risk team
provides ongoing monitoring of material credit risks through
regular reviews of appetite and policy.
Monitoring
High-level requirements are outlined in documented
standards covering the identification, monitoring and
management of customers in financial difficulty, with detailed
credit policy and guidance formalised within local credit
policies, including guidelines on the identification and
treatment of vulnerable customers.
Documented policy includes business-specific definitions for
identifying customers in, or likely to experience, financial
difficulty. There are accompanying courses of action outlined
that protect the group’s position, taking account of the
terms/covenants of facilities, security enforcement options,
legal remedies and third-party intervention (for example,
brokers).
This process is owned by the risk directors, ensuring that
prompt action is taken to review the financial conditions of
customers when warning signs indicate deterioration in
financial health, credit quality, covenant compliance or asset
strength/coverage. Where possible, credit limits are
amended where there is evidence of delinquency or
deteriorating financial condition/capacity to repay.
The credit risk framework aligns with the broader three lines
of defence approach, with a governance structure flowing
from local first-line business teams up to second-line risk
directors (and key oversight committees such as credit
committees, divisional RCCs, the CRMC, the Model
Governance Committee (“MGC”) and the Risk Committee)
overlaid with a third line formed by the group internal audit
function.
First line of defence: Credit risk management
The lending businesses have primary responsibility for
ensuring that a robust risk and control environment is
established as part of day-to-day operations, and that good-
quality credit applications are brought forward for
consideration.
They are also responsible for ensuring that their activities are
compliant with the rules and guidance set out in local credit
policies and processes. Each business unit has its own
formalised credit risk appetite and policy documents,
approved by divisional RCCs. This risk culture is facilitated
by local profit and loss ownership, ensuring a long-term
approach is taken, with an understanding of how loans will
be repaid.
Second line of defence: Risk oversight and control
The second line of defence has three tiers: business-aligned
risk directors and their teams, the central group credit risk
team, and oversight committees. The risk directors, who
report to the CCO, are responsible for setting and
communicating credit risk strategy, identifying exceptions
and ensuring local compliance.
Similarly, the risk heads in the Securities divisions, and the
asset and liability management function, ensure that their
respective operations are performed in line with the group
financial institution and non-banking financial institution
credit risk standards and also report up through their
divisional RCCs.
The central group credit risk team provides a further layer of
oversight and approval, supported by credit committees, and
the CRMC, MGC, GRCC and Risk Committee. Together, the
second line of defence provides a clear tactical and strategic
understanding of credit risk, proposing enhancements to the
credit risk framework for ongoing effective management and
control.
Third line of defence: Internal audit
The third line of defence is the group internal audit function.
This team uses both a risk-based approach and a rolling
programme of reviews to ensure that the first and second
lines of defence are working effectively.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
88
Banking overview
The Commercial business is a combination of several
specialist, predominantly secured, lending businesses.
The nature of assets financed varies across the businesses.
The majority of the loan book comprises loans of less than
£2.5 million. Credit assessment is undertaken predominantly
on an individual loan-by-loan basis.
Collection and recovery activity is executed promptly by
experts with relevant experience in specialised assets. This
approach allows remedial action to be implemented at the
appropriate time to minimise potential loss and support good
and fair customer outcomes.
The Retail business is predominantly high-volume secured or
structurally protected lending. The majority of the loan book
comprises loans less than £20,000 and includes both
regulated and unregulated agreements. Credit issues are
identified via largely automated monitoring and tracking
processes. Collections processes and actions, focused on
good and fair customer outcomes, are designed and
implemented to restore customers to a performing status,
with recovery methods applied to minimise potential loss.
The Property business is predominantly a low-volume,
specialised lending portfolio with credit assessment
undertaken on an individual loan-by-loan basis. The majority
of the loan book comprises residential development loans of
less than £10 million. All loans are regularly reviewed to
ensure that they are performing satisfactorily, with
Residential Development facilities monitored monthly by
independently appointed project monitoring surveyors to
certify build payments and the residual cost to complete.
This ensures the thorough supervision of all live
developments and facilitates the monthly checking of on-site
progress against the original build plan.
In the Commercial and Property businesses, performing
loans with elevated levels of credit risk may be placed on
watch lists depending on the perceived severity of the credit
risk. Loans appearing on watch lists are subject to monthly
management meetings where appropriate strategies are
determined.
Outlook
Expected credit losses decreased in the year to 31 July
2025, primarily resulting from the derecognition of net loans
and advances in Novitas. Further details relating to Novitas
are outlined on pages 90 to 91. Excluding Novitas, expected
credit losses increased, largely driven by increases to
existing impaired accounts and migrations into Stage 3,
primarily in the Property division. This underlying increase is
set against a backdrop of uncertain market conditions, which
continue to be monitored closely.
The external environment has been mixed this year. While
the UK economy has shown resilience, overall growth has
been modest and consumer spending remains cautious.
Despite some improvement in macroeconomic indicators,
uncertainty has persisted for both individuals and SMEs.
Notwithstanding the modest reductions in the Bank of
England base rate over the last 12 months, headwinds
remain, with higher interest rates, elevated input costs,
increased trade-related uncertainty and cost-of-living
pressures all continuing. All of these factors could result in
higher credit losses in the future.
Consumer affordability has continued to be challenged in the
higher interest rate environment and the resilience of SMEs
has been tested by changes in the UK’s Budget, and the
market volatility and uncertainty from tariffs.
Risk appetite has remained consistent, maintaining the
Banking division’s prudent, through-the-cycle underwriting
standards.
Further details on loans and advances to customers and
debt securities held are in Notes 10 and 11 to the Financial
Statements.
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Strategic report Governance report Financial statements

Credit risk highlights (audited)
1
31 July 2025
£ million
31 July 2024
£ million
Gross loans and advances to customers
Property
1,933.6 2,015.4
Retail
2,974.0 3,136.8
Commercial
4,789.7 5,112.6
Of which Novitas: 2.8 283.1
Excluding Novitas: 4,786.9 4,829.5
Total gross loans and advances to customers
9,697.3 10,264.8
Impairment provisions
Property
81.1 60.2
Retail
95.1 94.9
Commercial
73.5 290.7
Of which Novitas: 2.8 220.7
Excluding Novitas: 70.7 70.0
Total impairment provision
249.7 445.8
Provision coverage ratio
Property
4.2 % 3.0 %
Retail
3.2 % 3.0 %
Commercial
1.5 % 5.7 %
Novitas only: 100.0 % 78.0 %
Excluding Novitas: 1.5 % 1.4 %
Total impairment coverage ratio
2.6 % 4.3 %
Part and non-performing loans
Loans in Stage 2
1,291.0 1,128.8
Of which Novitas: 0.5 1.0
Loans in Stage 3
492.1 725.5
Of which Novitas: 2.3 282.1
Stage 2 coverage
2.6 % 2.8 %
Excluding Novitas: 2.6 % 2.7 %
Stage 3 coverage
33.6 % 49.9 %
Excluding Novitas: 33.3 % 32.2 %
1. The credit risk highlights table relates to assets held at amortised cost, which excludes £11.8 million of loans held at fair value through profit and loss
(“FVTPL”) under IFRS 9.
Disclosures are provided for loans and advances to
customers held at amortised cost under IFRS 9. This
excludes £11.8 million of loans and advances to customers
measured at fair value through profit or loss which are
managed on a consistent basis as detailed on pages 86 to
88, but do not attract an ECL under IFRS 9. Stage allocation
of loans and advances to customers has been applied in line
with the definitions set out in Note 1 to the Financial
Statements.
At 31 July 2025, 81.6% (31 July 2024: 81.9%) of gross loans
and advances to customers were Stage 1. Stage 2 loans and
advances to customers increased to 13.3% (31 July 2024:
11.0%). The remaining 5.1% (31 July 2024: 7.1%) of loans
and advances to customers were deemed to be credit-
impaired and were classified as Stage 3.
Excluding Novitas, the staging profile of loans and advances
to customers has deteriorated, primarily as a result of stage
migrations across the bank in the context of lower net new
business volumes during the year.
Overall impairment provisions decreased to £249.7 million
(31 July 2024: £445.8 million), following impacts of the
derecognition of net loans and advances in Novitas,
alongside regular reviews of staging and provision coverage
for individual loans and portfolios.
Excluding Novitas, impairment provisions increased across
the Banking division to £246.9 million (31 July 2024: £225.1
million), reflecting increases to existing impaired accounts
and migrations into Stage 3. These factors are set against
the backdrop of persistent external pressures resulting from
uncertainty in the macroeconomic environment.
As a result, there has been an overall decrease in provision
coverage to 2.6% (31 July 2024: 4.3%).
Novitas loans
Novitas provided funding to individuals who wished to
pursue legal cases. The decision was made to wind down
Novitas and withdraw from the legal services financing
market following a strategic review in July 2021, which
concluded that the overall risk profile of the business was no
longer compatible with the group’s long-term strategy and
risk appetite.
To protect customers in the event that their case failed, it
was a condition of the Novitas loan agreements that an
individual purchased an After the Event (“ATE”) insurance
policy which covered the loan. As previously announced, the
group accelerated its efforts to resolve the issues
surrounding Novitas and actively sought recovery from the
customers’ ATE insurers.
During the year, the group entered into settlement with two
insurers. This resulted in the derecognition of net loans and
advances to customers of £76.1 million from the
consolidated balance sheet, comprising gross loans and
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
90

Credit risk highlights (audited)
1
31 July 2025
£ million
31 July 2024
£ million
Gross loans and advances to customers
Property
1,933.6 2,015.4
Retail
2,974.0 3,136.8
Commercial
4,789.7 5,112.6
Of which Novitas: 2.8 283.1
Excluding Novitas: 4,786.9 4,829.5
Total gross loans and advances to customers
9,697.3 10,264.8
Impairment provisions
Property
81.1 60.2
Retail
95.1 94.9
Commercial
73.5 290.7
Of which Novitas: 2.8 220.7
Excluding Novitas: 70.7 70.0
Total impairment provision
249.7 445.8
Provision coverage ratio
Property
4.2 % 3.0 %
Retail
3.2 % 3.0 %
Commercial
1.5 % 5.7 %
Novitas only: 100.0 % 78.0 %
Excluding Novitas: 1.5 % 1.4 %
Total impairment coverage ratio
2.6 % 4.3 %
Part and non-performing loans
Loans in Stage 2
1,291.0 1,128.8
Of which Novitas: 0.5 1.0
Loans in Stage 3
492.1 725.5
Of which Novitas: 2.3 282.1
Stage 2 coverage
2.6 % 2.8 %
Excluding Novitas: 2.6 % 2.7 %
Stage 3 coverage
33.6 % 49.9 %
Excluding Novitas: 33.3 % 32.2 %
1. The credit risk highlights table relates to assets held at amortised cost, which excludes £11.8 million of loans held at fair value through profit and loss
(“FVTPL”) under IFRS 9.
Disclosures are provided for loans and advances to
customers held at amortised cost under IFRS 9. This
excludes £11.8 million of loans and advances to customers
measured at fair value through profit or loss which are
managed on a consistent basis as detailed on pages 86 to
88, but do not attract an ECL under IFRS 9. Stage allocation
of loans and advances to customers has been applied in line
with the definitions set out in Note 1 to the Financial
Statements.
At 31 July 2025, 81.6% (31 July 2024: 81.9%) of gross loans
and advances to customers were Stage 1. Stage 2 loans and
advances to customers increased to 13.3% (31 July 2024:
11.0%). The remaining 5.1% (31 July 2024: 7.1%) of loans
and advances to customers were deemed to be credit-
impaired and were classified as Stage 3.
Excluding Novitas, the staging profile of loans and advances
to customers has deteriorated, primarily as a result of stage
migrations across the bank in the context of lower net new
business volumes during the year.
Overall impairment provisions decreased to £249.7 million
(31 July 2024: £445.8 million), following impacts of the
derecognition of net loans and advances in Novitas,
alongside regular reviews of staging and provision coverage
for individual loans and portfolios.
Excluding Novitas, impairment provisions increased across
the Banking division to £246.9 million (31 July 2024: £225.1
million), reflecting increases to existing impaired accounts
and migrations into Stage 3. These factors are set against
the backdrop of persistent external pressures resulting from
uncertainty in the macroeconomic environment.
As a result, there has been an overall decrease in provision
coverage to 2.6% (31 July 2024: 4.3%).
Novitas loans
Novitas provided funding to individuals who wished to
pursue legal cases. The decision was made to wind down
Novitas and withdraw from the legal services financing
market following a strategic review in July 2021, which
concluded that the overall risk profile of the business was no
longer compatible with the group’s long-term strategy and
risk appetite.
To protect customers in the event that their case failed, it
was a condition of the Novitas loan agreements that an
individual purchased an After the Event (“ATE”) insurance
policy which covered the loan. As previously announced, the
group accelerated its efforts to resolve the issues
surrounding Novitas and actively sought recovery from the
customers’ ATE insurers.
During the year, the group entered into settlement with two
insurers. This resulted in the derecognition of net loans and
advances to customers of £76.1 million from the
consolidated balance sheet, comprising gross loans and
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
90
advances to customers of £318.1 million and expected credit
loss (“ECL”) provisions of £242.0 million, resulting in a £6.7
million impairment credit, which has been recorded within
impairment losses on financial assets in the consolidated
income statement.
At 31 July 2025, net loans and advances to customers
relating to Novitas of £nil, comprising gross loans and
advances to customers of £2.8 million and ECL provisions of
£2.8 million, remained on the consolidated balance sheet.
These loans are expected to be closed during the next
financial period.
An insurance receivable has been recognised within lending
receivables, representing the amounts due from the insurers
at 31 July 2025. £48.5 million was subsequently settled and
received in August 2025. The insurance receivable is
classified as a Stage 1 financial asset held at amortised cost
under IFRS 9 with an immaterial ECL provision.
Further detail on the impairment provision is included in Note
10 to the Financial Statements.
Provision coverage analysis by
business (audited)
In Commercial, the impairment coverage ratio decreased to
1.5% (31 July 2024: 5.7%), reflecting the impacts of the
derecognition of net loans and advances in Novitas.
Excluding Novitas, the Commercial provision coverage ratio
increased to 1.5% (31 July 2024: 1.4%) as migrations into
Stages 2 and 3 offset lower new business levels during the
financial year.
In Retail, the provision coverage ratio increased to 3.2%
(31 July 2024: 3.0%), reflecting a continuation of
macroeconomic pressures from the previous financial year
which has seen higher but stable levels of arrears and
forbearance in the Motor Finance business as a result of
persistent cost-of-living pressures on customers.
In Property, the provision coverage ratio increased to 4.2%
(31 July 2024: 3.0%), primarily as a result of migrations into
Stage 3 and increased provisions for some existing impaired
accounts during the financial year.
See Note 10 to the Financial Statements for full staging
tables and analysis, and pages 93 to 95 for additional detail
on changes to macroeconomic forecasts that have impacted
provisions during this financial year.
Measuring credit risk across our businesses
To assess credit risk effectively across the Banking division,
a number of judgements and estimates are used. These are
based on historical experience and reasonable expectations
of future events and are reviewed on an ongoing basis.
In particular, the calculation of the group’s expected credit
loss provision under IFRS 9 requires the group to make a
number of judgements, assumptions and estimates, which
have a material impact on the accounts.
This assessment, which requires judgement, is unbiased and
probability-weighted and uses historical, current and
forward-looking information. The most significant
judgements and estimates are set out below.
While the impact of climate change represents a source of
uncertainty, the group does not consider climate-related
risks to be a critical accounting judgement or estimate at 31
July 2025. Climate risk continues to be a key area of focus
for the group and it continues to assess the sensitivity of
assets and customers to climate-related risks as part of
regular credit monitoring. Transitional climate risks are
considered to be largely mitigated by short average loan
book tenors (15 months), conservatively secured and
diversified portfolios, and the rigorous underwriting,
monitoring and control processes that are in place.
Use of judgements (audited)
In the application of the group’s accounting policies, which
are described in Note 1 to the Financial Statements,
judgements that are considered by the Board to have the
most significant effect on the amounts in the Financial
Statements are as follows.
Significant increase in credit risk
Assets are transferred from Stage 1 to Stage 2 when there
has been a significant increase in credit risk since initial
recognition. Typically, the group assesses whether a
significant increase in credit risk has occurred based on a
quantitative and qualitative assessment, with a “30 days past
due” backstop.
Due to the diverse nature of the group’s lending businesses,
the specific indicators of a significant increase in credit risk
vary by business and may include some or all of the
following factors:
• quantitative assessment: the lifetime probability of default
(“PD”) has increased by more than an agreed threshold
relative to the equivalent at origination. Thresholds are
based on a fixed number of risk grade movements which
are bespoke to each business to ensure that the increased
risk since origination is appropriately captured;
• qualitative assessment: events or observed behaviour
indicate credit deterioration. This includes a wide range of
information that is reasonably available, including
individual credit assessments of the financial performance
of borrowers as appropriate during routine reviews, plus
forbearance and watch list information; or
• backstop criteria: the “30 days past due” backstop is met.
Definition of default
The definition of default is an important building block for
expected credit loss models and is considered a key
judgement. A default is considered to have occurred if any
unlikeliness to pay criterion is met or when a financial asset
meets a “90 days past due” backstop. While some criteria
are factual (e.g. administration, insolvency or bankruptcy),
others require a judgemental assessment of whether the
borrower has financial difficulties which are expected to have
a detrimental impact on their ability to meet contractual
obligations. A change in the definition of default may have a
material impact on the expected credit loss provision.
Use of estimates (audited)
Expected credit loss provisions are a key source of
estimation uncertainty which, depending on a wide range of
factors, could result in a material adjustment to the carrying
amounts of assets and liabilities in the next financial year.
The accuracy of expected credit loss provisions can be
impacted by unpredictable effects or unanticipated changes
to modelled estimates. In addition, forecasting errors could
also occur due to macroeconomic scenarios or weightings
differing from actual outcomes observed. Regular model
monitoring, validations and provision adequacy reviews are
key mechanisms to manage estimation uncertainty across
model estimates. Further detail on these most significant
estimates is set out in the following section.
In the previous financial year there were two critical
estimates relating to the expected credit loss provision for
Novitas, relating to time to recover periods and recovery
91
Strategic report Governance report Financial statements

rates, which are no longer relevant for this financial year end
following the insurance settlements described in the credit
risk highlights section.
Modelled estimates
The calculation of expected credit losses (“ECL”) for loans
and advances to customers, either on a 12-month or lifetime
basis, is based on the PD, the exposure at default (“EAD”)
and the loss given default (“LGD”) and includes forward-
looking macroeconomic information where appropriate.
PD, EAD and LGD parameters are projected over the
remaining life of each exposure. ECL is calculated for each
future quarter by multiplying the three parameters and is then
discounted back to the reporting date and summed. The
discount rate used in the ECL calculation is the effective
interest rate.
IFRS 9 risk parameters are estimated using historical data
wherever possible, and in the absence of sufficient loss
history an expert judgement approach is considered for
some parameters.
Probability of default
PD estimates represent the likelihood of a borrower
defaulting on their financial obligation. Bespoke model-
based approaches to estimate PDs are employed across the
Commercial, Retail and Property businesses. The framework
applied typically includes an economic response model to
quantify the impact of macroeconomic forecasts and a risk
ranking mechanism (e.g. a scorecard) to quantify obligor-
level likelihood of default. Risk characteristics that feed into
the PD model framework include current and past
information related to borrowers, transaction and payment
profiles, and future economic forecasts. Statistical
techniques, based on evidence observed in historical data,
and business knowledge are used to determine which
characteristics are predictive of default behaviour.
Exposure at default
EAD represents the amounts expected to be owed at the
time of default and is estimated using an amortising
schedule for the large majority of exposures, or a credit
conversion factor, depending on the nature of lending.
Loss given default
LGD represents an expectation of the extent of loss on a
defaulted exposure after taking into account cash recoveries,
including the value of collateral held and other credit risk
mitigants. LGD methodologies vary by the nature of assets
financed and can include estimates for the likelihood of
collateral recovery and a separate calculation for the likely
loss on recovery. For some businesses, LGDs are estimated
using liquidation curves based on historical cash flows.
Recoveries are adjusted to account for the impact of
discounting using the effective interest rate.
Forward-looking information
Determining expected credit losses under IFRS 9 requires
the incorporation of forward-looking macroeconomic
information that is reasonable, supportable and includes
assumptions linked to economic variables that impact losses
in each portfolio. The introduction of macroeconomic
information introduces additional volatility to provisions.
In order to calculate forward-looking provisions, economic
scenarios are sourced from Moody’s Analytics. These cover
a range of plausible economic paths that are used in
conjunction with PD, EAD and LGD parameters for each
portfolio to assess expected credit loss provisions across a
range of conditions. An overview of these scenarios using
key macroeconomic indicators is provided on pages 93
to 95. Ongoing benchmarking of the scenarios to other
economic providers is carried out monthly to provide
management with comfort on Moody’s Analytics
scenario paths.
Five different projected economic scenarios are currently
considered to cover a range of possible outcomes. These
include a baseline scenario, which reflects the best view of
future economic events. In addition, one upside scenario and
three downside scenario paths are defined relative to the
baseline. Management assigns the scenarios a probability
weighting to reflect the likelihood of specific scenarios, and
therefore loss outcomes, materialising, using a combination
of quantitative analysis and expert judgement.
The impact of forward-looking information varies across the
group’s lending businesses because of the differing sensitivity of
each portfolio to specific macroeconomic variables. This is
reflected through the development of bespoke macroeconomic
models that recognise the specific response of each business to
the macroeconomic environment.
The modelled impact of macroeconomic scenarios and their
respective weightings is reviewed by business experts in
relation to stage allocation and coverage ratios at the
individual and portfolio level, incorporating management’s
experience and knowledge of customers, the sectors in
which they operate, and the assets financed.
This includes assessment of the reaction of the ECL in the
context of the prevailing and forecast economic conditions,
for example where currently higher interest rates and
inflationary conditions exist compared to recent periods.
Economic forecasts have evolved over the course of 2025
and reflect the mixed external backdrop observed in the
year. Forecasts deployed in IFRS 9 macroeconomic models
are updated on a monthly basis. At 31 July 2025, the latest
baseline scenario forecasts gross domestic product (“GDP”)
growth of 1.1% in calendar year 2025 and an average base
rate of 4.2% across the same period. Consumer Price Index
(“CPI”) inflation is forecast to be 3.1% in calendar year 2025
in the baseline scenario, with 1.3% forecast in the protracted
downside scenario over the same period.
At 31 July 2025, the scenario weightings were: 30% upside,
32.5% baseline, 20% mild downside, 10.5% moderate
downside and 7% protracted downside. As economic
forecasts are considered to recognise developments in the
macroeconomic environment appropriately, no change has
been made to the weightings ascribed to the scenarios since
31 July 2024.
Given the current economic uncertainty, further analysis has
been undertaken to assess the appropriateness of the five
scenarios used. This included benchmarking the baseline
scenario to consensus economic views, as well as consideration
of an additional forecast related to stagflation, which could be
considered as an alternative downside scenario.
Compared to the scenarios in use in the expected credit
losses calculation, the stagflation scenario includes a longer
period of higher interest rates coupled with a shallower but
extended impact on GDP. Due to the relatively short tenor of
the portfolios, the stagflation scenario is considered to be of
less relevance than those deployed. This is supported by the
fact that, due to the higher severity of recessionary factors in
the existing scenarios, using the stagflation scenario instead
of the moderate or protracted downside scenario would
result in lower expected credit losses.
Risk report continued | Principal risks
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92

rates, which are no longer relevant for this financial year end
following the insurance settlements described in the credit
risk highlights section.
Modelled estimates
The calculation of expected credit losses (“ECL”) for loans
and advances to customers, either on a 12-month or lifetime
basis, is based on the PD, the exposure at default (“EAD”)
and the loss given default (“LGD”) and includes forward-
looking macroeconomic information where appropriate.
PD, EAD and LGD parameters are projected over the
remaining life of each exposure. ECL is calculated for each
future quarter by multiplying the three parameters and is then
discounted back to the reporting date and summed. The
discount rate used in the ECL calculation is the effective
interest rate.
IFRS 9 risk parameters are estimated using historical data
wherever possible, and in the absence of sufficient loss
history an expert judgement approach is considered for
some parameters.
Probability of default
PD estimates represent the likelihood of a borrower
defaulting on their financial obligation. Bespoke model-
based approaches to estimate PDs are employed across the
Commercial, Retail and Property businesses. The framework
applied typically includes an economic response model to
quantify the impact of macroeconomic forecasts and a risk
ranking mechanism (e.g. a scorecard) to quantify obligor-
level likelihood of default. Risk characteristics that feed into
the PD model framework include current and past
information related to borrowers, transaction and payment
profiles, and future economic forecasts. Statistical
techniques, based on evidence observed in historical data,
and business knowledge are used to determine which
characteristics are predictive of default behaviour.
Exposure at default
EAD represents the amounts expected to be owed at the
time of default and is estimated using an amortising
schedule for the large majority of exposures, or a credit
conversion factor, depending on the nature of lending.
Loss given default
LGD represents an expectation of the extent of loss on a
defaulted exposure after taking into account cash recoveries,
including the value of collateral held and other credit risk
mitigants. LGD methodologies vary by the nature of assets
financed and can include estimates for the likelihood of
collateral recovery and a separate calculation for the likely
loss on recovery. For some businesses, LGDs are estimated
using liquidation curves based on historical cash flows.
Recoveries are adjusted to account for the impact of
discounting using the effective interest rate.
Forward-looking information
Determining expected credit losses under IFRS 9 requires
the incorporation of forward-looking macroeconomic
information that is reasonable, supportable and includes
assumptions linked to economic variables that impact losses
in each portfolio. The introduction of macroeconomic
information introduces additional volatility to provisions.
In order to calculate forward-looking provisions, economic
scenarios are sourced from Moody’s Analytics. These cover
a range of plausible economic paths that are used in
conjunction with PD, EAD and LGD parameters for each
portfolio to assess expected credit loss provisions across a
range of conditions. An overview of these scenarios using
key macroeconomic indicators is provided on pages 93
to95. Ongoing benchmarking of the scenarios to other
economic providers is carried out monthly to provide
management with comfort on Moody’s Analytics
scenariopaths.
Five different projected economic scenarios are currently
considered to cover a range of possible outcomes. These
include a baseline scenario, which reflects the best view of
future economic events. In addition, one upside scenario and
three downside scenario paths are defined relative to the
baseline. Management assigns the scenarios a probability
weighting to reflect the likelihood of specific scenarios, and
therefore loss outcomes, materialising, using a combination
of quantitative analysis and expert judgement.
The impact of forward-looking information varies across the
group’s lending businesses because of the differing sensitivity of
each portfolio to specific macroeconomic variables. This is
reflected through the development of bespoke macroeconomic
models that recognise the specific response of each business to
the macroeconomic environment.
The modelled impact of macroeconomic scenarios and their
respective weightings is reviewed by business experts in
relation to stage allocation and coverage ratios at the
individual and portfolio level, incorporating management’s
experience and knowledge of customers, the sectors in
which they operate, and the assets financed.
This includes assessment of the reaction of the ECL in the
context of the prevailing and forecast economic conditions,
for example where currently higher interest rates and
inflationary conditions exist compared to recent periods.
Economic forecasts have evolved over the course of 2025
and reflect the mixed external backdrop observed in the
year. Forecasts deployed in IFRS 9 macroeconomic models
are updated on a monthly basis. At 31 July 2025, the latest
baseline scenario forecasts gross domestic product (“GDP”)
growth of 1.1% in calendar year 2025 and an average base
rate of 4.2% across the same period. Consumer Price Index
(“CPI”) inflation is forecast to be 3.1% in calendar year 2025
in the baseline scenario, with 1.3% forecast in the protracted
downside scenario over the same period.
At 31 July 2025, the scenario weightings were: 30% upside,
32.5% baseline, 20% mild downside, 10.5% moderate
downside and 7% protracted downside. As economic
forecasts are considered to recognise developments in the
macroeconomic environment appropriately, no change has
been made to the weightings ascribed to the scenarios since
31 July 2024.
Given the current economic uncertainty, further analysis has
been undertaken to assess the appropriateness of the five
scenarios used. This included benchmarking the baseline
scenario to consensus economic views, as well as consideration
of an additional forecast related to stagflation, which could be
considered as an alternative downside scenario.
Compared to the scenarios in use in the expected credit
losses calculation, the stagflation scenario includes a longer
period of higher interest rates coupled with a shallower but
extended impact on GDP. Due to the relatively short tenor of
the portfolios, the stagflation scenario is considered to be of
less relevance than those deployed. This is supported by the
fact that, due to the higher severity of recessionary factors in
the existing scenarios, using the stagflation scenario instead
of the moderate or protracted downside scenario would
result in lower expected credit losses.
Risk report continued | Principal risks
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92
The final scenarios deployed reflect modest improvement in
the UK economic outlook relative to 31 July 2024. Under the
baseline scenario, UK headline CPI inflation is expected to
moderate from current levels and meet the Bank of
England's 2% target during the second half of 2026. Aligned
to the overall downward trend in inflation from its 2022 peak,
the Bank of England base rate is forecast to continue to
reduce in all scenarios. House price outlook has improved
across all scenarios, recognising more resilient housing
market performance than previously anticipated.
Unemployment rate forecasts have marginally deteriorated
compared to 31 July 2024.
The tables below show economic assumptions within each
scenario, and the weighting applied to each at 31 July 2025.
The metrics shown are key UK economic indicators, chosen
to describe the economic scenarios. These are the main
metrics used to set scenario paths, which then influence a
wide range of additional metrics that are used in expected
credit loss models. The first tables show the forecasts of the
key metrics for the scenarios utilised for calendar years 2025
and 2026. The subsequent tables show averages and peak-
to-trough ranges for the same key metrics over the five-year
period from 2025 to 2029.
Scenario forecasts and weights
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
2025 2026 2025 2026 2025 2026 2025 2026 2025 2026
At 31 July 2025
UK GDP growth
1.1% 1.0% 1.9% 3.7% 0.4% (1.9%) 0.2% (3.4%) 0.1% (4.3%)
UK unemployment
4.7% 4.7% 4.5% 4.1% 4.8% 5.2% 5.0% 6.8% 5.1% 8.0%
UK HPI growth
3.3% 3.2% 9.9% 13.4% 0.2% (2.6%) (1.6%) (9.2%) (3.6%) (16.4%)
BoE base rate
4.2% 3.2% 4.3% 3.5% 4.1% 2.4% 4.1% 1.8% 3.9% 1.3%
Consumer Price Index
3.1% 2.0% 3.2% 2.1% 2.1% 0.3% 1.7% (0.6%) 1.3% (1.1%)
Weighting
32.5% 30% 20% 10.5% 7%
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
2024 2025 2024 2025 2024 2025 2024 2025 2024 2025
At 31 July 2024
UK GDP growth
1.0% 1.2% 1.8% 3.9% 0.3% (1.4)% (0.1)% (3.9)% (0.3)% (5.4)%
UK unemployment
4.4% 4.5% 4.2% 4.0% 4.5% 4.9% 4.7% 6.6% 4.8% 7.8%
UK HPI growth
0.7% 3.2% 7.1% 13.3% (2.3)% (2.6)% (4.1)% (9.2)% (6.0)% (16.4)%
BoE base rate
5.1% 4.2% 5.2% 4.4% 5.0% 3.5% 5.0% 2.9% 4.8% 2.3%
Consumer Price Index
2.5% 2.1% 2.6% 2.2% 1.6% 0.4% 1.1% (0.5)% 0.7% (1.0)%
Weighting
32.5% 30% 20% 10.5% 7%
Notes:
UK GDP growth: National Accounts Annual Real Gross Domestic Product, Seasonally Adjusted – year-on-year change (%).
UK unemployment: ONS Labour Force Survey, Seasonally Adjusted – Average (%).
UK HPI growth: Average nominal house prices, Land Registry, Seasonally Adjusted – Q4-to-Q4 change (%).
BoE base rate: Bank of England base rate – Average (%).
Consumer Price Index: ONS, All items, annual inflation – Q4-to-Q4 change (%).
Five-year average (calendar years 2025 to 2029)
Baseline
Upside
(strong)
Downside
(mild)
Downside
(moderate)
Downside
(protracted)
At 31 July 2025
UK GDP growth
1.6 % 2.3 % 1.1 % 0.8 % 0.7 %
UK unemployment
4.7 % 4.1 % 4.9 % 6.7 % 7.6 %
UK HPI growth
2.5 % 4.2 % 0.8 % (1.0) % (3.5) %
BoE base rate
3.0 % 3.1 % 2.7 % 2.0 % 1.5 %
Consumer Price Index
2.2 % 2.3 % 1.6 % 1.2 % 0.9 %
Weighting
32.5 % 30 % 20 % 10.5 % 7 %
Five-year average (calendar years 2024 to 2028)
Baseline
Upside
(strong)
Downside
(mild)
Downside
(moderate)
Downside
(protracted)
At 31 July 2024
UK GDP growth
1.5% 2.3% 1.1% 0.6% 0.4%
UK unemployment
4.6% 4.0% 4.8% 6.6% 7.4%
UK HPI growth
2.5% 4.2% 0.9% (1.0)% (3.5)%
BoE base rate
3.5% 3.6% 3.2% 2.5% 2.0%
Consumer Price Index
2.1% 2.2% 1.5% 1.2% 0.8%
Weighting
32.5 % 30 % 20 % 10.5 % 7 %
Notes:
UK GDP growth: National Accounts Annual Real Gross Domestic Product, Seasonally Adjusted – CAGR (%).
UK unemployment: ONS Labour Force Survey, Seasonally Adjusted – Average (%).
UK HPI growth: Average nominal house prices, Land Registry, Seasonally Adjusted – CAGR (%).
BoE base rate: Bank of England base rate – Average (%).
Consumer Price Index: ONS, All items, annual inflation – CAGR (%).
93
Strategic report Governance report Financial statements

The forecasts represent an economic view at 31 July 2025,
after which there have been further economic developments,
including the latest base rate reduction to 4.0% at the
August Monetary Policy Committee meeting. These
developments, and their impact on scenarios and
weightings, are subject to ongoing monitoring by
management.
These periods have been included as they demonstrate the
short, medium and long-term outlooks for the key
macroeconomic indicators which form the basis of the
scenario forecasts. The portfolio has an average residual
maturity of 15 months, with 99% of loan value having a
maturity of five years or less.
The following charts on page 95 represent the quarterly
forecast data included in the above tables incorporating
actual metrics up to 31 July 2025. The dark blue line shows
the baseline scenario, while the other lines represent the
various upside and downside scenarios.
The tables below provide a summary for the five-year period
(calendar years 2025 to 2029) of the peak-to-trough range of
values of the key UK economic variables used within the
economic scenarios at 31 July 2025 and 31 July 2024.
Five-year period (calendar year 2025 to 2029)
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
Peak Trough Peak Trough Peak Trough Peak Trough Peak Trough
At 31 July 2025
UK GDP growth
8.2% 0.7% 12.3% 0.7% 5.7% (2.1)% 4.0% (3.8)% 3.6% (5.0)%
UK unemployment
4.8% 4.5% 4.7% 3.8% 5.2% 4.5% 7.5% 4.5% 8.8% 4.5%
UK HPI growth
13.2% 1.5% 27.8% 1.5% 4.3% (3.1)% 2.2% (12.6)% 2.2% (22.0)%
BoE base rate
4.6% 2.5% 4.6% 2.5% 4.6% 1.8% 4.6% 1.0% 4.6% 0.6%
Consumer Price Index
3.4% 1.9% 3.4% 2.0% 3.4% (0.5)% 3.4% (1.2)% 3.4% (2.1)%
Weighting
32.5% 30% 20% 10.5% 7%
Five-year period (calendar year 2024 to 2028)
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
Peak Trough Peak Trough Peak Trough Peak Trough Peak Trough
At 31 July 2024
UK GDP growth
7.7% 0.7% 11.8% 0.7% 5.5% (1.4)% 2.8% (4.2)% 2.2% (6.3)%
UK unemployment
4.8% 4.3% 4.3% 3.7% 4.9% 4.3% 7.4% 4.3% 8.6% 4.3%
UK HPI growth
13.3% 0.7% 27.2% 0.7% 4.4% (5.7)% 0.9% (14.2)% 0.9% (23.4)%
BoE base rate
5.3% 2.5% 5.3% 2.5% 5.3% 2.1% 5.3% 1.1% 5.3% 0.6%
Consumer Price Index
3.6% 2.0% 3.6% 2.0% 3.6% (0.4)% 3.6% (1.1)% 3.6% (2.0)%
Weighting
32.5% 30% 20% 10.5% 7%
Notes:
UK GDP growth: Maximum and minimum quarterly GDP as a percentage change from start of period (%).
UK unemployment: Maximum and minimum unemployment rate (%).
UK HPI growth: Maximum and minimum average nominal house price as a percentage change from start of period (%).
BoE base rate: Maximum and minimum Bank of England base rate (%).
Consumer Price Index: Maximum and minimum inflation rate over the five-year period (%).
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The forecasts represent an economic view at 31 July 2025,
after which there have been further economic developments,
including the latest base rate reduction to 4.0% at the
August Monetary Policy Committee meeting. These
developments, and their impact on scenarios and
weightings, are subject to ongoing monitoring by
management.
These periods have been included as they demonstrate the
short, medium and long-term outlooks for the key
macroeconomic indicators which form the basis of the
scenario forecasts. The portfolio has an average residual
maturity of 15 months, with 99% of loan value having a
maturity of five years or less.
The following charts on page 95 represent the quarterly
forecast data included in the above tables incorporating
actual metrics up to 31 July 2025. The dark blue line shows
the baseline scenario, while the other lines represent the
various upside and downside scenarios.
The tables below provide a summary for the five-year period
(calendar years 2025 to 2029) of the peak-to-trough range of
values of the key UK economic variables used within the
economic scenarios at 31 July 2025 and 31 July 2024.
Five-year period (calendar year 2025 to 2029)
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
Peak Trough Peak Trough Peak Trough Peak Trough Peak Trough
At 31 July 2025
UK GDP growth
8.2% 0.7% 12.3% 0.7% 5.7% (2.1)% 4.0% (3.8)% 3.6% (5.0)%
UK unemployment
4.8% 4.5% 4.7% 3.8% 5.2% 4.5% 7.5% 4.5% 8.8% 4.5%
UK HPI growth
13.2% 1.5% 27.8% 1.5% 4.3% (3.1)% 2.2% (12.6)% 2.2% (22.0)%
BoE base rate
4.6% 2.5% 4.6% 2.5% 4.6% 1.8% 4.6% 1.0% 4.6% 0.6%
Consumer Price Index
3.4% 1.9% 3.4% 2.0% 3.4% (0.5)% 3.4% (1.2)% 3.4% (2.1)%
Weighting
32.5% 30% 20% 10.5% 7%
Five-year period (calendar year 2024 to 2028)
Baseline Upside (strong) Downside (mild) Downside (moderate) Downside (protracted)
Peak Trough Peak Trough Peak Trough Peak Trough Peak Trough
At 31 July 2024
UK GDP growth
7.7% 0.7% 11.8% 0.7% 5.5% (1.4)% 2.8% (4.2)% 2.2% (6.3)%
UK unemployment
4.8% 4.3% 4.3% 3.7% 4.9% 4.3% 7.4% 4.3% 8.6% 4.3%
UK HPI growth
13.3% 0.7% 27.2% 0.7% 4.4% (5.7)% 0.9% (14.2)% 0.9% (23.4)%
BoE base rate
5.3% 2.5% 5.3% 2.5% 5.3% 2.1% 5.3% 1.1% 5.3% 0.6%
Consumer Price Index
3.6% 2.0% 3.6% 2.0% 3.6% (0.4)% 3.6% (1.1)% 3.6% (2.0)%
Weighting
32.5% 30% 20% 10.5% 7%
Notes:
UK GDP growth: Maximum and minimum quarterly GDP as a percentage change from start of period (%).
UK unemployment: Maximum and minimum unemployment rate (%).
UK HPI growth: Maximum and minimum average nominal house price as a percentage change from start of period (%).
BoE base rate: Maximum and minimum Bank of England base rate (%).
Consumer Price Index: Maximum and minimum inflation rate over the five-year period (%).
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94
Real gross domestic product (annual % change)
GDP Growth
(% change in quarter from
previous year)
Baseline Upside
Mild Downside Moderate Downside
Protracted Downside
2025 2026 2027 2028 2029
-6%
-4%
-2%
0%
2%
4%
6%
Unemployment rate (%)
Unemployment Rate
(end of quarter
percentage values)
Baseline Upside
Mild Downside Moderate Downside
Protracted Downside
2025 2026 2027 2028 2029
0%
2%
4%
6%
8%
10%
House price index – current prices (annual % change)
HPI Growth
(% change in quarter from
previous year)
Baseline Upside
Mild Downside Moderate Downside
Protracted Downside
2025 2026 2027 2028 2029
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Bank of England base rate (%)
Base Rate
(end of quarter
percentage values)
Baseline Upside
Mild Downside Moderate Downside
Protracted Downside
2025 2026 2027 2028 2029
0%
1%
2%
3%
4%
5%
6%
Consumer price index (annual % change)
CPI Inflation
(% change in quarter from
previous year)
Baseline Upside
Mild Downside Moderate Downside
Protracted Downside
2025 2026 2027 2028 2029
-3%
-2%
-1%
0%
1%
2%
3%
4%
Scenario sensitivity analysis (audited)
The expected credit loss provision is sensitive to judgements
and estimations made with regard to the selection and
weighting of multiple economic scenarios. As a result,
management has assessed and considered the sensitivity of
the provision as follows:
• For the majority of the portfolios, the modelled expected
credit loss provision has been recalculated under the
upside strong and downside protracted scenarios
described above, applying a 100% weighting to each
scenario in turn. The change in provision requirement is
driven by the movement in risk metrics under each
scenario and resulting impact on stage allocation.
• Expected credit losses based on a simplified approach,
which do not utilise a macroeconomic model and require
expert judgement, are excluded from the sensitivity
analysis.
• In addition to the above, key considerations for the
sensitivity analysis are set out below, by segment:
– In Commercial, the sensitivity analysis excludes Novitas,
given the low materiality of remaining provisions.
– In Retail, the sensitivity analysis does not apply further
stress to the expected credit loss provision on loans and
advances to customers in Stage 3, because the
measurement of expected credit losses is considered
more sensitive to credit factors specific to the borrower
than macroeconomic scenarios.
– In Property, the sensitivity analysis excludes individually
assessed provisions, and certain sub-portfolios which
are deemed more sensitive to credit factors than the
macroeconomic scenarios.
Based on the above analysis, at 31 July 2025, application of
100% weighting to the upside strong scenario would
decrease the expected credit loss by £17.4 million whilst
application of 100% weighting to the protracted downside
scenario would increase the expected credit loss by £32.4
million, driven by the aforementioned changes in risk metrics
and stage allocation of the portfolios.
When performing sensitivity analysis there is a high degree of
estimation uncertainty. On this basis, 100% weighted
expected credit loss provisions presented for the upside and
downside scenarios should not be taken to represent the
lower or upper range of possible and actual expected credit
loss outcomes. The recalculated expected credit loss
provision for each of the scenarios should be read in the
context of the sensitivity analysis as a whole and in
conjunction with the disclosures provided in Note 10 to the
Financial Statements. The modelled impact presented is
based on gross loans and advances to customers at 31 July
2025; it does not incorporate future changes relating to
performance, growth or credit risk. In addition, given the
change in the macroeconomic conditions, underlying
95
Strategic report Governance report Financial statements

modelled provisions and methodology, and refined approach
to adjustments, comparison between the sensitivity results at
31 July 2025 and 31 July 2024 is not appropriate.
The economic environment remains uncertain and future
impairment charges may be subject to further volatility,
including from updates to macroeconomic variable forecasts
impacted by sustained cost-of-living pressures, changes in
fiscal policy, trade-related uncertainty (including the impact
of tariffs), and ongoing geopolitical conflicts.
Use of adjustments (audited)
Limitations in the group’s expected credit loss models or
input data may be identified through ongoing model
monitoring and validation of models. In certain
circumstances, management make appropriate adjustments
to model-calculated expected credit losses. These
adjustments are based on management judgements or
quantitative back-testing to ensure expected credit loss
provisions adequately reflect all known information. These
adjustments are generally determined by considering the
attributes or risks of a financial asset which are not captured
by existing expected credit loss model outputs. Management
adjustments are actively monitored, reviewed and
incorporated into future model developments where
applicable.
Macroeconomic forecasts continue to react to a range of
external factors including changes in the UK’s Budget,
inflationary pressures, the ongoing conflict in Ukraine, and
uncertainty from tariffs. In response, our use of adjustments
has evolved.
In particular, adjustments were applied in the previous
financial year in response to improvements in
macroeconomic forecasts that resulted in releases in
modelled provisions. A number of these releases were
considered premature or counterintuitive by management
and adjustments were made as a result. Portfolio
performance has been closely monitored during the financial
year under review, over which modelled provisions have
increased and external forecasts have remained broadly
stable. As a result, macroeconomic adjustments have
gradually reduced in recognition of the portfolio and models
appropriately reacting to changes in the external
environment.
While macroeconomic adjustment values have decreased,
the overall value of adjustments has increased since 31 July
2024 as a result of changes in the application of adjustments
relating to individual customers where, in management's
judgement, modelled provisions do not adequately reflect
expected credit losses.
The approach to adjustments continues to reflect the use of
expert management judgement which incorporates
management’s experience and knowledge of customers, the
areas in which they operate, and the underlying assets
financed.
The need for adjustments will continue to be monitored as
new information emerges which might not be recognised in
existing models.
At 31 July 2025, £4.0 million (31 July 2024: £(1.5) million) of
the expected credit loss provision was attributable to
adjustments, which reflects a combination of positive and
negative adjustments depending on the adjustment purpose
or model requirement. Adjustments include £2.1 million held
to reflect ongoing economic uncertainty (31 July 2024: £2.4
million).
Other credit risk tables (audited)
Segmental credit risk
The following tables set out loans and advances to
customers, trade receivables and undrawn facilities by the
group’s internal credit risk grading and illustrates the
allocation of these per IFRS 9 staging category for
comparative purposes. The analysis of lending has been
prepared based on the following risk categories:
• Low risk: The credit risk profile of the borrower is
considered acceptable with the borrower considered likely
to meet obligations as they fall due. Standard monitoring is
in place.
• Medium risk: Evidence of deterioration in the credit risk
profile of the borrower exists which requires increased
monitoring. Potential concerns over their ability to meet
obligations as they fall due may exist.
• High risk: Evidence of significant deterioration in the credit
risk profile of the borrower exists which requires enhanced
management. Full repayment may not be achieved, with
potential for loss identified.
Low risk loans and advances to customers have increased to
85% of the overall portfolio (31 July 2024: 84%), reflective of
relative portfolio resilience against the backdrop of persistent
macroeconomic pressures during the financial year.
77% (31 July 2024: 77%) of total advances were classified
as low risk Stage 1. Low risk Stage 2 represented 8%
(31 July 2024: 7%) of loans and advances to customers,
largely comprising early arrears cases, or agreements which
have triggered a significant increase in credit risk indicator,
or the “30 days past due” backstop. Low risk Stage 3 loans
and advances to customers primarily related to agreements
which have triggered the “90 days past due” backstop but
where full repayment is expected.
Medium risk loans account for 9% (31 July 2024: 8%) of total
loans and advances to customers, of which the majority were
spread across Stages 1 and 2. Medium risk Stage 1
decreased to 4% (31 July 2024: 5%). Medium risk Stage 2
represented 5% (31 July 2024: 4%) of the overall portfolio.
Loans and advances to customers reflected as medium risk
Stage 3 primarily related to agreements that have triggered
the “90 days past due” backstop in addition to other
significant increases in credit risk triggers.
High risk loans accounted for 5% (31 July 2024: 8%) of total
loans and advances to customers, with the majority
corresponding to Stage 3. This decrease primarily reflected
the impacts of derecognition of net loans and advances in
Novitas during the financial year.
Risk report continued | Principal risks
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96

modelled provisions and methodology, and refined approach
to adjustments, comparison between the sensitivity results at
31 July 2025 and 31 July 2024 is not appropriate.
The economic environment remains uncertain and future
impairment charges may be subject to further volatility,
including from updates to macroeconomic variable forecasts
impacted by sustained cost-of-living pressures, changes in
fiscal policy, trade-related uncertainty (including the impact
of tariffs), and ongoing geopolitical conflicts.
Use of adjustments (audited)
Limitations in the group’s expected credit loss models or
input data may be identified through ongoing model
monitoring and validation of models. In certain
circumstances, management make appropriate adjustments
to model-calculated expected credit losses. These
adjustments are based on management judgements or
quantitative back-testing to ensure expected credit loss
provisions adequately reflect all known information. These
adjustments are generally determined by considering the
attributes or risks of a financial asset which are not captured
by existing expected credit loss model outputs. Management
adjustments are actively monitored, reviewed and
incorporated into future model developments where
applicable.
Macroeconomic forecasts continue to react to a range of
external factors including changes in the UK’s Budget,
inflationary pressures, the ongoing conflict in Ukraine, and
uncertainty from tariffs. In response, our use of adjustments
has evolved.
In particular, adjustments were applied in the previous
financial year in response to improvements in
macroeconomic forecasts that resulted in releases in
modelled provisions. A number of these releases were
considered premature or counterintuitive by management
and adjustments were made as a result. Portfolio
performance has been closely monitored during the financial
year under review, over which modelled provisions have
increased and external forecasts have remained broadly
stable. As a result, macroeconomic adjustments have
gradually reduced in recognition of the portfolio and models
appropriately reacting to changes in the external
environment.
While macroeconomic adjustment values have decreased,
the overall value of adjustments has increased since 31 July
2024 as a result of changes in the application of adjustments
relating to individual customers where, in management's
judgement, modelled provisions do not adequately reflect
expected credit losses.
The approach to adjustments continues to reflect the use of
expert management judgement which incorporates
management’s experience and knowledge of customers, the
areas in which they operate, and the underlying assets
financed.
The need for adjustments will continue to be monitored as
new information emerges which might not be recognised in
existing models.
At 31 July 2025, £4.0 million (31 July 2024: £(1.5) million) of
the expected credit loss provision was attributable to
adjustments, which reflects a combination of positive and
negative adjustments depending on the adjustment purpose
or model requirement. Adjustments include £2.1 million held
to reflect ongoing economic uncertainty (31 July 2024: £2.4
million).
Other credit risk tables (audited)
Segmental credit risk
The following tables set out loans and advances to
customers, trade receivables and undrawn facilities by the
group’s internal credit risk grading and illustrates the
allocation of these per IFRS 9 staging category for
comparative purposes. The analysis of lending has been
prepared based on the following risk categories:
• Low risk: The credit risk profile of the borrower is
considered acceptable with the borrower considered likely
to meet obligations as they fall due. Standard monitoring is
in place.
• Medium risk: Evidence of deterioration in the credit risk
profile of the borrower exists which requires increased
monitoring. Potential concerns over their ability to meet
obligations as they fall due may exist.
• High risk: Evidence of significant deterioration in the credit
risk profile of the borrower exists which requires enhanced
management. Full repayment may not be achieved, with
potential for loss identified.
Low risk loans and advances to customers have increased to
85% of the overall portfolio (31 July 2024: 84%), reflective of
relative portfolio resilience against the backdrop of persistent
macroeconomic pressures during the financial year.
77% (31 July 2024: 77%) of total advances were classified
as low risk Stage 1. Low risk Stage 2 represented 8%
(31 July 2024: 7%) of loans and advances to customers,
largely comprising early arrears cases, or agreements which
have triggered a significant increase in credit risk indicator,
or the “30 days past due” backstop. Low risk Stage 3 loans
and advances to customers primarily related to agreements
which have triggered the “90 days past due” backstop but
where full repayment is expected.
Medium risk loans account for 9% (31 July 2024: 8%) of total
loans and advances to customers, of which the majority were
spread across Stages 1 and 2. Medium risk Stage 1
decreased to 4% (31 July 2024: 5%). Medium risk Stage 2
represented 5% (31 July 2024: 4%) of the overall portfolio.
Loans and advances to customers reflected as medium risk
Stage 3 primarily related to agreements that have triggered
the “90 days past due” backstop in addition to other
significant increases in credit risk triggers.
High risk loans accounted for 5% (31 July 2024: 8%) of total
loans and advances to customers, with the majority
corresponding to Stage 3. This decrease primarily reflected
the impacts of derecognition of net loans and advances in
Novitas during the financial year.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
96
Stage 1
£ million
Stage 2
£ million
Stage 3
£ million
Total
£ million
At 31 July 2025
Gross loans and advances to customers
1
Low risk
7,491.4 769.6 18.7 8,279.7
Medium risk
422.1 461.4 23.1 906.6
High risk
4.0 68.5 450.3 522.8
Total
7,917.5 1,299.5 492.1 9,709.1
Undrawn commitments
Low risk
809.8 7.7 — 817.5
Medium risk
— 2.2 — 2.2
High risk
— — 3.3 3.3
Total
809.8 9.9 3.3 823.0
Gross trade receivables
2
Low risk
8.2 — — 8.2
Medium risk
— 0.5 — 0.5
High risk
— — 1.9 1.9
Total
8.2 0.5 1.9 10.6
Stage 1
£ million
Stage 2
£ million
Stage 3
£ million
Total
£ million
At 31 July 2024
Gross loans and advances to customers
Low risk
7,943.3 679.6 15.4 8,638.3
Medium risk
474.6 360.6 16.2 851.4
High risk
4.4 88.6 693.9 786.9
Total
8,422.3 1,128.8 725.5 10,276.6
Undrawn commitments
Low risk
1,025.1 18.3 – 1,043.4
Medium risk
– 1.2 – 1.2
High risk
– – 3.1 3.1
Total
1,025.1 19.5 3.1 1,047.7
Gross trade receivables
2
Low risk
11.8 – – 11.8
Medium risk
– 1.5 – 1.5
High risk
– – 3.2 3.2
Total
11.8 1.5 3.2 16.5
1. Gross loans and advances to customers include £11.8 million of loans and advances held at FVTPL, allocated as Stage 1 Low risk (£3.3 million) and
Stage 2 Medium risk (£8.5 million) based on management judgement.
2. Lifetime expected credit losses are recognised for all trade receivables under the IFRS 9 simplified approach. The figures presented are on a gross
basis before deducting for expected credit losses of £2.1 million (31 July 2024: £2.7 million) relating to predominantly Stage 3 receivables.
Forbearance
Forbearance occurs when a customer is experiencing
difficulty in meeting their financial commitments and a
concession is granted, by changing the terms of the financial
arrangement, which would not otherwise be considered. This
arrangement can be temporary or permanent, depending on
the customer’s circumstances. The Banking division reports
on forborne exposures as either performing or non-
performing in line with regulatory requirements. A
forbearance policy is maintained to ensure the necessary
processes are in place to enable consistently fair treatment
of all customers and that each is managed based on their
individual circumstances. The arrangements agreed with
customers will aim to create a sustainable and affordable
financial position, thereby reducing the likelihood of suffering
a credit loss. The forbearance policy is periodically reviewed
to ensure it remains effective.
The Banking division offers a range of concessions to
support customers which vary depending on the product and
the customer’s status. Such concessions include grace
periods/payment moratoria, extensions of the loan term, and
refinancing.
Loans are classified as forborne at the time a customer in
financial difficulty is granted a concession and the loan will
remain treated and recorded as forborne until the following
exit conditions are met:
• the loan is considered as performing and there is no
past-due amount according to the amended contractual
terms;
• a minimum two-year probation period has passed from the
date the forborne exposure was considered as performing,
during which time regular and timely payments have been
made; and
• none of the customer’s exposures with Close Brothers are
more than 30 days past due at the end of the probation
period.
At 31 July 2025, the gross carrying amount of exposures
with forbearance measures was £406.1 million (31 July 2024:
£363.8 million). The key drivers of this increase have been
higher forbearance in Motor Finance, reflecting continued
macroeconomic challenges and enduring cost-of-living
pressures on customers, and project-specific issues in our
Property business.
97
Strategic report Governance report Financial statements

An analysis of forborne loans is shown in the table below:
31 July 2025 31 July 2024
Gross loans and advances to customers (£ million)
9,709.1 10,276.6
Forborne loans (£ million)
406.1 363.8
Forborne loans as a percentage of gross loans and advances to customers (%)
4.2 % 3.5%
Provision on forborne loans (£ million)
113.8 89.4
Number of customers supported
15,882 13,166
The following is a breakdown of forborne loans by segment:
31 July 2025
£ million
31 July 2024
£ million
Commercial
112.9 118.5
Retail
50.6 42.8
Property
242.6 202.5
Total
406.1 363.8
The following is a breakdown of the number of customers supported by segment:
31 July 2025
Number of
customers
supported
31 July 2024
Number of
customers
supported
Commercial
948 839
Retail
14,880 12,275
Property
54 52
Total
15,882 13,166
Following review, the concession types reported below have been updated from those used in the Annual Report 2024 to align
to the broader list of concessions used in regulatory reporting. This change has been made to support consistency with
regulatory frameworks and improve ease of interpretation. The majority of concessions shown as “Other forbearance
measures” relates to agreements where collections and recoveries activity has been deferred.
The following is a breakdown of forborne loans by concession type, based on the updated approach:
31 July 2025
£ million
31 July 2024
£ million
1
Grace period/payment moratorium
136.3 147.0
Extension of maturity/term
139.5 98.8
Rescheduled payments
32.7 28.0
Debt forgiveness
0.2 —
Other forbearance measures
97.4 90.0
Total
406.1 363.8
1. Comparatives have been updated to align to the expanded concession type categories used in this financial year’s reporting.
Government lending schemes
Since the pandemic period, following accreditation,
customers have been offered facilities under various UK and
Irish government-introduced loan schemes, thereby enabling
the Banking division to maximise its support to small
businesses. At 31 July 2025, there are 3,350 (31 July 2024:
4,112) remaining facilities, with residual balance of £461.6
million (31 July 2024: £543.0 million) following further
repayments across the Commercial businesses.
The Banking division maintains a regular reporting cycle of
these facilities to monitor performance. To date, a number of
claims have been made and payments received under the
government guarantee.
Collateral held
The group mitigates credit risk through holding collateral
against loans and advances to customers. The group has
internal policies on the acceptability of specific collateral types,
the requirements for ensuring effective enforceability and
monitoring of collateral in-life. Internal policies define, amongst
other things, legal documentation requirements, the nature of
assets accepted, LTV and age at origination, and exposure
maturity and in-life inspection requirements. An asset valuation
is undertaken as part of the loan origination process.
The principal types of collateral held by the group against
loans and advances to customers in the Property and
Commercial businesses include residential and commercial
property and charges over business assets such as
equipment, inventory and accounts receivable. Within Retail,
the group holds collateral primarily in the form of vehicles in
Motor Finance and refundable insurance premiums in
Premium Finance, where an additional layer of protection
may exist through broker recourse.
The Banking division’s collateral policies have not materially
changed during the reporting period. There has been an
increase in the proportion of exposures in higher LTV bands
as exposures backed by government lending schemes have
run-off and been replaced by more normalised LTV profiles.
Analysis of gross loans and advances to customers by LTV
ratio is provided below. The value of collateral used in
determining the LTV ratio is based upon data captured at
loan origination or, where available, a more recent valuation.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
98

An analysis of forborne loans is shown in the table below:
31 July 2025 31 July 2024
Gross loans and advances to customers (£ million)
9,709.1 10,276.6
Forborne loans (£ million)
406.1 363.8
Forborne loans as a percentage of gross loans and advances to customers (%)
4.2 % 3.5%
Provision on forborne loans (£ million)
113.8 89.4
Number of customers supported
15,882 13,166
The following is a breakdown of forborne loans by segment:
31 July 2025
£ million
31 July 2024
£ million
Commercial
112.9 118.5
Retail
50.6 42.8
Property
242.6 202.5
Total
406.1 363.8
The following is a breakdown of the number of customers supported by segment:
31 July 2025
Number of
customers
supported
31 July 2024
Number of
customers
supported
Commercial
948 839
Retail
14,880 12,275
Property
54 52
Total
15,882 13,166
Following review, the concession types reported below have been updated from those used in the Annual Report 2024 to align
to the broader list of concessions used in regulatory reporting. This change has been made to support consistency with
regulatory frameworks and improve ease of interpretation. The majority of concessions shown as “Other forbearance
measures” relates to agreements where collections and recoveries activity has been deferred.
The following is a breakdown of forborne loans by concession type, based on the updated approach:
31 July 2025
£ million
31 July 2024
£ million
1
Grace period/payment moratorium
136.3 147.0
Extension of maturity/term
139.5 98.8
Rescheduled payments
32.7 28.0
Debt forgiveness
0.2 —
Other forbearance measures
97.4 90.0
Total
406.1 363.8
1. Comparatives have been updated to align to the expanded concession type categories used in this financial year’s reporting.
Government lending schemes
Since the pandemic period, following accreditation,
customers have been offered facilities under various UK and
Irish government-introduced loan schemes, thereby enabling
the Banking division to maximise its support to small
businesses. At 31 July 2025, there are 3,350 (31 July 2024:
4,112) remaining facilities, with residual balance of £461.6
million (31 July 2024: £543.0 million) following further
repayments across the Commercial businesses.
The Banking division maintains a regular reporting cycle of
these facilities to monitor performance. To date, a number of
claims have been made and payments received under the
government guarantee.
Collateral held
The group mitigates credit risk through holding collateral
against loans and advances to customers. The group has
internal policies on the acceptability of specific collateral types,
the requirements for ensuring effective enforceability and
monitoring of collateral in-life. Internal policies define, amongst
other things, legal documentation requirements, the nature of
assets accepted, LTV and age at origination, and exposure
maturity and in-life inspection requirements. An asset valuation
is undertaken as part of the loan origination process.
The principal types of collateral held by the group against
loans and advances to customers in the Property and
Commercial businesses include residential and commercial
property and charges over business assets such as
equipment, inventory and accounts receivable. Within Retail,
the group holds collateral primarily in the form of vehicles in
Motor Finance and refundable insurance premiums in
Premium Finance, where an additional layer of protection
may exist through broker recourse.
The Banking division’s collateral policies have not materially
changed during the reporting period. There has been an
increase in the proportion of exposures in higher LTV bands
as exposures backed by government lending schemes have
run-off and been replaced by more normalised LTV profiles.
Analysis of gross loans and advances to customers by LTV
ratio is provided below. The value of collateral used in
determining the LTV ratio is based upon data captured at
loan origination or, where available, a more recent valuation.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
98
Commercial
£ million
Retail
£ million
Property
£ million
Total
£ million
LTV
1
60% or lower
650.7 131.7 976.1 1,758.5
>60% to 70%
622.3 139.2 709.1 1,470.6
>70% to 80%
423.8 330.4 40.6 794.8
>80% to 90%
972.1 976.3 30.3 1,978.7
>90% to 100%
1,492.3 534.7 67.7 2,094.7
Greater than 100%
342.4 434.5 109.6 886.5
Structurally protected
2
69.9 394.9 — 464.8
Unsecured
228.0 32.3 0.2 260.5
Total at 31 July 2025
3
4,801.5 2,974.0 1,933.6 9,709.1
Commercial
£ million
Retail
£ million
Property
£ million
Total
£ million
LTV
1
60% or lower
828.3 143.4 1,100.1 2,071.8
>60% to 70%
552.7 150.1 667.1 1,369.9
>70% to 80%
575.3 332.7 56.2 964.2
>80% to 90%
848.5 1,056.9 56.5 1,961.9
>90% to 100%
1,451.4 550.3 27.3 2,029.0
Greater than 100%
326.0 419.9 107.6 853.5
Structurally protected
2
329.3 445.8 – 775.1
Unsecured
212.9 37.7 0.6 251.2
Total at 31 July 2024
5,124.4 3,136.8 2,015.4 10,276.6
Gross loans and advances to customers which are credit-impaired split by LTV ratio:
Commercial
£ million
Retail
£ million
Property
£ million
Total
£ million
LTV
60% or lower
27.2 2.0 40.8 70.0
>60% to 70%
4.4 3.1 37.7 45.2
>70% to 80%
6.0 9.4 6.7 22.1
>80% to 90%
14.5 23.1 26.1 63.7
>90% to 100%
30.9 29.8 67.7 128.4
Greater than 100%
15.0 21.4 109.6 146.0
Structurally protected
2
1.9 5.3 — 7.2
Unsecured
8.2 1.1 0.2 9.5
Total at 31 July 2025
108.1 95.2 288.8 492.1
Commercial
£ million
Retail
£ million
Property
£ million
Total
£ million
LTV
60% or lower
39.2 1.8 12.3 53.3
>60% to 70%
5.6 2.5 11.3 19.4
>70% to 80%
5.8 8.2 24.6 38.6
>80% to 90%
13.9 23.2 52.1 89.2
>90% to 100%
35.2 28.1 27.3 90.6
Greater than 100%
12.6 19.4 107.1 139.1
Structurally protected
2
274.4 5.4 – 279.8
Unsecured
13.5 1.4 0.6 15.5
Total at 31 July 2024
400.2 90.0 235.3 725.5
1. Government lending scheme facilities totalling £461.6 million (31 July 2024: £543.0 million) are allocated to a low LTV category reflecting the nature of
the government guarantee and resultant level of lending risk.
2. Exposures are considered structurally protected when, in management’s judgement, they have characteristics which mitigate the credit risk of the
exposure to a significant extent, in spite of not representing tangible security.
3. Total gross loans and advances to customers includes £11.8 million of loans and advances held at FVTPL.
99
Strategic report Governance report Financial statements

Cyber risk
Cyber risk is risk arising from inadequate internal
and external information and cyber security,
where failures impact the confidentiality, integrity
and availability of electronic data or critical
technology services.
Exposure
Cyber risks arise from the organisation’s routine operations
and use of technology, and may lead to service disruptions,
breaches of sensitive data, reputational harm, or adverse
effects on the group’s financial performance and customer
trust.
The group’s exposure to cyber risk is shaped by its
engagement with third parties, the introduction of new digital
products and services, and the need for secure, reliable data
to conduct its business. These elements are integral to
achieving the group’s strategic goals.
The group is committed to upholding high standards of
cyber security in pursuit of its strategic goals, acknowledging
that exposure may arise as threats and vulnerabilities evolve.
To address these challenges, robust cyber controls and
continuous monitoring are employed to ensure risks are
managed within acceptable levels.
Day-to-day management of cyber risk is the responsibility of
the business, complemented by guidance and oversight from
the information security and risk and compliance functions,
and subject to independent assurance from group internal
audit.
Requirements and responsibilities are defined in the
Information Security Policy and supporting standards. These
form part of the Enterprise Risk Management Framework to
identify, assess, mitigate, monitor, and report cyber risks,
incidents, and vulnerabilities that could affect the
achievement of business objectives or disrupt critical
systems and processes.
Risk appetite
The group seeks to prevent cyber risk incidents causing
losses, impacting customers or resulting in disruption to the
availability and integrity of systems and data, and where
impractical, to detect and take immediate steps to respond
and recover from them efficiently and effectively.
The group tolerates a level of cyber risk exposure within
defined thresholds but has limited appetite for cyber risks
with significant residual exposure. In such cases, mitigation
strategies are required to reduce exposure to an acceptable
level, with controls implemented to reduce the likelihood and
impact of high-severity events.
Measurement
The group measures cyber risk through key risk indicators,
observed impact of risk events and periodic risk and control
assessment and risk scenario analysis. Conservative trigger
and limit thresholds for key risk indicators are regularly
monitored within each business, with exceptions reported to
the Group Risk and Compliance Committee (“GRCC”) to
oversee any necessary corrective actions.
Material cyber risk events are identified, reviewed and
escalated in line with criteria set out in the Enterprise Risk
Management Framework, the Information Security Policy and
supporting standards. Where appropriate, this may include a
formal post-incident review led by the group’s information
security function, with oversight provided by the risk and
compliance function. Root cause analysis is undertaken and
lessons learned are captured, with appropriate management
action plans implemented.
Mitigation
The group adopts a risk-based approach to mitigation of
cyber risk, using an industry-standard control framework
aligned with relevant laws and regulations, to inform its cyber
risk management, and continually assesses its maturity. The
group maintains robust cyber and information security
standards and policies, and controls are in place and
operating, with periodic assurance completed. The group
invests in business and technical controls and continues to
enhance its cyber security capabilities, including threat
intelligence, cloud security, identity and access
management, education and awareness, partnerships with
strategic third parties and effective deployment across the
three lines of defence model to manage and undertake
assurance of controls within the group and our third parties.
Where deviations from risk thresholds or emergent cyber
threats are observed, the group undertakes assessment and
remediation activities to address identified historical
deficiencies to bring them within risk appetite.
Monitoring
The Board delegates authority to the GRCC, supported by
the Operations and Technology Risk Committee (“OTRC”), to
manage the group’s cyber risk on a day-to-day basis and
provide oversight of its exposure. Regular management
information related to the group’s cyber risk profile and
exposure is presented to and discussed by these
committees and additionally local business risk and
compliance committees (“RCCs”).
Specialist internal resources and third-party consultancies
are engaged to periodically assess the group’s cyber
security programme and the efficacy of its controls,
supporting improvements to the management of material
risks from cyber security threats.
In addition to routine monitoring of known risks, the group
undertakes continuous horizon scanning of trends and
emerging cyber risks to support a programme of continuous
improvement. These include changes in the tactics,
techniques and procedures employed by external threat
actors and technological developments with the potential to
affect the group’s cyber security posture, such as artificial
intelligence (“AI”) and quantum computing.
Outlook
Cyber risk is an increasing concern for the group, consistent
with the financial services industry and other sectors. As
cyber threats become increasingly sophisticated, the group
will uphold a balanced, risk-based strategy in managing
related risks, with capital investments and control
improvements directed toward areas of significant risk
concentration.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
100

Cyber risk
Cyber risk is risk arising from inadequate internal
and external information and cyber security,
where failures impact the confidentiality, integrity
and availability of electronic data or critical
technology services.
Exposure
Cyber risks arise from the organisation’s routine operations
and use of technology, and may lead to service disruptions,
breaches of sensitive data, reputational harm, or adverse
effects on the group’s financial performance and customer
trust.
The group’s exposure to cyber risk is shaped by its
engagement with third parties, the introduction of new digital
products and services, and the need for secure, reliable data
to conduct its business. These elements are integral to
achieving the group’s strategic goals.
The group is committed to upholding high standards of
cyber security in pursuit of its strategic goals, acknowledging
that exposure may arise as threats and vulnerabilities evolve.
To address these challenges, robust cyber controls and
continuous monitoring are employed to ensure risks are
managed within acceptable levels.
Day-to-day management of cyber risk is the responsibility of
the business, complemented by guidance and oversight from
the information security and risk and compliance functions,
and subject to independent assurance from group internal
audit.
Requirements and responsibilities are defined in the
Information Security Policy and supporting standards. These
form part of the Enterprise Risk Management Framework to
identify, assess, mitigate, monitor, and report cyber risks,
incidents, and vulnerabilities that could affect the
achievement of business objectives or disrupt critical
systems and processes.
Risk appetite
The group seeks to prevent cyber risk incidents causing
losses, impacting customers or resulting in disruption to the
availability and integrity of systems and data, and where
impractical, to detect and take immediate steps to respond
and recover from them efficiently and effectively.
The group tolerates a level of cyber risk exposure within
defined thresholds but has limited appetite for cyber risks
with significant residual exposure. In such cases, mitigation
strategies are required to reduce exposure to an acceptable
level, with controls implemented to reduce the likelihood and
impact of high-severity events.
Measurement
The group measures cyber risk through key risk indicators,
observed impact of risk events and periodic risk and control
assessment and risk scenario analysis. Conservative trigger
and limit thresholds for key risk indicators are regularly
monitored within each business, with exceptions reported to
the Group Risk and Compliance Committee (“GRCC”) to
oversee any necessary corrective actions.
Material cyber risk events are identified, reviewed and
escalated in line with criteria set out in the Enterprise Risk
Management Framework, the Information Security Policy and
supporting standards. Where appropriate, this may include a
formal post-incident review led by the group’s information
security function, with oversight provided by the risk and
compliance function. Root cause analysis is undertaken and
lessons learned are captured, with appropriate management
action plans implemented.
Mitigation
The group adopts a risk-based approach to mitigation of
cyber risk, using an industry-standard control framework
aligned with relevant laws and regulations, to inform its cyber
risk management, and continually assesses its maturity. The
group maintains robust cyber and information security
standards and policies, and controls are in place and
operating, with periodic assurance completed. The group
invests in business and technical controls and continues to
enhance its cyber security capabilities, including threat
intelligence, cloud security, identity and access
management, education and awareness, partnerships with
strategic third parties and effective deployment across the
three lines of defence model to manage and undertake
assurance of controls within the group and our third parties.
Where deviations from risk thresholds or emergent cyber
threats are observed, the group undertakes assessment and
remediation activities to address identified historical
deficiencies to bring them within risk appetite.
Monitoring
The Board delegates authority to the GRCC, supported by
the Operations and Technology Risk Committee (“OTRC”), to
manage the group’s cyber risk on a day-to-day basis and
provide oversight of its exposure. Regular management
information related to the group’s cyber risk profile and
exposure is presented to and discussed by these
committees and additionally local business risk and
compliance committees (“RCCs”).
Specialist internal resources and third-party consultancies
are engaged to periodically assess the group’s cyber
security programme and the efficacy of its controls,
supporting improvements to the management of material
risks from cyber security threats.
In addition to routine monitoring of known risks, the group
undertakes continuous horizon scanning of trends and
emerging cyber risks to support a programme of continuous
improvement. These include changes in the tactics,
techniques and procedures employed by external threat
actors and technological developments with the potential to
affect the group’s cyber security posture, such as artificial
intelligence (“AI”) and quantum computing.
Outlook
Cyber risk is an increasing concern for the group, consistent
with the financial services industry and other sectors. As
cyber threats become increasingly sophisticated, the group
will uphold a balanced, risk-based strategy in managing
related risks, with capital investments and control
improvements directed toward areas of significant risk
concentration.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
100
The group expects increased levels of risk of data loss or
service disruption resulting from technology failures or
malicious activities involving external or internal threats.
Wider availability of advanced tools for conducting cyber
attacks, such as ransomware-as-a-service and AI
technologies, are expected to lower technical barriers to
entry in launching sophisticated and opportunistic attacks,
leading to an increase in their frequency and intensity.
The group will continuously monitor the cyber threat
landscape and engage collaboratively with regulators,
industry bodies, trusted third parties, and peer organisations
to ensure robust oversight. We will implement measures to
address risks that exceed established thresholds, including
strengthening cyber security policies, procedures, and
controls to minimise both the likelihood and impact of such
events.
Funding and liquidity risk
Funding risk is the risk of loss caused by the
inability to raise funds at an acceptable price or
to access markets in a timely manner or any
decrease in the stability of the current funding
base.
Liquidity risk is the risk that the group or any of
its entities do not have sufficient liquid assets to
meet liabilities as they come due during normal
and disrupted markets.
Exposure
Funding and liquidity are managed on a legal entity basis
with each of the group’s divisions (Banking and Winterflood)
responsible for ensuring it maintains sufficient liquidity for its
own purposes. The group’s divisions operate independently
of each other with no liquidity reliance between them.
The company has relatively few cash requirements and all
requirements are known in advance, for example external
dividends. It meets its cash requirements through deposits
placed with the Banking division and its committed
borrowing facilities.
The Banking division’s funding profile comprises a broad
range of channels. Its diversified approach to funding
includes secured funding, unsecured funding, retail deposits
and non-retail deposits. Funding risk exposure primarily
arises if the Banking division is unable to obtain the
necessary funding to support its asset positions.
Unsustainable or undiversified funding bases, such as an
over-reliance on short-term deposits, can increase the level
of risk and can lead to a deviation from the funding plan. In
turn, this can increase the costs of raising new funds,
reducing the bank’s ability to originate new assets and
potentially leading to negative market or customer
perception.
The Banking division’s ILAAP covers potential event drivers
from a range of stress testing scenarios, including
idiosyncratic examples. This ensures liquidity management
remains a source of strength and features a robust and
prudent approach to assessing and maintaining liquidity
requirements. The Banking division’s ILAAP is combined with
the Internal Capital Adequacy and Risk Assessments
(“ICARA”) from Winterflood, alongside the company
considerations, to form the group ILAAP.
Funding and liquidity risk in Winterflood is driven by four
primary sources: long trading book risk positions; overnight
and intraday settlements; margin requirements; and multi-
day client orders. Winterflood maintains risk appetites
sufficient to ensure continued compliance with the rules
under the Investment Firm Prudential Regulation (“IFPR”).
Further detail on the group’s funding and liquidity exposure
is provided on pages 57 and 58 of the Financial Overview
and Note 26 “Financial risk management”.
Risk appetite
The group adopts a conservative approach to funding and
liquidity risk and seeks to maintain a funding and liquidity
position characterised by preserving a simple and
transparent balance sheet, sustaining a diverse range of
funding sources and holding a prudent level of high-quality
liquidity. As such, the weighted average maturity of funding
allocated to the loan book is longer than the weighted
average maturity of its lending portfolio.
These objectives form the basis for the group’s Funding and
Liquidity Risk Appetite Statement, approved annually by the
Board, which outlines the levels of funding and liquidity risk
that the group is willing to assume. Given the materiality of
the Banking division, this is primarily focused on the levels of
risk assumed within the bank.
Measurement
A variety of metrics are used to measure the Banking
division’s funding and liquidity position to ensure compliance
with both external regulatory requirements and internal risk
appetite. These metrics cover both the short and long-term
view of liquidity and funding and have limits and early
warning indicators in place that are approved via the Asset
and Liability Committee (“ALCO”). These metrics include
term funding as a percentage of loan book, weighted
average tenor of loan book versus weighted average tenor of
funding, available cash balance with the Bank of England,
and liquid to total assets ratio.
Funding is measured and monitored in accordance with the
Banking division’s funding plan, which seeks to ensure that
the bank maintains a balanced and prudent approach to its
funding risk that is in line with risk appetite. The funding plan
is supplemented by metrics that highlight any funding
concentration risks, funding ratios and levels of
encumbrance. The net stable funding ratio (“NSFR”) was
implemented by the PRA on 1 January 2022. The four-
quarter average ratio to 31 July 2025 was 145.9% (31 July
2024: 134.4%), comfortably in excess of the minimum
requirement of 100%.
Liquidity is managed in accordance with regulatory
requirements and the ILAAP which is approved by the Board.
The group’s liquidity coverage ratio (“LCR”) is significantly
above the regulatory requirement. This is because the nature
of the funding model means that it holds higher inflows
compared to outflows within the 30-day period and
significantly more high quality liquid assets (“HQLA”) than is
required under regulatory metrics. The group’s 12-month
average LCR to 31 July 2025 was 1,012% (31 July 2024:
1,034%). Our liquidity coverage ratio is substantially above
101
Strategic report Governance report Financial statements

the minimum regulatory requirements of 100%, as we
continue to adopt a conservative liquidity position and
prudently manage our financial resource.
In addition to regulatory metrics, the Banking division also
uses a suite of internally developed liquidity stress scenarios
to monitor its potential liquidity exposure daily and determine
its HQLA requirements. This ensures that the Banking
division remains within risk appetite and identifies potential
areas of vulnerability. The outcomes of these scenarios are
formally reported to the ALCO, GRCC and Board.
Mitigation (audited)
This funding approach is based on the principles of “borrow
long, lend short” and ensuring a diverse range of sources
and channels of funding. Economic uncertainty has
continued over the last 12 months, increasing market
competitiveness. Despite the challenges this has presented,
the Banking division’s ability to fund the loan book has been
largely unaffected. The Banking division has actively sought
to grow the retail deposit base and optimise the funding mix
in light of market conditions. The Banking division's deposits
continue to remain diverse in terms of source, type and
tenor, ensuring flexibility and greater optionality. Retail and
corporate customer funding is supported by wholesale
funding programmes including unsecured medium-term
notes and secured funding programmes. The bank has now
repaid all funds drawn under the Bank of England TFSME.
The balance sheet and subsequent funding plan continues to
remain well within internal risk appetites and total available
funding is kept well in excess of the loan book funding
requirement to ensure funding is available when needed as
shown by the NSFR metrics.
The following tables analyse the contractual maturities of the
group’s on-balance sheet financial liabilities on an
undiscounted cash flow basis.
On demand
£ million
Within three
months
£ million
Between three
months and
one year
£ million
Between one
and two years
£ million
Between two
and five years
£ million
After more than
five years
£ million
Total
£ million
31 July 2025
Deposits by banks
9.3 78.9 — — — — 88.2
Deposits by customers
1,161.7 2,625.6 1,570.5 2,070.3 1,614.3 — 9,042.4
Loans and overdrafts from banks
1.5 — — — — — 1.5
Debt securities in issue
— 71.2 84.3 114.4 1,577.6 403.3 2,250.9
Subordinated loan capital
— 2.0 — 3.0 15.0 205.0 225.0
Total 31 July 2025
1,172.5 2,777.7 1,654.8 2,187.7 3,206.9 608.3 11,608.0
On demand
£ million
Within three
months
£ million
Between three
months and
one year
£ million
Between one
and two years
£ million
Between two
and five years
£ million
After more than
five years
£ million
Total
£ million
31 July 2024
Deposits by banks
0.9 53.2 86.1 — — — 140.2
Deposits by customers
708.9 2,309.5 1,502.1 2,008.7 2,474.8 — 9,004.0
Loans and overdrafts from banks
46.7 9.9 1.4 2.7 111.7 — 172.4
Debt securities in issue
— 40.0 119.3 195.4 1,541.7 409.8 2,306.2
Subordinated loan capital
— 2.0 — 2.0 16.0 209.0 229.0
Total 31 July 2024
756.5 2,414.6 1,708.9 2,208.8 4,144.2 618.8 11,851.8
Monitoring
Funding and liquidity are measured and monitored on a daily
basis with monthly reports forming standing items for
discussion at both the ALCO and GRCC, with the Risk
Committee maintaining overall oversight. Any liquidity and
funding issues are escalated as required to the ALCO, and
then onwards to the GRCC and Risk Committee.
The Banking division operates a three lines of defence model
with the treasury function responsible for the measurement
and management of the Banking division’s funding and
liquidity position and asset and liability management risk,
providing independent review and challenge. ALCO provides
oversight of funding and liquidity and supports the relevant
senior managers in discharging their senior management
function responsibilities. Internal audit provides independent
assurance on first and second lines of defence, the
appropriateness and effectiveness of internal controls and
policy implementation.
Outlook
Notwithstanding the outcome of the Supreme Court’s
judgment following the FCA’s review of historical motor
commissions, uncertainty regarding the design and scope of
an industry-wide redress scheme remains. Accordingly, the
bank has consciously maintained a higher level of liquidity,
with the majority of its large, high quality liquid asset portfolio
held in cash and government bonds. During the year,
treasury assets increased 20% to £2.8 billion (31 July 2024:
£2.3 billion) and were predominantly held on deposit with the
Bank of England. Consistent with the funding plan, the bank
expects to continue to lose a number of rate sensitive
corporate customers and the expected attrition from this
segment to continue to be met through growth in retail
deposits. During the 2026 financial year, the focus will be on
maintaining secured funding programmes and continuing to
fund primarily through retail deposits. The funding model
continues to provide robust support, and the strength of the
“borrow long, lend short” business model provides
significant funding resilience, resulting in a stable funding
base.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
102

the minimum regulatory requirements of 100%, as we
continue to adopt a conservative liquidity position and
prudently manage our financial resource.
In addition to regulatory metrics, the Banking division also
uses a suite of internally developed liquidity stress scenarios
to monitor its potential liquidity exposure daily and determine
its HQLA requirements. This ensures that the Banking
division remains within risk appetite and identifies potential
areas of vulnerability. The outcomes of these scenarios are
formally reported to the ALCO, GRCC and Board.
Mitigation (audited)
This funding approach is based on the principles of “borrow
long, lend short” and ensuring a diverse range of sources
and channels of funding. Economic uncertainty has
continued over the last 12 months, increasing market
competitiveness. Despite the challenges this has presented,
the Banking division’s ability to fund the loan book has been
largely unaffected. The Banking division has actively sought
to grow the retail deposit base and optimise the funding mix
in light of market conditions. The Banking division's deposits
continue to remain diverse in terms of source, type and
tenor, ensuring flexibility and greater optionality. Retail and
corporate customer funding is supported by wholesale
funding programmes including unsecured medium-term
notes and secured funding programmes. The bank has now
repaid all funds drawn under the Bank of England TFSME.
The balance sheet and subsequent funding plan continues to
remain well within internal risk appetites and total available
funding is kept well in excess of the loan book funding
requirement to ensure funding is available when needed as
shown by the NSFR metrics.
The following tables analyse the contractual maturities of the
group’s on-balance sheet financial liabilities on an
undiscounted cash flow basis.
On demand
£ million
Within three
months
£ million
Between three
months and
one year
£ million
Between one
and two years
£ million
Between two
and five years
£ million
After more than
five years
£ million
Total
£ million
31 July 2025
Deposits by banks
9.3 78.9 — — — — 88.2
Deposits by customers
1,161.7 2,625.6 1,570.5 2,070.3 1,614.3 — 9,042.4
Loans and overdrafts from banks
1.5 — — — — — 1.5
Debt securities in issue
— 71.2 84.3 114.4 1,577.6 403.3 2,250.9
Subordinated loan capital
— 2.0 — 3.0 15.0 205.0 225.0
Total 31 July 2025
1,172.5 2,777.7 1,654.8 2,187.7 3,206.9 608.3 11,608.0
On demand
£ million
Within three
months
£ million
Between three
months and
one year
£ million
Between one
and two years
£ million
Between two
and five years
£ million
After more than
five years
£ million
Total
£ million
31 July 2024
Deposits by banks
0.9 53.2 86.1 — — — 140.2
Deposits by customers
708.9 2,309.5 1,502.1 2,008.7 2,474.8 — 9,004.0
Loans and overdrafts from banks
46.7 9.9 1.4 2.7 111.7 — 172.4
Debt securities in issue
— 40.0 119.3 195.4 1,541.7 409.8 2,306.2
Subordinated loan capital
— 2.0 — 2.0 16.0 209.0 229.0
Total 31 July 2024
756.5 2,414.6 1,708.9 2,208.8 4,144.2 618.8 11,851.8
Monitoring
Funding and liquidity are measured and monitored on a daily
basis with monthly reports forming standing items for
discussion at both the ALCO and GRCC, with the Risk
Committee maintaining overall oversight. Any liquidity and
funding issues are escalated as required to the ALCO, and
then onwards to the GRCC and Risk Committee.
The Banking division operates a three lines of defence model
with the treasury function responsible for the measurement
and management of the Banking division’s funding and
liquidity position and asset and liability management risk,
providing independent review and challenge. ALCO provides
oversight of funding and liquidity and supports the relevant
senior managers in discharging their senior management
function responsibilities. Internal audit provides independent
assurance on first and second lines of defence, the
appropriateness and effectiveness of internal controls and
policy implementation.
Outlook
Notwithstanding the outcome of the Supreme Court’s
judgment following the FCA’s review of historical motor
commissions, uncertainty regarding the design and scope of
an industry-wide redress scheme remains. Accordingly, the
bank has consciously maintained a higher level of liquidity,
with the majority of its large, high quality liquid asset portfolio
held in cash and government bonds. During the year,
treasury assets increased 20% to £2.8 billion (31 July 2024:
£2.3 billion) and were predominantly held on deposit with the
Bank of England. Consistent with the funding plan, the bank
expects to continue to lose a number of rate sensitive
corporate customers and the expected attrition from this
segment to continue to be met through growth in retail
deposits. During the 2026 financial year, the focus will be on
maintaining secured funding programmes and continuing to
fund primarily through retail deposits. The funding model
continues to provide robust support, and the strength of the
“borrow long, lend short” business model provides
significant funding resilience, resulting in a stable funding
base.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
102
Legal and regulatory risk
Legal and regulatory risk is the risk of non-
compliance with laws and regulations which
could give rise to fines, litigation, sanctions and
the potential for material adverse impact upon
the group.
Exposure
The group is subject to the laws and regulations of the
various jurisdictions in which it operates. This exposure
includes risks of breaching financial services regulations and
laws, as well as action resulting from contractual breach and
litigation (including direct customer claims based on
regulatory breaches).
Failure to comply with existing legal or regulatory
requirements, or to adapt to changes in a timely fashion in
the course of the provision of products and services, may
result in legal and regulatory risk.
Changes could also affect our financial performance, capital
liquidity and access to markets in which we operate.
With an increased regulatory focus on protecting customers,
any failure to implement and/or adapt to these changes
quickly may expose the group to reputational harm, legal or
regulatory sanctions and/or customer redress requirements.
Risk appetite
The group has minimal appetite for legal and regulatory risk,
seeking to operate to high ethical standards and expecting
its staff to operate in accordance with the laws, regulations
and voluntary codes which impact the group and its
activities.
The group seeks to avoid knowingly operating in a manner
which is contrary to the provisions of the regulatory system
and has no tolerance for knowingly transacting business
outside the scope of its regulatory permissions or relevant
legislation.
The group will respond in an appropriate, risk-based and
proportionate manner to any changes to the legal and
regulatory environment, as well as changes driven by any
strategic initiatives.
Measurement
The group monitors and manages its legal, regulatory and
compliance risks through regular engagement and
interaction across the organisation, and the implementation
of appropriate policies, standards and procedures. This
includes reliance on a formal horizon scanning capability to
identify changes, as well as regular management information
which enables oversight and challenge via RCCs.
Mitigation
The group’s Enterprise Risk Management Framework,
including its suite of policies and standards and the
associated three lines of defence operating model, sets
common control objectives across risk disciplines. This
consistent approach to setting and embedding control
expectations acts to mitigate the likelihood and impact of
events which could give rise to legal and regulatory risk.
Clear accountability and ownership for meeting regulatory
requirements is overseen by business heads, thus driving
oversight and action.
Dedicated specialist legal and compliance teams with
relevant knowledge and experience provide advice, support
and challenge to the group’s businesses, enabling alignment
with legal and regulatory requirements. These teams further
have the ability to consult with external experts on technical
or otherwise complex matters as appropriate.
Internal change and investment processes consider
regulatory and legal inputs, such that sufficient funding can
be allocated to deliver system and process changes in line
with evolving regulatory and legal expectations.
Monitoring
In line with the group’s three lines of defence model,
businesses monitor their alignment with standards on an
ongoing basis. Relevant management information, including
the output of quality assurance activities, is reviewed by the
RCCs.
An independent compliance monitoring team undertakes
assurance to assess compliance with key regulations and the
effectiveness of associated controls. Reports are provided to
management and any remedial actions identified are tracked
to completion.
Legal and compliance teams monitor for external
developments through both structured horizon scanning
activity, regular external updates on relevant issues and
engagement in industry forums.
Outlook
Legal and regulatory risk continues to be inherently elevated
across the financial services industry. The UK government’s
current proposals to reform UK financial services regulation
and potential divergence between the UK and EU regulatory
regimes could affect and provide further challenges for the
group.
The ongoing inherent risk exposure for the group continues
to increase across the jurisdictions in which it operates. The
nature and scale of any risk exposure related to Consumer
Duty by the FCA remains to be seen as it continues to evolve
across the industry. Separately, the group’s retail lending
offerings in the Republic of Ireland operate in an environment
with increasing regulatory activity – the Central Bank of
Ireland continues to embed further regulatory expectations
with respect to operational resilience and securing customer
interests.
The group faces legal risks that could result in awards of
substantial monetary damages, remediation exercises or
fines. Specifically, the group has received a number of
complaints, some of which are with the Financial
Ombudsman Service (“FOS”), and is subject to a number of
claims through the courts regarding historical commission
arrangements with intermediaries on its Motor Finance
products.
This inflow of complaints commenced following the FCA’s
2021 changes to its Handbook rules after its consideration of
historical motor finance commission arrangements and has
increased following the January 2024 publication of three
FOS decisions against other lenders on this topic, and the
103
Strategic report Governance report Financial statements

FCA’s simultaneous announcement of a review of this sector.
This has resulted in an announcement by the FCA on
3 August 2025 that it will consult on an industry-wide
scheme to compensate motor finance customers who were
treated unfairly, with the consultation to begin by early
October 2025.
This industry-wide scheme, once implemented, may give rise
to a potential future obligation to compensate customers
with historic claims. In its H1 2025 financial statements, the
group recognised a provision in relation to motor finance
commissions of up to £165 million. This provision has been
reassessed in light of all available information and recent
developments, and remains unchanged. The ultimate cost to
the group could be materially higher or lower than the
provision taken and remains subject to further clarity from
the FCA on the scope and design of a redress scheme.
As outlin
ed in Note 16, the group has recognised a provision
of £33.0 million in r
elation to a proactive customer redress
programme to be implemented by the group, following
identification of historical deficiencies in certain operational
processes related to early settlements of loans in the Motor
Finance business.
Non-traded market risk
Non-traded market risk is the current or
prospective risk to the group’s capital or
earnings arising from changes in interest rates,
credit spreads and foreign exchange rates
applied to the group’s non-trading book.
Exposure
The group’s non-traded market risk exposure consists of
interest rate risk in the banking book (“IRRBB”), credit
spread risk in the banking book (“CSRBB”) and foreign
exchange risk.
IRRBB is predominantly incurred in the Banking division as a
result of its lending and funding activities and from funding
activities for the group holding company. Interest rate risk in
the other division is immaterial.
CSRBB arises from the HQLA portfolio held in the Banking
division.
Foreign exchange risk is incurred across the group and
arises from foreign currency loan commitments; translating
foreign currency assets, liabilities and profits; and non-
sterling investments.
Risk appetite
The group has a restricted appetite for interest rate risk
which is limited to that required to operate efficiently. The
group’s policy is to match repricing characteristics of assets
and liabilities naturally. Where this is not possible, vanilla
interest rate swaps are used to hedge the risk within
prescribed limits.
The group has a limited appetite for credit spread risk which
occurs due to the HQLA portfolio. The portfolio primarily
comprises of Bank of England reserves, highly rated UK and
European sovereign debt, sovereign-guaranteed debt,
supranational debt and UK covered bonds.
The group has a restricted appetite for foreign exchange risk.
It avoids large open positions and sets individual currency
limits to mitigate the risk.
Measurement
Interest rate risk
The group recognises three main sources of IRRBB which
could adversely impact future income or the value of the
balance sheet:
• repricing risk – the risk presented by assets and liabilities
that reprice at different times;
• embedded optionality risk – the risk presented by
contractual terms embedded into certain assets and
liabilities; and
• basis risk – the risk presented by a mismatch in the
reference interest rate for assets and liabilities.
IRRBB is assessed and measured on a behavioural basis by
applying key behavioural and modelling assumptions
including, but not limited to, those related to fixed rate loans
subject to prepayment risk, the behaviour of non-maturity
assets and liabilities, the treatment of own equity, and the
expectation of embedded interest rate options. This
assessment is performed across a range of regulatory
prescribed and internal interest rate shock scenarios
approved by the bank’s ALCO.
Two measures are used for measuring IRRBB, namely
Earnings at Risk (“EaR”) and Economic Value (“EV”):
• EaR measures short-term impacts to earnings, highlighting
any earnings sensitivity, should interest rates change
unexpectedly.
• EV measures longer-term earnings sensitivity, highlighting
the potential future sensitivity of earnings, and any risk to
capital, should interest rates change unexpectedly.
No material exposure exists in the other parts of the group,
and accordingly the analysis below relates to the Banking
division and company.
EaR impact (audited)
The table below sets out the assessed impact on group net
interest income over a 12-month period from interest rate
changes. The results shown are for an instantaneous and
parallel change in interest rates at 31 July 2025:
31 July 2025
£ million
31 July 2024
£ million
0.5% increase
2.1 0.1
2.5% increase
10.1 0.5
0.5% decrease
(2.1) (0.1)
2.5% decrease
(9.3) (0.8)
The group also monitors any potential earning exposure from
basis mismatches between its lending and funding activities
on a monthly cadence. To provide a clearer assessment of
the group’s exposure to interest rate changes, basis risk is
excluded from the EaR numbers.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
104

FCA’s simultaneous announcement of a review of this sector.
This has resulted in an announcement by the FCA on
3 August 2025 that it will consult on an industry-wide
scheme to compensate motor finance customers who were
treated unfairly, with the consultation to begin by early
October 2025.
This industry-wide scheme, once implemented, may give rise
to a potential future obligation to compensate customers
with historic claims. In its H1 2025 financial statements, the
group recognised a provision in relation to motor finance
commissions of up to £165 million. This provision has been
reassessed in light of all available information and recent
developments, and remains unchanged. The ultimate cost to
the group could be materially higher or lower than the
provision taken and remains subject to further clarity from
the FCA on the scope and design of a redress scheme.
As outlined in Note 16, the group has recognised a provision
of £33.0 million in relation to a proactive customer redress
programme to be implemented by the group, following
identification of historical deficiencies in certain operational
processes related to early settlements of loans in the Motor
Finance business.
Non-traded market risk
Non-traded market risk is the current or
prospective risk to the group’s capital or
earnings arising from changes in interest rates,
credit spreads and foreign exchange rates
applied to the group’s non-trading book.
Exposure
The group’s non-traded market risk exposure consists of
interest rate risk in the banking book (“IRRBB”), credit
spread risk in the banking book (“CSRBB”) and foreign
exchange risk.
IRRBB is predominantly incurred in the Banking division as a
result of its lending and funding activities and from funding
activities for the group holding company. Interest rate risk in
the other division is immaterial.
CSRBB arises from the HQLA portfolio held in the Banking
division.
Foreign exchange risk is incurred across the group and
arises from foreign currency loan commitments; translating
foreign currency assets, liabilities and profits; and non-
sterling investments.
Risk appetite
The group has a restricted appetite for interest rate risk
which is limited to that required to operate efficiently. The
group’s policy is to match repricing characteristics of assets
and liabilities naturally. Where this is not possible, vanilla
interest rate swaps are used to hedge the risk within
prescribed limits.
The group has a limited appetite for credit spread risk which
occurs due to the HQLA portfolio. The portfolio primarily
comprises of Bank of England reserves, highly rated UK and
European sovereign debt, sovereign-guaranteed debt,
supranational debt and UK covered bonds.
The group has a restricted appetite for foreign exchange risk.
It avoids large open positions and sets individual currency
limits to mitigate the risk.
Measurement
Interest rate risk
The group recognises three main sources of IRRBB which
could adversely impact future income or the value of the
balance sheet:
• repricing risk – the risk presented by assets and liabilities
that reprice at different times;
• embedded optionality risk – the risk presented by
contractual terms embedded into certain assets and
liabilities; and
• basis risk – the risk presented by a mismatch in the
reference interest rate for assets and liabilities.
IRRBB is assessed and measured on a behavioural basis by
applying key behavioural and modelling assumptions
including, but not limited to, those related to fixed rate loans
subject to prepayment risk, the behaviour of non-maturity
assets and liabilities, the treatment of own equity, and the
expectation of embedded interest rate options. This
assessment is performed across a range of regulatory
prescribed and internal interest rate shock scenarios
approved by the bank’s ALCO.
Two measures are used for measuring IRRBB, namely
Earnings at Risk (“EaR”) and Economic Value (“EV”):
• EaR measures short-term impacts to earnings, highlighting
any earnings sensitivity, should interest rates change
unexpectedly.
• EV measures longer-term earnings sensitivity, highlighting
the potential future sensitivity of earnings, and any risk to
capital, should interest rates change unexpectedly.
No material exposure exists in the other parts of the group,
and accordingly the analysis below relates to the Banking
division and company.
EaR impact (audited)
The table below sets out the assessed impact on group net
interest income over a 12-month period from interest rate
changes. The results shown are for an instantaneous and
parallel change in interest rates at 31 July 2025:
31 July 2025
£ million
31 July 2024
£ million
0.5% increase
2.1 0.1
2.5% increase
10.1 0.5
0.5% decrease
(2.1) (0.1)
2.5% decrease
(9.3) (0.8)
The group also monitors any potential earning exposure from
basis mismatches between its lending and funding activities
on a monthly cadence. To provide a clearer assessment of
the group’s exposure to interest rate changes, basis risk is
excluded from the EaR numbers.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
104
The group’s EaR at 31 July 2025 reflects its policy to ensure
exposure to interest rate shocks is managed within the
group’s risk appetites and the group’s strategy to manage
and minimise interest rate risk, to that required to operate
efficiently. The EaR measure is a combination of the group’s
repricing profile and the embedded optionality risk, of which
the latter is negligible in the current interest rate environment.
Earnings at Risk changed from £(0.1) million as at 31 July
2024, to £(2.1) million, as at 31 July 2025, for a 0.5%
reduction in interest rates. This reflects the group’s decision
to maintain a higher level of liquidity in light of the uncertainty
regarding the FCA’s review of motor finance commission
arrangements, noting that for liquidity holdings, earnings
reduce when interest rates fall.
EV impact (audited)
The table below sets out the assessed impact on group EV,
which measures the potential change in the balance sheet
value following an instantaneous and parallel change in
interest rates at 31 July 2025:
31 July 2025
£ million
31 July 2024
£ million
0.5% increase
1.0 3.5
2.5% increase
4.8 17.2
0.5% decrease
(0.9) (3.5)
2.5% decrease
(0.3) (14.4)
The group’s EV at 31 July 2025 reflects its policy to ensure
exposure to interest rate shocks is managed within the
group’s risk appetites, and the group’s strategy to manage
and minimise interest rate risk, to that required to operate
efficiently. The EV measure is a combination of the repricing
profile and the embedded optionality. Economic Value at 31
July 2025, improved to £(0.9) million for a 0.5% decrease in
interest rates due to the group bond being closer to maturity,
and more active group hedging.
For a 2.5% decrease in interest rates, Economic Value
benefited from the interest rate floors embedded in some of
the customer loans.
Credit spread risk in the banking book
The group’s HQLA portfolio is held for the purpose of
liquidity management. The table below sets out the total
exposure to each asset class held within the HQLA portfolio
by the Banking division.
Credit spread risk arises on the bonds held in the HQLA
portfolio and specifically to the change in the value of a bond
relating to a change in a bond’s credit spread, which is the
difference between a bond’s total interest rate and the
corresponding risk-free interest rate, and represents the
perceived creditworthiness of that bond.
In the HQLA portfolio, each bond’s interest rate exposure is
hedged, leaving the residual credit spread. Credit spread risk
is monitored, assessed and measured. Measurement
techniques include a historical stress methodology that is
consistent with PRA requirements. The historical stress
estimate is monitored against an internal risk appetite limit.
Credit spread risk is only realised if the bond is sold and the
swap hedging the interest rate risk is unwound before
maturity.
31 July 2025
£ million
31 July 2024
£ million
Cash and balances at central
banks
1,917.0 1,584.0
Sovereign and central bank debt
(LCR Level 1)
601.6 383.7
Covered bonds (LCR Level 1)
100.4 187.7
Covered bonds (LCR Level 2)
5.2 0
SSA bonds (LCR Level 1)
146.2 145.5
Total treasury liquid asset
holdings
2,770.4 2,300.9
At 31 July 2025, the Banking division did not hold any
encumbered assets in its HQLA portfolio.
Foreign exchange risk (audited)
The group recognises three categories of FX risk:
1. transaction risk: the risk relating to foreign currency loan
commitments;
2. translation risk: the risk relating to converting foreign
currency balances and profits into sterling; and
3. structural FX risk: the risk relating to the potential impact
on capital ratios relating to non-GBP exposures.
Transaction risk is measured daily within treasury based on
net cash flows and contracted future exposures. Treasury’s
strategy is to hedge the FX risk as soon as it arrives, and to
have zero FX transaction exposure each day at close of
business.
Translation risk is monitored within each business monthly,
translating non-UK profits regularly to mitigate fluctuations in
foreign exchange rates. The group’s largest FX exposure is
from its euro lending and funding activities. A change in the
euro exchange rate would increase the group’s equity by the
following amounts:
31 July 2025
£ million
31 July 2024
£ million
15% strengthening of sterling
against the euro 2.0 0.5
The bank seeks to match its assets and liabilities by
currency; any remaining gaps are hedged using exchange
rate derivative contracts. Details of these derivatives are
disclosed in Note 13 “Derivative financial instruments”.
Structural FX risk is assessed at least annually and is
deemed to be immaterial.
The group also has exposures which arise from share trading
settled in foreign currency in Winterflood and foreign
currency equity investments. The group has policies and
processes in place to manage foreign currency risk, and as
such the impact of any reasonably expected exchange rate
fluctuations would not be material.
Mitigation (audited)
The group maintains a limited appetite for interest rate risk
with simple hedging strategies in place to mitigate risk. The
Banking division’s treasury is responsible for hedging the
non-traded interest rate risk. Any residual risk which cannot
be naturally matched is hedged utilising vanilla derivative
transactions to remain within prescribed risk limits. The
Group Asset and Liability Committee (“GALCO”) and ALCO
are respectively responsible for approving any changes to
hedging strategies before implementation for the company
and bank.
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Derivative transactions can only be undertaken with
approved counterparties and within the respective credit risk
limits assigned to those counterparties.
All marketable securities are “hold to collect and sell” and
have their interest rate exposure hedged on a back-to-back
basis with vanilla interest rate swaps. The exception to this is
the £250 million group bond, which is hedged as part of the
overall group exposure.
Foreign exchange exposures are generally hedged using
foreign exchange forwards or currency swaps with
exposures monitored daily against approved limits.
Monitoring
The GALCO monitors the non-traded market risk exposure
across the group’s balance sheet. ALCO monitors the non-
traded market risk exposure for the Banking division.
Treasury is responsible for day-to-day management of all
non-traded market risks. Day-to-day oversight is exercised
via a combination of daily reporting by the treasury finance
team, and divisional RCC review and challenge. Further
independent oversight is provided via the second line of
defence through the asset liability management risk team
(“ALM Risk”), with monthly reporting into ALCO and GALCO.
Banking businesses have operational processes and controls
in place to monitor their exposure to IRRBB and ensure it
remains within approved local risk appetites. Any exceptions
are reported to ALM Risk on the same working day. Residual
IRRBB that is not transferred into treasury for central
management through the Banking division’s funding
transference process, is monitored by the businesses
through their respective RCCs, treasury’s first line of
defence, and ALM Risk.
ALM Risk is responsible for maintaining processes and
controls to monitor the group position and report exposures
to ALCO and GALCO, and subsequently to GRCC and the
Risk Committee. An ALM system is deployed as the primary
source for IRRBB reporting and risk measurement.
Outlook
The group expects exposure to interest rate risk, credit
spread risk and foreign exchange risk to remain broadly
stable.
Operational risk
Operational risk is the risk of loss or customer
harm resulting from inadequate or failed
processes, people and systems or external
events. This includes the risk of being unable to
recover systems quickly and maintain critical
services.
Exposure
Operational risks arise from day-to-day business activities,
many of which have the potential to result in direct or indirect
financial loss or adverse impact, including impact to the
group's financial performance, levels of customer care or
reputation.
The group strives to deliver operational efficiency in the
implementation of its objectives and accepts that a level of
loss may arise from operational failure. Implementing key
controls and monitoring helps ensure that risks are
managed, and losses remain within acceptable limits.
Operational risk is a core component of the Enterprise Risk
Management Framework and is embedded in day-to-day
business activities. Requirements and responsibilities are set
out in the Operational Risk Policy and supporting standards
as part of the framework to identify, assess, mitigate, monitor
and report the operational risks, events and issues that could
impact the achievement of business objectives or impact
core business processes.
The business is responsible for the day-to-day management
of operational risk, with advice and oversight provided by the
risk and compliance function with assurance activities
undertaken by group internal audit.
The group’s exposure to operational risk is impacted through
the need to engage with innovative, dynamic third parties;
delivery of new products and services; and effective use of
reliable data in a changing external environment, to support
delivery of the group’s strategic objectives.
Alongside ongoing risk and control monitoring, operational
risk oversight is aligned across the following key risk
categories:
IT resilience risk
The group’s ability to adapt to disruptions, while maintaining
continuous operations on critical processes and
safeguarding technology in the face of severe but plausible
adverse events, operational disruptions or incremental
changes. The group recognises the significant regulatory
focus on resilience with increased reliance on remote
working, use of third parties, cloud solutions and automated
digital solutions.
How this risk is managed
The group’s technology estate is undergoing significant
transformation, with a strategic shift towards simplification
and optimisation. This includes the migration of core
business services to cloud platforms and deepening
partnerships with key third-party providers. Over the next
two reporting periods, the group will prioritise resilience
through enhanced business continuity and disaster recovery
planning, while also improving agility in the delivery of
banking products.
Financial crime and fraud risk
The risk that the group’s products and services are used to
facilitate financial crime and fraud against the group, its
customers and third parties. If the group does not take
measures to minimise the impact of financial crime and fraud
risk, or adhere with the relevant laws and regulations, it risks
financial loss, regulatory fines and reputational damage.
The group has an established control framework to help
prevent and mitigate financial crime and fraud risks,
including policies, standards and procedures including fraud
loss recovery plans that are consistent with the group’s
purpose and designed to help safeguard the interest of
customers.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
106

Derivative transactions can only be undertaken with
approved counterparties and within the respective credit risk
limits assigned to those counterparties.
All marketable securities are “hold to collect and sell” and
have their interest rate exposure hedged on a back-to-back
basis with vanilla interest rate swaps. The exception to this is
the £250 million group bond, which is hedged as part of the
overall group exposure.
Foreign exchange exposures are generally hedged using
foreign exchange forwards or currency swaps with
exposures monitored daily against approved limits.
Monitoring
The GALCO monitors the non-traded market risk exposure
across the group’s balance sheet. ALCO monitors the non-
traded market risk exposure for the Banking division.
Treasury is responsible for day-to-day management of all
non-traded market risks. Day-to-day oversight is exercised
via a combination of daily reporting by the treasury finance
team, and divisional RCC review and challenge. Further
independent oversight is provided via the second line of
defence through the asset liability management risk team
(“ALM Risk”), with monthly reporting into ALCO and GALCO.
Banking businesses have operational processes and controls
in place to monitor their exposure to IRRBB and ensure it
remains within approved local risk appetites. Any exceptions
are reported to ALM Risk on the same working day. Residual
IRRBB that is not transferred into treasury for central
management through the Banking division’s funding
transference process, is monitored by the businesses
through their respective RCCs, treasury’s first line of
defence, and ALM Risk.
ALM Risk is responsible for maintaining processes and
controls to monitor the group position and report exposures
to ALCO and GALCO, and subsequently to GRCC and the
Risk Committee. An ALM system is deployed as the primary
source for IRRBB reporting and risk measurement.
Outlook
The group expects exposure to interest rate risk, credit
spread risk and foreign exchange risk to remain broadly
stable.
Operational risk
Operational risk is the risk of loss or customer
harm resulting from inadequate or failed
processes, people and systems or external
events. This includes the risk of being unable to
recover systems quickly and maintain critical
services.
Exposure
Operational risks arise from day-to-day business activities,
many of which have the potential to result in direct or indirect
financial loss or adverse impact, including impact to the
group's financial performance, levels of customer care or
reputation.
The group strives to deliver operational efficiency in the
implementation of its objectives and accepts that a level of
loss may arise from operational failure. Implementing key
controls and monitoring helps ensure that risks are
managed, and losses remain within acceptable limits.
Operational risk is a core component of the Enterprise Risk
Management Framework and is embedded in day-to-day
business activities. Requirements and responsibilities are set
out in the Operational Risk Policy and supporting standards
as part of the framework to identify, assess, mitigate, monitor
and report the operational risks, events and issues that could
impact the achievement of business objectives or impact
core business processes.
The business is responsible for the day-to-day management
of operational risk, with advice and oversight provided by the
risk and compliance function with assurance activities
undertaken by group internal audit.
The group’s exposure to operational risk is impacted through
the need to engage with innovative, dynamic third parties;
delivery of new products and services; and effective use of
reliable data in a changing external environment, to support
delivery of the group’s strategic objectives.
Alongside ongoing risk and control monitoring, operational
risk oversight is aligned across the following key risk
categories:
IT resilience risk
The group’s ability to adapt to disruptions, while maintaining
continuous operations on critical processes and
safeguarding technology in the face of severe but plausible
adverse events, operational disruptions or incremental
changes. The group recognises the significant regulatory
focus on resilience with increased reliance on remote
working, use of third parties, cloud solutions and automated
digital solutions.
How this risk is managed
The group’s technology estate is undergoing significant
transformation, with a strategic shift towards simplification
and optimisation. This includes the migration of core
business services to cloud platforms and deepening
partnerships with key third-party providers. Over the next
two reporting periods, the group will prioritise resilience
through enhanced business continuity and disaster recovery
planning, while also improving agility in the delivery of
banking products.
Financial crime and fraud risk
The risk that the group’s products and services are used to
facilitate financial crime and fraud against the group, its
customers and third parties. If the group does not take
measures to minimise the impact of financial crime and fraud
risk, or adhere with the relevant laws and regulations, it risks
financial loss, regulatory fines and reputational damage.
The group has an established control framework to help
prevent and mitigate financial crime and fraud risks,
including policies, standards and procedures including fraud
loss recovery plans that are consistent with the group’s
purpose and designed to help safeguard the interest of
customers.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
106
Whilst external environmental drivers may now be easing
cost-of-living causal factors, the opportunism and
sophistication of individuals and groups, and the technology
to support financial crime and fraud, is increasing. The
largest driver of events is third-party identity fraud, with the
largest losses coming as a result of credit facility misuse.
How this risk is managed
The group has established a framework of systems and
controls to help prevent and detect financial crime and fraud.
The group continuously evolves and enhances the control
framework to prevent its products and services being used
to facilitate financial crime and fraud. The group is also
taking advantage of new technologies to combat emerging
threats.
Third-party risk
The risk associated with ensuring that the group’s
outsourced and offshoring arrangements are controlled
effectively, including the risk of failure which may impact
customer service; the potential cessation of specific
activities; the risk of personally identifiable information or
group sensitive data being exposed or exploited; and the risk
of financial, reputational and regulatory censure should the
third party enter into any illegal or unethical activities.
In line with the group’s increased strategic appetite for
material outsourcing to provide greater agility to meet
strategic goals, our risk frameworks are evolving to maintain
effective risk management.
How this risk is managed
The group continues to enhance its third-party risk and
controls framework, and oversight approach, with ongoing
performance management and due diligence undertaken, to
seek to ensure that supplier relationships are controlled
effectively.
Workplace risk (property, physical and personal
security risk)
The risk to the safety and protection of colleagues,
customers and physical assets arising from unauthorised
access to buildings, theft, robbery, intimidation, blackmail,
sabotage, terrorism and other physical security risks.
How this risk is managed
Physical and personal security standards are managed by
the group’s property and workplace team. Controls are in
place to protect physical assets, as well as the security of
colleagues and customers.
Data risk
The risk of poor-quality data leading to loss, customer
disruption, potential misrepresentation in regulatory
reporting, non-compliance with General Data Protection
Regulations (“GDPR”) and unnecessary rework.
Quality data underpins decision-making at all levels of the
organisation. The group views data risk holistically through
the life cycle from acquisition to usage and eventual
disposal.
Ongoing development and enhancement of the group’s data
strategy, methodology, framework and governance to
identify, assess, treat and report risk and issues across our
critical data elements continues.
How this risk is managed
The group is taking active steps to strengthen its data
governance framework. In collaboration with a leading
consultancy, efforts are focused on embedding governance
across business units to seek to ensure data is well-
managed, reliable, and of the quality required to support
decision-making and regulatory compliance.
Model risk
The group has adopted the PRA’s SS1/23 definition of a
model, defined as “a quantitative method, system, or
approach that applies statistical, economic, financial, or
mathematical theories, techniques, and assumptions to
process input data into output”.
Model input data could be quantitative and/or qualitative, or
expert judgement-based, and model outputs are quantitative
or qualitative.
The use of models invariably presents an element of model
risk, and the group has adopted the European Directive
2013/36/EU (Article 3(1)(11)) definition of model risk i.e. “the
potential loss an institution may incur, as a consequence of
decisions that could be principally based on the output of
internal models, due to errors in the development,
implementation or use of such models.” Model risk increases
with greater model complexity, higher uncertainty around
inputs and assumptions, broader use, and larger potential
impact. If left unmitigated, model risk may lead to poor
decision-making, misreporting or a failure to identify risks.
How this risk is managed
The group has a robust model risk framework embedded
across the group and deploys a risk-based approach to
classify each model according to materiality. This is
underpinned by a Model Risk Policy and various supporting
standards and procedures.
The group has adopted a three lines of defence approach to
the management of model risk, with the first line formed by
model owners and model developers focusing on the build,
maintenance and monitoring of models. The second line of
defence is composed of two teams: the group model risk
management and the risk operations and governance teams.
The former is responsible for the model risk policy and
associated standards along with the independent validation
exercises across the group. The latter teams are responsible
for the management of the model inventory (master source of
the group’s model management information) and the
aggregate model risk reporting (based on governance status
and performance of models). Finally, the third line of defence
is formed by our internal audit function performing
independent audits.
The Model Governance Committee is the primary model
approval authority and body responsible for overseeing the
framework used to manage model risk.
Information security risk
The risks arising from inadequate internal and external
information, where failures impact the confidentiality,
integrity and availability of electronic data.
In response to the evolving threat landscape, the group
continues to mature. This includes strengthening defences
through strategic partnerships and enhancing internal
capabilities. Visibility and vigilance remain central to the
group’s approach, seeking to ensure proactive identification
and mitigation of risks to technology and data.
How this risk is managed
The group uses an industry-standard framework to anchor
its cyber risk management, continually assessing and
developing its maturity. The group maintains robust cyber
and information security standards and policies, and controls
are in place and operating, with periodic assurance
107
Strategic report Governance report Financial statements

completed. This includes threat intelligence, education and
awareness, partnerships with strategic partners and effective
deployment across the three lines of defence model to
manage and undertake assurance of controls within the
group and our third parties.
People risk
The risk of not having sufficiently skilled, capable and
engaged colleagues, who are clear on their responsibilities
and accountabilities and who behave in an ethical way. This
could lead to inappropriate decision-making that is
detrimental to customers, colleagues, other key stakeholders
or shareholders and could ultimately lead to regulatory
sanction.
How this risk is managed
The group has a range of key risk indicator (“KRI”) metrics in
place which help to measure and report people risk.
Operational controls are designed to mitigate the risks
associated throughout each element of the colleague life
cycle. Group-wide systems provide tools and online
guidance to all colleagues to support them in discharging
their accountabilities and creating a culture in which
everyone can thrive. Periodic employee engagement surveys
are also completed.
Risk appetite
The group is prepared to tolerate a level of operational risk
exposure within agreed limits but has limited appetite for
operational risks with significant residual exposure. In these
instances a near-term mitigation strategy is required. The
group monitors aggregate loss trends and seeks to limit
aggregate losses arising in any given year. Where risks could
impact not just financial loss but our ability to service
customers, in line with the group’s conservative approach to
risk management, controls are implemented in a manner that
reduces the likelihood of higher-impact events. Should they
crystalise, immediate steps are taken to minimise disruption
and ensure swift recovery.
Measurement
Operational risk is measured through KRIs, observed impact
of risk events, periodic risk and control self-assessments and
scenario analysis.
Each key risk has a set of defined KRIs which are regularly
monitored via local, divisional and group committees with
exceptions reported to the GRCC and the Board Risk
Committee.
Material operational risk events are identified, reviewed and
escalated in line with criteria set out in the Enterprise Risk
Management Framework and supporting standards. Lessons
are learned and root cause analysis is undertaken, with
appropriate management action plans implemented.
Losses may result from both internal and external events and
are categorised using risk categories defined as part of the
taxonomy deployed within our risk management tool.
Mapping to the Basel II categories is disclosed to support
industry data and trends analysis. Due to the nature of risk
events, losses and recoveries can take time to crystallise and
therefore may be restated for prior or subsequent financial
years.
Mitigation
The group seeks to deliver its strategic objectives and
maintain operational resilience and accepts a level of loss
may arise from operational failure.
A clear governance structure supports effective risk
ownership and accountability across the group. Risk culture
is reinforced through training, tone from the top and clear
escalation routes for concerns.
We operate controls over the group’s most significant
operational risks ensuring there are near-term mitigation
strategies where risks are greatest and seek to ensure these
are sufficient to prevent material disruption of our service to
customers and/or our businesses. Where appropriate we
also maintain insurance policies to mitigate the financial
impact of certain operational risks.
Monitoring
The Board delegates authority to the GRCC to manage the
group’s operational risk framework on a day-to-day basis
and provide oversight of its exposure. The committee is
supported by the OTRC which is responsible for oversight of
technology, information security, third-party and certain
other resilience-related risks. Regular management
information is presented to and discussed by these
committees and additionally local business RCCs.
The risk function has a dedicated operational risk team
which is responsible for maintaining the framework, tool sets
and reporting necessary for effective operational risk
management. The group has identified, assessed and
monitored all key operational and resilience risks, including
undertaking a biannual assessment of control effectiveness,
monitoring key risk indicator trends and escalating events, in
accordance with policy and standard requirements.
Operational risk losses by Basel category
% of total volume % of total losses
Operational risk losses by Basel category
1, 2, 3, 4, 5
2025 2024 2025 2024
Business disruption and system failures
1% 1% 0% 0%
Clients, products and business practices
4% 6% 9% 8%
Execution, delivery and process management
14% 13% 27% 71%
External fraud
80% 81% 63% 20%
Internal fraud
0% 0% 0% 0%
Employment practices and workplace safety
0% 0% 0% 0%
Damage to physical assets
0% 0% 0% 0%
1. Gross losses greater than or equal to £5,000.
2. Historical loss amounts can change due to the dynamic and ongoing reporting of recoveries.
3. Losses from CBAM excluded from 2024 and 2025.
4. Percentages have been rounded where appropriate.
5. Table excludes any operational losses which may arise in line with the provision taken in relation to early settlements in Motor Finance.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
108

completed. This includes threat intelligence, education and
awareness, partnerships with strategic partners and effective
deployment across the three lines of defence model to
manage and undertake assurance of controls within the
group and our third parties.
People risk
The risk of not having sufficiently skilled, capable and
engaged colleagues, who are clear on their responsibilities
and accountabilities and who behave in an ethical way. This
could lead to inappropriate decision-making that is
detrimental to customers, colleagues, other key stakeholders
or shareholders and could ultimately lead to regulatory
sanction.
How this risk is managed
The group has a range of key risk indicator (“KRI”) metrics in
place which help to measure and report people risk.
Operational controls are designed to mitigate the risks
associated throughout each element of the colleague life
cycle. Group-wide systems provide tools and online
guidance to all colleagues to support them in discharging
their accountabilities and creating a culture in which
everyone can thrive. Periodic employee engagement surveys
are also completed.
Risk appetite
The group is prepared to tolerate a level of operational risk
exposure within agreed limits but has limited appetite for
operational risks with significant residual exposure. In these
instances a near-term mitigation strategy is required. The
group monitors aggregate loss trends and seeks to limit
aggregate losses arising in any given year. Where risks could
impact not just financial loss but our ability to service
customers, in line with the group’s conservative approach to
risk management, controls are implemented in a manner that
reduces the likelihood of higher-impact events. Should they
crystalise, immediate steps are taken to minimise disruption
and ensure swift recovery.
Measurement
Operational risk is measured through KRIs, observed impact
of risk events, periodic risk and control self-assessments and
scenario analysis.
Each key risk has a set of defined KRIs which are regularly
monitored via local, divisional and group committees with
exceptions reported to the GRCC and the Board Risk
Committee.
Material operational risk events are identified, reviewed and
escalated in line with criteria set out in the Enterprise Risk
Management Framework and supporting standards. Lessons
are learned and root cause analysis is undertaken, with
appropriate management action plans implemented.
Losses may result from both internal and external events and
are categorised using risk categories defined as part of the
taxonomy deployed within our risk management tool.
Mapping to the Basel II categories is disclosed to support
industry data and trends analysis. Due to the nature of risk
events, losses and recoveries can take time to crystallise and
therefore may be restated for prior or subsequent financial
years.
Mitigation
The group seeks to deliver its strategic objectives and
maintain operational resilience and accepts a level of loss
may arise from operational failure.
A clear governance structure supports effective risk
ownership and accountability across the group. Risk culture
is reinforced through training, tone from the top and clear
escalation routes for concerns.
We operate controls over the group’s most significant
operational risks ensuring there are near-term mitigation
strategies where risks are greatest and seek to ensure these
are sufficient to prevent material disruption of our service to
customers and/or our businesses. Where appropriate we
also maintain insurance policies to mitigate the financial
impact of certain operational risks.
Monitoring
The Board delegates authority to the GRCC to manage the
group’s operational risk framework on a day-to-day basis
and provide oversight of its exposure. The committee is
supported by the OTRC which is responsible for oversight of
technology, information security, third-party and certain
other resilience-related risks. Regular management
information is presented to and discussed by these
committees and additionally local business RCCs.
The risk function has a dedicated operational risk team
which is responsible for maintaining the framework, tool sets
and reporting necessary for effective operational risk
management. The group has identified, assessed and
monitored all key operational and resilience risks, including
undertaking a biannual assessment of control effectiveness,
monitoring key risk indicator trends and escalating events, in
accordance with policy and standard requirements.
Operational risk losses by Basel category
% of total volume % of total losses
Operational risk losses by Basel category
1, 2, 3, 4, 5
2025 2024 2025 2024
Business disruption and system failures
1% 1% 0% 0%
Clients, products and business practices
4% 6% 9% 8%
Execution, delivery and process management
14% 13% 27% 71%
External fraud
80% 81% 63% 20%
Internal fraud
0% 0% 0% 0%
Employment practices and workplace safety
0% 0% 0% 0%
Damage to physical assets
0% 0% 0% 0%
1. Gross losses greater than or equal to £5,000.
2. Historical loss amounts can change due to the dynamic and ongoing reporting of recoveries.
3. Losses from CBAM excluded from 2024 and 2025.
4. Percentages have been rounded where appropriate.
5. Table excludes any operational losses which may arise in line with the provision taken in relation to early settlements in Motor Finance.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
108
In the second line, operational risk managers are aligned to
businesses, with an additional technical second line of
defence team providing specialist oversight of technology,
workplace, information security, data, resilience and third-
party risks. Monitoring of all operational risk domains is
conducted via divisional RCCs with escalation to the GRCC
and Risk Committee as appropriate.
The delivery of a standardised framework and management
information across all operating risks is complemented by
periodic thematic reviews conducted on key focus areas and
reviewed by the GRCC and Board Risk Committee.
Assurance is obtained through reviews conducted by second
line and group internal audit.
Additionally, the group has an embedded Whistleblowing
Policy which sets out the high-level framework for meeting
regulatory requirements in relation to the handling of
reportable concerns by whistleblowers. The policy and
supporting standard sets out the process to raising aspects
of concerns by all employees, past and current, across the
group.
Furthermore, the risk function performs a level of oversight of
the group’s business planning process, including analysis of
industry trends or forward-looking threats that could lead to
material impact on our ability to deliver on the strategic
objectives or result in a significant impact on assessment of
operational risk capital.
Stress testing
The group develops and maintains a suite of operational risk
scenarios using internal and external data. These scenarios
provide insights into the stresses the business could be
subject to given plausible but severe circumstances.
Scenarios cover material operational risks across key risk
domains and are developed by businesses and senior
management across the group with the process facilitated by
the risk function, GRCC and the Risk Committee, as part of
the ICAAP process, and support the setting of operational
risk Pillar 2a capital. Management actions are agreed and
monitored and linked with business resilience and continuity
testing where appropriate.
Outlook
The group is undertaking a significant change agenda in an
effort to simplify and to reduce its cost base. Change
delivery and capacity therefore continue to be areas of
management focus. The group continues to plan resource
needs to support its strategy, change execution and wider
technology and information transformation, noting continued
management strain is anticipated.
The established group-wide operational risk framework is
currently being enhanced as part of the group's investment
in improved capability. This includes transitioning to a new
governance, risk and compliance system which will further
enhance monitoring and oversight as well as the provision of
group-wide operational risk training. The group is also
undertaking a review of its Risk Target Operating Model to
further enhance risk management capability, capacity and
embedment of risk management across the group.
Reputational risk
Reputational risk is the risk of detriment to
stakeholder perception of the group, leading to
impairment of its reputation and its future goals,
due to any action or inaction of the company, its
employees or associated third parties.
Exposure
Protection and effective stewardship of the group’s
reputation are fundamental to its long-term success.
Detrimental stakeholder perception could lead to impairment
of the group’s current business and future goals. The group
remains exposed to potential reputational risk in the course
of its usual activities, such as through employee, supplier or
intermediary conduct, the provision of products and
services, crystallisation of another risk type, or as a result of
changes outside its influence.
Risk appetite
The group has a strong reputation which it has built over
many years and considers it a valuable asset, managing it
accordingly through consistent focus on a set of cultural and
ethical attributes. The group has no tolerance for behaviours
that contradict these attributes in a manner that could harm
it, and avoids engaging with third parties, markets or
products that would inhibit the group’s adherence to them.
The group seeks to operate in a responsible manner that has
client outcomes at the heart of everything that it does.
Protection of the group’s reputation is firmly embedded in its
business-as-usual activities, and the group, as part of its
overall strategy, adopts a prudent approach to risk-taking.
The group also recognises that its reputation is linked to
broader responsibilities to help address social, economic
and environmental challenges, and maintains appropriate
sustainable objectives that the group sets itself as a
business.
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D
r
i
v
e
r
s
I
m
p
a
c
t
a
r
e
a
s
Core drivers of reputational risk
Employee conduct
Supplier and
intermediary conduct
Products and services
Changes in business/
societal context
Crystallisation of
another risk type
Reputational risk
Customers and clients
Intermediaries
Employees
Suppliers
Regulators and
government
Communities and
theenvironment
Investors
Measurement
Risk identification and subsequent management actions are
embedded within business-as-usual activities.
Additionally, the group actively monitors for changes in the
business, legal, regulatory and social environment in which it
operates to ensure the timely identification, assessment and
mitigation of any potential reputation concerns that may arise
following changes in the expectations of key stakeholders.
For instance, the management of the increased media
attention in relation to the FCA’s review of historical motor
finance commission arrangements.
Mitigation
Reputational risk management is embedded through the
organisation, including via:
• focus on employee conduct, with cultural attributes
embedded throughout the group;
• supplier and intermediary conduct management through
the relationship life cycle;
• new product approval and existing product review
processes for business products and services;
• a proactive approach to environmental, social and
governance matters;
• embedding of reputational risk management within the
management frameworks of other risk types;
• proactive communication and engagement with investors,
analysts and other market participants; and
• proactive engagement with regulators on key matters.
In addition, the group maintains policies and standards that
serve to protect the group’s reputation, most notably those
covering anti-bribery, conflicts of interest, dignity at work
and high-risk client policies. These are regularly reviewed
and updated with staff receiving annual training to reinforce
understanding of their obligations.
The group crisis management team supports management of
cases where there is a potential risk of reputational impact
on the group on an exceptional basis. A communications
plan also forms part of the group’s Recovery Plan, which
sets out core principles to ensure fair and transparent
communication, to control the risk of misinformation and
minimise any negative reaction to the implementation of
recovery options.
Monitoring
Reputational risk is considered across all three lines of
defence as part of oversight and assurance activities.
Adherence to the group’s cultural framework is monitored
through the culture dashboard, which is reported to the
Board on a quarterly basis and includes key metrics in
relation to culture across the group and each of its divisions.
Customer forums are also in place across the group,
reinforcing its commitment to favourable client outcomes.
Regular engagement with investors also enables open
communication with this stakeholder group.
Sustainability considerations are integrated across
management forums at a business and group level. For more
information on this see the Sustainability Report on page 27.
Outlook
Established group-wide and employee-level focus on
responsibility and sustainability enables an approach in all
businesses that aligns to a range of stakeholder
expectations, which is supported by group-level oversight.
The continuation of elevated attention in relation to any
redress schemes, including that associated with the FCA's
review of historical motor finance commission arrangements,
may lead to an adverse perception of the group.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
110

Core drivers of reputational risk
Employee conduct
Supplier and
intermediary conduct
Products and services
Changes in business/
societal context
Crystallisation of
another risk type
Reputational risk
Customers and clients
Intermediaries
Employees
Suppliers
Regulators and
government
Communities and
theenvironment
Investors
Measurement
Risk identification and subsequent management actions are
embedded within business-as-usual activities.
Additionally, the group actively monitors for changes in the
business, legal, regulatory and social environment in which it
operates to ensure the timely identification, assessment and
mitigation of any potential reputation concerns that may arise
following changes in the expectations of key stakeholders.
For instance, the management of the increased media
attention in relation to the FCA’s review of historical motor
finance commission arrangements.
Mitigation
Reputational risk management is embedded through the
organisation, including via:
• focus on employee conduct, with cultural attributes
embedded throughout the group;
• supplier and intermediary conduct management through
the relationship life cycle;
• new product approval and existing product review
processes for business products and services;
• a proactive approach to environmental, social and
governance matters;
• embedding of reputational risk management within the
management frameworks of other risk types;
• proactive communication and engagement with investors,
analysts and other market participants; and
• proactive engagement with regulators on key matters.
In addition, the group maintains policies and standards that
serve to protect the group’s reputation, most notably those
covering anti-bribery, conflicts of interest, dignity at work
and high-risk client policies. These are regularly reviewed
and updated with staff receiving annual training to reinforce
understanding of their obligations.
The group crisis management team supports management of
cases where there is a potential risk of reputational impact
on the group on an exceptional basis. A communications
plan also forms part of the group’s Recovery Plan, which
sets out core principles to ensure fair and transparent
communication, to control the risk of misinformation and
minimise any negative reaction to the implementation of
recovery options.
Monitoring
Reputational risk is considered across all three lines of
defence as part of oversight and assurance activities.
Adherence to the group’s cultural framework is monitored
through the culture dashboard, which is reported to the
Board on a quarterly basis and includes key metrics in
relation to culture across the group and each of its divisions.
Customer forums are also in place across the group,
reinforcing its commitment to favourable client outcomes.
Regular engagement with investors also enables open
communication with this stakeholder group.
Sustainability considerations are integrated across
management forums at a business and group level. For more
information on this see the Sustainability Report on page 27.
Outlook
Established group-wide and employee-level focus on
responsibility and sustainability enables an approach in all
businesses that aligns to a range of stakeholder
expectations, which is supported by group-level oversight.
The continuation of elevated attention in relation to any
redress schemes, including that associated with the FCA's
review of historical motor finance commission arrangements,
may lead to an adverse perception of the group.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
110
Traded market risk
Traded market risk is the risk that a change in
the value of an underlying market variable will
give rise to an adverse movement in the value of
the group’s trading assets and trading liabilities.
Exposure
Traded market risk in the group only arises in Winterflood,
whose core business is to provide liquidity and interact with
the market on a principal basis, holding positions in financial
instruments as a result of its client facilitation activity.
Winterflood operates as a market maker in equities,
exchange-traded products, investment trusts and sovereign
and corporate bonds, operating across three primary
markets: the United Kingdom, North America and Europe.
For hedging purposes, derivatives are also traded, although
these are limited to listed futures in UK fixed income markets
and FX forwards.
Risk appetite
Winterflood’s strategic objectives and business plan are
centred on its ability to continue transacting in the markets in
which it operates, in the manner it has historically. The group
sets its risk appetite accordingly, acknowledging that an
acceptable level of traded market risk must be incurred for
the business to operate effectively.
Winterflood maintains sufficient levels of capital and liquidity
to cover its traded market risk exposure.
Measurement
Traded market risk is measured against a set of defined risk
limits set at global, desk and individual stock levels, on both
an intraday and end-of-day basis. These limits are monitored
via a combination of internally-developed and external
systems on an intraday and overnight basis against a limit
framework aligned to the group’s risk appetite.
The framework incorporates:
• market risk appetite being managed via trading book
exposure limits. The limits are set on gross cash positions,
also the sterling value of a basis point (“SV01”) for
products with interest rate exposure;
• adoption of a real-time limit monitoring system, along with
end-of-day summary reports to track equity, fixed income
and FX exposures against agreed limits; and
• minimal exposure to derivatives (limited to hedging of
interest rate exposures and FX positions resulting from
exposures in securities settling in foreign currency).
Mitigation (audited)
The management of traded market risk is fully embedded
within Winterflood’s governance and control framework. Key
attributes include:
• oversight of all risk issues, including traded market risk, via
Winterflood’s RCC. Management information and KRIs are
reported to the committee on a monthly basis with
escalation to the GRCC and Risk Committee where
needed;
• the maintenance of a group Market Risk Policy and a
specific Traded Market Risk Standard at Winterflood,
outlining minimum governance requirements and
escalation. Implementation of these requirements is
achieved through documented front office procedures and
risk procedures;
• the maintenance of risk mandates for all traders, detailing
the business’ market-making strategy, controls
frameworks and policies and procedures;
• order entry controls in place across the trading floor
limiting, amongst other trading variables, the executable
value per order (these are documented in a front office
procedure); and
• the provision of training to all new joiners and newly
certified staff by the Business and Trading Controls team.
This training includes certain market risk considerations as
well as details on order entry controls.
Monitoring
Building on the use of real-time limit monitoring, the
monitoring of traded market risk is embedded across all
three lines of defence. Top-down visibility is exercised via
Winterflood’s RCC, which retains oversight of core traded
market risk management information and key risk indicators,
as well as stress testing outputs, policies and standards.
The Winterflood risk team works in conjunction with the
Business and Trading Controls team to ensure the
management of traded market risk is correctly aligned to
applicable controls. To support this, management
information dashboards are utilised alongside daily reporting
to help manage market risk on a daily and intraday basis.
Outlook
The following themes have driven markets over the past
12months: fiscal credibility of advanced economies, falling
inflation and interest rates, increased trade barriers and
escalating conflicts. These themes look likely to continue
over the next 12 months, with the potential to impact trading
volumes and security valuations.
111
Strategic report Governance report Financial statements

Trading financial instruments: Equity shares and debt securities (audited)
The group’s trading activities relate to Winterflood. The following table shows the group’s trading book exposure to market
risk:
Highest
exposure
£ million
Lowest
exposure
£ million
Average
exposure
£ million
Exposure at
31 July 2025
£ million
For the year ended 31 July 2025
Equity shares
Long
46.7 18.5 25.6 28.3
Short
21.7 4.8 7.9 10.4
Net position
17.7 17.9
Debt securities
Long
23.4 3.2 8.6 10.5
Short
15.1 2.0 5.4 6.0
Net position
3.2 4.5
Highest
exposure
£ million
Lowest
exposure
£ million
Average
exposure
£ million
Exposure at
31 July 2024
£ million
For the year ended 31 July 2024
Equity shares
Long
54.9 19.0 26.0 25.8
Short
35.1 3.8 7.2 9.3
Net position
18.8 16.5
Debt securities
Long
31.9 4.7 12.9 16.0
Short
12.5 1.9 4.4 5.5
Net position
8.5 10.5
With respect to the long and short positions on debt securities, £1.6 million and £0.2 million (2024: £11.1 million and £0.1
million) were due to mature within one year respectively.
The average exposure has been calculated on a daily basis. The highest and lowest exposure columns reflect the absolute
maximum and minimum long and short debt and equity exposures across the relevant period (rather than the maximum and
minimum net position).
Based upon the trading book exposure given above, a 10% hypothetical fall in equity and debt market prices would result in a
£1.8 million decrease in the group's earnings and net assets on the equity trading book and a £0.5 million decrease on the gilts
trading book.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
112

Trading financial instruments: Equity shares and debt securities (audited)
The group’s trading activities relate to Winterflood. The following table shows the group’s trading book exposure to market
risk:
Highest
exposure
£ million
Lowest
exposure
£ million
Average
exposure
£ million
Exposure at
31 July 2025
£ million
For the year ended 31 July 2025
Equity shares
Long
46.7 18.5 25.6 28.3
Short
21.7 4.8 7.9 10.4
Net position
17.7 17.9
Debt securities
Long
23.4 3.2 8.6 10.5
Short
15.1 2.0 5.4 6.0
Net position
3.2 4.5
Highest
exposure
£ million
Lowest
exposure
£ million
Average
exposure
£ million
Exposure at
31 July 2024
£ million
For the year ended 31 July 2024
Equity shares
Long
54.9 19.0 26.0 25.8
Short
35.1 3.8 7.2 9.3
Net position
18.8 16.5
Debt securities
Long
31.9 4.7 12.9 16.0
Short
12.5 1.9 4.4 5.5
Net position
8.5 10.5
With respect to the long and short positions on debt securities, £1.6 million and £0.2 million (2024: £11.1 million and £0.1
million) were due to mature within one year respectively.
The average exposure has been calculated on a daily basis. The highest and lowest exposure columns reflect the absolute
maximum and minimum long and short debt and equity exposures across the relevant period (rather than the maximum and
minimum net position).
Based upon the trading book exposure given above, a 10% hypothetical fall in equity and debt market prices would result in a
£1.8 million decrease in the group's earnings and net assets on the equity trading book and a £0.5 million decrease on the gilts
trading book.
Risk report continued | Principal risks
Close Brothers Group plc Annual Report 2025
112
Going concern
The Directors have assessed whether they consider it
appropriate that the company and the group adopt the going
concern basis of accounting in preparing the financial
statements. For the purposes of going concern, the Directors
have reviewed the group’s strategic plan to December 2026,
being 15 months from the date of approval of the financial
statements. This is in line with the assessment period (15
months) reviewed as part of the FY 2024 going concern
assessment and is in excess of IAS 1 and UK Corporate
Governance Code requirements of at least 12 months.
As part of the Directors’ consideration of the appropriateness
of adopting the going concern basis, a range of forward-
looking scenario analyses have been considered. These
include the 3 Year Strategic Plan (“3YSP”) presented to the
Board in July, the “severe but plausible” scenario, and the
2024 Internal Liquidity Adequacy Assessment Process
(“ILAAP”) and 2024 Internal Capital Adequacy Assessment
Process (“ICAAP”). These were reviewed together with a
number of key risks which are set out in the Risk Report
under the heading Principal risks: Funding and liquidity risk
on pages 101 to 102 and Capital risk on pages 81 to 83.
A key area of focus in the 2025 financial year has been the
Financial Conduct Authority (“FCA”) review of historical
motor finance commission arrangements and the Supreme
Court appeals, and their impact on the group’s activities. The
group recognised a provision of £165 million relating to
motor finance commissions in January 2025. This provision
is based on probability weighted scenarios using various
assumptions and which included estimates for certain
potential operational and legal costs, as well as estimates for
potential customer redress. This provision has since been
reviewed, considering developments since January 2025,
namely the Supreme Court's judgment in relation to the
Supreme Court appeals and the FCA announcement
regarding its intention to consult on an industry wide redress
scheme in respect of motor finance commissions. Based on
further analysis and updated probability weighted scenarios,
the Directors have concluded that the existing provision
continues to be appropriate. Further details on motor finance
commissions is outlined on pages 8 to 9.
Whilst the Supreme Court appeals have concluded and
some clarity has been gained, the FCA's review of motor
finance commission arrangements is ongoing and
uncertainty as to the range of outcomes prevails. The group
recognises the need to plan for a range of possible
outcomes, and continues to prioritise maintaining a strong
capital position, balance sheet, and prudent approach to
managing its financial resources.
The group’s “severe but plausible” going concern scenario
builds on the 3YSP, and overlays with additional provision
relating to motor finance commissions in January 2026,
subdued loan book growth and higher-than-expected
operational costs. Such an additional provision was derived
by stressing the assumptions used to calculate the existing
provision relating to motor finance commissions.
The modelling output of the “severe but plausible” scenario
highlights the resilient capital position, with the group's
capital ratios in excess of minimum regulatory requirements
and capacity to absorb losses and increases in RWAs
beyond the impacts modelled, strengthened by available
management actions.
The two stress testing scenarios modelled for the group’s
most recent ICAAP, approved by the Board in January 2025,
were used to provide additional context for the Directors
alongside the going concern assessment. The ICAAP forms
part of the group’s overall capital risk framework, outlined on
page 81.
The group continues to have a strong and conservative
business model, lending in a variety of sectors across a
diverse range of assets. The group remains well positioned in
each of its businesses, is soundly funded, and has strong
levels of liquidity. The group maintains strong headroom to
minimum regulatory requirements to withstand the “severe
but plausible” going concern scenario elements. In making
their going concern assessment, the Directors have also
considered the operational agility and resilience of the
company and the group. The Directors continually expect to
maintain a high level of operational and system performance.
Under all assessed scenarios, the group continues to
operate with sufficient levels of capital for the next 15
months from the reporting date, with the group’s capital
ratios in excess of minimum regulatory requirements.
Separately from managing the group capital position, the
group adopts a conservative approach to funding and
liquidity risk and seeks to maintain a funding and liquidity
position characterised by sustaining a diverse range of
funding sources and holding a prudent level of high-quality
liquidity. As such, the weighted average maturity of its
funding is longer than the weighted average maturity of its
lending portfolio. The Board reviewed these factors when
concluding upon going concern.
These objectives form the basis for the group Funding and
Liquidity Risk Appetite Statement, approved annually by the
Board, which outlines the levels of funding and liquidity risk
that the group is willing to assume. Given the materiality of
the Banking division, this is primarily focused on the levels of
risk assumed within the bank.
As part of the liquidity management process, the Banking
division also uses a suite of internally developed liquidity
stress scenarios to monitor its potential liquidity exposure
daily and determine its HQLA requirements. This ensures
that the Banking division remains within risk appetite and
identifies potential areas of vulnerability. These stresses are
formally approved by the ALCO, GRCC and Board and cover
both idiosyncratic and market-wide stresses. The bank
adopts the most severe stress to determine the amount of
liquidity it needs to hold. At 31 July 2025, the bank held
sufficient liquidity resources to meet the applicable stress.
In conclusion, the Directors have determined that they have
a reasonable expectation that the company and the group,
as a whole, have adequate resources to continue as a going
concern for a period of at least 12 months from the date of
approval of the financial statements. Accordingly, they
continue to adopt the going concern basis in preparing the
Annual Report.
113
Strategic report Governance report Financial statements

Viability statement
Consideration
In accordance with provision 31 of the UK Corporate
Governance Code, the Board has assessed the prospects of
the group and confirms that it has a reasonable expectation
that the company and group will continue to operate and
meet their liabilities, as they fall due, for the three-year period
up to 31 July 2028.
Strategic and financial outlook
The Board has considered the longer-term viability of the
group and considers three years to be an appropriate period
for the assessment to be made. A period of three years has
been chosen because it is the period covered by the group’s
well-embedded strategic planning cycle. A three-year period
aligns with the group regulatory and internal stress testing
processes, including: (i) group-wide internal forecasting and
stress testing, which have undergone significant review and
challenge, to confirm the viability of the group; (ii) the ICAAP,
which assesses capital requirements; and (iii) the ILAAP,
which identifies liquidity requirements.
Risk management and risk profile
In making its assessment, the Board has identified and
assessed the principal and emerging risks facing the group
and these are highlighted on pages 74 to 79. The group’s
approach to monitoring and managing the principal risks
faced by the group’s business, including financial, business,
market and operational risks, has remained consistent given
the group’s activities, business model and strategy are
unchanged.
The group utilises an established risk management
framework to identify and monitor its portfolio of emerging
risks incorporating the group’s “bottom up” and “top down”
approach. These approaches are monitored by the local and
group risk and compliance committees. Key emerging risks
can be found in the Risk Report on page 79.
Assessment
The group will continue to monitor and assess these risks,
by: adhering to its established business model as outlined on
pages 16 and 17; implementing an integrated risk
management approach based on the concept of “three lines
of defence”; and setting and operating within clearly defined
and monitored risk appetites.
As outlined in the going concern statement, a key area of
focus for the financial year has been the FCA's review of
historical motor finance commission arrangements and the
Supreme Court appeals, and their impact on the group’s
activities. Whilst the Supreme Court appeals have concluded
and some clarity has been gained, the FCA's review is
ongoing and uncertainty as to the range of outcomes
prevails, and the group recognises the need to plan for a
range of possible outcomes. The Board has placed
considerable focus on its review and challenge of the
group’s 3YSP and the results of key scenario modelling.
The group’s business model has worked well through a
range of economic, social and environmental conditions over
multiple economic cycles, and this is projected to continue
over the medium term. Taking into account the group’s
lending in a variety of sectors across a diverse range of
assets, the Board considers medium-term economic, social,
environmental and technological trends at the individual
business unit level as part of the strategic planning cycle.
This includes focusing on the long-term strategic approach
to simplify, optimise and grow the group business model,
with key priorities outlined on pages 10 to 11.
The Board has also assessed the group’s viability by
considering several forward-looking scenarios, namely the
ICAAP and ILAAP, as well as the “severe but plausible”
scenario that was used for the going concern assessment.
Various macroeconomic assumptions have been assessed
across the scenarios including GDP growth, inflation, interest
rates, unemployment, residential house prices and equity
prices (refer to the Risk Report on pages 92 to 95). The
modelling considers the group’s future projections of
profitability, cash flows, capital requirements and resources,
and other key financial and regulatory ratios over the period.
In the modelled scenarios, it has been assumed that no
significant structural changes to the company or group will
be required that are not known or planned at the time of the
assessment.
The group’s “severe but plausible” going concern scenario
has been extended out to the 2028 financial year in order to
support the viability assessment, with overlays to the 3YSP.
The overlays include an additional provision relating to motor
finance commissions in January 2026, subdued loan book
growth and higher-than-expected operational costs.
Headroom to regulatory requirements was maintained on all
capital ratios in this scenario, demonstrating the group’s
capacity to absorb losses. In addition, the Directors have
reviewed the key management actions which would be taken
in the event of a stress scenario, in order to mitigate the
stress, and the viability of these actions based on recent
experience.
The group maintains capital ratios significantly above
regulatory minima, which are currently set at a minimum
common equity tier 1 ratio of 9.7% and a minimum total
capital ratio of 13.7%. In all assessed scenarios, the
company and group continue to operate with sufficient levels
of capital, with the group’s capital ratios and funding and
liquidity positions in excess of minimum regulatory
requirements.
Close Brothers Group plc Annual Report 2025
114

Viability statement
Consideration
In accordance with provision 31 of the UK Corporate
Governance Code, the Board has assessed the prospects of
the group and confirms that it has a reasonable expectation
that the company and group will continue to operate and
meet their liabilities, as they fall due, for the three-year period
up to 31 July 2028.
Strategic and financial outlook
The Board has considered the longer-term viability of the
group and considers three years to be an appropriate period
for the assessment to be made. A period of three years has
been chosen because it is the period covered by the group’s
well-embedded strategic planning cycle. A three-year period
aligns with the group regulatory and internal stress testing
processes, including: (i) group-wide internal forecasting and
stress testing, which have undergone significant review and
challenge, to confirm the viability of the group; (ii) the ICAAP,
which assesses capital requirements; and (iii) the ILAAP,
which identifies liquidity requirements.
Risk management and risk profile
In making its assessment, the Board has identified and
assessed the principal and emerging risks facing the group
and these are highlighted on pages 74 to 79. The group’s
approach to monitoring and managing the principal risks
faced by the group’s business, including financial, business,
market and operational risks, has remained consistent given
the group’s activities, business model and strategy are
unchanged.
The group utilises an established risk management
framework to identify and monitor its portfolio of emerging
risks incorporating the group’s “bottom up” and “top down”
approach. These approaches are monitored by the local and
group risk and compliance committees. Key emerging risks
can be found in the Risk Report on page 79.
Assessment
The group will continue to monitor and assess these risks,
by: adhering to its established business model as outlined on
pages 16 and 17; implementing an integrated risk
management approach based on the concept of “three lines
of defence”; and setting and operating within clearly defined
and monitored risk appetites.
As outlined in the going concern statement, a key area of
focus for the financial year has been the FCA's review of
historical motor finance commission arrangements and the
Supreme Court appeals, and their impact on the group’s
activities. Whilst the Supreme Court appeals have concluded
and some clarity has been gained, the FCA's review is
ongoing and uncertainty as to the range of outcomes
prevails, and the group recognises the need to plan for a
range of possible outcomes. The Board has placed
considerable focus on its review and challenge of the
group’s 3YSP and the results of key scenario modelling.
The group’s business model has worked well through a
range of economic, social and environmental conditions over
multiple economic cycles, and this is projected to continue
over the medium term. Taking into account the group’s
lending in a variety of sectors across a diverse range of
assets, the Board considers medium-term economic, social,
environmental and technological trends at the individual
business unit level as part of the strategic planning cycle.
This includes focusing on the long-term strategic approach
to simplify, optimise and grow the group business model,
with key priorities outlined on pages 10 to 11.
The Board has also assessed the group’s viability by
considering several forward-looking scenarios, namely the
ICAAP and ILAAP, as well as the “severe but plausible”
scenario that was used for the going concern assessment.
Various macroeconomic assumptions have been assessed
across the scenarios including GDP growth, inflation, interest
rates, unemployment, residential house prices and equity
prices (refer to the Risk Report on pages 92 to 95). The
modelling considers the group’s future projections of
profitability, cash flows, capital requirements and resources,
and other key financial and regulatory ratios over the period.
In the modelled scenarios, it has been assumed that no
significant structural changes to the company or group will
be required that are not known or planned at the time of the
assessment.
The group’s “severe but plausible” going concern scenario
has been extended out to the 2028 financial year in order to
support the viability assessment, with overlays to the 3YSP.
The overlays include an additional provision relating to motor
finance commissions in January 2026, subdued loan book
growth and higher-than-expected operational costs.
Headroom to regulatory requirements was maintained on all
capital ratios in this scenario, demonstrating the group’s
capacity to absorb losses. In addition, the Directors have
reviewed the key management actions which would be taken
in the event of a stress scenario, in order to mitigate the
stress, and the viability of these actions based on recent
experience.
The group maintains capital ratios significantly above
regulatory minima, which are currently set at a minimum
common equity tier 1 ratio of 9.7% and a minimum total
capital ratio of 13.7%. In all assessed scenarios, the
company and group continue to operate with sufficient levels
of capital, with the group’s capital ratios and funding and
liquidity positions in excess of minimum regulatory
requirements.
Close Brothers Group plc Annual Report 2025
114
In making this assessment, the Directors have considered a
wide range of information, including:
• the Board’s risk appetite and robust assessment of the
principal and emerging risks which could impact the
performance of the group, and how these are managed –
please refer to the Risk Report on pages 68 to 112;
• the group’s current financial position and prospects –
please refer to the Financial Overview section on pages 51
to 67; and
• the group’s business model and strategy – please refer to
the Business model section on pages 16 to 17, and the
Strategy and Key Performance Indicators sections on
pages 10 to 13.
The Directors have also considered the results of the most
recent iterations of the following reviews:
• the annual review of the Recovery Plan, which included
employing a number of scenarios to test the group
Recovery Plan, the wide range of risk indicators and the
recovery options available to the group;
• the 2024 group ICAAP, which included both stress testing
and scenario analysis. At a group level, two severe stress
test scenarios were assessed representing protracted
downside scenarios. These took account of the scope and
likely effectiveness of mitigating actions that could be
taken by management to avoid or reduce the impact or
occurrence of underlying risks. As part of the ICAAP,
reverse stress testing was also undertaken to support the
identification of potential adverse circumstances and
events; and
• the 2024 ILAAP, which was reviewed to assess the
group’s liquidity across a range of market-wide and
idiosyncratic scenarios. This confirmed the ongoing
strength of the group’s funding and liquidity model. Please
refer to note 26 on financial risk management for further
details.
This forward-looking Viability Statement made by the Board
is based on information and knowledge of the group at
30 September 2025. Unexpected risks and uncertainties may
arise from future events or conditions, such as economic
changes and business conditions, which are beyond the
group’s control and could cause the group’s actual
performance and results to differ from those anticipated.
In conclusion, the Directors have determined that they have
a reasonable expectation that the group and company will be
able to continue their operations and meet their liabilities as
they fall due over the three-year period of the assessment.
This Strategic Report was approved by the board and signed
on its behalf by
Mike Morgan
Chief Executive
30 September 2025
115
Strategic report Governance report Financial statements

Chairman's introduction to governance
“The Board's purpose is to lead the
group to generate long-term value for
shareholders and all its stakeholders.
High-quality and effective corporate
governance and considered decision-
making underpin the long-term,
sustainable success of the group.”
Michael N. Biggs
Chairman
Dear shareholder
On behalf of the Board, I am pleased to introduce the
Corporate Governance Report (the “Report”) for the year
ended 31 July 2025.
The following pages explain the group’s corporate
governance arrangements and the key activities undertaken
by the Board during the year to ensure effective decision-
making and stewardship of the group’s strategy, business
model and performance. The report explains how we have
complied with the UK Corporate Governance Code 2018
(the “Code”) during the year.
Outlook
During the course of the 2025 financial year, the FCA’s
review of historical motor finance commission arrangements
and the October Court of Appeal decision in Hopcraft, gave
rise to significant industry-wide uncertainty. Notwithstanding
the fact that the outcome of our Supreme Court appeal of
Hopcraft provides clarity as to the law, there remains a
significant amount of uncertainty pending the outcome of the
FCA’s review of motor finance commissions and any
industry-wide redress scheme. As we navigate this
continued uncertainty, now more than ever before, the
importance of maintaining high standards of corporate
governance is paramount. The Board’s purpose is to lead the
group to generate long-term value for shareholders and all its
stakeholders. High-quality and effective corporate
governance and considered decision-making underpin the
long-term, sustainable success of the group.
Strategic priorities
This year has brought unique challenges for the group. The
uncertainty relating to historical motor commissions has
been the major focus for the year and has required the Board
to lead dynamically and prepare the group to deal with a
wide range of possible outcomes. We made the decision to
appeal the Hopcraft judgment and the case was heard at the
Supreme Court in April 2025, with the judgment announced
on 1 August 2025. We look forward to the greater clarity that
will come with the conclusion of the FCA’s consultation on a
redress scheme.
The Board also initiated a separate remediation exercise in
relation to historical deficiencies which have been identified
in certain operational processes in relation to the early
settlements of loans in the Motor Finance business. Effective
Board decision-making in these areas has been supported
by a great deal of additional meeting time through a
significant number of ad hoc Board meetings. I would like to
thank my fellow Directors for the dedication and significant
extra time commitment they have demonstrated this year in
particular.
The Board has navigated these challenges while continuing
to look more broadly to the group’s strategic outlook,
resilience and growth. During the year we continued to build
capital through a variety of methods, including the sale of
Close Brothers Asset Management, in line with our
previously announced approach to further strengthening the
group’s capital position. We have also taken important
strategic decisions to drive organisational simplification and
efficiency to optimise our cost base, as shown on page 10.
Close Brothers Group plc Annual Report 2025
116

Chairman's introduction to governance
“The Board's purpose is to lead the
group to generate long-term value for
shareholders and all its stakeholders.
High-quality and effective corporate
governance and considered decision-
making underpin the long-term,
sustainable success of the group.”
Michael N. Biggs
Chairman
Dear shareholder
On behalf of the Board, I am pleased to introduce the
Corporate Governance Report (the “Report”) for the year
ended 31 July 2025.
The following pages explain the group’s corporate
governance arrangements and the key activities undertaken
by the Board during the year to ensure effective decision-
making and stewardship of the group’s strategy, business
model and performance. The report explains how we have
complied with the UK Corporate Governance Code 2018
(the “Code”) during the year.
Outlook
During the course of the 2025 financial year, the FCA’s
review of historical motor finance commission arrangements
and the October Court of Appeal decision in Hopcraft, gave
rise to significant industry-wide uncertainty. Notwithstanding
the fact that the outcome of our Supreme Court appeal of
Hopcraft provides clarity as to the law, there remains a
significant amount of uncertainty pending the outcome of the
FCA’s review of motor finance commissions and any
industry-wide redress scheme. As we navigate this
continued uncertainty, now more than ever before, the
importance of maintaining high standards of corporate
governance is paramount. The Board’s purpose is to lead the
group to generate long-term value for shareholders and all its
stakeholders. High-quality and effective corporate
governance and considered decision-making underpin the
long-term, sustainable success of the group.
Strategic priorities
This year has brought unique challenges for the group. The
uncertainty relating to historical motor commissions has
been the major focus for the year and has required the Board
to lead dynamically and prepare the group to deal with a
wide range of possible outcomes. We made the decision to
appeal the Hopcraft judgment and the case was heard at the
Supreme Court in April 2025, with the judgment announced
on 1 August 2025. We look forward to the greater clarity that
will come with the conclusion of the FCA’s consultation on a
redress scheme.
The Board also initiated a separate remediation exercise in
relation to historical deficiencies which have been identified
in certain operational processes in relation to the early
settlements of loans in the Motor Finance business. Effective
Board decision-making in these areas has been supported
by a great deal of additional meeting time through a
significant number of ad hoc Board meetings. I would like to
thank my fellow Directors for the dedication and significant
extra time commitment they have demonstrated this year in
particular.
The Board has navigated these challenges while continuing
to look more broadly to the group’s strategic outlook,
resilience and growth. During the year we continued to build
capital through a variety of methods, including the sale of
Close Brothers Asset Management, in line with our
previously announced approach to further strengthening the
group’s capital position. We have also taken important
strategic decisions to drive organisational simplification and
efficiency to optimise our cost base, as shown on page 10.
Close Brothers Group plc Annual Report 2025
116
The group’s business model relies on the excellent service,
specialist expertise and strong relationships with our
customers, and I am pleased that these strong foundations
continue to lie at the heart of what we do and why we do it.
Leadership and culture
During the year, following a period of medical leave, Adrian
Sainsbury stood down from his position as Group Chief
Executive to focus on his health. Mike Morgan was
subsequently appointed Group Chief Executive in January
2025, following several years as Group Finance Director.
Mike brings deep knowledge of the organisation to the role
and his appointment ensures continuity in the leadership of
the group and delivery of our strategy. On behalf of the entire
Board, I sincerely thank Adrian for his contribution to the
group which included overseeing a period of significant
growth and development and successfully leading the
organisation through challenging periods and heightened
geopolitical uncertainty.
Following the end of the 2025 financial year, the Board was
pleased to appoint Fiona McCarthy, Group Chief Finance
Officer, as an Executive Director. Fiona has over 30 years’
experience in financial services across the retail, commercial,
corporate and investment banking sectors, including six
years at Close Brothers. We are looking forward to working
with Fiona in this new capacity.
As I approach the end of my tenure as Chairman, having
been appointed in 2017, Mark Pain, Senior Independent
Director, will lead the search for my successor over the next
year. In the meantime, I look forward to continuing to lead
the Board as we navigate the current uncertainty facing the
market and ensure the group is well positioned for
sustainable growth once there is greater clarity with regard to
the FCA’s review of historical motor finance commission
arrangements.
Board composition and diversity
The Board is committed to ensuring that it possesses the
right balance of skills and diversity to ensure the success of
the group, and I am pleased to report that our Board is
composed of 56% female Directors and includes one
Director from a minority ethnic background. Furthermore, the
Board now meets the FCA Listing Rule requirement to have
one of the most senior Board positions occupied by a female
Director, following Fiona McCarthy's appointment as an
Executive Director post year end. Further information on the
composition of the Board and its diversity can be found on
pages 118 and 137.
I am pleased to report that, despite the challenges facing the
group and the market as a whole, our distinctive culture
remains embedded. Once again, our colleagues have
demonstrated commitment to our values, providing our
customers with the expertise and service we are renowned
for. More information on the Board’s oversight of culture can
be found on page 133.
Board effectiveness
This year’s annual review of the Board and committee
effectiveness was led internally by the Company Secretary,
building on the findings of last year’s externally led
performance review. The review was thorough and rigorous
and found that the Board and its committees continue to
operate effectively. More information is set out on page 130.
Sustainability, ESG and diversity and inclusion
During the year, the Board and its committees oversaw a
range of ESG priorities. These support our continued
commitment to aligning climate positioning with the
business-led strategy that supports customers and clients in
their transition to a low carbon future and achieving net zero
across our operations, our supply chain and the activities we
finance by 2050 or sooner.
To ensure that ESG matters are considered holistically as
part of Board decision-making and strategy, responsibility for
ESG will be transferred in the 2026 financial year to the
Board from the Nomination and Governance Committee.
Diversity and Inclusion (“D&I”) has been a key focus in the
year and the Board has overseen progress made against the
group’s recently refreshed D&I strategy to continue the
development of a diverse and inclusive talent pipeline.
Further detail on how we oversee D&I can be found on
pages 136 and 137.
Stakeholder engagement
The Board places great emphasis on stakeholder interests
when steering the group’s strategy and overseeing the
group’s risk profile. The uncertainty resulting from the Court
of Appeal’s October decision in Hopcraft and the FCA’s
review has had a significant effect on our stakeholders. The
Board’s response to these events and the decisive actions
taken have been guided by stakeholder views.
During the year, the Board met with a number of stakeholder
groups, and considered a wide range of stakeholder
interests. Our formal statement in relation to Section 172 of
the Companies Act 2006, together with further detail
regarding how the Directors have engaged with and had
regard to the interests of stakeholders, can be found on
pages 22 and 132.
Shareholder engagement remains a key priority and
members of the Board have been pleased to meet with
investors during the year to discuss the group’s immediate
priorities and capital actions as well as the longer-term
outlook. This included our annual corporate governance
roadshow where I met with approximately 50% of the share
register to engage and understand their views on a variety of
topics. I look forward to meeting with shareholders at the
forthcoming AGM on 20 November 2025. Further details will
be set out in the Notice of AGM sent to shareholders in due
course.
On behalf of the Board, I would like to thank shareholders
and all stakeholders for their continued support. I, along with
my fellow Directors, look forward to further engagement in
the year ahead as we continue to create a more efficient and
resilient business, delivering greater value for shareholders
and continuing to support our valued customers.
Michael N. Biggs
Chairman
30 September 2025
117
Strategic report Governance report Financial statements

Governance at a glance
Compliance with the UK Corporate Governance Code 2018
The UK Corporate Governance Code 2018, published by
the Financial Reporting Council (“FRC”), applied to the
company throughout the financial year ended 31 July
2025. A copy of the Code can be found on the FRC’s
website at www.frc.org.uk
.
It is the Board’s view that, throughout the year, the
company has applied the principles and complied in full
with the provisions set out in the Code. The following
table sets out the relevant sections of this Annual Report
2025, where shareholders can read in more detail how
we have embedded governance principles and specific
provisions of the Code across our organisation.
Board leadership Page 124
Division of responsibilities Pages 128 to 129
Composition, succession and evaluation Page 131
Audit, risk and internal control Page 138
Remuneration Page 147
The UK Corporate Governance Code 2024 (the
“2024Code”) applies to the financial year beginning
1August 2025. The principles and provisions of the 2024
Code have been robustly considered and the group is
evolving its corporate governance practices to ensure
continued compliance once the provisions of the 2024
Code become applicable. More information on the group’s
response to the 2024 Code can be found on page 135.
Board statistics
Board composition as at the date of publication is
summarised below. Membership of the Board is
continuously reviewed to ensure the group’s current
and future needs are met. More information can be
found on pages 136.
Gender diversity
Female 5
Male 4
Ethnic diversity
White/White British 8
Asian/Asian British 1
Balance of the Board
Executive Directors 2
Non-executive Directors 7
Board tenure
0-3 years 3
4-6 years 5
7-9 years 1
Non-executive Directors’
skillsand experience
All appointments to the Board follow a robust decision-
making process, which may include conducting an
external search where appropriate. Our view is that the
Board possesses the right balance of skills and
experience to navigate the challenges ahead and to
deliver long-term, sustainable growth. The effectiveness
of the Board and its committees has been assessed this
financial year by an internal approach led by the
Company Secretary, which confirmed that the Board
and its committees continue to be effective. The findings
of the annual Board evaluation can be found on
page 130. The number of Non-executive Directors
possessing deep experience in each area as at the date
of publication is shown in the chart below.
Broad financial services 6/7
llllll
Finance, audit and accounting 7/7
lllllll
People and culture 7/7
lllllll
Risk 7/7
lllllll
Regulatory framework 7/7
lllllll
ESG 6/7
llllll
Technology, digital and
operations
6/7
llllll
Strategy 7/7
lllllll
Leadership 6/7
llllll
Listed company governance 7/7
lllllll
Close Brothers Group plc Annual Report 2025
118

Governance at a glance
Compliance with the UK Corporate Governance Code 2018
The UK Corporate Governance Code 2018, published by
the Financial Reporting Council (“FRC”), applied to the
company throughout the financial year ended 31 July
2025. A copy of the Code can be found on the FRC’s
website at www.frc.org.uk.
It is the Board’s view that, throughout the year, the
company has applied the principles and complied in full
with the provisions set out in the Code. The following
table sets out the relevant sections of this Annual Report
2025, where shareholders can read in more detail how
we have embedded governance principles and specific
provisions of the Code across our organisation.
Board leadership Page 124
Division of responsibilities Pages 128 to 129
Composition, succession and evaluation Page 131
Audit, risk and internal control Page 138
Remuneration Page 147
The UK Corporate Governance Code 2024 (the
“2024Code”) applies to the financial year beginning
1August 2025. The principles and provisions of the 2024
Code have been robustly considered and the group is
evolving its corporate governance practices to ensure
continued compliance once the provisions of the 2024
Code become applicable. More information on the group’s
response to the 2024 Code can be found on page 135.
Board statistics
Board composition as at the date of publication is
summarised below. Membership of the Board is
continuously reviewed to ensure the group’s current
and future needs are met. More information can be
found on pages 136.
Gender diversity
Female 5
Male 4
Ethnic diversity
White/White British 8
Asian/Asian British 1
Balance of the Board
Executive Directors 2
Non-executive Directors 7
Board tenure
0-3 years 3
4-6 years 5
7-9 years 1
Non-executive Directors’
skillsand experience
All appointments to the Board follow a robust decision-
making process, which may include conducting an
external search where appropriate. Our view is that the
Board possesses the right balance of skills and
experience to navigate the challenges ahead and to
deliver long-term, sustainable growth. The effectiveness
of the Board and its committees has been assessed this
financial year by an internal approach led by the
Company Secretary, which confirmed that the Board
and its committees continue to be effective. The findings
of the annual Board evaluation can be found on
page 130. The number of Non-executive Directors
possessing deep experience in each area as at the date
of publication is shown in the chart below.
Broad financial services 6/7
llllll
Finance, audit and accounting 7/7
lllllll
People and culture 7/7
lllllll
Risk 7/7
lllllll
Regulatory framework 7/7
lllllll
ESG 6/7
llllll
Technology, digital and
operations
6/7
llllll
Strategy 7/7
lllllll
Leadership 6/7
llllll
Listed company governance 7/7
lllllll
Close Brothers Group plc Annual Report 2025
118
Our governance framework
The Board’s principal responsibilities are to promote the long-term success of the group and to create and deliver value
forshareholders, while protecting the interests of other stakeholders. The Board sets the group’s strategy and has
responsibility for the governance, performance, culture and risk management, and internal controls of the group.
The Board
Nomination and
Governance Committee
Audit Committee Risk Committee
Remuneration
Committee
See page 134 See page 138 See page 144 See page 147
Disclosure Committee
1
Executive Committee
Management committees
Overview of the Board’s work this year See page 126.
Leading the group’s response to regulatory matters, in particular the ongoing uncertainty in relation
to motor commissions, which included the decision to appeal the Court of Appeal’s decision in
Hopcraft to the Supreme Court.
Oversight of strategic activities to simplify the group and to ensure it is well positioned to generate
strong returns. These decisions included the sale of Close Brothers Asset Management and
Winterflood, the decision to wind down Close Brothers Vehicle Hire, and the repositioning of the
Premium Finance business to focus the growth of the business towards commercial lines insurance
premium finance.
Executing a number of actions to strengthen the group’s available CET1 capital by approximately
£400 million by the end of the 2025 financial year including loan book moderation, cost-saving
initiatives, and the sale of Close Brothers Asset Management.
Further development of significant multi-year cost management initiatives, aimed at achieving at least
£20 million of annualised cost savings by the end of the 2025 financial year, which has been
exceeded with £25 million of savings achieved.
Board priorities for FY 2026
Concluding the execution of activities for simplification of the group and cost saving initiatives to
drive sustainable growth and enhance efficiency.
Continuing to build on the findings of recent Board evaluations and the embedding of enhanced
internal controls processes ahead of the adoption of the 2024 Code, to ensure the group operates
under the highest standards of corporate governance.
Continuing to engage with a wide range of stakeholder groups to ensure the expectations of
stakeholders are considered and embedded in Board decision-making, especially as the group
emerges from the ongoing motor commissions uncertainty.
Overseeing orderly succession planning at Board level, taking into account the tenure of current
Directors and the current Board’s skill set against its current needs, along with diversity and
inclusion.
Communities and environment Investors Colleagues Customers and partners Suppliers Regulators and government
1. The Disclosure Committee is responsible for overseeing the timely and accurate disclosure of sensitive information and ensuring that adequate
procedures and controls are in place to enable compliance with legal and regulatory disclosure obligations.
119
Strategic report Governance report Financial statements

Board of Directors
Mike Biggs
Chairman
Appointed: Non-executive Director
March 2017; Chairman May 2017
Experience and competencies
Mike has more than 50 years’
experience within the financial
services sector, gained in both
executive and non-executive roles.
He has extensive experience as a
listed company chairman and uses
his broad skills and deep knowledge
to lead the Board and ensure that it
operates effectively. Mike’s
considerable experience of engaging
with key stakeholders, including
major shareholders and regulators,
makes him well placed to serve as
Chairman and drive the strategy and
culture of the group. Mike is an
Associate of the ICAEW.
External roles
• Current – none
Past
• Direct Line Insurance Group plc,
chairman
1
• Resolution Limited, chairman
• Resolution plc, chief executive
officer and group finance director
1
• Aviva plc, finance director
1
Mike Morgan
Chief Executive
Appointed: Executive Director
November 2018; Chief Executive
January 2025
Experience and competencies
Mike was appointed Chief Executive
in 2025. Prior to this, Mike served as
Finance Director since 2018. Mike
brings deep experience of the group
to this role, having held a number of
senior roles within the group and
bank since joining Close Brothers in
2010. Mike is a chartered accountant
and his combined extensive
experience of financial services and
financial leadership, as well as his
strong understanding of the group
and its businesses, make him suitable
to serve as Chief Executive.
External roles
Current
• Member of the finance, audit and
risk committee of Battersea Dogs &
Cats Home
Past
• ICAEW Financial Services Faculty
Board, chair
• RBS, divisional finance director
• Scottish Provident, various senior
roles
Fiona McCarthy
Group Chief Finance Officer
Appointed: Executive Director August
2025; Group Chief Finance Officer
January 2025
Experience and competencies
Fiona was appointed as Chief
Finance Officer of the group in
January 2025 and was appointed to
the Board on 29 August 2025. Fiona
has over 30 years of financial services
experience, gained across the retail,
commercial, corporate and
investment banking sectors. She
joined Close Brothers in 2019 as
Group Financial Planning & Analysis
Director and prior to this worked at
UBS, most latterly as interim CFO for
the global investment bank. Fiona
started her career at NatWest, where
she undertook a number of senior
finance roles.
External roles
• Current – none
Past
• NatWest, various senior finance
roles
• UBS, interim CFO for the global
investment bank
1. Directorship of publicly listed organisation.
Close Brothers Group plc Annual Report 2025
120

Board of Directors
Mike Biggs
Chairman
Appointed: Non-executive Director
March 2017; Chairman May 2017
Experience and competencies
Mike has more than 50 years’
experience within the financial
services sector, gained in both
executive and non-executive roles.
He has extensive experience as a
listed company chairman and uses
his broad skills and deep knowledge
to lead the Board and ensure that it
operates effectively. Mike’s
considerable experience of engaging
with key stakeholders, including
major shareholders and regulators,
makes him well placed to serve as
Chairman and drive the strategy and
culture of the group. Mike is an
Associate of the ICAEW.
External roles
• Current – none
Past
• Direct Line Insurance Group plc,
chairman
1
• Resolution Limited, chairman
• Resolution plc, chief executive
officer and group finance director
1
• Aviva plc, finance director
1
Mike Morgan
Chief Executive
Appointed: Executive Director
November 2018; Chief Executive
January 2025
Experience and competencies
Mike was appointed Chief Executive
in 2025. Prior to this, Mike served as
Finance Director since 2018. Mike
brings deep experience of the group
to this role, having held a number of
senior roles within the group and
bank since joining Close Brothers in
2010. Mike is a chartered accountant
and his combined extensive
experience of financial services and
financial leadership, as well as his
strong understanding of the group
and its businesses, make him suitable
to serve as Chief Executive.
External roles
Current
• Member of the finance, audit and
risk committee of Battersea Dogs &
Cats Home
Past
• ICAEW Financial Services Faculty
Board, chair
• RBS, divisional finance director
• Scottish Provident, various senior
roles
Fiona McCarthy
Group Chief Finance Officer
Appointed: Executive Director August
2025; Group Chief Finance Officer
January 2025
Experience and competencies
Fiona was appointed as Chief
Finance Officer of the group in
January 2025 and was appointed to
the Board on 29 August 2025. Fiona
has over 30 years of financial services
experience, gained across the retail,
commercial, corporate and
investment banking sectors. She
joined Close Brothers in 2019 as
Group Financial Planning & Analysis
Director and prior to this worked at
UBS, most latterly as interim CFO for
the global investment bank. Fiona
started her career at NatWest, where
she undertook a number of senior
finance roles.
External roles
• Current – none
Past
• NatWest, various senior finance
roles
• UBS, interim CFO for the global
investment bank
1. Directorship of publicly listed organisation.
Close Brothers Group plc Annual Report 2025
120
Committee membership
Chair Nomination and Governance Audit Risk Remuneration
Mark Pain
Senior Independent Director
Appointed: Non-executive Director
and Senior Independent Director
(“SID”) January 2021
Experience and competencies
Mark brings to the Board more than
30 years’ finance, risk management
and commercial experience. He has
held executive and non-executive
roles in both listed and private
financial services companies,
including in retail banking and
insurance. Mark has experience as a
SID and makes a highly valuable
contribution to the Board. He was
previously finance director of Barratt
Developments plc and Abbey National
plc and this experience equips him to
support the chair as SID.
External roles
Current
• AXA UK plc, chairman
• Empiric Student Property plc,
non-executive chairman
1
Past
• Barratt Developments plc,
financedirector
1
• Abbey National plc, finance director
1
• Yorkshire Building Society, senior
independent director
• London Square Limited,
non-executive chairman
• Ladbrokes Coral Group plc,
non-executive director
1
• Punch Taverns plc, non-executive
director
1
• Spirit Pub Company plc,
non-executive director
1
• Johnston Press plc, non-executive
director
1
• Aviva Insurance Limited,
non-executive director
1. Directorship of publicly listed organisation.
Tracey Graham
Independent Non-executive Director
Appointed: Non-executive Director
March 2022
Experience and competencies
Tracey brings to the Board significant
executive leadership experience from
organisations in the financial and
business services sectors, both in the
UK and internationally. She is an
experienced non-executive director,
having served on a number of listed
company boards across a range of
financial services sectors and is
experienced in leading large
commercial transactions. She is an
experienced remuneration committee
chair and has extensive experience
serving as a SID. Tracey’s significant
commercial, operational and
customer service insights are of great
benefit to the Board.
External roles
Current
• Nationwide Building Society, SID
• Virgin Money UK plc,
non-executive director
• Clydesdale Bank plc,
non-executive director
• Pension Insurance Corporation plc,
non-executive director and SID
• Pension Insurance Corporation
Group Limited, non-executive
director and SID
Past
• Royal London Mutual Insurance
Society Limited, non-executive
director
• Ibstock plc, SID
1
• AXA Insurance plc, director of
customer services
• Talaris Limited, chief executive officer
• De La Rue plc, various executive roles
• HSBC, various senior positions
• LINK Scheme Limited,
non-executive director
• DiscoverIE Group plc, SID
1
Kari Hale
Independent Non-executive Director
Appointed: Non-executive Director
June 2023
Experience and competencies
Kari brings to the Board extensive
audit and commercial expertise and a
deep understanding of the audit and
governance environment, drawing on
his many years in senior audit roles at
Deloitte, including membership of its
financial services industry board. His
expertise includes leading sensitive
and complex audits of high-profile
organisations. Kari has deep
experience of the financial services
sector and served as a senior adviser
to the Financial Reporting Council,
having previously been an executive
director at the Financial Services
Authority. Kari also brings experience
of chairing audit committees at large
financial services organisations,
making him qualified to chair the
Audit Committee of the group.
External roles
Current
• AXA UK plc, non-executive director
Past
• Deloitte, senior audit partner
• Financial Reporting Council, senior
adviser
• Financial Services Authority,
executive director
121
Strategic report Governance report Financial statements

Committee membership
Chair Nomination and Governance Audit Risk Remuneration
Patricia Halliday
Independent Non-executive Director
Appointed: Non-executive Director
August 2021
Experience and competencies
Patricia brings considerable risk and
commercial expertise to the Board.
She has more than 30 years’
experience in risk management
across the investment, corporate and
retail banking sectors, including
serving as chief risk officer in financial
services organisations. Her deep
understanding of the regulatory, risk
and governance environment is
immeasurably valuable and supports
the Board’s leadership of the group.
Her experience qualifies her to chair
the Risk Committee.
External roles
Current
• State Street Corporation, director
1
• TD Bank Europe Limited, non-
executive director
Past
• Santander UK, chief risk officer
• GE Capital International Holdings
Limited, chief risk officer
• Deutsche Bank, credit risk
managing director
• Barclays Capital, various senior risk
management roles
1. Directorship of publicly listed organisation.
Tesula Mohindra
Independent Non-executive Director
Appointed: Non-executive Director
July 2021
Experience and competencies
Tesula brings to the Board extensive
finance and commercial expertise,
drawing on over 25 years’ experience
which includes senior executive and
advisory roles in the banking,
insurance and pension fund sectors.
Tesula qualified as a chartered
accountant with PwC and held
managing director roles at JP Morgan
and at UBS, specialising in corporate
finance for financial institutions and
pension fund risk management. She
was a founding member of the
management team of Paternoster, the
specialist bulk annuity insurer, where
she was a member of the executive
committee. She has worked as an
independent financial consultant
advising on business plans and
capital raising. Tesula’s considerable
financial services expertise gained in
a broad range of organisations, from
investment banks to start-ups,
supports the Board’s leadership of
the group and makes her well
positioned to serve the Board.
External roles
Current
• RAC Group, non-executive director
• NHBC (National House Building
Council), non-executive director
• Variety, the Children’s Charity,
trustee
Past
• JP Morgan, managing director
• UBS, managing director
Sally Williams
Independent Non-executive Director
Appointed: Non-executive Director
January 2020
Experience and competencies
Sally brings extensive risk, regulatory
and governance experience to the
Board, having held senior executive
positions at Marsh, National Australia
Bank and Aviva. Prior to that, Sally
held roles at PwC in both their risk
management and audit teams, over a
period of 15 years. She is a chartered
accountant, and also has significant
experience chairing audit
committees. The Board benefits from
Sally’s considerable experience of the
broader UK financial services and
insurance sectors, and her
understanding of risk management,
compliance and audit matters.
External roles
Current
• Lancashire Holdings Limited,
non-executive director
1
• Ovarian Cancer Action, trustee
Past
• Marsh Ltd, director of risk and
governance
• National Australia Bank, head of
risk, London
• Aviva, group risk and governance
director
• PwC, director, risk management
• Family Assurance Friendly Society
Limited (OneFamily), non-executive
director
Board of Directors continued
Close Brothers Group plc Annual Report 2025
122

Committee membership
Chair Nomination and Governance Audit Risk Remuneration
Patricia Halliday
Independent Non-executive Director
Appointed: Non-executive Director
August 2021
Experience and competencies
Patricia brings considerable risk and
commercial expertise to the Board.
She has more than 30 years’
experience in risk management
across the investment, corporate and
retail banking sectors, including
serving as chief risk officer in financial
services organisations. Her deep
understanding of the regulatory, risk
and governance environment is
immeasurably valuable and supports
the Board’s leadership of the group.
Her experience qualifies her to chair
the Risk Committee.
External roles
Current
• State Street Corporation, director
1
• TD Bank Europe Limited, non-
executive director
Past
• Santander UK, chief risk officer
• GE Capital International Holdings
Limited, chief risk officer
• Deutsche Bank, credit risk
managing director
• Barclays Capital, various senior risk
management roles
1. Directorship of publicly listed organisation.
Tesula Mohindra
Independent Non-executive Director
Appointed: Non-executive Director
July 2021
Experience and competencies
Tesula brings to the Board extensive
finance and commercial expertise,
drawing on over 25 years’ experience
which includes senior executive and
advisory roles in the banking,
insurance and pension fund sectors.
Tesula qualified as a chartered
accountant with PwC and held
managing director roles at JP Morgan
and at UBS, specialising in corporate
finance for financial institutions and
pension fund risk management. She
was a founding member of the
management team of Paternoster, the
specialist bulk annuity insurer, where
she was a member of the executive
committee. She has worked as an
independent financial consultant
advising on business plans and
capital raising. Tesula’s considerable
financial services expertise gained in
a broad range of organisations, from
investment banks to start-ups,
supports the Board’s leadership of
the group and makes her well
positioned to serve the Board.
External roles
Current
• RAC Group, non-executive director
• NHBC (National House Building
Council), non-executive director
• Variety, the Children’s Charity,
trustee
Past
• JP Morgan, managing director
• UBS, managing director
Sally Williams
Independent Non-executive Director
Appointed: Non-executive Director
January 2020
Experience and competencies
Sally brings extensive risk, regulatory
and governance experience to the
Board, having held senior executive
positions at Marsh, National Australia
Bank and Aviva. Prior to that, Sally
held roles at PwC in both their risk
management and audit teams, over a
period of 15 years. She is a chartered
accountant, and also has significant
experience chairing audit
committees. The Board benefits from
Sally’s considerable experience of the
broader UK financial services and
insurance sectors, and her
understanding of risk management,
compliance and audit matters.
External roles
Current
• Lancashire Holdings Limited,
non-executive director
1
• Ovarian Cancer Action, trustee
Past
• Marsh Ltd, director of risk and
governance
• National Australia Bank, head of
risk, London
• Aviva, group risk and governance
director
• PwC, director, risk management
• Family Assurance Friendly Society
Limited (OneFamily), non-executive
director
Board of Directors continued
Close Brothers Group plc Annual Report 2025
122
Executive Committee
The biographies of the Executive Committee members can be found at
www.closebrothers.com/who-we-are
. The role of the Executive Committee is described
on page 124, and the process for succession planning and appointmentsis overseen by
theNomination and Governance Committee as described on page 135.
Mike Morgan
Chief Executive
Fiona McCarthy
Group Chief
FinanceOfficer
Ian Cowie
Chief Executive
OfficerRetail
Bradley Dyer
Winterflood Chief
Executive
Rebekah Etherington
Group Head of
HumanResources
Phil Hooper
Chief Executive
OfficerProperty
Nazrul Kazi
Group Head of
InternalAudit
Sarah Peazer-Davies
General Counsel and
Company Secretary
Matt Roper
Chief Executive
OfficerCommercial
Robert Sack
Group Chief Risk Officer
Yogesh Sholapurkar
Group Chief
TechnologyOfficer
123
Strategic report Governance report Financial statements

Corporate governance report
Board governance and activities
Governance framework
Our governance framework, as illustrated on page 119,
supports the delivery of the group’s strategy through
effective decision-making, long-term shareholder value and
contribution to wider society.
Certain matters are reserved for the Board, primarily in
relation to:
• setting and monitoring strategy for the group;
• corporate structure, capital and ensuring adequate
financial resources;
• financial reporting and controls;
• oversight of risk management, regulatory compliance,
internal controls and whistleblowing;
• significant financial matters including acquisitions,
disposals and investments;
• shareholder, market and regulatory communications;
• Board and committee membership;
• delegation of authority; and
• corporate governance matters.
The matters reserved for the Board, which are periodically
reviewed, are available at www.closebrothers.com/investor-
relations/investor-information/corporate-governance. When
carrying out its duties, the Board acts in accordance with
relevant legislative and regulatory requirements while at all
times having regard to the directors’ duties set out in the
Companies Act 2006, including the duty pursuant to s.172 of
the Companies Act 2006, being the duty to promote the
success of the company for the benefit of its members as a
whole. Stakeholder considerations are a core focus of all
Board decisions, about which you can read more on
page132.
The Board delegates responsibility for certain matters to its
committees. Each committee has terms of reference, which
are available at www.closebrothers.com/investor-relations/
investor-information/corporate-governance. The chair of
each committee reports at each subsequent Board meeting
on matters discussed at committee meetings. All Non-
executive Directors have access to committee papers and
have a standing invitation to attend any committee meeting.
Reports from the Board’s committees are set out later in this
Annual Report 2025 and they include further detail on each
committee’s role and responsibilities, along with a summary
of the activities undertaken during the year.
The Board delegates the execution of the group’s strategy
and the day-to-day management of the business to the
Executive Committee, which is led by the Chief Executive
and supported by management committees.
Robust governance is embedded throughout the
organisation, and numerous committees at management
level provide oversight across day-to-day operations.
Management committees ensure that matters are sufficiently
developed and challenged as they are escalated upwards.
2025 Board strategy day
• The Board strategy day in 2025 focused the
Board’s thinking on where the group sits within its
market, sector and the opportunities available to
deliver returns for shareholders in the coming
years.
• The Board reviewed the group’s portfolio and plans
to simplify the group and optimise its cost base¸
including detailed reviews of strategic programmes
in each Banking division.
• The cost reduction programme, developed in three
phases and aiming to save at least £20 million per
year, was challenged by the Board alongside the
three-year strategic plan.
Board leadership
The Board provides effective leadership and oversight of the
group as a whole, to ensure the group’s activities and
performance continue to meet stakeholder expectations. The
Board sets the group’s purpose and strategic objectives and
monitors management’s performance against those
objectives, ensuring alignment with the group’s culture and
values. The Board oversees the group’s risk management
and internal controls systems which enables risk to be
appropriately assessed and managed.
This year, the Board has been particularly focused on
reshaping and simplifying the group to position it well for
growth and to enable it to deliver sustainable shareholder
returns. Strategic decision-making has been supported by
detailed insights from senior management and guidance
from expert external advisers. Board decision-making is also
influenced by the interests and views of our key
stakeholders, including employees, customers, shareholders
and regulators.
In a year where the Board’s focus has been on navigating
considerable market uncertainty arising from the FCA’s
review of historical motor commission arrangements and the
Court of Appeal’s October decision in Hopcraft, the annual
Board strategy day was particularly significant. The strategy
day allows the Board to engage with senior management on
the long-term strategic direction of the group and to
challenge and scrutinise longer-term planned investment and
initiatives.
Risk management, internal controls
andwhistleblowing
The Board is responsible for, and actively monitors, the
group’s risk management and internal control systems. The
Board considers a range of matters in relation to risk
management and internal controls, and the Group Chief Risk
Officer attends all scheduled Board meetings to report to the
Board on risk management activities across the group.
Close Brothers Group plc Annual Report 2025
124

Corporate governance report
Board governance and activities
Governance framework
Our governance framework, as illustrated on page 119,
supports the delivery of the group’s strategy through
effective decision-making, long-term shareholder value and
contribution to wider society.
Certain matters are reserved for the Board, primarily in
relation to:
• setting and monitoring strategy for the group;
• corporate structure, capital and ensuring adequate
financial resources;
• financial reporting and controls;
• oversight of risk management, regulatory compliance,
internal controls and whistleblowing;
• significant financial matters including acquisitions,
disposals and investments;
• shareholder, market and regulatory communications;
• Board and committee membership;
• delegation of authority; and
• corporate governance matters.
The matters reserved for the Board, which are periodically
reviewed, are available at www.closebrothers.com/investor-
relations/investor-information/corporate-governance. When
carrying out its duties, the Board acts in accordance with
relevant legislative and regulatory requirements while at all
times having regard to the directors’ duties set out in the
Companies Act 2006, including the duty pursuant to s.172 of
the Companies Act 2006, being the duty to promote the
success of the company for the benefit of its members as a
whole. Stakeholder considerations are a core focus of all
Board decisions, about which you can read more on
page132.
The Board delegates responsibility for certain matters to its
committees. Each committee has terms of reference, which
are available at www.closebrothers.com/investor-relations/
investor-information/corporate-governance. The chair of
each committee reports at each subsequent Board meeting
on matters discussed at committee meetings. All Non-
executive Directors have access to committee papers and
have a standing invitation to attend any committee meeting.
Reports from the Board’s committees are set out later in this
Annual Report 2025 and they include further detail on each
committee’s role and responsibilities, along with a summary
of the activities undertaken during the year.
The Board delegates the execution of the group’s strategy
and the day-to-day management of the business to the
Executive Committee, which is led by the Chief Executive
and supported by management committees.
Robust governance is embedded throughout the
organisation, and numerous committees at management
level provide oversight across day-to-day operations.
Management committees ensure that matters are sufficiently
developed and challenged as they are escalated upwards.
2025 Board strategy day
• The Board strategy day in 2025 focused the
Board’s thinking on where the group sits within its
market, sector and the opportunities available to
deliver returns for shareholders in the coming
years.
• The Board reviewed the group’s portfolio and plans
to simplify the group and optimise its cost base¸
including detailed reviews of strategic programmes
in each Banking division.
• The cost reduction programme, developed in three
phases and aiming to save at least £20 million per
year, was challenged by the Board alongside the
three-year strategic plan.
Board leadership
The Board provides effective leadership and oversight of the
group as a whole, to ensure the group’s activities and
performance continue to meet stakeholder expectations. The
Board sets the group’s purpose and strategic objectives and
monitors management’s performance against those
objectives, ensuring alignment with the group’s culture and
values. The Board oversees the group’s risk management
and internal controls systems which enables risk to be
appropriately assessed and managed.
This year, the Board has been particularly focused on
reshaping and simplifying the group to position it well for
growth and to enable it to deliver sustainable shareholder
returns. Strategic decision-making has been supported by
detailed insights from senior management and guidance
from expert external advisers. Board decision-making is also
influenced by the interests and views of our key
stakeholders, including employees, customers, shareholders
and regulators.
In a year where the Board’s focus has been on navigating
considerable market uncertainty arising from the FCA’s
review of historical motor commission arrangements and the
Court of Appeal’s October decision in Hopcraft, the annual
Board strategy day was particularly significant. The strategy
day allows the Board to engage with senior management on
the long-term strategic direction of the group and to
challenge and scrutinise longer-term planned investment and
initiatives.
Risk management, internal controls
andwhistleblowing
The Board is responsible for, and actively monitors, the
group’s risk management and internal control systems. The
Board considers a range of matters in relation to risk
management and internal controls, and the Group Chief Risk
Officer attends all scheduled Board meetings to report to the
Board on risk management activities across the group.
Close Brothers Group plc Annual Report 2025
124
During the year under review, the Board considered and
approved:
• the group’s ICAAP and ILAAP statements;
• the annual compliance plan;
• the Enterprise Risk Management Framework;
• the principal and emerging risks facing the group; and
• the group risk appetite statements.
Further information on the Board’s work throughout the year
can be found on page 124.
Effectiveness of risk management and internal
controlsystems
The Board defines the level of risk the group is willing to
accept in achieving its strategic goals and ensures that
effective risk management internal control systems are in
place. These systems are designed to provide reasonable,
not absolute, assurance against material misstatement, loss,
and fraud.
Controls aim to manage, not eliminate, risks to business
objectives, support efficient operations, ensure reporting
integrity, and maintain regulatory compliance. Key controls
are regularly reviewed for design and operational
effectiveness and to seek to ensure compliance with
applicable laws and regulations.
In its annual review, the Board considered the group’s key
risks, the operation of the risk framework, and the evolving
control culture. Following this review, the Board is satisfied
that the systems are effective, with any identified
weaknesses addressed through management oversight and
action plans.
This assessment is supported by the work of the Risk
Committee and the Audit Committee, which monitor
effectiveness of the systems of risk management and internal
control through regular updates and reviews by the second
line of defence, internal audit, and external auditors. The Risk
Committee also reviewed the Enterprise Risk Management
Framework to ensure alignment with the group’s risk
appetite and regulatory requirements.
Detailed information in respect of the risk management and
internal control systems is provided within the Risk Report
on pages 68 to 112 and the Risk Committee report on pages
144 to 146.
Principal and emerging risks
The Board has performed a robust assessment of the
principal and emerging risks facing the group, including
those that would threaten the group’s business model, future
performance, solvency or liquidity. These principal and
emerging risks are regularly reviewed and challenged by the
Risk Committee and at management-level governance
forums, via risk management information and commentary
provided by the Group Chief Risk Officer. The risk
management information provides a view of the risk profile of
the group, performance in line with risk appetite, an
assessment of the group-level emerging risks and mitigating
actions to ensure the group’s preparedness should a risk
crystallise. The process for identifying, managing and
mitigating these risks forms a core part of the Enterprise Risk
Management Framework and further detail is provided in the
Risk Report on pages 68 to 112.
Deep dives
During the year the Board held a number of deep
dives to discuss significant matters in greater depth
than would normally be possible in normal Board
meetings. Where relevant, external advisers
supported the delivery of the sessions.
Topics this year have included:
• group cost reduction initiatives and operational
efficiency enhancements;
• strategic repositioning of the Premium Finance
business to focus the growth of the business
towards commercial lines insurance premium
finance and to streamline operations;
• the group's successful appeal of the Hopcraft case
to the Supreme Court, which included extensive
scenario planning for a range of possible
outcomes; and
• annual refresher on the Senior Managers and
Certification Regime and regulatory obligations and
expectations.
Further information on areas of specific focus can be
found on page 127.
The Board confirms that throughout the year ended 31 July
2025 and up to the date of approval of this Annual Report
2025, there have been rigorous processes in place to
identify, evaluate and manage the principal and emerging
risks faced by the group. The Board has also assessed the
likelihood of a risk crystallising and the costs of control in
accordance with the Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting
published by the FRC.
Further information on the group’s principal and emerging
risks can be found in the Risk Report on pages 68 to 112.
Whistleblowing arrangements
The Board oversees the group’s whistleblowing
arrangements, which include channels through which a
person may raise matters of concern anonymously. It
monitors the operation and effectiveness of these
arrangements, ensuring that processes are in place for the
proportionate and independent investigation of matters
raised through the mechanisms available and for follow-up
action. During the year, the Board received half-yearly
updates from the Group Head of Operational Risk and
Compliance. These updates covered:
• the status and outcomes of any whistleblowing matters
raised within the six-month period;
• an overview of the group’s whistleblowing arrangements
across all jurisdictions in which the group operates and an
assessment of the effectiveness of those arrangements;
and
• information on steps taken by the group to ensure the
protection of those using the group’s whistleblowing
arrangements.
In addition, the Board appoints one of the Directors,
currently Kari Hale, to act as the group’s whistleblowing
champion. In this role, Kari engages with the Group Head of
Operational Risk and Compliance regularly in relation to
whistleblowing matters. For more details about the group’s
whistleblowing procedures, see page 41.
125
Strategic report Governance report Financial statements

Board activities during the year
During the year, the Board and its committees considered various matters and took carefully considered decisions for the
long-term benefit of the group and its stakeholders. The Board’s focus this year was on the FCA motor commissions review
and the appeal of the Court of Appeal’s decision in Hopcraft to the Supreme Court, and also the longer-term activities to
deliver simplification, optimisation and growth.
Colleagues Regulators and government Suppliers
Customers and partners Communities and environment Investors
Key events and areas of focus this year are set out below.
Area of focus
Summary of the Board’s work in this area
Succession planning
• approved the appointment of Mike Morgan as Chief Executive
• oversaw various key appointments to the Executive Committee
• reviewed succession planning and the talent pipeline in each business and functional area
Motor commissions
• decided to appeal the Court of Appeal's decision in Hopcraft to the Supreme Court, which
had an ultimately positive outcome
• continued to navigate the group through a period of market uncertainty
• executed the capital plan announced in March 2024, resulting in over £400 million of CET1
capital generated or preserved as of 31 July 2025
Simplification
• reviewed the group’s portfolio and opportunities to simplify business activities
• made several key decisions to reshape the group, including reaching agreement to sell Close
Brothers Asset Management, Winterflood, and Close Brewery Rentals Limited, to wind down
Close Brothers Vehicle Hire, and reposition the premium business to focus on commercial lines
Budget review
• implemented enhanced governance and scrutiny in relation to discretionary spend and third-
party management to ensure prudence and challenge in balancing appropriate investment
with cost discipline
Cost management
• developed and challenged wide-ranging proposals to reduce the group’s cost base by at
least £20 million of annualised cost savings by the end of the 2025 financial year, with £25
million already delivered. This has been achieved through streamlining of our technology,
suppliers and property, and workforce, whilst having regard to the current and future
expectations of customers and employees
External reporting
• considered and approved the half-year results and full-year results and accompanying
reports, including scrutiny of the assumptions underpinning them in relation to the uncertainty
pending the Supreme Court’s decision in respect of the Hopcraft appeal and the FCA’s
review of historical motor finance commission arrangements
• recognised and subsequently reconfirmed a £165 million charge for the provision in relation
to motor finance commissions and other adjusting items
People and culture
• considered the results of the annual employee opinion survey, which this year was facilitated
by a new external provider and was redesigned to provide enhanced insights, reaching the
conclusion that employee sentiment remains positive in comparison to sector benchmarks
despite the challenging environment
Corporate governance
reforms
• assessed the group’s readiness for the adoption of the new 2024 Code and continued to
oversee management-led workstreams to develop the group’s internal controls framework
Regulatory matters
• continued positive engagement with the PRA and FCA as well as other relevant regulators,
and received updates on management-level interaction with the PRA and FCA
• focused on maintaining strong relationships with regulators and embedding regulatory
expectations within the business
Customers
• implemented enhanced customer documentation to ensure greater transparency regarding
commission arrangements in light of the Court of Appeal’s decision in the Hopcraft case
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
126

Board activities during the year
During the year, the Board and its committees considered various matters and took carefully considered decisions for the
long-term benefit of the group and its stakeholders. The Board’s focus this year was on the FCA motor commissions review
and the appeal of the Court of Appeal’s decision in Hopcraft to the Supreme Court, and also the longer-term activities to
deliver simplification, optimisation and growth.
Colleagues Regulators and government Suppliers
Customers and partners Communities and environment Investors
Key events and areas of focus this year are set out below.
Area of focus
Summary of the Board’s work in this area
Succession planning
• approved the appointment of Mike Morgan as Chief Executive
• oversaw various key appointments to the Executive Committee
• reviewed succession planning and the talent pipeline in each business and functional area
Motor commissions
• decided to appeal the Court of Appeal's decision in Hopcraft to the Supreme Court, which
had an ultimately positive outcome
• continued to navigate the group through a period of market uncertainty
• executed the capital plan announced in March 2024, resulting in over £400 million of CET1
capital generated or preserved as of 31 July 2025
Simplification
• reviewed the group’s portfolio and opportunities to simplify business activities
• made several key decisions to reshape the group, including reaching agreement to sell Close
Brothers Asset Management, Winterflood, and Close Brewery Rentals Limited, to wind down
Close Brothers Vehicle Hire, and reposition the premium business to focus on commercial lines
Budget review
• implemented enhanced governance and scrutiny in relation to discretionary spend and third-
party management to ensure prudence and challenge in balancing appropriate investment
with cost discipline
Cost management
• developed and challenged wide-ranging proposals to reduce the group’s cost base by at
least £20 million of annualised cost savings by the end of the 2025 financial year, with £25
million already delivered. This has been achieved through streamlining of our technology,
suppliers and property, and workforce, whilst having regard to the current and future
expectations of customers and employees
External reporting
• considered and approved the half-year results and full-year results and accompanying
reports, including scrutiny of the assumptions underpinning them in relation to the uncertainty
pending the Supreme Court’s decision in respect of the Hopcraft appeal and the FCA’s
review of historical motor finance commission arrangements
• recognised and subsequently reconfirmed a £165 million charge for the provision in relation
to motor finance commissions and other adjusting items
People and culture
• considered the results of the annual employee opinion survey, which this year was facilitated
by a new external provider and was redesigned to provide enhanced insights, reaching the
conclusion that employee sentiment remains positive in comparison to sector benchmarks
despite the challenging environment
Corporate governance
reforms
• assessed the group’s readiness for the adoption of the new 2024 Code and continued to
oversee management-led workstreams to develop the group’s internal controls framework
Regulatory matters
• continued positive engagement with the PRA and FCA as well as other relevant regulators,
and received updates on management-level interaction with the PRA and FCA
• focused on maintaining strong relationships with regulators and embedding regulatory
expectations within the business
Customers
• implemented enhanced customer documentation to ensure greater transparency regarding
commission arrangements in light of the Court of Appeal’s decision in the Hopcraft case
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
126
Financial calendar
September 2024
• Full-year results and roadshows
• Publication of Annual Report 2024
• Pillar 3 disclosures
• Announcement of sale of Close Brothers Asset
Management
October 2024
• Court of Appeal’s decision in Hopcraft handed down
November 2024
• Annual General Meeting 2024
• Q1 trading update
January 2025
• Mike Morgan appointed as Chief Executive
February 2025
• Announcement of anticipated £165 million provision
relating to motor finance commissions
March 2025
• Half-year results and UK roadshow
• Sale of Close Brothers Asset Management completed
April 2025
• Hopcraft case appealed to the Supreme Court
May 2025
• Q3 trading update
June 2025
• Annual corporate governance roadshow
July 2025
• Announcement of the repositioning of the Premium
business to focus on Commercial lines and the sale of
each of the Brewery Rentals and Winterflood businesses
Workforce engagement
Workforce engagement is a valuable means by which
the Directors, and in particular the Non-executive
Directors, are able to ensure employee interests are
understood and embedded in Board decision-
making. Spending time with colleagues across the
group also provides Directors with first-hand insight
into the group’s day-to-day operations.
In June 2025, and in celebration of 50 years of the
Property business, a number of the Non-executive
Directors met with a group of representatives from all
levels and roles within the Property business to
discuss current business trends and challenges and
market outlook. The Board heard directly from
colleagues about a variety of matters and it was an
opportunity for the Board to congratulate the team
on their recent successes.
The Property team then arranged a site visit for the
Non-executive Directors to a development of former
industrial space into residential properties and
commercial space in east London. The development,
which was nearing completion, is being built by a
long-standing customer and financed by Close
Brothers, and the Non-executive Directors were
given a tour of the development by the customer.
The visit was very well received by both the Non-
executive Directors and the Property team.
Opportunities like this allow the Board to receive
direct insights from customers and ensure that the
Board is able to focus its decision-making on
delivering outstanding service and expertise for
customers.
127
Strategic report Governance report Financial statements

Board governance and activities
Attendance at scheduled Board and committee meetings during FY 2025
Board
Nomination and
Governance
Committee Risk Committee Audit Committee
Remuneration
Committee
Mike Biggs
8/8 5/5 – – 4/4
Mike Morgan
8/8 – – – –
Mark Pain
8/8 5/5 6/7 – 4/4
Tracey Graham
8/8 5/5 7/7 – 4/4
Kari Hale
8/8 5/5 7/7 5/5 –
Patricia Halliday
8/8 – 7/7 5/5 4/4
Tesula Mohindra
8/8 – 7/7 5/5 –
Sally Williams
8/8 – 6/7 4/5 –
Former Directors
Adrian Sainsbury
1
1/3 – – – –
1. Adrian Sainsbury resigned as Chief Executive and as Executive Director with effect from 6 January 2025.
Meetings of the Board
The ordinary schedule of Board and committee meetings is designed to ensure a sufficient number of meetings are held for
each forum and that these fall at the optimal checkpoints during the financial year.
In addition to the scheduled Board and committee meetings as detailed in the table, 20 further ad hoc Board meetings were
convened this year to ensure the Board was able to oversee additional important business that included managing
developments with regard to the group’s Supreme Court appeal of the Hopcraft case and the ongoing FCA review of historical
motor finance commission arrangements.
Board and committee meeting dates are scheduled in advance to ensure, so far as possible, the availability of all Directors. In
the event that, in exceptional circumstances, Directors are unable to attend a meeting, they receive papers as usual and have
the opportunity to relay their comments and questions in advance of the meeting, as well as follow up with the Chairman or
Committee Chair if necessary.
The agendas for Board and committee meetings are set by the Chairman and committee chairs working with the Company
Secretary and with input from the Chief Executive and relevant functional heads. Management are invited to attend meetings
as appropriate. Each scheduled Board and committee meeting includes dedicated time for discussion between the Non-
executive Directors, without the Executive Directors and management present.
Board and committee papers are circulated to the Directors with sufficient time in advance of meetings and include dedicated
reporting on stakeholder considerations and senior manager insights with regard to employee and customer sentiment and
culture across the group.
The Board also makes use of a range of other engagement mechanisms to consider matters and steer the group including:
• The annual Board strategy day (refer to page 124)
• Workforce engagement opportunities as detailed on page 133
• Meetings with investors and significant shareholders, including at the corporate governance roadshow
• Separate informal Board sessions to explore important topics with management in the form of deep dives
Roles and responsibilities
In line with the Code, the role of the Chairman is distinct and separate from that of the Chief Executive and there is a clear
division of responsibilities between the two. The roles of the Chairman, Chief Executive and Senior Independent Director, as
approved by the Board in July 2025, can be found on the company’s website at www.closebrothers.com/investor-relations/
investor-information/corporate-governance. A summary of various Board roles is set out below.
In addition, the Chairman, Chief Executive and each of the committee chairs have various prescribed responsibilities under the
Senior Managers and Certification Regime, overseen by the FCA. Other Board members also take on additional responsibilities
required by legislation such as whistleblowing champion, although responsibility for oversight of these matters remains with
the whole Board.
Division of responsibilities
Mike Biggs
Chairman
• Responsible for leading the Board and ensuring that it operates effectively, observing the
highest standards of corporate governance.
• Promotes balanced and effective decision-making and challenge of executive management
with sufficient time for constructive debate and discussion.
• Ensures that the Board as a whole is responsible for developing the group’s strategy and
assessing and monitoring culture across the group.
• Promotes effective engagement between the Board, its shareholders and other stakeholders.
• Chairs the Nomination and Governance Committee, monitors the Board’s composition and
succession planning, and leads the annual Board evaluation process.
Role
Responsibilities
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
128

Board governance and activities
Attendance at scheduled Board and committee meetings during FY 2025
Board
Nomination and
Governance
Committee Risk Committee Audit Committee
Remuneration
Committee
Mike Biggs
8/8 5/5 – – 4/4
Mike Morgan
8/8 – – – –
Mark Pain
8/8 5/5 6/7 – 4/4
Tracey Graham
8/8 5/5 7/7 – 4/4
Kari Hale
8/8 5/5 7/7 5/5 –
Patricia Halliday
8/8 – 7/7 5/5 4/4
Tesula Mohindra
8/8 – 7/7 5/5 –
Sally Williams
8/8 – 6/7 4/5 –
Former Directors
Adrian Sainsbury
1
1/3 – – – –
1. Adrian Sainsbury resigned as Chief Executive and as Executive Director with effect from 6 January 2025.
Meetings of the Board
The ordinary schedule of Board and committee meetings is designed to ensure a sufficient number of meetings are held for
each forum and that these fall at the optimal checkpoints during the financial year.
In addition to the scheduled Board and committee meetings as detailed in the table, 20 further ad hoc Board meetings were
convened this year to ensure the Board was able to oversee additional important business that included managing
developments with regard to the group’s Supreme Court appeal of the Hopcraft case and the ongoing FCA review of historical
motor finance commission arrangements.
Board and committee meeting dates are scheduled in advance to ensure, so far as possible, the availability of all Directors. In
the event that, in exceptional circumstances, Directors are unable to attend a meeting, they receive papers as usual and have
the opportunity to relay their comments and questions in advance of the meeting, as well as follow up with the Chairman or
Committee Chair if necessary.
The agendas for Board and committee meetings are set by the Chairman and committee chairs working with the Company
Secretary and with input from the Chief Executive and relevant functional heads. Management are invited to attend meetings
as appropriate. Each scheduled Board and committee meeting includes dedicated time for discussion between the Non-
executive Directors, without the Executive Directors and management present.
Board and committee papers are circulated to the Directors with sufficient time in advance of meetings and include dedicated
reporting on stakeholder considerations and senior manager insights with regard to employee and customer sentiment and
culture across the group.
The Board also makes use of a range of other engagement mechanisms to consider matters and steer the group including:
• The annual Board strategy day (refer to page 124)
• Workforce engagement opportunities as detailed on page 133
• Meetings with investors and significant shareholders, including at the corporate governance roadshow
• Separate informal Board sessions to explore important topics with management in the form of deep dives
Roles and responsibilities
In line with the Code, the role of the Chairman is distinct and separate from that of the Chief Executive and there is a clear
division of responsibilities between the two. The roles of the Chairman, Chief Executive and Senior Independent Director, as
approved by the Board in July 2025, can be found on the company’s website at www.closebrothers.com/investor-relations/
investor-information/corporate-governance. A summary of various Board roles is set out below.
In addition, the Chairman, Chief Executive and each of the committee chairs have various prescribed responsibilities under the
Senior Managers and Certification Regime, overseen by the FCA. Other Board members also take on additional responsibilities
required by legislation such as whistleblowing champion, although responsibility for oversight of these matters remains with
the whole Board.
Division of responsibilities
Mike Biggs
Chairman
• Responsible for leading the Board and ensuring that it operates effectively, observing the
highest standards of corporate governance.
• Promotes balanced and effective decision-making and challenge of executive management
with sufficient time for constructive debate and discussion.
• Ensures that the Board as a whole is responsible for developing the group’s strategy and
assessing and monitoring culture across the group.
• Promotes effective engagement between the Board, its shareholders and other stakeholders.
• Chairs the Nomination and Governance Committee, monitors the Board’s composition and
succession planning, and leads the annual Board evaluation process.
Role
Responsibilities
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
128
Mike Morgan
Chief Executive
• Executes the group’s strategy as agreed with the Board.
• Leads the Executive Committee in the day-to-day management of the group.
• Ensures that the group’s business is conducted with the highest standards of integrity aligned
with the group’s culture.
• Manages the group’s risk exposure in line with Board policies and risk appetite.
• Leads the group’s investor relations activities.
Mark Pain
Senior Independent
Director
• Provides a sounding board for the Chairman.
• Provides an alternative channel of communication for shareholders and other stakeholders.
• Meets with Non-executive Directors annually without the Chairman present to appraise the
Chairman’s performance.
• Leads the process for Chairman succession.
Non-executive
Directors
• Provide constructive challenge and scrutiny of the performance of management.
• Bring external perspective, knowledge and experience to the Board.
• Assist in the development of strategy and the decision-making process.
• Promote the highest standards of integrity and governance.
• Through membership of the group’s committees, determine appropriate levels of
remuneration, review the integrity of the financial statements, review succession plans for the
Board and the Executive Committee and monitor the risk profile of the group.
• Gather the views of the workforce through attendance at key business events and through
employee engagement.
Sarah Peazer-Davies
General Counsel and
Company Secretary
• Advises the Directors on corporate governance, legal matters and the discharge of their duties.
• Ensures the Board receives high-quality information and in sufficient time.
• Supports relationship-building and the flow of information between the Board and the
Executive Committee.
• Facilitates Board inductions, the annual Board evaluation and ongoing development.
• Available to provide advice and support to all Directors on matters of corporate governance.
• Organises all Board and committee meetings as well as the Annual General Meeting (“AGM”).
Role
Responsibilities
Directors’ independence
The Board considers that each Non-executive Director is
independent under provision 10 of the Code. The Chairman,
Mike Biggs, was considered to be independent on
appointment in line with the provisions of the Code.
Directors’ independence is annually reviewed and
challenged, taking into consideration (amongst other things)
the factors set out within provision 10 of the Code.
Conflicts of interest
The Board, with the support of the Company Secretary,
regularly reviews Directors’ interests to identify any actual or
potential conflicts of interest. Directors are responsible for
notifying the Chairman and the Company Secretary of any
changes to the nature of their interests and are reminded of
this at the start of each Board and committee meeting. The
Company Secretary maintains a register of Directors’
interests, including those conflicts authorised by the Board.
As required by the Code, the Board’s practice is to assess
whether Directors’ external appointments should be
approved in advance of proposed additional appointments
being taken on by any of our Directors, with significant
consideration given to the following factors:
• whether the external appointment is likely to give rise to
any actual or potential conflicts of interest;
• how any such conflicts could be managed or mitigated;
and
• whether the proposed external appointment would be
likely to compromise the Director’s ability to dedicate
appropriate time and diligence to their existing
responsibilities to the group.
Time commitment
The Non-executive Directors’ letters of appointment set out
the time commitment expected of them, and all Directors
must seek prior Board approval before taking on significant
additional commitments. The Board is satisfied that each
Non-executive Director continues to and is able to dedicate
sufficient time to the company’s affairs. The Directors’
attendance at scheduled meetings is on page 128.
During the year, Tracey Graham was appointed to the boards
of Virgin Money UK PLC, Clydesdale Bank PLC and Pension
Insurance Corporation plc. Patricia Halliday was also
appointed to the boards of State Street Corporation and TD
Bank Europe Limited. Ahead of each of these appointments,
the Board considered whether these roles would give rise to
any conflicts of interest or affect Tracey Graham and Patricia
Halliday’s independence or ability to devote sufficient time to
the company’s business. The Board concluded that each of
Tracey Graham and Patricia Halliday would be able to
appropriately manage any conflicts of interest which may
arise and continue to dedicate sufficient time to the business
of the company.
Election and re-election of Directors at the
2025AGM
In accordance with the Code, all Directors retire and submit
themselves for election or re-election at each AGM. The
Board will only recommend to shareholders that Executive
and Non-executive Directors be proposed for election or re-
election at an AGM after evaluating the performance of the
individual Directors and considering their suitability, time
commitment and ability to continue to contribute to
theBoard.
Fiona McCarthy was appointed to the Board on 29 August
2025 and will be proposed for election at the 2025 AGM.
The Board has determined that all Directors continue to be
effective and demonstrate sufficient commitment to their
role. At the recommendation of the Nomination and
Governance Committee, the Board will therefore be
recommending that all serving Directors be elected or
re-elected by shareholders at the 2025 AGM. Please see
page 164 for further information.
129
Strategic report Governance report Financial statements

Board performance review, training and induction
Board performance review
In line with recognised best practice and the
recommendations of the Code, the Board undertakes a
formal and rigorous review of its performance annually to
assess the effectiveness of the Board and to identify areas
for improvement. The performance review process is
externally facilitated at least every three years by an
independent provider.
This year the Board performance review was conducted
internally. All Directors attended a private meeting with the
Company Secretary which was guided by a series of
questions put together by the Company Secretary and taking
into account the Board’s activity in the past year as well as
the findings of the prior year’s externally led evaluation. A
number of senior managers who interact most closely with
the Board were also interviewed so as to provide a broader
perspective.
Following the interviews, the Company Secretary collated the
feedback and produced a report outlining the performance of
the Board and its committees. The report was shared with
the Chairman in the first instance, with any committee
feedback being provided directly to the committee chairs,
and was then put to the Board for review. The findings of the
review have informed a detailed action plan to be
implemented over the coming year.
Evaluation cycle
The Nomination and Governance Committee is responsible
for overseeing the annual Board performance review and
considered and approved the proposals for the 2025
evaluation.
Findings of the performance review
The review of the Board’s performance found that the Board
and its committees continue to operate effectively. In
particular, the review evidenced that the Board is focusing
on the right matters, given the challenging backdrop against
which the group is operating. The Board provides effective
oversight of the overall business, is well led and provides
valuable counsel to management. The dynamics inside and
outside the boardroom, including the relationship with key
leaders, received particularly positive feedback, and there
was good consensus regarding the strategic priorities facing
the group.
A number of priorities for the Board in the upcoming year
were identified, including:
• ensuring appropriate focus on forward-looking strategy
and growth opportunities to ensure that the group
continues to develop its value proposition;
• continuing to ensure appropriate balance between strategy
and risk in Board and committee discussions, while
maintaining a prudent approach to risk appetite;
• continuing to maintain focus on efficiency and cost
management to protect the group’s valuable franchise;
• giving appropriate consideration to the balance of skills,
experience and diversity of the Board when considering
succession planning; and
• allowing additional opportunities for informal engagement
with management where possible.
A detailed review of the findings will be undertaken, including
a comparison to the findings of last year’s external Board
evaluation. The Board, together with the Company Secretary,
will develop an action plan to build on and address the
recommendations of the evaluation.
Implementation of the findings of the FY 2024 evaluation
The Board has also considered its progress against the findings of the FY 2024 evaluation, as shown in the following table:
Areas of focus
Progress made
Continued refinements to oversight of risk, strategy and
people, ensuring appropriate mechanisms are in place to
deal with emerging challenges
Increased NED-only time both during meetings and more
informally to ensure greater opportunity for discussion;
increased focus on horizon scanning through sessions led by
legal and regulatory experts.
Maintaining alignment with management in key areas to
ensure continued focus on overarching priorities and
capacity to execute strategy
Detailed focus on cost management and delivery of cost
reduction through the year (see page 6; continued emphasis
on refined Board reporting from senior management and
focused agendas; increased oversight and monitoring of
progress against agreed strategic objectives.
Further review of decision-making processes and lessons
learnt from past decisions to support future success
Greater emphasis within Board reporting to challenge core
assumptions and inform key business priorities.
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
130
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Board performance review, training and induction
Board performance review
In line with recognised best practice and the
recommendations of the Code, the Board undertakes a
formal and rigorous review of its performance annually to
assess the effectiveness of the Board and to identify areas
for improvement. The performance review process is
externally facilitated at least every three years by an
independent provider.
This year the Board performance review was conducted
internally. All Directors attended a private meeting with the
Company Secretary which was guided by a series of
questions put together by the Company Secretary and taking
into account the Board’s activity in the past year as well as
the findings of the prior year’s externally led evaluation. A
number of senior managers who interact most closely with
the Board were also interviewed so as to provide a broader
perspective.
Following the interviews, the Company Secretary collated the
feedback and produced a report outlining the performance of
the Board and its committees. The report was shared with
the Chairman in the first instance, with any committee
feedback being provided directly to the committee chairs,
and was then put to the Board for review. The findings of the
review have informed a detailed action plan to be
implemented over the coming year.
Evaluation cycle
The Nomination and Governance Committee is responsible
for overseeing the annual Board performance review and
considered and approved the proposals for the 2025
evaluation.
Findings of the performance review
The review of the Board’s performance found that the Board
and its committees continue to operate effectively. In
particular, the review evidenced that the Board is focusing
on the right matters, given the challenging backdrop against
which the group is operating. The Board provides effective
oversight of the overall business, is well led and provides
valuable counsel to management. The dynamics inside and
outside the boardroom, including the relationship with key
leaders, received particularly positive feedback, and there
was good consensus regarding the strategic priorities facing
the group.
A number of priorities for the Board in the upcoming year
were identified, including:
• ensuring appropriate focus on forward-looking strategy
and growth opportunities to ensure that the group
continues to develop its value proposition;
• continuing to ensure appropriate balance between strategy
and risk in Board and committee discussions, while
maintaining a prudent approach to risk appetite;
• continuing to maintain focus on efficiency and cost
management to protect the group’s valuable franchise;
• giving appropriate consideration to the balance of skills,
experience and diversity of the Board when considering
succession planning; and
• allowing additional opportunities for informal engagement
with management where possible.
A detailed review of the findings will be undertaken, including
a comparison to the findings of last year’s external Board
evaluation. The Board, together with the Company Secretary,
will develop an action plan to build on and address the
recommendations of the evaluation.
Implementation of the findings of the FY 2024 evaluation
The Board has also considered its progress against the findings of the FY 2024 evaluation, as shown in the following table:
Areas of focus
Progress made
Continued refinements to oversight of risk, strategy and
people, ensuring appropriate mechanisms are in place to
deal with emerging challenges
Increased NED-only time both during meetings and more
informally to ensure greater opportunity for discussion;
increased focus on horizon scanning through sessions led by
legal and regulatory experts.
Maintaining alignment with management in key areas to
ensure continued focus on overarching priorities and
capacity to execute strategy
Detailed focus on cost management and delivery of cost
reduction through the year (see page 6; continued emphasis
on refined Board reporting from senior management and
focused agendas; increased oversight and monitoring of
progress against agreed strategic objectives.
Further review of decision-making processes and lessons
learnt from past decisions to support future success
Greater emphasis within Board reporting to challenge core
assumptions and inform key business priorities.
Corporate governance report continued
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130
Directors’ performance
In addition to the review of the Board’s performance, the
Chairman holds regular meetings with individual Directors at
which, among other things, their individual performance is
discussed. Informed by the Chairman’s continuing
observation of individual Directors during the year, these
discussions form part of the basis for recommending the
election and re-election of Directors at the company’s AGM,
and include consideration of the Director’s performance and
contribution to the Board and its committees, their time
commitment and the Board’s overall composition.
Chairman’s performance
As in previous years, Mark Pain, in his role as the Senior
Independent Director, led the annual assessment of the
Chairman’s performance. This involved discussions with the
other Non-executive Directors individually, without the
Chairman being present, and consultation with the Chief
Executive. The Senior Independent Director subsequently
provided feedback to the Chairman.
Directors’ fitness and propriety
In line with its regulatory obligations, the group undertakes
annual reviews of the fitness and propriety of all those in
senior manager functions, including all of the company’s
Directors and a number of other senior executives. This
process comprises assessments of individuals’ honesty,
integrity and reputation, financial soundness, competence
and capability, and continuing professional development.
This year’s reviews have confirmed the fitness and propriety
of all of the company’s Directors and other senior executives
who perform senior management functions. Consideration of
matters relating to fitness and propriety also form an
important part of the Board’s recruitment process for Non-
executive Directors.
Ongoing training and development
Each year, and taking into account the annual assessment of
Directors’ skills and experience and the findings of the Board
performance review, the Nomination and Governance
Committee considers the group’s strategy and operating
environment to identify development opportunities for the
Board. A tailored programme of sessions covering topics of
strategic, regulatory and operational relevance is approved
and scheduled for the year. In addition, the Company
Secretary is available to advise all Directors on all matters of
corporate governance.
Induction
On appointment, all new Directors receive a comprehensive
and personalised induction programme. The programme is
developed and overseen by the Company Secretary to
familiarise new Directors with the group.
Induction programmes are tailored to each Director and
typically include visits to local offices, one-to-one meetings
with Executive Directors, the Company Secretary and senior
management, and a meeting with the external auditor.
Directors also receive guidance on their statutory and
regulatory responsibilities, together with a range of relevant
current and historical information about the group and its
business. A key aim of the induction is to ensure that new
Board members are equipped to contribute to the group and
the work of the Board as quickly as possible.
During the year, Mike Morgan was appointed as Chief
Executive. As Mike had already served as Group Finance
Director for a number of years and had held senior roles
within the business prior to that, he was already familiar with
the group and its activities on appointment to his new role.
Mike was also interim Chief Executive during the former
Chief Executive’s period of medical absence, so he was well
placed to take on the role on a permanent basis when
appointed in January.
Fiona McCarthy will receive a tailored induction to her new
role as Director in due course.
Director induction programme
Strategy
• Markets
• Opportunities
• Culture
Financial
• Forecast and budget
• Investor views
• Audit
Regulatory
• Risk management
• Regulatory landscape
• Corporate governance
Chief Executive induction
Notwithstanding his extensive prior experience, upon
appointment as Chief Executive, Mike participated in
additional training and development activities to
support his transition into his new role. These
included:
• meetings with each of his direct reports and other
key individuals to discuss the strategy and priorities
in each business area
• regular one-to-one meetings with the Chairman
and SID
• tailored executive coaching
131
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Stakeholder engagement
The Board recognises that the group’s stakeholders have
different values and priorities. It is important for the Board to
understand and consider the interests of stakeholders.
Further information about the company’s key stakeholder
groups, as well as the company’s Section 172 Statement,
can be found in the Strategic Report on pages 22 to 25.
The Board assesses stakeholder views and takes them into
account when making decisions. The two case studies
shown on this page provide practical examples of how the
Board takes into account the company’s different
stakeholders as an integral part of its decision-making
process.
Sale of Close Brothers Asset Management
In September 2024, the Board agreed to sell Close
Brothers Asset Management (“CBAM”) to Oaktree Capital
Management (“Oaktree”) for consideration of up to £200
million. The transaction completed in February 2025
following regulatory approval. The sale of CBAM
supports our wider strategy of simplifying the group,
driving operational efficiencies and growing the core
lending business, as we seek to deliver sustainable risk-
adjusted returns for shareholders. The proceeds from the
sale also contributed to the previously announced plan to
strengthen the group’s capital base by £400 million. Due
to the level of consideration received, the sale was
deemed to be a significant transaction according to the
UK Listing Rules and the Board was therefore required to
confirm its view that the transaction was in the best
interests of all stakeholders.
The Board considered the impact of the sale on CBAM’s
clients. Having regard to Oaktree’s strong reputation and
experience in UK wealth management, and their intention
to continue to operate the business on an independent
basis, the Board determined that a sale to Oaktree would
help ensure continuity of service for clients. The Board
noted Oaktree’s intention to maintain CBAM’s client-
centric culture, invest in the business to accelerate its
growth trajectory, and preserve the bespoke investment
manager model within the business.
The Board also considered the need to ensure the CBAM
team would be supportive of the new ownership
structure and selected Oaktree as the preferred partner
on the basis that they offered a good outcome for all
stakeholders.
Hopcraft response and Supreme Court appeal
As a result of the Court of Appeal’s decision in October
2024, the Board took several key decisions.
Following an assessment of the legal position, the Board
decided to temporarily pause all new UK motor finance
business while the impact of the judgment was analysed
and customer documents and processes were updated.
Though this resulted in a reduction of new business
volumes in the Motor Finance business, the Board was
clear as to the importance of ensuring compliance with
the law. During the days following the handing down of
the Court of Appeal’s decision, Mike Morgan, acting as
interim Chief Executive, initiated the group’s executive
crisis management committee, which met on a daily
basis to monitor and manage the immediate response to,
and impact of, the decision on the group. There were
also a series of all-colleague briefings to keep colleagues
updated as to the latest developments and to ensure
transparency, giving colleagues the opportunity to ask
questions.
The Board commissioned an urgent review of the
customer journeys in other businesses within the group
to identify any other areas in which improvements should
be made outside of Motor Finance, with the result being
that a number of other processes and documents were
updated.
During the six weeks following the Court of Appeal’s
decision, the Board met a number of times to consider a
number of impacts of the Court of Appeal’s decision on
the group, including customer, partner and shareholder
queries, market reaction, regulatory engagement,
industry body consultation and impact on employees.
After careful consideration, the Board decided to apply
for permission to appeal the decision to the Supreme
Court in order to challenge the legal position as set out in
the Court of Appeal’s judgment. Permission to Appeal
was granted on 11December 2024. In preparing for the
Supreme Court appeal, the Board reviewed its advisory
panel and approved the appointment of a new external
legal and counsel team in order to maximise the group’s
chances of a successful outcome.
In February 2025, following a detailed assessment of the
potential outcomes that could flow from each of the
Supreme Court appeal and the FCA’s ongoing review of
historical motor finance commission arrangements, the
Board took the decision to recognise a £165 million
provision, based on a series of probability-weighted
scenarios. This £165 million charge for the provision has
subsequently been reassessed in light of all available
information and recent developments and remains
unchanged.
Throughout the period, the Board had the benefit of
increased reporting, capital and liquidity analysis and
updates from management on dialogue with the group’s
primary regulator, in each case in order to ensure full
oversight as to the group’s ability to respond to a range
of potential outcomes.
The Supreme Court's judgment, which was announced
on 1 August 2025, provided clarity on important legal and
commercial principles. The FCA subsequently
announced on 3 August its intention to launch a public
consultation by early October 2025 on an industry-wide
redress scheme. The Board remains poised to continue
to respond pro-actively, taking into account the views of
all stakeholders, as the FCA's consultation proceeds.
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
132

Stakeholder engagement
The Board recognises that the group’s stakeholders have
different values and priorities. It is important for the Board to
understand and consider the interests of stakeholders.
Further information about the company’s key stakeholder
groups, as well as the company’s Section 172 Statement,
can be found in the Strategic Report on pages 22 to 25.
The Board assesses stakeholder views and takes them into
account when making decisions. The two case studies
shown on this page provide practical examples of how the
Board takes into account the company’s different
stakeholders as an integral part of its decision-making
process.
Sale of Close Brothers Asset Management
In September 2024, the Board agreed to sell Close
Brothers Asset Management (“CBAM”) to Oaktree Capital
Management (“Oaktree”) for consideration of up to £200
million. The transaction completed in February 2025
following regulatory approval. The sale of CBAM
supports our wider strategy of simplifying the group,
driving operational efficiencies and growing the core
lending business, as we seek to deliver sustainable risk-
adjusted returns for shareholders. The proceeds from the
sale also contributed to the previously announced plan to
strengthen the group’s capital base by £400 million. Due
to the level of consideration received, the sale was
deemed to be a significant transaction according to the
UK Listing Rules and the Board was therefore required to
confirm its view that the transaction was in the best
interests of all stakeholders.
The Board considered the impact of the sale on CBAM’s
clients. Having regard to Oaktree’s strong reputation and
experience in UK wealth management, and their intention
to continue to operate the business on an independent
basis, the Board determined that a sale to Oaktree would
help ensure continuity of service for clients. The Board
noted Oaktree’s intention to maintain CBAM’s client-
centric culture, invest in the business to accelerate its
growth trajectory, and preserve the bespoke investment
manager model within the business.
The Board also considered the need to ensure the CBAM
team would be supportive of the new ownership
structure and selected Oaktree as the preferred partner
on the basis that they offered a good outcome for all
stakeholders.
Hopcraft response and Supreme Court appeal
As a result of the Court of Appeal’s decision in October
2024, the Board took several key decisions.
Following an assessment of the legal position, the Board
decided to temporarily pause all new UK motor finance
business while the impact of the judgment was analysed
and customer documents and processes were updated.
Though this resulted in a reduction of new business
volumes in the Motor Finance business, the Board was
clear as to the importance of ensuring compliance with
the law. During the days following the handing down of
the Court of Appeal’s decision, Mike Morgan, acting as
interim Chief Executive, initiated the group’s executive
crisis management committee, which met on a daily
basis to monitor and manage the immediate response to,
and impact of, the decision on the group. There were
also a series of all-colleague briefings to keep colleagues
updated as to the latest developments and to ensure
transparency, giving colleagues the opportunity to ask
questions.
The Board commissioned an urgent review of the
customer journeys in other businesses within the group
to identify any other areas in which improvements should
be made outside of Motor Finance, with the result being
that a number of other processes and documents were
updated.
During the six weeks following the Court of Appeal’s
decision, the Board met a number of times to consider a
number of impacts of the Court of Appeal’s decision on
the group, including customer, partner and shareholder
queries, market reaction, regulatory engagement,
industry body consultation and impact on employees.
After careful consideration, the Board decided to apply
for permission to appeal the decision to the Supreme
Court in order to challenge the legal position as set out in
the Court of Appeal’s judgment. Permission to Appeal
was granted on 11December 2024. In preparing for the
Supreme Court appeal, the Board reviewed its advisory
panel and approved the appointment of a new external
legal and counsel team in order to maximise the group’s
chances of a successful outcome.
In February 2025, following a detailed assessment of the
potential outcomes that could flow from each of the
Supreme Court appeal and the FCA’s ongoing review of
historical motor finance commission arrangements, the
Board took the decision to recognise a £165 million
provision, based on a series of probability-weighted
scenarios. This £165 million charge for the provision has
subsequently been reassessed in light of all available
information and recent developments and remains
unchanged.
Throughout the period, the Board had the benefit of
increased reporting, capital and liquidity analysis and
updates from management on dialogue with the group’s
primary regulator, in each case in order to ensure full
oversight as to the group’s ability to respond to a range
of potential outcomes.
The Supreme Court's judgment, which was announced
on 1 August 2025, provided clarity on important legal and
commercial principles. The FCA subsequently
announced on 3 August its intention to launch a public
consultation by early October 2025 on an industry-wide
redress scheme. The Board remains poised to continue
to respond pro-actively, taking into account the views of
all stakeholders, as the FCA's consultation proceeds.
Corporate governance report continued
Close Brothers Group plc Annual Report 2025
132
Culture and workforce engagement
Culture and values
The Board recognises the importance of our unique and
distinctive culture for the long-term success of the group.
The Board plays a key role in establishing, monitoring and
assessing how culture has been embedded and leading by
example to promote the desired culture. The Board spends
time monitoring, and satisfying itself as to, the alignment of
the group’s purpose, values and strategy with its culture.
During the year, the Board monitored, assessed and
promoted the embedding of the group’s culture in the
following ways:
• The Board received updates from the Group Head of HR
on the results of the anonymous employee opinion survey
which tracks against our own and sector-wide cultural
markers in addition to a quarterly culture dashboard which
includes external stakeholder considerations. This
reporting is used by the Board to assess the extent to
which desired behaviours are embedded across the
employee population.
• The Chief Executive’s updates to the Board included
dedicated reporting on people and culture within each
division to allow the Board to consider cultural issues with
suitable granularity.
• Site visits and attendance by the Non-executive Directors
at various employee events and management committees,
as well as structured site visits with dedicated employee
engagement sessions, more information about which can
be found below.
• The Remuneration Committee considered culture,
behaviour and conduct issues and the inclusion of
culture-related objectives as part of the Executive
Directors’ performance assessment (further detail on
which can be found in the Directors’ Remuneration Report
on page 147).
• The Board reviewed the group’s whistleblowing
arrangements. See page 125 for further detail.
Engagement with employees
The Board’s engagement with employees is mutually
beneficial. It allows the Board to monitor the group’s culture
and maintain an engaged and motivated workforce to
support the group in delivering a high level of service to our
customers. Our values of service, expertise, relationships,
teamwork, integrity and prudence form an important part of
who we are.
As permitted by the Code, the Board has put in place its
own arrangements to engage with employees across the
group. With oversight from the Nomination and Governance
Committee, a programme to facilitate Board engagement is
managed by the Company Secretary. The Board, through the
work of the Nomination and Governance Committee, keeps
its workforce engagement arrangements under review to
ensure they remain appropriate to the group.
The Board values opportunities for Directors to engage with
employees, across regional locations and at events of
different levels of formality. This allows the Board to engage
with the group’s workforce authentically and for the
workforce to raise topics which they might not otherwise
have the opportunity to discuss with the Board. The Board
acknowledges the benefits of meaningful engagement with
senior management, who play an important role in
embedding the group’s culture through the business and in
reporting to the Board on employee sentiment within the
businesses.
Examples of engagement and consultation in the year with
employees included:
• In June 2025, members of the Board met with
representatives of the Property business and visited a
residential development financed by Close Brothers, as
described on page 127.
• Non-executive Directors’ participation at local governance
fora and events which are attended by significant numbers
of employees and can include Q&A sessions.
• Participation by Directors in focused initiatives operated by
the group’s diversity and inclusion networks through the
year.
• Informal networking events hosted by the Directors and
which are open to smaller groups of employees to attend.
• Regular all-employee town halls run by the Executive
Directors and Executive Committee, providing updates on
the performance and operations of the group.
The Board considers that its employee engagement activities
during the year have been effective, have allowed the
Directors to engage widely with employees across a broad
manner of settings and engagement styles, and afford the
Board meaningful insight as to employee sentiment to ensure
employee interests are embedded in Board decision-making.
Engagement with shareholders
The Board believes it is important to maintain an open and
constructive relationship with shareholders in order to
provide shareholders with reliable and timely information.
Examples of engagement and consultation with our
shareholders undertaken by the Chairman and Chief
Executive during the year include:
• The AGM, which is an opportunity for shareholders to
engage with and question the Directors and senior
management.
• The Chairman met with a number of institutional
shareholders, covering c.50% of the share register by
holding, to discuss matters such as strategy, corporate
governance, succession planning and the Board’s actions
to strengthen the group’s capital position.
• Frequent updates on shareholder engagement and
investor feedback following results announcements and
investor roadshows.
Additionally, the Remuneration Committee Chair is available
to discuss remuneration matters with stakeholders, and the
SID is available to meet with shareholders when required.
133
Strategic report Governance report Financial statements

Nomination and Governance
Committee report
Michael N. Biggs
Chair of the Nomination and Governance Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the report of
the Nomination and Governance Committee (the
“Committee”) for 2025. The report sets out the work of the
Committee over the year and the key responsibilities of the
Committee.
Succession planning was a key focus of the Committee this
year. Adrian Sainsbury’s unexpected leave of absence for
medical reasons, and subsequent resignation as Chief
Executive, required the Committee to put into place
contingency measures before permanently appointing Mike
Morgan as Chief Executive. Fiona McCarthy was appointed
as Group Chief Finance Officer in January 2025 and was
subsequently appointed as an Executive Director in August
2025.
The Committee has consequently placed greater focus this
year on talent and development at Executive Committee level
and below, recognising that once the group emerges from
the current period of uncertainty arising from the FCA’s
review of historical motor finance commission arrangements,
it is important that the group has effective leadership in place
to deliver our strategy, optimisation and growth.
The Committee is responsible for ensuring that the highest
standards of corporate governance are embedded at Board
level and across the wider group, and this year the
Committee’s work in this area has focused on assessing the
impact of the new 2024 Code for the group, evaluating the
effectiveness of the Board’s workforce engagement
arrangements, and implementing the findings of the prior
year’s externally led Board evaluation.
Michael N. Biggs
Chair of the Nomination and Governance Committee
30 September 2025
Role of the Committee
To monitor the composition of the Board and its
committees, ensure orderly succession planning and
lead the Board appointments process.
Membership
Mike Biggs (Chair), Tracey Graham, Kari Hale and
Mark Pain.
Other regular attendees by invitation
Chief Executive and Group Head of Human
Resources.
Meetings
• Number of scheduled meetings: Five
• For details of attendance, see page 128
2025 highlights
• Led the process for the appointment of Mike
Morgan as Chief Executive and oversaw the
succession of various key roles on the Executive
Committee.
• Reviewed the group’s executive succession plans
and looked at the talent pipeline at a business/
functional level through the year.
• Considered the group’s corporate governance
arrangements in light of the new 2024 Code and
considered areas for incremental enhancement.
• Monitoring and oversight of ESG.
How time was spent
n
Succession planning 52%
n
Diversity, inclusion and engagement 18%
n
ESG 4%
n
Board composition and governance 26%
Interaction with other committees
The Nomination and Governance Committee makes
recommendations to the Board and all other
committees regarding the appointment and removal
of their members and chair.
Close Brothers Group plc Annual Report 2025
134

Nomination and Governance
Committee report
Michael N. Biggs
Chair of the Nomination and Governance Committee
Dear Shareholder
On behalf of the Board, I am pleased to present the report of
the Nomination and Governance Committee (the
“Committee”) for 2025. The report sets out the work of the
Committee over the year and the key responsibilities of the
Committee.
Succession planning was a key focus of the Committee this
year. Adrian Sainsbury’s unexpected leave of absence for
medical reasons, and subsequent resignation as Chief
Executive, required the Committee to put into place
contingency measures before permanently appointing Mike
Morgan as Chief Executive. Fiona McCarthy was appointed
as Group Chief Finance Officer in January 2025 and was
subsequently appointed as an Executive Director in August
2025.
The Committee has consequently placed greater focus this
year on talent and development at Executive Committee level
and below, recognising that once the group emerges from
the current period of uncertainty arising from the FCA’s
review of historical motor finance commission arrangements,
it is important that the group has effective leadership in place
to deliver our strategy, optimisation and growth.
The Committee is responsible for ensuring that the highest
standards of corporate governance are embedded at Board
level and across the wider group, and this year the
Committee’s work in this area has focused on assessing the
impact of the new 2024 Code for the group, evaluating the
effectiveness of the Board’s workforce engagement
arrangements, and implementing the findings of the prior
year’s externally led Board evaluation.
Michael N. Biggs
Chair of the Nomination and Governance Committee
30 September 2025
Role of the Committee
To monitor the composition of the Board and its
committees, ensure orderly succession planning and
lead the Board appointments process.
Membership
Mike Biggs (Chair), Tracey Graham, Kari Hale and
Mark Pain.
Other regular attendees by invitation
Chief Executive and Group Head of Human
Resources.
Meetings
• Number of scheduled meetings: Five
• For details of attendance, see page 128
2025 highlights
• Led the process for the appointment of Mike
Morgan as Chief Executive and oversaw the
succession of various key roles on the Executive
Committee.
• Reviewed the group’s executive succession plans
and looked at the talent pipeline at a business/
functional level through the year.
• Considered the group’s corporate governance
arrangements in light of the new 2024 Code and
considered areas for incremental enhancement.
• Monitoring and oversight of ESG.
How time was spent
n
Succession planning 52%
n
Diversity, inclusion and engagement 18%
n
ESG 4%
n
Board composition and governance 26%
Interaction with other committees
The Nomination and Governance Committee makes
recommendations to the Board and all other
committees regarding the appointment and removal
of their members and chair.
Close Brothers Group plc Annual Report 2025
134
Key responsibilities of the Committee
• Regularly reviewing the structure, size and composition of
the Board and its committees, and making
recommendations to the Board with regard to any changes.
• Considering the leadership needs of the group both now
and in the future and succession planning of Directors and
senior management.
• Overseeing the group’s approach to the development of a
diverse talent pipeline.
• Reviewing the continued independence of the
Non-executive Directors and assessing the Board’s
balance of skills, knowledge and experience.
• Evaluating the skills, knowledge and experience required
for any particular Board appointment, where appropriate
with the assistance of external advisers, to facilitate the
search for suitable candidates.
• Leading the Board’s annual evaluation process, including
the appointment of an external Board evaluator, when
appropriate.
Executive Director and Executive Committee
succession
During the year, Adrian Sainsbury, the former Chief
Executive, took a temporary medical leave of absence.
Whilst Adrian was on leave, the Committee oversaw the
implementation of its contingency plans to ensure continuity
of leadership of the group during a critical period which
included managing the period following the Court of
Appeal’s decision in the Hopcraft case in October 2024.
Recognising that Adrian held both an Executive Director role
and a senior management function, the Committee was
mindful of the needs of the group and its stakeholders, in
particular, the Financial Conduct Authority. Mike Morgan
assumed Adrian’s principal responsibilities supported by the
Chairman and other members of the Board and senior
management. The Committee determined that appropriate
expertise existed within the group to manage this period.
Given Mike Morgan's deep understanding of the group’s
activities and the current uncertainties facing the group as
well as his track record of delivery against strategic
objectives, the Committee recommended to the Board that
he be appointed interim Chief Executive during Adrian’s
leave. When Adrian stepped down in January 2025, Mike
Morgan received approval from the regulator and was
appointed as permanent Chief Executive, which ensured
continuity of leadership. Mike served as Finance Director for
five years and prior to this had held a number of senior roles
within the group.
After the year end, on 29 August 2025, the Board was
pleased to appoint Fiona McCarthy, Group Chief Finance
Officer, as an Executive Director. Fiona brings over 30 years’
financial services experience in a variety of sectors, including
six years at Close Brothers.
As part of Board succession planning, consideration is being
given to the requirements of the Code and in particular the
tenure of the Chairman, who was appointed as Chairman in
May 2017. Mark Pain, in his capacity as Senior Independent
Director, will lead the Board’s search for a new Chairman
over the coming year. It is recognised that Mike Biggs may
serve beyond a nine-year term as Chairman during the
period in which the search for his replacement is underway.
Succession planning
In addition to the matters set out above, the Committee also
paid particular attention to succession planning at senior
management level. As is typical each year, the senior
management succession plan was reviewed by the
Committee. This plan identifies emergency, three-year and
five-year successors for each Executive Committee role and
highlights areas of the group where there may be a shortage
of internal talent in the medium term.
In light of the need to prepare the group for a refocusing on
the strategy once the current uncertainty passes, the
Committee conducted in-depth talent reviews of certain
areas of the group focusing on Property, Commercial and
Operations.
The Committee also oversaw a number of key appointments
at Executive Committee level, including the appointment of a
new Group Chief Finance Officer, General Counsel and
Company Secretary and Chief Technology Officer.
Further information on talent and succession planning can be
found in the Sustainability Report on pages 42 to 45.
Corporate governance
The new UK Corporate Governance Code 2024 (the “2024
Code”) shall apply to the group for the financial year
beginning 1 August 2025. In light of this, the Committee has
undertaken a review of the group’s corporate governance
arrangements and practices to identify any areas for
enhancement as a result of the 2024 Code. The Committee
has concluded that gradual enhancements will be made over
the coming years with regard to internal controls and these
workstreams are supported by the Audit and Risk
Committees.
Board evaluation
The prior year’s Board evaluation was externally led and the
Committee oversaw the design and progress of that
evaluation. During FY 2025, the Committee reviewed the
findings of the 2024 evaluation and supported the Board in
agreeing an action plan to progress these findings. As the
year progressed, the Committee ensured that the Board
received periodic updates on the status of these actions and
future initiatives to enhance the areas of focus.
In addition, the Committee reviewed proposals for the 2025
Board evaluation, which was internally facilitated. The
Committee led the 2025 evaluation which took the form of
one-to-one interviews between each Director and the
Company Secretary. Key themes were collated and shared
with the Committee and the full Board for consideration. You
can read more about the 2025 Board evaluation process and
outcomes on pages 130 to 131.
The Committee also conducted its annual review of the
individual and collective skills possessed by members of the
Board, and reaffirmed that the Non-executive Directors
continue to possess the relevant skills and expertise,
including extensive experience within financial services and
in regulated or listed companies, to be effective in their roles.
Where areas for further enhancement or additional Board
professional development were identified, either from the
findings of the prior year’s Board evaluation or as a result of
horizon scanning, these were incorporated into the deep dive
sessions and annual training programme overseen by the
Company Secretary with input from the Chairman and the
Chief Executive and approved by the Committee.
135
Strategic report Governance report Financial statements

The chart on page 118 indicates the key skills expected of
the Board and possessed by the Non-executive Directors.
Further information on the background and experience of
each of the Non-executive Directors can be found in their
biographies on pages 120 to 122. Given the regulated
environment within which the group operates, Directors are
also required to undergo an annual fitness and propriety
assessment, pursuant to the Senior Managers and
Certification Regime.
During the year, the Committee carried out a review of the
expected time commitment of each Director based on their
committee membership, other Board roles and industry
benchmarking. The Committee considers that each Director
is able to dedicate the required amount of time to the
company’s business. Given the heightened uncertainty
arising from the Court of Appeal's decision in the Hopcraft
case and the FCA’s review of historical motor finance
commission arrangements, a great number of additional
unscheduled meetings have been held during the year and
members of the Board have met with a range of stakeholders
to discuss these matters.
Board roles and responsibilities
The Committee continues to keep under review the
responsibilities of the Chairman, Senior Independent Director
and the Chief Executive to ensure these remain fit for
purpose and reflective of the expectations of these roles. In
accordance with the Code, a statement of responsibilities
can be found at www.closebrothers.com/investor-relations/
investor-information/corporate-governance and further detail
is available on pages 128 to 129.
Board and Committee composition
The composition of each committee is as follows:
Nomination
and
Governance
Committee
Audit
Committee
Risk
Committee
Remuneration
Committee
Mike Biggs
Chair •
Mark Pain
• • •
Tracey
Graham
• • Chair
Kari Hale
• Chair •
Patricia
Halliday
• Chair •
Tesula
Mohindra
• •
Sally Williams
• •
Election and re-election of Directors at the
2025 AGM
The Committee is responsible for considering and making
recommendations to the Board concerning the election and
re-election of Directors, having regard to their performance,
suitability, time commitment and ability to continue to
contribute to the Board. Following this year’s review, the
Committee has recommended to the Board that all serving
Directors be elected or re-elected at the AGM.
You can read more about the Board’s recommendation that
all Directors be elected or re-elected at the 2025 AGM on
page 164.
Diversity and inclusion
The group has made significant progress against its diversity
and inclusion (“D&I”) strategy, although the Committee
recognises the need for D&I to remain a priority. Diversity at
all levels of the organisation is critical to ensuring the group
is able to execute its longer-term strategy and continue to
meet and respond to stakeholder needs and expectations.
Diversity in the boardroom ensures that different
perspectives are considered and supports the challenge
needed to ensure effective decision-making.
During the year, the Committee undertook its annual review
of the Board Diversity Policy, which applies to both the
Board and its committees. The policy sets out specific
objectives with regard to diversity and inclusion in the
boardroom, the recruitment of new Directors and longer-term
targets, as well as corresponding governance responsibilities.
The Committee considered that the policy remains
appropriate and that no further updates were required at this
stage. The Board Diversity Policy is available at
www.closebrothers.com/
investor-relations/investor-information/corporate-governance.
The Committee also considered the group’s diversity in the
context of the Listing Rule requirements on diversity metrics
and reporting. At 31 July 2025, being the reference date for
the purposes of Listing Rule 6.6.6(9), which requires the
disclosure of certain diversity statistics, and as shown in the
tables below:
• the Board met its target of having at least 40% female
Directors;
• the Board met its target of having one Director from a
minority ethnic background; and
• with the appointment of Fiona McCarthy, Group Chief
Finance Officer, as an Executive Director post year end,
the Board now meets its target of having one of its most
senior roles occupied by a female Director.
In accordance with Listing Rule 6.6.6(9), the data for the
above disclosure is as disclosed by the relevant individuals
at 31 July 2025.
The Committee considers that the Board remains diverse,
with Directors from a range of backgrounds, but will seek to
take opportunities to further improve the diversity of the
Board, where this is consistent with the skills, experience
and expertise required at a particular point in time.
The following tables illustrate the gender and ethnic diversity
of the executive management population, which comprises
the Executive Committee pursuant to Listing Rule 6.6.6(10).
The Committee takes seriously its role in overseeing the
development of a diverse pipeline for senior management
positions and the link between diversity and inclusion and
delivery of the company’s purpose and strategic aims. To
that end, the Committee considered updates during the year
in relation to diversity and inclusion initiatives across the
group and oversaw the group’s refreshed three-year diversity
and inclusion strategy, focusing on attraction and retention
of diverse talent, enhancing the culture of the group, and
shaping the group’s inclusive brand and embedding
inclusion in all interactions with stakeholders.
Nomination and Governance Committee report continued
Close Brothers Group plc Annual Report 2025
136

The chart on page 118 indicates the key skills expected of
the Board and possessed by the Non-executive Directors.
Further information on the background and experience of
each of the Non-executive Directors can be found in their
biographies on pages 120 to 122. Given the regulated
environment within which the group operates, Directors are
also required to undergo an annual fitness and propriety
assessment, pursuant to the Senior Managers and
Certification Regime.
During the year, the Committee carried out a review of the
expected time commitment of each Director based on their
committee membership, other Board roles and industry
benchmarking. The Committee considers that each Director
is able to dedicate the required amount of time to the
company’s business. Given the heightened uncertainty
arising from the Court of Appeal's decision in the Hopcraft
case and the FCA’s review of historical motor finance
commission arrangements, a great number of additional
unscheduled meetings have been held during the year and
members of the Board have met with a range of stakeholders
to discuss these matters.
Board roles and responsibilities
The Committee continues to keep under review the
responsibilities of the Chairman, Senior Independent Director
and the Chief Executive to ensure these remain fit for
purpose and reflective of the expectations of these roles. In
accordance with the Code, a statement of responsibilities
can be found at www.closebrothers.com/investor-relations/
investor-information/corporate-governance and further detail
is available on pages 128 to 129.
Board and Committee composition
The composition of each committee is as follows:
Nomination
and
Governance
Committee
Audit
Committee
Risk
Committee
Remuneration
Committee
Mike Biggs
Chair •
Mark Pain
• • •
Tracey
Graham
• • Chair
Kari Hale
• Chair •
Patricia
Halliday
• Chair •
Tesula
Mohindra
• •
Sally Williams
• •
Election and re-election of Directors at the
2025 AGM
The Committee is responsible for considering and making
recommendations to the Board concerning the election and
re-election of Directors, having regard to their performance,
suitability, time commitment and ability to continue to
contribute to the Board. Following this year’s review, the
Committee has recommended to the Board that all serving
Directors be elected or re-elected at the AGM.
You can read more about the Board’s recommendation that
all Directors be elected or re-elected at the 2025 AGM on
page 164.
Diversity and inclusion
The group has made significant progress against its diversity
and inclusion (“D&I”) strategy, although the Committee
recognises the need for D&I to remain a priority. Diversity at
all levels of the organisation is critical to ensuring the group
is able to execute its longer-term strategy and continue to
meet and respond to stakeholder needs and expectations.
Diversity in the boardroom ensures that different
perspectives are considered and supports the challenge
needed to ensure effective decision-making.
During the year, the Committee undertook its annual review
of the Board Diversity Policy, which applies to both the
Board and its committees. The policy sets out specific
objectives with regard to diversity and inclusion in the
boardroom, the recruitment of new Directors and longer-term
targets, as well as corresponding governance responsibilities.
The Committee considered that the policy remains
appropriate and that no further updates were required at this
stage. The Board Diversity Policy is available at
www.closebrothers.com/
investor-relations/investor-information/corporate-governance.
The Committee also considered the group’s diversity in the
context of the Listing Rule requirements on diversity metrics
and reporting. At 31 July 2025, being the reference date for
the purposes of Listing Rule 6.6.6(9), which requires the
disclosure of certain diversity statistics, and as shown in the
tables below:
• the Board met its target of having at least 40% female
Directors;
• the Board met its target of having one Director from a
minority ethnic background; and
• with the appointment of Fiona McCarthy, Group Chief
Finance Officer, as an Executive Director post year end,
the Board now meets its target of having one of its most
senior roles occupied by a female Director.
In accordance with Listing Rule 6.6.6(9), the data for the
above disclosure is as disclosed by the relevant individuals
at 31 July 2025.
The Committee considers that the Board remains diverse,
with Directors from a range of backgrounds, but will seek to
take opportunities to further improve the diversity of the
Board, where this is consistent with the skills, experience
and expertise required at a particular point in time.
The following tables illustrate the gender and ethnic diversity
of the executive management population, which comprises
the Executive Committee pursuant to Listing Rule 6.6.6(10).
The Committee takes seriously its role in overseeing the
development of a diverse pipeline for senior management
positions and the link between diversity and inclusion and
delivery of the company’s purpose and strategic aims. To
that end, the Committee considered updates during the year
in relation to diversity and inclusion initiatives across the
group and oversaw the group’s refreshed three-year diversity
and inclusion strategy, focusing on attraction and retention
of diverse talent, enhancing the culture of the group, and
shaping the group’s inclusive brand and embedding
inclusion in all interactions with stakeholders.
Nomination and Governance Committee report continued
Close Brothers Group plc Annual Report 2025
136
Gender identity reporting
1
under LR6.6.6(10)
Number of
Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, SID
and Chairman)
Number in
executive
management
Percentage
of executive
management
Men
4 50% 3 8 73%
Women
4 50% – 3 27%
Not specified/prefer not to say
– – – – –
Ethnic background reporting
1
under LR6.6.6(10)
Number of
Board
members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, SID
and Chairman)
Number in
executive
management
Percentage
of executive
management
White British or other White (including minority-white groups)
7 88% 3 8 73%
Mixed/Multiple ethnic groups
– – – 1 9%
Asian/Asian British
1 12% – 2 18%
Black/African/Caribbean/Black British
– – – – –
Other ethnic group, including Arab
– – – – –
Not specified/prefer not to say
– – – – –
1. The numerical data detailing gender identity and ethnic background is as self-disclosed by the relevant individuals at 31 July 2025, being the chosen
reference date for the purposes of LR6.6.6(9) and LR6.6.6(10), and reflects the composition of the Board and executive management at that date.
Board diversity
n
Male 50%
n
Female 50%
Senior management
1
n
Male 66%
n
Female 34%
Workforce diversity
2
n
Male 55%
n
Female 45%
1. Comprises all members of the Executive Committee as shown on page 123, as well as their direct reports, excluding administrative support.
2. Comprises all employees of the group including senior management.
The Committee continues to monitor the approach to
diversity and inclusion across the group. Please see the
charts above for a breakdown of the group’s gender
diversity. More detail on the group’s approach to diversity
and inclusion can be found in the Sustainability Report on
pages 42 to 45.
Workforce engagement
The Committee keeps the Board’s workforce engagement
arrangements, which are described on page 133 as under
review. During the year, the Committee considered the
current workforce engagement arrangements in place and
considered that they remain effective and suited to the size
and structure of the group.
Environmental, social and governance matters
and sustainability
Throughout the year, the Committee received and
considered dedicated updates on ESG matters relevant to
the group.
Areas of focus this year included:
• consideration of how the group will meet its longer-term
goal of achieving net zero by 2050;
• oversight of the group’s sustainability strategy including
green lending growth aligned to existing businesses and
customers;
• reviewing the group’s sustainability credentials and climate
ranking and stakeholders’ perception of the group’s
climate strategy;
• consideration of the legislative and government-backed
climate changes following changes to the UK political
landscape; and
• receiving updates on the group’s charitable and
community involvement including colleague-led donations
and group-initiative donations to corporate charity
partners.
The Committee recognises and welcomes the continuing and
increasing focus on sustainability and the contribution that
the group makes to the wider community. To ensure that
ESG matters are considered holistically as part of Board
decision-making and strategy, responsibility for ESG will be
transferred in FY 2026 from the Committee to the Board.
Further information on the group’s approach to sustainability
can be found in the Sustainability Report on pages 27 to 48
of this Annual Report.
Committee effectiveness
An internally led evaluation of the effectiveness of the Board
and its committees was undertaken during the year in line
with the requirements of the UK Corporate Governance
Code, as described on page 131. The evaluation found that
the Committee continues to operate effectively.
The Committee considers that it has access to sufficient
resources to enable it to carry out its duties and it has
continued to perform effectively.
137
Strategic report Governance report Financial statements

Audit Committee report
Kari Hale
Chair of the Audit Committee
Dear shareholder
On behalf of the Board, I am pleased to present the report of
the Audit Committee for 2025, outlining how the Committee
discharged its responsibilities and met its objectives. I would
like to thank the Committee members for their contributions
and support throughout this challenging year in which the
profile and sensitivity of certain key issues has been
particularly high.
The Committee oversees and challenges the group’s
financial reporting and maintenance of an effective internal
control environment. This year the Committee has
considered a full schedule, and focus has remained on
challenging the key accounting judgements and estimates
set out on the following pages, assessing the integrity and
fair presentation of the group’s financial reporting and
reviewing the group’s internal controls.
The new UK Corporate Governance Code was a focus for
the Committee this year and there have been enhancements
made to international standards for internal audit which are
being reflected in the group’s internal procedures.
Looking ahead to 2026, we expect to receive an update on
the FCA’s review of historical motor finance commission
arrangements and the Committee will remain focused on the
implications of the outcomes of this review and the resultant
accounting and reporting impacts for the group.
Kari Hale
Chair of the Audit Committee
30 September 2025
Role of the Committee
To oversee and independently challenge
themanagement of financial reportingand
maintenance of an effective internal control
environment.
Membership
Kari Hale (Chair), Patricia Halliday, Tesula Mohindra
and Sally Williams.
Other regular attendees by invitation
Chairman of the Board, Executive Directors, Group
Chief Finance Officer, Group Head of Internal Audit,
Group Chief Risk Officer, Group Financial Controller,
Group Financial Planning and Analysis Director,
General Counsel and Company Secretary, Group
Head of Operational Risk and Compliance, external
auditor.
Meetings
• Number of scheduled meetings: Five
• For details of attendance, see page 128
2025 highlights
• Challenging key accounting judgements with focus
on expected credit loss provisions, impairment
assessments of goodwill, revenue recognition, and
the implications of the FCA's review of motor
finance commission arrangements and the
Supreme Court appeals.
• Reviewing the integrity of the group’s financial
reporting and considering key disclosure matters,
including the going concern and viability
statements at year end.
• Reviewing material corporate transactions from a
financial accounting and reporting perspective.
• Overseeing the development of enhancements to
the internal control framework to align with the new
UK Corporate Governance Code provisions.
How time was spent
n
Financial and regulatory reporting
19%
n
Business and accounting updates
36%
n
External audit
15%
n
Internal audit
25%
n
Other governance matters (including
administration)
5%
Interaction with other committees
The Audit Committee oversees, along with the Risk
Committee, the recommendations of the group’s
internal and external auditors and the effectiveness of
the group’s internal control and risk management
systems.
Close Brothers Group plc Annual Report 2025
138

Audit Committee report
Kari Hale
Chair of the Audit Committee
Dear shareholder
On behalf of the Board, I am pleased to present the report of
the Audit Committee for 2025, outlining how the Committee
discharged its responsibilities and met its objectives. I would
like to thank the Committee members for their contributions
and support throughout this challenging year in which the
profile and sensitivity of certain key issues has been
particularly high.
The Committee oversees and challenges the group’s
financial reporting and maintenance of an effective internal
control environment. This year the Committee has
considered a full schedule, and focus has remained on
challenging the key accounting judgements and estimates
set out on the following pages, assessing the integrity and
fair presentation of the group’s financial reporting and
reviewing the group’s internal controls.
The new UK Corporate Governance Code was a focus for
the Committee this year and there have been enhancements
made to international standards for internal audit which are
being reflected in the group’s internal procedures.
Looking ahead to 2026, we expect to receive an update on
the FCA’s review of historical motor finance commission
arrangements and the Committee will remain focused on the
implications of the outcomes of this review and the resultant
accounting and reporting impacts for the group.
Kari Hale
Chair of the Audit Committee
30 September 2025
Role of the Committee
To oversee and independently challenge
themanagement of financial reportingand
maintenance of an effective internal control
environment.
Membership
Kari Hale (Chair), Patricia Halliday, Tesula Mohindra
and Sally Williams.
Other regular attendees by invitation
Chairman of the Board, Executive Directors, Group
Chief Finance Officer, Group Head of Internal Audit,
Group Chief Risk Officer, Group Financial Controller,
Group Financial Planning and Analysis Director,
General Counsel and Company Secretary, Group
Head of Operational Risk and Compliance, external
auditor.
Meetings
• Number of scheduled meetings: Five
• For details of attendance, see page 128
2025 highlights
• Challenging key accounting judgements with focus
on expected credit loss provisions, impairment
assessments of goodwill, revenue recognition, and
the implications of the FCA's review of motor
finance commission arrangements and the
Supreme Court appeals.
• Reviewing the integrity of the group’s financial
reporting and considering key disclosure matters,
including the going concern and viability
statements at year end.
• Reviewing material corporate transactions from a
financial accounting and reporting perspective.
• Overseeing the development of enhancements to
the internal control framework to align with the new
UK Corporate Governance Code provisions.
How time was spent
n
Financial and regulatory reporting
19%
n
Business and accounting updates
36%
n
External audit
15%
n
Internal audit
25%
n
Other governance matters (including
administration)
5%
Interaction with other committees
The Audit Committee oversees, along with the Risk
Committee, the recommendations of the group’s
internal and external auditors and the effectiveness of
the group’s internal control and risk management
systems.
Close Brothers Group plc Annual Report 2025
138
Key responsibilities
The Committee’s key responsibilities, on behalf of the Board,
are to:
• monitor significant accounting judgements and estimates;
• monitor the integrity of financial reporting including
recommending to the Board whether it is fair, balanced
and understandable;
• oversee the effectiveness of the group’s internal controls;
• review the activities and effectiveness of the group internal
audit function;
• review the effectiveness and quality of the external audit
process and the independence of the external auditor;
• recommend the external auditor of the group and their
fees; and
• review the plan and findings of the audit with the external
auditor.
The Committee reports to the Board on how it discharges its
responsibilities and makes recommendations to the Board,
all of which have been accepted during the year.
Committee composition, operation
andeffectiveness
The Committee operates independently of management to
ensure the interests of shareholders are properly protected in
relation to financial reporting and internal controls.
All members of the Committee are independent Non-
executive Directors and continue to bring a diverse range of
experience in finance, risk, control and business, with
particular experience in the financial services sector. The
Board has confirmed that the members of the Committee
have the necessary expertise to provide effective challenge
to management; this includes the chair. The qualifications of
each of the members is outlined on pages 120 to 122. While
the Committee’s membership comprises the Non-executive
Directors noted on page 138, all Non-executive Directors
may attend meetings as agreed with the chair of the
Committee. The Chief Executive, Group Chief Finance
Officer, Group Head of Internal Audit, Group Chief Risk
Officer, Group Financial Controller, Group Financial Planning
and Analysis Director, Group Head of Operational Risk and
Compliance, General Counsel and Company Secretary, and
external auditor also attend meetings as appropriate. During
the course of the year, the Committee held separate
sessions with the internal and external audit teams, without
management present.
The Committee undertook an annual review of its
effectiveness, in line with the requirements of the UK
Corporate Governance Code, as described on page 130. The
review found that the Committee continues to operate
effectively and has executed its responsibilities in line with its
terms of reference. It is considered appropriately constituted
and has access to sufficient resources to enable it to carry
out its duties.
External audit
The Committee oversees the relationship with
PricewaterhouseCoopers LLP (“PwC”), its external auditor,
covering engagement terms, fees and independence. The
Committee and the external auditor have policies and
procedures designed to protect independence and
objectivity. PwC has been auditor to the group since August
2017, following the group’s last competitive tender during
the financial year ended 31 July 2017. Heather Varley has
been the group’s lead audit partner since March 2022 and
due to independence requirements, FY 2026 will represent
Heather’s last year as the group’s lead audit partner. Heather
attended all meetings of the Committee. Matters discussed
with PwC are set out in its report on pages 168 to 176.
The Financial Reporting Council (“FRC”) routinely monitors
the quality of the audit work of certain UK audit firms through
inspections of sample audits. During the year, the FRC
conducted an Audit Quality Review of the audit performed by
PwC of the group's 2024 financial statements. There were no
significant recommendations made by the FRC for further
improvement. One recommendation was made where further
clarity could have been provided and two areas of good
practice were highlighted. The findings of the review were
discussed with the lead audit partner and the Committee is
satisfied with the quality of the audit.
The Committee also reviewed PwC’s audit plan, including
the underlying methodology and PwC’s risk identification
processes. The Committee continues to hold private
sessions with the external auditor without the presence of
Executive Directors or management. These sessions
facilitate open discussions and provide a forum for PwC to
raise any concerns. In addition to this, the chair periodically
meets with the audit partner.
External auditor effectiveness and appointment
The Committee assesses the independence and objectivity,
qualifications and effectiveness of the external auditor on an
annual basis as well as making a recommendation on the
reappointment of the auditor to the Board. The evaluation
includes consideration of quality, independence and
objectivity, technical competence and auditor challenge.
The process was facilitated by a group-wide survey, a survey
of the PwC senior audit team and a review of audit and non-
audit fees. The feedback and scores from the review are
shared with the external auditor and an action plan is
developed to address remediation of any issues identified.
Overall, the Committee has concluded that PwC remains
independent, and it was satisfied with the auditor’s
performance and recommended to the Board a proposal for
reappointment at the AGM. Looking ahead, subject to
shareholder approval, PwC will undertake the audit of the
company and the group for the year ending 31 July 2026.
As FY 2026 will represent PwC's ninth year as external
auditor, in conformance with the required provisions and UK
Corporate Governance Code in respect of audit tendering
and rotation, the group has commenced planning for the
next tender, taking into account shareholder interests as well
as the FRC’s “Audit Committees and the External Audit:
Minimum Standard”.
139
Strategic report Governance report Financial statements

Financial reporting and critical accounting
judgements and estimates
The Committee spent considerable time reviewing the half-
year report and Annual Report. The Committee discussed
and challenged the key accounting judgements made by
management in preparing the financial statements. This
included consideration of the internal controls over financial
reporting and focus on revenue recognition in light of the
remediation of early settlements of loans in the Motor
Finance business. Particular focus was given to the
accounting and disclosure considerations with respect to the
businesses which have been classified as discontinued
operations in the year. Additionally, the Committee reviewed
and challenged the assessment performed against IAS 37
which determined that a provision should be recognised with
regard to motor finance commissions arrangements. The
Committee noted that there were no new material standards,
or amendments to standards, relevant to the group that
became effective for the reporting period. The key judgement
areas were largely unchanged from the prior year, reflecting
the group’s adherence to its business model and the
consistency of approach to financial reporting. The main
areas of focus are outlined below. Each of these matters
were discussed with the external auditor and, where
appropriate, have been addressed in the external auditor’s
report.
In June 2025, the FRC's Corporate Reporting Review
(“CRR”) team carried out an ordinary course review of the
Annual Report for the year ended 31July2024. As is its
custom and practice, the FRC’s review was based solely on
the Annual Report 2024 with no detailed knowledge of the
group or underlying transactions entered into. At the end of
its review, the FRC raised no questions or queries and
required no formal response. The FRC made a small number
of suggestions to enhance certain disclosures. We welcome
the FRC’s feedback, and these points have been considered
by the Committee and as part of the preparation of this
year’s Annual Report.
Summary of financial reporting and critical accounting judgements and estimates
Expected credit loss
(“ECL”) provision
31 July 2025: £249.7 million
31 July 2024: £445.8 million
The group’s ECL provision is
dependent on management’s
judgements and estimates.
The Committee monitors management’s judgements in relation to ECL, ensuring that the
group’s ECL models and related IFRS 9 judgements and disclosures are appropriate.
Regular IFRS 9 updates were provided to the Committee throughout the year. The
Committee challenged the level of provisions held by the group, and the judgements and
estimates used to calculate these provisions. Particular focus was given to:
• changes/updates to ECL models or methodology;
• the impact of the macroeconomic environment and the extent to which models are able
to capture these risks;
• the use of post-model adjustments (“PMAs”), including the retention or release of PMAs;
• whether coverage levels continue to reflect the economic risks for customers and the
credit risk in the loan book; and
• single name loss risks and appropriateness of specifically assessed provisions.
Credit risk and provision disclosures were discussed to ensure they give a balanced
articulation of the group’s credit risk profile, and key drivers of the ECL charge.
Conclusion: the Committee was satisfied that the impairment provision and the
disclosures provided in the financial statements are appropriate.
Goodwill
31 July 2025: £34.1 million
31 July 2024: £102.9 million
Goodwill is allocated to eight
(31 July 2024: nine) cash
generating units (“CGUs”), all
of which must be tested
annually for impairment. This
assessment is based on
management judgement.
The Committee was presented with goodwill impairment assessments at both the half year
and the year end. The Committee challenged the appropriateness of the assessment,
conclusions and resulting disclosures.
At the year end, Winterflood has been classified as held for sale under IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations given the agreed sale to Marex Group
plc. As a result, a partial goodwill impairment of £14.5 million has been recognised to
reduce the carrying value of Winterflood down to fair value, less costs to sell. In addition, as
disclosed in the half-year results, £2.1 million of goodwill was fully impaired in relation to
the group's operating lease assets rental businesses. Separately, there was heightened
focus on Motor Finance with the cash flows included in the impairment assessment based
on the Board's updated growth and cost strategy for the business, as summarised in the
“Our strategy” section of the Strategic Report.
Committee updates included comprehensive information on the impairment assessment
methodology, results and sensitivity analysis. The methodology and assumptions were
discussed and challenged, including the approach to cash flows which takes into account a
longer forecast period for certain CGUs, discount rate used, and calculation of carrying
values.
Conclusion: The Committee was satisfied that, aside from the Winterflood and
operating lease assets rental CGUs, there was no impairment and the disclosures
provided in the financial statements are appropriate.
Key issue
Committee review and conclusion
Audit Committee report continued
Close Brothers Group plc Annual Report 2025
140

Financial reporting and critical accounting
judgements and estimates
The Committee spent considerable time reviewing the half-
year report and Annual Report. The Committee discussed
and challenged the key accounting judgements made by
management in preparing the financial statements. This
included consideration of the internal controls over financial
reporting and focus on revenue recognition in light of the
remediation of early settlements of loans in the Motor
Finance business. Particular focus was given to the
accounting and disclosure considerations with respect to the
businesses which have been classified as discontinued
operations in the year. Additionally, the Committee reviewed
and challenged the assessment performed against IAS 37
which determined that a provision should be recognised with
regard to motor finance commissions arrangements. The
Committee noted that there were no new material standards,
or amendments to standards, relevant to the group that
became effective for the reporting period. The key judgement
areas were largely unchanged from the prior year, reflecting
the group’s adherence to its business model and the
consistency of approach to financial reporting. The main
areas of focus are outlined below. Each of these matters
were discussed with the external auditor and, where
appropriate, have been addressed in the external auditor’s
report.
In June 2025, the FRC's Corporate Reporting Review
(“CRR”) team carried out an ordinary course review of the
Annual Report for the year ended 31July2024. As is its
custom and practice, the FRC’s review was based solely on
the Annual Report 2024 with no detailed knowledge of the
group or underlying transactions entered into. At the end of
its review, the FRC raised no questions or queries and
required no formal response. The FRC made a small number
of suggestions to enhance certain disclosures. We welcome
the FRC’s feedback, and these points have been considered
by the Committee and as part of the preparation of this
year’s Annual Report.
Summary of financial reporting and critical accounting judgements and estimates
Expected credit loss
(“ECL”) provision
31 July 2025: £249.7 million
31 July 2024: £445.8 million
The group’s ECL provision is
dependent on management’s
judgements and estimates.
The Committee monitors management’s judgements in relation to ECL, ensuring that the
group’s ECL models and related IFRS 9 judgements and disclosures are appropriate.
Regular IFRS 9 updates were provided to the Committee throughout the year. The
Committee challenged the level of provisions held by the group, and the judgements and
estimates used to calculate these provisions. Particular focus was given to:
• changes/updates to ECL models or methodology;
• the impact of the macroeconomic environment and the extent to which models are able
to capture these risks;
• the use of post-model adjustments (“PMAs”), including the retention or release of PMAs;
• whether coverage levels continue to reflect the economic risks for customers and the
credit risk in the loan book; and
• single name loss risks and appropriateness of specifically assessed provisions.
Credit risk and provision disclosures were discussed to ensure they give a balanced
articulation of the group’s credit risk profile, and key drivers of the ECL charge.
Conclusion: the Committee was satisfied that the impairment provision and the
disclosures provided in the financial statements are appropriate.
Goodwill
31 July 2025: £34.1 million
31 July 2024: £102.9 million
Goodwill is allocated to eight
(31 July 2024: nine) cash
generating units (“CGUs”), all
of which must be tested
annually for impairment. This
assessment is based on
management judgement.
The Committee was presented with goodwill impairment assessments at both the half year
and the year end. The Committee challenged the appropriateness of the assessment,
conclusions and resulting disclosures.
At the year end, Winterflood has been classified as held for sale under IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations given the agreed sale to Marex Group
plc. As a result, a partial goodwill impairment of £14.5 million has been recognised to
reduce the carrying value of Winterflood down to fair value, less costs to sell. In addition, as
disclosed in the half-year results, £2.1 million of goodwill was fully impaired in relation to
the group's operating lease assets rental businesses. Separately, there was heightened
focus on Motor Finance with the cash flows included in the impairment assessment based
on the Board's updated growth and cost strategy for the business, as summarised in the
“Our strategy” section of the Strategic Report.
Committee updates included comprehensive information on the impairment assessment
methodology, results and sensitivity analysis. The methodology and assumptions were
discussed and challenged, including the approach to cash flows which takes into account a
longer forecast period for certain CGUs, discount rate used, and calculation of carrying
values.
Conclusion: The Committee was satisfied that, aside from the Winterflood and
operating lease assets rental CGUs, there was no impairment and the disclosures
provided in the financial statements are appropriate.
Key issue
Committee review and conclusion
Audit Committee report continued
Close Brothers Group plc Annual Report 2025
140
Revenue recognition
The group offers a range of
products and services for
which revenue is recognised
under IFRS 9, IFRS 15 and
IFRS 16. Appropriate
recognition is a key focus of
the Committee.
The Committee reviewed management’s approach to revenue recognition, highlighting the
key areas where judgement is required across interest, fee and commission income. The
Committee noted the materially consistent approach in comparison to prior years and the
detailed assessment that is performed by management and challenged by PwC.
The recognition of revenue in relation to early settlements has also been challenged in light
of the customer remediation programme for early settlements of loans in the Motor Finance
business, and the Committee is satisfied that it is materially appropriate in the current and
each of the previous financial years.
Conclusion: The Committee was satisfied that revenue recognition for each of the
group’s key businesses is appropriate.
Motor finance
commission
arrangements
During the 2024 and 2025
financial years, the
accounting judgements
surrounding the FCA’s review
of historical motor finance
commission arrangements
were identified as a critical
accounting judgement and
estimate.
The FCA’s review of historical motor finance commission arrangements is progressing and
the FCA will be consulting on a compensation scheme for customers later this year.
In 2024, it was concluded that this matter was a contingent liability under IAS 37
Provisions, Contingent Liabilities and Contingent Assets. At the half year, a further detailed
assessment against IAS 37 was performed, which determined that the criteria for a
provision had been met and a £165 million charge for the provision was recognised. During
the second half of the financial year, the provision on the balance sheet at 31 July 2025
reduced slightly to £163.9 million, reflecting some utilisation in relation to costs, partly
offset by a discount unwind for the time value of money.
Taking into account all available information, including the outcome of the appeal to the
Supreme Court with respect to the Hopcraft case, and the FCA's updates thereafter, the
provision on the balance sheet at 31 July 2025 has been reassessed and challenged by the
Committee, and remains unchanged at £163.9 million.
The range of risks has narrowed following the Supreme Court judgment and the underlying
components of the provision have been updated. Notwithstanding this, determining the
provision requires significant judgement and estimation; the critical accounting judgements
and key sources of estimation uncertainty in relation to this provision have been disclosed
in the financial statements with sensitivity provided where appropriate.
Conclusion: The Committee was satisfied with the judgement and estimation made
with regard to the provision and the disclosures provided in the financial statements
were concluded to be appropriate.
Corporate transactions
The group engaged in a
number of corporate
transactions during the year.
The accounting and reporting
impact of these transactions
has been another area of key
focus for the Committee.
The Committee reviewed management's accounting approach in relation to the sale of
Close Brothers Asset Management, Winterflood and Close Brewery Rentals Limited, and
the strategic exit of our Vehicle Hire business.
Judgement is required in some areas, including in determining whether the “held for sale”
and “discontinued operations” criteria under IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations have been met, and in the value in use impairment assessment for
the operating lease assets of the Vehicle Hire business. In addition, the Committee
reviewed the presentation of these transactions and the associated disclosures.
Conclusion: The Committee was satisfied with the judgements and disclosures made
in relation to the corporate transactions in the year.
Going concern and
Viability Statement
The Directors are required to
confirm whether they have a
reasonable expectation that
the company and the group
will be able to continue to
operate and meet their
liabilities as they fall due for a
specified period. The Viability
Statement must also disclose
the basis for the Directors’
conclusions and explain why
the period chosen is
appropriate.
The Committee assisted the Board in determining the appropriateness of adopting the
going concern basis of accounting and in performing the assessment of the viability of the
group.
The Committee reviewed and challenged papers which were in support of the going
concern basis and the longer-term viability of the group. The analysis took into account a
stressed going concern scenario. This scenario builds on the group's three-year strategic
plan, and overlays the impact of a hypothetical severe but plausible motor finance
commissions redress provision, subdued loan book growth and higher-than-expected
operational costs.
The Committee considered management's assessment that in all scenarios the group will
continue to operate with sufficient levels of capital during the assessed period, as well as
its sound funding and liquidity positions. In addition, the Committee reviewed the
disclosures, including the information provided on a severe but plausible scenario.
Conclusion: The Committee concluded that it remained appropriate to prepare the
accounts on a going concern basis, advised the Board that three years was a suitable
period of review for the Viability Statement, and recommended the Viability Statement
to the Board for approval, as set out on pages 114 to 115.
Key issue
Committee review and conclusion
141
Strategic report Governance report Financial statements

Fair, balanced and
understandable
Under the UK Corporate
Governance Code, the Board
is required to perform an
assessment of fair, balanced
and understandable
reporting.
On behalf of the Board, the Committee considered whether the draft Annual Report 2025,
when taken as a whole, is fair, balanced and understandable and provides the necessary
information for shareholders to assess the group’s position, performance, business model
and strategy.
The production of the Annual Report 2025 was managed by the Group Chief Finance
Officer, with overall governance and coordination provided by a cross-functional team led
by the Group Financial Controller. Ahead of presentation to the Committee, a robust review
process was conducted, and content was assessed to ensure disclosures, taken as a
whole, were accurate, balanced and verifiable.
During its appraisal of the Annual Report 2025, the Committee reviewed the group’s
performance in light of the principal and emerging risks, along with the uncertainties
surrounding the FCA’s review of motor finance commission arrangements and the
execution of the capital plan. Challenge was given regarding the use of adjusted measures,
areas of significant judgement and estimation uncertainty, and emerging issues.
The Committee discussed and challenged the balance and fairness of the overall report
with management. The views of the external auditor were considered, including any
feedback with regard to areas where disclosures could be enhanced.
Conclusion: The Committee was satisfied that the Annual Report 2025, taken as a
whole, is fair, balanced and understandable and recommended this assessment to
the Board.
Key issue
Committee review and conclusion
Financial reporting controls
Risk management and internal controls
The Board is required to make a statement in the Annual
Report 2025 relating to the effectiveness of risk management
systems and internal controls.
In considering the effectiveness of internal controls, the
Committee received and discussed reports from internal
audit and the external auditor. At each meeting the
Committee is presented with a report from the Group Head
of Internal Audit, and reviews major findings relating to
control weaknesses and management’s response. The
Committee challenged management where appropriate on
the timeframe for delivery of actions. In addition, metrics and
updates are provided to the Committee throughout the year
covering the group financial control framework.
The Committee has spent time considering enhancements to
internal controls over financial reporting, both in the context
of preparation for the new UK Corporate Governance Code
and in response to enhancements required in light of any
process issues identified.
In conjunction with the Risk Committee, we have satisfied
ourselves that the group’s internal financial control
framework is effective and adequately aligned with the
group’s risk profile. Whilst controls aim to manage risk,
ensure reporting integrity, and maintain regulatory
compliance, they cannot eliminate risk entirely.
Notwithstanding, through regular reviews of key controls for
design and operational effectiveness, we are also satisfied
that internal financial controls are appropriately designed and
effective in identifying risks faced by the group, with any
identified weakness addressed through management
oversight and action plans. Full details of the internal control
framework are given within the Risk Report on pages 68 to
73.
Revised UK Corporate Governance Code 2024
The Committee received updates through the course of the
year covering the group’s preparations for the revised UK
Corporate Governance Code 2024. The Code shall apply to
the financial year beginning 1 August 2025, with the
exception of Provision 29, which shall apply to the financial
year beginning 1 August 2026. Committee discussions
particularly focused on controls transformation requirements.
Group internal audit
The Committee continued to have oversight of group internal
audit through reports provided to the Committee and one-to-
one meetings with the Group Head of Internal Audit.
The Committee reviewed, challenged and approved the
internal audit plan and amendments made during the year
and monitored progress against delivery of the plan. It also
approved an updated internal audit charter, which sets out
the mandate, authority and roles and responsibilities of the
function.
The Committee received regular reports on internal audit
activities across the group, including thematic root cause
analysis, detailing areas identified during audits to support
strengthening of the group’s risk management and internal
control framework and management’s progress on
remediation of issues. The Committee challenged
management where appropriate on the timeframe for delivery
of actions and, on occasion, invited relevant members of
management to attend the Committee and provide progress
updates on the remediation of issues.
The annual internal audit assessment was reviewed by the
Committee, which found the governance and risk and control
framework of the group to be generally effective, with strong
Board oversight and challenge over strategy, culture,
operations and risk management.
Audit Committee report continued
Close Brothers Group plc Annual Report 2025
142

Fair, balanced and
understandable
Under the UK Corporate
Governance Code, the Board
is required to perform an
assessment of fair, balanced
and understandable
reporting.
On behalf of the Board, the Committee considered whether the draft Annual Report 2025,
when taken as a whole, is fair, balanced and understandable and provides the necessary
information for shareholders to assess the group’s position, performance, business model
and strategy.
The production of the Annual Report 2025 was managed by the Group Chief Finance
Officer, with overall governance and coordination provided by a cross-functional team led
by the Group Financial Controller. Ahead of presentation to the Committee, a robust review
process was conducted, and content was assessed to ensure disclosures, taken as a
whole, were accurate, balanced and verifiable.
During its appraisal of the Annual Report 2025, the Committee reviewed the group’s
performance in light of the principal and emerging risks, along with the uncertainties
surrounding the FCA’s review of motor finance commission arrangements and the
execution of the capital plan. Challenge was given regarding the use of adjusted measures,
areas of significant judgement and estimation uncertainty, and emerging issues.
The Committee discussed and challenged the balance and fairness of the overall report
with management. The views of the external auditor were considered, including any
feedback with regard to areas where disclosures could be enhanced.
Conclusion: The Committee was satisfied that the Annual Report 2025, taken as a
whole, is fair, balanced and understandable and recommended this assessment to
the Board.
Key issue
Committee review and conclusion
Financial reporting controls
Risk management and internal controls
The Board is required to make a statement in the Annual
Report 2025 relating to the effectiveness of risk management
systems and internal controls.
In considering the effectiveness of internal controls, the
Committee received and discussed reports from internal
audit and the external auditor. At each meeting the
Committee is presented with a report from the Group Head
of Internal Audit, and reviews major findings relating to
control weaknesses and management’s response. The
Committee challenged management where appropriate on
the timeframe for delivery of actions. In addition, metrics and
updates are provided to the Committee throughout the year
covering the group financial control framework.
The Committee has spent time considering enhancements to
internal controls over financial reporting, both in the context
of preparation for the new UK Corporate Governance Code
and in response to enhancements required in light of any
process issues identified.
In conjunction with the Risk Committee, we have satisfied
ourselves that the group’s internal financial control
framework is effective and adequately aligned with the
group’s risk profile. Whilst controls aim to manage risk,
ensure reporting integrity, and maintain regulatory
compliance, they cannot eliminate risk entirely.
Notwithstanding, through regular reviews of key controls for
design and operational effectiveness, we are also satisfied
that internal financial controls are appropriately designed and
effective in identifying risks faced by the group, with any
identified weakness addressed through management
oversight and action plans. Full details of the internal control
framework are given within the Risk Report on pages 68 to
73.
Revised UK Corporate Governance Code 2024
The Committee received updates through the course of the
year covering the group’s preparations for the revised UK
Corporate Governance Code 2024. The Code shall apply to
the financial year beginning 1 August 2025, with the
exception of Provision 29, which shall apply to the financial
year beginning 1 August 2026. Committee discussions
particularly focused on controls transformation requirements.
Group internal audit
The Committee continued to have oversight of group internal
audit through reports provided to the Committee and one-to-
one meetings with the Group Head of Internal Audit.
The Committee reviewed, challenged and approved the
internal audit plan and amendments made during the year
and monitored progress against delivery of the plan. It also
approved an updated internal audit charter, which sets out
the mandate, authority and roles and responsibilities of the
function.
The Committee received regular reports on internal audit
activities across the group, including thematic root cause
analysis, detailing areas identified during audits to support
strengthening of the group’s risk management and internal
control framework and management’s progress on
remediation of issues. The Committee challenged
management where appropriate on the timeframe for delivery
of actions and, on occasion, invited relevant members of
management to attend the Committee and provide progress
updates on the remediation of issues.
The annual internal audit assessment was reviewed by the
Committee, which found the governance and risk and control
framework of the group to be generally effective, with strong
Board oversight and challenge over strategy, culture,
operations and risk management.
Audit Committee report continued
Close Brothers Group plc Annual Report 2025
142
The Committee completed its annual review of the
effectiveness of the internal audit function and its level of
independence. This year an external quality assessment of
the function was undertaken to assess conformance with the
required standards, and benchmark internal audit against
market practice. The review concluded that the internal audit
function was found to be an established, highly regarded
function and that it generally conforms with the International
Professional Practices Framework, which includes the
Institute of Internal Auditors Global Internal Audit Standards
and Code of Ethics. “Generally conforms” is the highest
rating attainable and means the function is compliant with
the requirements of the Standards in all material aspects.
The assessment found that there was a good culture of
engagement between management and internal audit, and
that the function provides a professional audit service which
is independent and objective.
In addition to reviewing the internal audit function’s
effectiveness and independence, the Committee assessed
the level of internal audit resource and the appropriateness
of the skills and experience of the internal audit function to
fulfil its mandate. It concluded the function was adequately
resourced, experienced and skilled, with additional co-
sourced expertise engaged, where required, for specialist
skills.
Non-audit services
The Committee oversees the group’s policy on the provision
of non-audit services by the external auditor, which
incorporates the Financial Reporting Council’s Revised
Ethical Standard published in January 2024.
The group’s policy is that permission to engage the external
auditor will always be refused where there is an actual or
potential threat to independence. However, the Committee
will give permission where the service complies with the
group policy and where work is closely related to the audit, a
detailed understanding of the group is required and the
external auditor can provide a higher quality and/or better
value service. The group follows the mandatory regulatory
cap requirement of 70% which compares the annual value of
non-audit services to the average of three years’ audit fees.
The total audit fees for the financial year amounted to £6.1
million (2024: £5.0 million) while total non-audit fees
including those relating to services required by legislation
amounted to £0.9 million (2024: £1.4 million), representing
15% (2024: 28%) of the current year audit fee. This includes
non-audit services not required by legislation of £0.6 million
(2024: £0.7 million), 1% (2024: 14%) of the audit fee,
predominantly relating to the review of the group’s interim
financial statements and funding assurance work.
During the year, an additional audit fee of £0.8 million was
paid to the auditors in relation to scope changes in the prior
year's audit, which is not included above. If this additional
audit fee were to be included in the prior year comparatives,
the total audit fees for the prior year would amount to £5.8
million. Total prior year non-audit fees would represent 24%
of total audit fees and prior year non-audit fees relating to
services not required by legislation would represent 12% of
total audit fees.
The Committee was satisfied that these fees, individually and
in aggregate, were consistent with the non-audit services
policy and did not believe that they posed a threat to the
external auditor’s independence.
Statutory audit services order compliance
The company confirms compliance with the provisions of the
Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014
for the year to 31 July 2025.
143
Strategic report Governance report Financial statements

Risk Committee report
Patricia Halliday
Chair of the Risk Committee
Dear shareholder
I am pleased to present the report of the Risk Committee (the
“Committee”) for 2025, outlining the Committee’s key
responsibilities and principal areas of risk we have focused
on during the year. I would also like to thank the Committee
members for their contributions and commitment.
The past year has brought unique challenges for the group,
driven by the uncertainty relating to the FCA’s review of
historical motor finance commission arrangements, which
remained high on the Committee’s agenda, given the wide
range of potential outcomes of this review and the
associated outcome of the Supreme Court ruling.
In the context of the wide range of scenarios evaluated for
motor commissions potential redress and contingency
planning, close monitoring of the group's capital and liquidity
position continued, with steps taken to build and further
strengthen the group's capital and liquidity levels.
The Committee maintained a full agenda on principal risks,
with regular reviews of credit risk, and consideration of the
external environment, key risk indicators and the potential
impact on our customers. Operational risk and resilience
controls were important areas of focus, including updates on
transition plans as we exited/sold businesses, operational
impacts from potential outcomes in the Hopcraft case, and
changes to our processes and systems. Conduct risk and
Consumer Duty assessments also received attention,
including oversight of related improvement programmes.
The year ahead is likely to remain challenging as we receive
further clarity on the FCA's review of motor finance
commission arrangements. Furthermore, we expect a volatile
external economic environment and ongoing geopolitical
tensions to add to the complexity of the prevailing risk
environment. The steps taken to strengthen our financial
position help enable the group to face into these challenges.
Noting the further streamlining of the group, we will continue
monitoring programmes of work to simplify our processes
and systems to deliver enhanced control effectiveness.
Patricia Halliday
Chair of the Risk Committee
30 September 2025
Role of the Committee
To assist the Board in its oversight of risk and ensure
a supportive risk culture is fully embedded.
Membership
Patricia Halliday (Chair), Kari Hale, Tracey Graham,
Tesula Mohindra, Mark Pain and Sally Williams.
Other regular attendees by invitation
Chairman of the Board, Executive Directors, Group
Chief Finance Officer, Group Head of Internal Audit,
Group Chief Risk Officer, General Counsel and
Company Secretary, Group Head of Operational Risk
and Compliance, external auditor.
Meetings
• Number of scheduled meetings: Seven
• For details of attendance, see page 128
2025 highlights
• Ongoing oversight of the implication of the FCA’s
review of historical motor finance commission
arrangements, including plans to ensure
preparedness to quickly respond once further
clarity on the regulatory position is received.
• Delivery of actions to address findings in response
to the FCA’s market-wide review of Borrowers in
Financial Difficulty.
• Further strengthening the group’s operational
resilience, with enhancements made to continue to
embed resilience into our business-as-usual
operations.
• Oversight and monitoring of risks relating to the
disposal of Close Brothers Asset Management mid-
year and the risks associated with strategic
changes to the Premium Finance business.
• Oversight of the planning of the group’s migration
to cloud as part of a wider technological
transformation programme.
How time was spent
n
Principal risks and monitoring
24%
n
Business updates
25%
n
Policy and risk appetite
7%
n
Regulatory matters
38%
n
Other governance matters (including
administration)
6%
Interaction with other committees
The Risk Committee jointly oversees, along with the
Audit Committee, the recommendations of the
group’s internal and external auditors and the
effectiveness of the group’s internal control and risk
management systems. It also provides advice and
input to the Remuneration Committee on
remuneration policies and performance objectives.
Close Brothers Group plc Annual Report 2025
144

Risk Committee report
Patricia Halliday
Chair of the Risk Committee
Dear shareholder
I am pleased to present the report of the Risk Committee (the
“Committee”) for 2025, outlining the Committee’s key
responsibilities and principal areas of risk we have focused
on during the year. I would also like to thank the Committee
members for their contributions and commitment.
The past year has brought unique challenges for the group,
driven by the uncertainty relating to the FCA’s review of
historical motor finance commission arrangements, which
remained high on the Committee’s agenda, given the wide
range of potential outcomes of this review and the
associated outcome of the Supreme Court ruling.
In the context of the wide range of scenarios evaluated for
motor commissions potential redress and contingency
planning, close monitoring of the group's capital and liquidity
position continued, with steps taken to build and further
strengthen the group's capital and liquidity levels.
The Committee maintained a full agenda on principal risks,
with regular reviews of credit risk, and consideration of the
external environment, key risk indicators and the potential
impact on our customers. Operational risk and resilience
controls were important areas of focus, including updates on
transition plans as we exited/sold businesses, operational
impacts from potential outcomes in the Hopcraft case, and
changes to our processes and systems. Conduct risk and
Consumer Duty assessments also received attention,
including oversight of related improvement programmes.
The year ahead is likely to remain challenging as we receive
further clarity on the FCA's review of motor finance
commission arrangements. Furthermore, we expect a volatile
external economic environment and ongoing geopolitical
tensions to add to the complexity of the prevailing risk
environment. The steps taken to strengthen our financial
position help enable the group to face into these challenges.
Noting the further streamlining of the group, we will continue
monitoring programmes of work to simplify our processes
and systems to deliver enhanced control effectiveness.
Patricia Halliday
Chair of the Risk Committee
30 September 2025
Role of the Committee
To assist the Board in its oversight of risk and ensure
a supportive risk culture is fully embedded.
Membership
Patricia Halliday (Chair), Kari Hale, Tracey Graham,
Tesula Mohindra, Mark Pain and Sally Williams.
Other regular attendees by invitation
Chairman of the Board, Executive Directors, Group
Chief Finance Officer, Group Head of Internal Audit,
Group Chief Risk Officer, General Counsel and
Company Secretary, Group Head of Operational Risk
and Compliance, external auditor.
Meetings
• Number of scheduled meetings: Seven
• For details of attendance, see page 128
2025 highlights
• Ongoing oversight of the implication of the FCA’s
review of historical motor finance commission
arrangements, including plans to ensure
preparedness to quickly respond once further
clarity on the regulatory position is received.
• Delivery of actions to address findings in response
to the FCA’s market-wide review of Borrowers in
Financial Difficulty.
• Further strengthening the group’s operational
resilience, with enhancements made to continue to
embed resilience into our business-as-usual
operations.
• Oversight and monitoring of risks relating to the
disposal of Close Brothers Asset Management mid-
year and the risks associated with strategic
changes to the Premium Finance business.
• Oversight of the planning of the group’s migration
to cloud as part of a wider technological
transformation programme.
How time was spent
n
Principal risks and monitoring
24%
n
Business updates
25%
n
Policy and risk appetite
7%
n
Regulatory matters
38%
n
Other governance matters (including
administration)
6%
Interaction with other committees
The Risk Committee jointly oversees, along with the
Audit Committee, the recommendations of the
group’s internal and external auditors and the
effectiveness of the group’s internal control and risk
management systems. It also provides advice and
input to the Remuneration Committee on
remuneration policies and performance objectives.
Close Brothers Group plc Annual Report 2025
144
Key responsibilities
The Risk Committee’s principal roles and responsibilities are
to support the Board in its oversight of risk management
across the group. The identification, management and
mitigation of risk is fundamental to the success of the group.
The Risk Committee also plays an important role in setting
the tone and culture that promotes effective risk
management across the group. The Risk Committee’s key
responsibilities are to:
• oversee the maintenance and development of a supportive
culture and “tone from the top” in relation to the
management of risk;
• review and recommend to the Board for approval the
group’s risk appetite, which is the level of risk the group is
willing to take in pursuit of its strategic objectives;
• monitor the group’s risk profile against the prescribed
risk appetite;
• review the effectiveness of the risk management
framework in ensuring that key risks are identified and
appropriately managed;
• provide input from a risk perspective into the alignment of
remuneration with performance against risk appetite
(through the Remuneration Committee); and
• ensure a robust assessment of both the principal and
emerging risks facing the group over the course of the year
is undertaken, and review reports from the risk and
compliance functions on the effectiveness of the
processes that support the management and mitigation of
those risks.
Overview of main activities during the year
The Committee receives a report from the Chief Risk Officer
at each meeting to focus discussion on the key strategic
risks, principal and emerging risks. A clear forward-looking
agenda is in place and agendas are structured to facilitate
effective discussion and debate on key topics.
At each regular meeting, the Committee has:
• reviewed and assessed the group’s emerging and principal
risks;
• reviewed and discussed any material risk events;
• reviewed and monitored the group’s risk profile in respect
of performance against risk appetite, risk trends, consumer
outcomes, emerging risks and risk concentrations; and
• received updates in relation to compliance and regulatory
matters.
During the year, the Committee considered the wide range of
evolving risks facing the group. Areas of focus during the
year were closely aligned to the regulatory agenda and the
Committee maintained a balance between consideration of
strategic risks as well as oversight of key remediation
programmes and regulatory submissions. In addition to
ensuring that we keep aligned to the supervisory priorities of
our regulatory bodies, risk responses to singular regulatory
initiatives and any resulting actions feature accordingly. The
Committee oversaw the delivery of actions in response to the
FCA’s market-wide review of Borrowers in Financial
Difficulty, which assessed forbearance and related practices,
and has been materially completed, with embedding of
changes ongoing.
The Committee and the Board have continued to assess the
potential outcomes and impacts of the FCA’s review of
historical motor finance commission arrangements, and the
outcome of the appeal to the Supreme Court in relation to
the Hopcraft motor commissions case. Throughout this, we
have continued to engage proactively with our regulators and
time has been spent reviewing updates from management on
the capital planning scenarios and funding and liquidity
measures as we prepare for further clarity from the review
and associated outcomes. The Committee has maintained
close monitoring of the capital and liquidity position with
focus on our forecasting of capital and liquidity throughout
the period to ensure we are monitoring appropriately in line
with our established capital planning measures. Overall,
throughout the year we have continued to maintain robust
and healthy liquidity levels consistent with our conservative
approach to funding based on the principle of “borrow long,
lend short”. The Committee maintains regular oversight and
visibility of funding and liquidity risk.
Credit risk has remained a core topic during the year, with
the Committee receiving various deep dives as part of a
rolling programme of credit portfolio reviews. Oversight of
key lending portfolios including motor, property, premium,
energy, and invoice finance have been regular features on
the Risk Committee agenda this year. The Chief Risk Officer
also provides insights on the overall credit environment when
presenting their regular report. In the context of ongoing
macroeconomic uncertainty, overall, our loan book has
continued to display resilience, demonstrating the beneficial
impact of our prudent lending criteria, the predominantly
secured nature of lending and application of a consistent risk
appetite. Notwithstanding some signs of credit stress being
seen in pockets of our lending book due to the external
environment, our vigilance and early engagement approach
facilitates an ability to react as required.
Operational resilience has remained a key area of oversight,
and this year’s self-assessment demonstrated the good
progress made in embedding operational resilience within
our business-as-usual operations. Numerous enhancements
have been made across the group, with a focus on
increasing the resilience of our operations and services to
customers. These enhancements include the deployment of
new operational processes and technology services to
further mitigate risk to service continuity, and together with
associated documentation enhancements has built a greater
understanding of resilience across the organisation.
The Committee has also spent time this year considering
enhancements to our overall control environment in the
context of preparation for the new UK Corporate Governance
Code and in response to enhancements required in response
to both the FCA review into historical motor finance
commission arrangements together with any process issues
identified. These enhancements mark a positive build on our
existing control environment.
Similarly, cyber risk was a key feature on the Committee's
agenda as we continue our cyber security journey and
building on our cyber controls and capabilities. This included
monitoring progress towards an enhanced risk-based
approach to ensure we are appropriately positioned to
address the ever-changing nature of the threat environment
and the need to build appropriate security mechanisms to
mitigate against cyber attacks.
145
Strategic report Governance report Financial statements

Following approval of the first Consumer Duty self-
assessment in June 2024, the Committee was satisfied to
reconfirm approval for this financial year. The importance of
good consumer outcomes has remained a priority as the
Committee maintains oversight on the identification and
remediation of any issues that need to be addressed and
drive forward a culture of delivering good consumer
outcomes at every stage of the customer journey. This year
the Committee has been kept regularly updated on further
embedding of the Conduct Risk Framework and additional
enhancements made during the year. The Committee has
also received and reviewed regular monitoring reports of
consumer outcomes and reviewed and approved, on behalf
of the Board, management's annual report on consumer
outcomes and ongoing action improvement plans.
As the group has announced various strategic initiatives
during the year, the Committee has maintained oversight and
consideration of the risk profile attached to these. These
include the risks associated with divestment or similar
actions to ensure that the risk and business environments
remain within appetite. Similarly, priorities of our regulatory
bodies and their own strategic aims have featured heavily on
our own agenda.
As part of the group’s contingency planning activities, in
addition to our routine suite of regulatory stress-testing
activities, management participated in our crisis
management and disaster recovery exercises and other fire-
drill activities, which continue to demonstrate our resilience
and ability to respond in a crisis event.
Sustainability items retain prominent positions as areas of
focus. Climate risk and its impact on both us as a group, as
well as our borrowers, remains a priority area of focus and
this year, we have been pleased to see further embedding of
our risk management practices within our wider risk
frameworks. Combined with our culture dashboard and
monitoring of people risk, this helps us keep sustainability
considerations at the forefront of all we do whilst we support
our businesses in serving our customers. Additionally, the
linkage between culture, risk and compensation remains an
important one and the Risk Committee and the Chief Risk
Officer have provided input to the Remuneration Committee
again this year to seek to ensure that risk behaviours and the
management of operational risk incidents over the course of
the financial year are appropriately reflected in decisions
taken about performance and reward.
Looking ahead to 2026
It is anticipated that the regulatory agenda and current areas
of activity will continue to feature heavily on the Committee’s
agenda into 2026. We expect to receive an update on the
FCA’s review of historical motor finance commission
arrangements and the content and any associated
workstreams will form a focal point for the Risk Committee
and executive team more widely. As further clarity is received
on this, the Committee will play a key role in ensuring the
impacts are fully assessed and understood.
Our readiness for Basel 3.1 implementation continues and
will further mature throughout the next financial year and I
look forward to updates to the Committee on this in the
coming months ahead of the deferred regulatory deadline.
Our focus on Consumer Duty will continue and the
importance of good consumer outcomes will continue to be
prioritised as the legal and regulatory position around the
resolution of complaints relating to motor finance
commissions becomes clearer.
Progress and builds upon the operational resilience and
cyber maturity landscape will be monitored keenly by the
Committee. Ongoing cyber threats that continue to impact
global institutions indicate a wider adverse trend and
therefore continued focus into 2026 will remain critical.
In the context of expected ongoing uncertainty in the
macroeconomic environment, vigilance, monitoring and
controlled risk appetite will continue to be key as we move
forward. A strong forward-looking focus on emerging risks
and the outcome of the FCA’s review of historical motor
finance commission arrangements will be important.
Emerging risks and possible emergence periods are
monitored on an ongoing basis, with agreed mitigating
actions in place. This, along with our business-as-usual
horizon scanning activities, is designed to enable us to
anticipate risks and take appropriate management actions.
Central to our ability to do this is our established risk
measurement, monitoring and reporting framework. Our
focus on products and markets we know and understand
aligns with a consistent risk appetite against which we
measure ourselves.
As we look ahead to the next financial year the Committee
will continue to oversee the management and mitigation of
those risks most likely to pose harm to the group and
maintain focus on several key topics including regulatory
developments, macroeconomic uncertainty and the cyber
landscape.
Committee effectiveness
In accordance with the UK Corporate Governance Code, a
review of the effectiveness of the Board and its committees
was undertaken during the year, as described on pages 130
to 131. The results of the Committee effectiveness review
confirm that the Committee continues to operate effectively
and has executed its responsibilities in line with its terms of
reference. It is considered appropriately constituted and has
access to sufficient resources to enable it to carry out its
duties.
Risk Committee report continued
Close Brothers Group plc Annual Report 2025
146

Following approval of the first Consumer Duty self-
assessment in June 2024, the Committee was satisfied to
reconfirm approval for this financial year. The importance of
good consumer outcomes has remained a priority as the
Committee maintains oversight on the identification and
remediation of any issues that need to be addressed and
drive forward a culture of delivering good consumer
outcomes at every stage of the customer journey. This year
the Committee has been kept regularly updated on further
embedding of the Conduct Risk Framework and additional
enhancements made during the year. The Committee has
also received and reviewed regular monitoring reports of
consumer outcomes and reviewed and approved, on behalf
of the Board, management's annual report on consumer
outcomes and ongoing action improvement plans.
As the group has announced various strategic initiatives
during the year, the Committee has maintained oversight and
consideration of the risk profile attached to these. These
include the risks associated with divestment or similar
actions to ensure that the risk and business environments
remain within appetite. Similarly, priorities of our regulatory
bodies and their own strategic aims have featured heavily on
our own agenda.
As part of the group’s contingency planning activities, in
addition to our routine suite of regulatory stress-testing
activities, management participated in our crisis
management and disaster recovery exercises and other fire-
drill activities, which continue to demonstrate our resilience
and ability to respond in a crisis event.
Sustainability items retain prominent positions as areas of
focus. Climate risk and its impact on both us as a group, as
well as our borrowers, remains a priority area of focus and
this year, we have been pleased to see further embedding of
our risk management practices within our wider risk
frameworks. Combined with our culture dashboard and
monitoring of people risk, this helps us keep sustainability
considerations at the forefront of all we do whilst we support
our businesses in serving our customers. Additionally, the
linkage between culture, risk and compensation remains an
important one and the Risk Committee and the Chief Risk
Officer have provided input to the Remuneration Committee
again this year to seek to ensure that risk behaviours and the
management of operational risk incidents over the course of
the financial year are appropriately reflected in decisions
taken about performance and reward.
Looking ahead to 2026
It is anticipated that the regulatory agenda and current areas
of activity will continue to feature heavily on the Committee’s
agenda into 2026. We expect to receive an update on the
FCA’s review of historical motor finance commission
arrangements and the content and any associated
workstreams will form a focal point for the Risk Committee
and executive team more widely. As further clarity is received
on this, the Committee will play a key role in ensuring the
impacts are fully assessed and understood.
Our readiness for Basel 3.1 implementation continues and
will further mature throughout the next financial year and I
look forward to updates to the Committee on this in the
coming months ahead of the deferred regulatory deadline.
Our focus on Consumer Duty will continue and the
importance of good consumer outcomes will continue to be
prioritised as the legal and regulatory position around the
resolution of complaints relating to motor finance
commissions becomes clearer.
Progress and builds upon the operational resilience and
cyber maturity landscape will be monitored keenly by the
Committee. Ongoing cyber threats that continue to impact
global institutions indicate a wider adverse trend and
therefore continued focus into 2026 will remain critical.
In the context of expected ongoing uncertainty in the
macroeconomic environment, vigilance, monitoring and
controlled risk appetite will continue to be key as we move
forward. A strong forward-looking focus on emerging risks
and the outcome of the FCA’s review of historical motor
finance commission arrangements will be important.
Emerging risks and possible emergence periods are
monitored on an ongoing basis, with agreed mitigating
actions in place. This, along with our business-as-usual
horizon scanning activities, is designed to enable us to
anticipate risks and take appropriate management actions.
Central to our ability to do this is our established risk
measurement, monitoring and reporting framework. Our
focus on products and markets we know and understand
aligns with a consistent risk appetite against which we
measure ourselves.
As we look ahead to the next financial year the Committee
will continue to oversee the management and mitigation of
those risks most likely to pose harm to the group and
maintain focus on several key topics including regulatory
developments, macroeconomic uncertainty and the cyber
landscape.
Committee effectiveness
In accordance with the UK Corporate Governance Code, a
review of the effectiveness of the Board and its committees
was undertaken during the year, as described on pages 130
to 131. The results of the Committee effectiveness review
confirm that the Committee continues to operate effectively
and has executed its responsibilities in line with its terms of
reference. It is considered appropriately constituted and has
access to sufficient resources to enable it to carry out its
duties.
Risk Committee report continued
Close Brothers Group plc Annual Report 2025
146
Directors’ remuneration report
Tracey Graham
Chair of the Remuneration Committee
Dear shareholder
I am pleased to present the Directors’ Remuneration Report
for the 2025 financial year. I would like to thank my fellow
Remuneration Committee members for their support and
contribution to the work of the Committee during the year.
This report sets out the pay decisions that the Committee
has taken for the year, including how we implemented the
Remuneration Policy approved by shareholders at the 2024
AGM. It also provides an update on our approach to
remuneration for the 2026 financial year.
Last year, we implemented a Directors’ Remuneration Policy
that included flexibility to operate an interim restricted stock
incentive model, which replaced both the annual bonus and
the performance share award grant under the Long Term
Incentive Plan (“LTIP”) in 2025. We adopted this approach
given the difficulty of setting meaningful performance targets
in the context of the FCA’s review of historical motor finance
commission arrangements. We conducted extensive
shareholder consultation prior to adopting this pay model
and I was pleased by the level of support that we received at
the AGM, with a vote of 95% in favour. We also received a
vote of 98% in favour of our Directors' Remuneration Report.
I would like to thank all shareholders for their ongoing
support.
Whilst the outcome of the Supreme Court Appeal on
1 August 2025 has provided welcome clarity on important
legal and commercial principles, until the FCA has concluded
its consultation and confirmed the design and scope of any
redress scheme, there remains uncertainty as to the range of
outcomes and the financial impact to the group. The
Committee decided to continue operating our interim
restricted stock incentive model for the 2026 financial year.
This approach reflects the guidance included in last year’s
Annual Report that we might extend the operation of the
interim restricted stock model should these extraordinary
circumstances continue beyond the 2025 financial year.
Role of the Committee
To assist the Board in its oversight of the group’s
remuneration framework, remuneration of the Board
and senior executives, and key remuneration
decisions.
Membership
Tracey Graham (Chair), Mike Biggs, Mark Pain and
Patricia Halliday.
Other regular attendees by invitation
Chief Executive, Group Head of Human Resources,
Head of Reward and HR Operations.
Meetings
• Number of scheduled meetings: Four
• For details of attendance, see page 128
2025 highlights
• Consulted over 20 of our major shareholders on the
proposed extension of the restricted stock model.
• Conducted the 2025 annual compensation review
for Executive Directors and the wider workforce.
• Undertook regulatory matters including Material
Risk Takers framework, annual internal audit of
remuneration and group risk adjustment.
• Reviewed statutory and regulatory remuneration
disclosures including gender pay gap report.
How time was spent
n
Remuneration Policy and disclosure
5%
n
Risk and reward
68%
n
Annual remuneration disclosure
16%
n
Other governance matters (including
administration)
11%
Interaction with other committees
The Remuneration Committee works with the Audit
Committee and Risk Committee chairs on the design
and implementation of remuneration policies and the
determination of remuneration outcomes.
This report sets out our approach to remuneration for
the group’s Executive Directors and employees for
the 2025 financial year.
The Directors’ Remuneration Report is divided into
three sections:
• Annual Statement from the Remuneration
Committee Chair – pages 147 to 149
• Annual Report on Remuneration – pages 150 to
160
• Summary of Directors’ Remuneration Policy –
pages 161 to 163
147
Strategic report Governance report Financial statements

How the group performed during the 2025
financial year
Overall, we reported a statutory operating loss before tax of
£122.4 million (2024: statutory operating profit of £132.7
million), primarily driven by adjusting items in relation to
motor finance commissions, including a £165.0 million
provision and £18.7 million associated with complaints
handling and other operational and legal costs. We also
recognised a £33.0 million provision for the proactive
customer remediation programme in Motor Finance in
relation to early settlement of loans and an operating loss
before tax of £47.5 million for our rentals businesses,
including the £30.0 million write-down of assets in the
Vehicle Hire business.
While the performance partially reflects legacy issues that
the current management team are taking decisive steps to
address, the Board recognises that our returns have fallen
short of where they should be and welcome the Chief
Executive's focus on addressing these. On an adjusted
basis, excluding the impact from adjusting items, which do
not reflect the underlying performance of our business and
discontinued operations, the group's operating profit
decreased 14% to £144.3 million (2024: £167.6 million). We
have strengthened our capital position, delivered cost
actions resulting in annualised savings of around £25 million
since March 2024, and simplified the group through the sale
of CBAM, Winterflood and the Brewery Rentals business. We
achieved a CET capital ratio of 13.8%, significantly above
our applicable requirement of 9.7%. The sale of Winterflood
is expected to increase the group's CET1 capital ratio by
c.55 basis points over time.
As we have continued to navigate this period of
unprecedented uncertainty, the Committee has sought to
balance rewarding and retaining our people, including our
Executive Directors, in order to safeguard the future of our
franchise, with the experience of all our stakeholders. Further
details regarding the actions we have taken for the wider
workforce are set out on page 153.
Changes to the Board of Directors during
the2025 financial year
In January, the Board announced that following a period of
medical leave, Adrian Sainsbury would step down from his
position as Group Chief Executive and Executive Director of
the group with effect from 6 January 2025 to focus on his
health. He was replaced on a permanent basis by Mike
Morgan, who had performed the interim Chief Executive role
for which he received an acting up allowance of £136,823.
The departure details for Adrian are set out on page 158. He
was treated as a good leaver for the purposes of the
company’s incentive plans.
To recognise Mike’s appointment to the Chief Executive role,
the Committee determined that he would receive an annual
salary of £968,000 and a pension allowance at 10% of
annual salary, which is in line with the contribution levels for
all employees. He also receives a car allowance of £18,000.
Mike’s salary level was aligned with the salary received by
Adrian. The Committee also agreed to grant an additional
top-up restricted stock award, which took his total grant in
the 2025 financial year to £650,000. This is below the
£750,000 grant level for restricted stock that was proposed
for Adrian last year.
Executive Director remuneration outcomes for
the 2025 financial year
The interim restricted stock incentive model, introduced for
the 2025 financial year, replaced both the annual bonus and
the performance share award granted under the LTIP in
2025. Therefore, the Executive Directors were not eligible for
an annual bonus for 2025.
The 2022 LTIP was based on adjusted EPS growth (35%),
return on opening equity (“RoE”) (35%) and a scorecard of
risk management objectives (30%). The financial metrics
were not met, reflecting the impact of the legacy issues that
crystallised in the performance period. The risk management
objectives over the three years to 2025 were partially met.
This would have resulted in an LTIP vesting of 18.5% of the
maximum opportunity. However, in recognition of the
shareholder experience, the Committee has determined that
there should be nil vesting on the 2022-2025 LTIP. Further
details are set out on page 157.
Proposed implementation of the Policy for the
2026 financial year
Notwithstanding Mike’s performance in his first year as Chief
Executive, acknowledging the shareholder experience, the
Committee agreed that Mike will not receive a salary
increase for the 2026 financial year. His salary will therefore
remain at £968,000. This is in line with the approach being
taken for other members of the Executive Committee.
As outlined above, until the FCA has concluded its
consultation and confirmed the design and scope of any
redress scheme, there remains uncertainty as to the range of
outcomes and the financial impact to the group. As such,
setting robust and meaningful performance metrics for our
“ordinary course” annual bonus and performance-based
LTIP remains a challenge for the 2026 financial year. We are
therefore continuing with the grant of restricted stock to the
Chief Executive for the 2026 financial year. Our approach to
this award will be unchanged from the 2025 financial year:
• The restricted stock award will replace both the annual
bonus and performance share award under the LTIP in the
2026 financial year.
• The Committee determined that the award value for Mike
Morgan will be 75% of salary (£726,000). This is below the
maximum level of 80% of salary included within the Policy.
For reference, the “ordinary course” incentive opportunity
under the annual bonus and LTIP is 220% of salary.
• The award will be subject to performance underpins as
detailed on page 159.
• The restricted stock award would vest 100% after year
three, subject to assessment against the performance
underpins. The entire award would then be subject to a
two-year holding period.
• Clawback periods will continue to be seven years,
extendable to 10 years.
The Committee believes this approach will continue to
achieve the following objectives:
• retain and motivate Mike in his role as Chief Executive and
ensure he is focused on executing our strategy and
protecting our valuable franchise;
• incentivise and reward stewardship of the business during
this period of uncertainty;
• increase Mike’s equity stake in the business in the long-
term interests of all of our stakeholders.
Directors’ Remuneration Report continued
Close Brothers Group plc Annual Report 2025
148

How the group performed during the 2025
financial year
Overall, we reported a statutory operating loss before tax of
£122.4 million (2024: statutory operating profit of £132.7
million), primarily driven by adjusting items in relation to
motor finance commissions, including a £165.0 million
provision and £18.7 million associated with complaints
handling and other operational and legal costs. We also
recognised a £33.0 million provision for the proactive
customer remediation programme in Motor Finance in
relation to early settlement of loans and an operating loss
before tax of £47.5 million for our rentals businesses,
including the £30.0 million write-down of assets in the
Vehicle Hire business.
While the performance partially reflects legacy issues that
the current management team are taking decisive steps to
address, the Board recognises that our returns have fallen
short of where they should be and welcome the Chief
Executive's focus on addressing these. On an adjusted
basis, excluding the impact from adjusting items, which do
not reflect the underlying performance of our business and
discontinued operations, the group's operating profit
decreased 14% to £144.3 million (2024: £167.6 million). We
have strengthened our capital position, delivered cost
actions resulting in annualised savings of around £25 million
since March 2024, and simplified the group through the sale
of CBAM, Winterflood and the Brewery Rentals business. We
achieved a CET capital ratio of 13.8%, significantly above
our applicable requirement of 9.7%. The sale of Winterflood
is expected to increase the group's CET1 capital ratio by
c.55 basis points over time.
As we have continued to navigate this period of
unprecedented uncertainty, the Committee has sought to
balance rewarding and retaining our people, including our
Executive Directors, in order to safeguard the future of our
franchise, with the experience of all our stakeholders. Further
details regarding the actions we have taken for the wider
workforce are set out on page 153.
Changes to the Board of Directors during
the2025 financial year
In January, the Board announced that following a period of
medical leave, Adrian Sainsbury would step down from his
position as Group Chief Executive and Executive Director of
the group with effect from 6 January 2025 to focus on his
health. He was replaced on a permanent basis by Mike
Morgan, who had performed the interim Chief Executive role
for which he received an acting up allowance of £136,823.
The departure details for Adrian are set out on page 158. He
was treated as a good leaver for the purposes of the
company’s incentive plans.
To recognise Mike’s appointment to the Chief Executive role,
the Committee determined that he would receive an annual
salary of £968,000 and a pension allowance at 10% of
annual salary, which is in line with the contribution levels for
all employees. He also receives a car allowance of £18,000.
Mike’s salary level was aligned with the salary received by
Adrian. The Committee also agreed to grant an additional
top-up restricted stock award, which took his total grant in
the 2025 financial year to £650,000. This is below the
£750,000 grant level for restricted stock that was proposed
for Adrian last year.
Executive Director remuneration outcomes for
the 2025 financial year
The interim restricted stock incentive model, introduced for
the 2025 financial year, replaced both the annual bonus and
the performance share award granted under the LTIP in
2025. Therefore, the Executive Directors were not eligible for
an annual bonus for 2025.
The 2022 LTIP was based on adjusted EPS growth (35%),
return on opening equity (“RoE”) (35%) and a scorecard of
risk management objectives (30%). The financial metrics
were not met, reflecting the impact of the legacy issues that
crystallised in the performance period. The risk management
objectives over the three years to 2025 were partially met.
This would have resulted in an LTIP vesting of 18.5% of the
maximum opportunity. However, in recognition of the
shareholder experience, the Committee has determined that
there should be nil vesting on the 2022-2025 LTIP. Further
details are set out on page 157.
Proposed implementation of the Policy for the
2026 financial year
Notwithstanding Mike’s performance in his first year as Chief
Executive, acknowledging the shareholder experience, the
Committee agreed that Mike will not receive a salary
increase for the 2026 financial year. His salary will therefore
remain at £968,000. This is in line with the approach being
taken for other members of the Executive Committee.
As outlined above, until the FCA has concluded its
consultation and confirmed the design and scope of any
redress scheme, there remains uncertainty as to the range of
outcomes and the financial impact to the group. As such,
setting robust and meaningful performance metrics for our
“ordinary course” annual bonus and performance-based
LTIP remains a challenge for the 2026 financial year. We are
therefore continuing with the grant of restricted stock to the
Chief Executive for the 2026 financial year. Our approach to
this award will be unchanged from the 2025 financial year:
• The restricted stock award will replace both the annual
bonus and performance share award under the LTIP in the
2026 financial year.
• The Committee determined that the award value for Mike
Morgan will be 75% of salary (£726,000). This is below the
maximum level of 80% of salary included within the Policy.
For reference, the “ordinary course” incentive opportunity
under the annual bonus and LTIP is 220% of salary.
• The award will be subject to performance underpins as
detailed on page 159.
• The restricted stock award would vest 100% after year
three, subject to assessment against the performance
underpins. The entire award would then be subject to a
two-year holding period.
• Clawback periods will continue to be seven years,
extendable to 10 years.
The Committee believes this approach will continue to
achieve the following objectives:
• retain and motivate Mike in his role as Chief Executive and
ensure he is focused on executing our strategy and
protecting our valuable franchise;
• incentivise and reward stewardship of the business during
this period of uncertainty;
• increase Mike’s equity stake in the business in the long-
term interests of all of our stakeholders.
Directors’ Remuneration Report continued
Close Brothers Group plc Annual Report 2025
148
It remains the Committee’s intention that we will revert back
to operating the ordinary course annual bonus and LTIP for
the 2027 financial year.
We consulted on the proposed extension of the restricted
stock model for the 2026 financial year by sending a letter to
a number of our significant shareholders, covering c.80% of
the register. I was pleased that the feedback we received
supported the proposed approach.
Appointment of an Executive Director
In August, the Board confirmed the appointment of Fiona
McCarthy, Group Chief Finance Officer, as an Executive
Director. The Committee has developed a remuneration
package that recognises her significant capabilities and
experience, while reflecting the reduced complexity of the
group following the sale of CBAM and Winterflood.
The Committee determined that Fiona should receive a
salary level of £500,000, with a pension contribution of 10%
of salary, which is in line with the rate for the wider
workforce. She will also receive a restricted stock award of
62% of salary (£310,000) for the 2025 financial year, below
the maximum opportunity of 80%, with the award structured
in line with the award for Mike Morgan. The aggregate
package for Fiona is therefore set at a c.20% discount to the
intended package provided to Mike Morgan in his role as
Group Finance Director in 2025. The Committee may look to
progress Fiona’s package in future years, taking into account
company and personal performance over time.
Supporting the wider workforce
The Remuneration Committee’s aim is to always consider the
wider workforce, our shareholders and other stakeholders by
taking a fair, prudent and balanced approach to remuneration.
The Committee is particularly focused on ensuring that Close
Brothers supports its broader workforce and demonstrates
its ethos as a responsible business. We are committed to
paying all staff at or above the national living wage, which is
in excess of the national minimum wage.
While remaining focused on ensuring a balanced cost profile
across the group, the average salary increase for the wider
workforce for the 2026 financial year is 2.3%.
During this period of uncertainty, Close Brothers has been
mindful of the need to retain and motivate our talented
workforce to continue to protect the franchise, support our
customers and to operate the business within our risk
appetite. As such, the Committee decided to continue to
fund the bonus pool for wider colleagues, albeit at a lower
level than prior years. While the Committee recognises the
shareholder context, including the suspension of the
dividend, the Committee agreed that maintaining some level
of bonus is important for the sustainable retention of
colleagues.
Our commitment to closing the gender pay gap centres on
increasing female representation at all levels, supported by
targeted representation goals and development
programmes. This commitment extends to broader inclusion
initiatives to ensure fairness and equality for all. We actively
participate in various inclusion charters and partnerships,
leveraging external expertise to inform our strategies. Eight
executive-sponsored inclusion networks organise internal
events and initiatives to deliver on our broader inclusion
commitments. Executive pay is linked to inclusion objectives
via our “ordinary course” performance-based LTIP.
Employee feedback consistently reflects a positive
perception of our inclusive environment, with 91% of
colleagues in our 2025 opinion survey stating they feel
included, and we remain dedicated to fostering a workplace
where everyone feels valued and proud to work for us.
Looking ahead – key focus areas for the
Remuneration Committee for 2026
The Remuneration Committee intends to continue its
openness to dialogue with shareholders in the coming year,
recognising that pay remains a focus for our investors. We
will continue to consider the experiences of colleagues, our
shareholders and other stakeholders and to remunerate
executives fairly and appropriately. We remain committed to
a responsible approach to executive pay.
I hope that you will find this report on the Directors’
remuneration accessible and clear, and that you agree with
the decisions we have taken, which balance the interests of
all stakeholders. I look forward to receiving your support on
the Directors’ Remuneration Report at the forthcoming AGM.
Tracey Graham
Chair of the Remuneration Committee
30 September 2025
149
Strategic report Governance report Financial statements

Annual Report on Remuneration
Remuneration Committee
The Remuneration Committee’s main responsibilities are to:
• review and determine the total remuneration packages of Executive Directors and other senior executives, including group
Material Risk Takers and senior control function staff in consultation with the Chairman and Chief Executive and within the
terms of the agreed Policy;
• approve the design and targets of any performance-related pay schemes operated by the group;
• review the design of all-employee share incentive plans;
• ensure that contractual terms on termination and any payments made are fair to the individual and the group, that failure is
not rewarded and that a duty to mitigate risk is fully recognised;
• review any major changes in employee benefits structures throughout the group;
• ensure that the remuneration structures in the group are compliant with the rules and requirements of regulators, and all
relevant legislation;
• ensure that provisions regarding disclosure of remuneration are fulfilled; and
• seek advice from group control functions to ensure remuneration structures and annual bonuses are appropriately aligned to
the group’s risk appetite.
Remuneration Committee effectiveness
An external evaluation of the effectiveness of the Board and its committees was undertaken during the year in line with the
requirements of the UK Corporate Governance Code, as described on page 151. The evaluation found that the Remuneration
Committee continues to operate effectively.
The Remuneration Committee considers that it has access to sufficient resources to enable it to carry out its duties and it has
continued to perform effectively.
Membership activity in the 2025 financial year
There were seven meetings of the Remuneration Committee held during the year, which included three additional meetings
that took place in August 2024, October 2024 and January 2025. There is a standing calendar of items which is supplemented
by other significant issues that arise during the year. The key matters addressed during the year were as follows:
August
2024
September
2024
October
2024
Additional
January
2025
January
2025
April
2025
July
2025
Remuneration Policy and disclosures
Approve the annual remuneration governance model
•
Approve Total Reward Principles
•
Approve Remuneration Policy Statement for 2024
• •
Approve Directors’ Remuneration Report and the remuneration
section of the Pillar 3 disclosure for 2024
•
Review and approve of Directors’ Remuneration Policy for 2024
• •
Approve UK Gender Pay Gap submission
•
Approve revised clawback period
•
Risk and reward
Review and approve risk-adjustment process/outcomes
• • • • •
Approve Material Risk Takers for 2025
• • • •
Annual remuneration discussions
Approve approach to year-end compensation
•
Review group LTIP non-financial targets for 2025
•
Approve group LTIP financial and non-financial targets for 2025
•
Review and determine 2024 EDs’ annual bonus outcome
•
Approve medium and long-term awards
•
Approve 2021 group LTIP vesting
•
Review risk management objectives for 2022 group LTIP vesting
•
Approve year-end all-employee group-wide salary and bonus
analysis/proposals for 2024
•
Approve proposed 2024 compensation for Material Risk Takers
•
Review formulaic incentive schemes and approval of schemes for
2025
• •
Special business
Approve revised Omnibus Plan Rules
•
Approve interim CEO arrangements
• •
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
150

Annual Report on Remuneration
Remuneration Committee
The Remuneration Committee’s main responsibilities are to:
• review and determine the total remuneration packages of Executive Directors and other senior executives, including group
Material Risk Takers and senior control function staff in consultation with the Chairman and Chief Executive and within the
terms of the agreed Policy;
• approve the design and targets of any performance-related pay schemes operated by the group;
• review the design of all-employee share incentive plans;
• ensure that contractual terms on termination and any payments made are fair to the individual and the group, that failure is
not rewarded and that a duty to mitigate risk is fully recognised;
• review any major changes in employee benefits structures throughout the group;
• ensure that the remuneration structures in the group are compliant with the rules and requirements of regulators, and all
relevant legislation;
• ensure that provisions regarding disclosure of remuneration are fulfilled; and
• seek advice from group control functions to ensure remuneration structures and annual bonuses are appropriately aligned to
the group’s risk appetite.
Remuneration Committee effectiveness
An external evaluation of the effectiveness of the Board and its committees was undertaken during the year in line with the
requirements of the UK Corporate Governance Code, as described on page 151. The evaluation found that the Remuneration
Committee continues to operate effectively.
The Remuneration Committee considers that it has access to sufficient resources to enable it to carry out its duties and it has
continued to perform effectively.
Membership activity in the 2025 financial year
There were seven meetings of the Remuneration Committee held during the year, which included three additional meetings
that took place in August 2024, October 2024 and January 2025. There is a standing calendar of items which is supplemented
by other significant issues that arise during the year. The key matters addressed during the year were as follows:
August
2024
September
2024
October
2024
Additional
January
2025
January
2025
April
2025
July
2025
Remuneration Policy and disclosures
Approve the annual remuneration governance model
•
Approve Total Reward Principles
•
Approve Remuneration Policy Statement for 2024
• •
Approve Directors’ Remuneration Report and the remuneration
section of the Pillar 3 disclosure for 2024
•
Review and approve of Directors’ Remuneration Policy for 2024
• •
Approve UK Gender Pay Gap submission
•
Approve revised clawback period
•
Risk and reward
Review and approve risk-adjustment process/outcomes
• • • • •
Approve Material Risk Takers for 2025
• • • •
Annual remuneration discussions
Approve approach to year-end compensation
•
Review group LTIP non-financial targets for 2025
•
Approve group LTIP financial and non-financial targets for 2025
•
Review and determine 2024 EDs’ annual bonus outcome
•
Approve medium and long-term awards
•
Approve 2021 group LTIP vesting
•
Review risk management objectives for 2022 group LTIP vesting
•
Approve year-end all-employee group-wide salary and bonus
analysis/proposals for 2024
•
Approve proposed 2024 compensation for Material Risk Takers
•
Review formulaic incentive schemes and approval of schemes for
2025
• •
Special business
Approve revised Omnibus Plan Rules
•
Approve interim CEO arrangements
• •
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
150
UK Corporate Governance Code
We continue to be compliant with the executive pay provisions of the 2018 UK Corporate Governance Code. Our pay
arrangements are also consistent with the following principles set out in the Code:
Clarity
This Directors’ Remuneration Report provides open and transparent disclosure of our executive
remuneration arrangements for our internal and external stakeholders.
Predictability
Our incentive arrangements contain maximum opportunity levels with outcomes varying depending on
the level of performance achieved against specific measures. The charts on page 160 of the 2024
Annual Report provides estimates of the potential total reward opportunity for the executive directors
under the Policy.
Simplicity and
alignment to
culture
Under our ordinary course Policy, incentive arrangements for our executives are straightforward, with
individuals eligible for an annual bonus and, at more senior levels, a single performance-based long-
term incentive plan. As part of the new Policy, an interim pay model based on restricted stock may be
operated in lieu of an annual bonus and a grant of performance-based LTIP. Performance measures or
underpins used in these plans are designed to support delivery of the group’s key strategic priorities
and our commitment to adopt a responsible, sustainable business model, in line with our purpose and
values.
Proportionality
and risk
Our variable remuneration arrangements are designed to provide a fair and proportionate link between
group performance and reward. In particular, partial deferral of the annual bonus into shares, five-year
release periods for LTIP awards and stretching shareholding requirements that apply during and post-
employment provide a clear link to the ongoing performance of the group and therefore long-term
alignment with stakeholders. We are also satisfied that the variable pay structures do not encourage
inappropriate risk-taking. Notwithstanding this, the Remuneration Committee retains an overriding
discretion that allows it to adjust formulaic annual bonus and/or LTIP/restricted stock outcomes so as to
guard against disproportionate out-turns. Malus and clawback provisions also apply to both the annual
bonus and LTIP/restricted stock and can be triggered in circumstances outlined in the Policy.
Advice
During the year under review and up to the date of this report, the Remuneration Committee consulted and received input from
the Chairman of the Board, the Chief Executive, the Group Head of Human Resources, the Head of Reward and HR
Operations, the Group Chief Risk Officer and the Company Secretary. Where the Remuneration Committee seeks input from
employees, this never relates to their own remuneration.
The Remuneration Committee’s remuneration advisers are Deloitte LLP (a member of the Remuneration Consultants Group)
who were appointed by the Remuneration Committee following a competitive tendering process. During the year, separate
teams within Deloitte provided advice and support in a range of areas, including operations, corporate development and
regulatory compliance. The Remuneration Committee is satisfied that the provision of these other services does not affect the
objectivity and independence of the remuneration advice provided by Deloitte as the other services are unrelated to reward
matters. Total fees paid to Deloitte were £66,000 during the 2025 financial year, calculated on a time and material basis.
Slaughter and May provided legal advice on the company’s equity scheme rules and the fees paid were £43,500, calculated on
a time and material basis. The Remuneration Committee is satisfied with the independence of the advice.
Statement of voting on the Directors’ Remuneration Policy at the 2024 AGM
For Against
Number of
abstentions
Directors’ Remuneration Policy
94.9% 5.1% 85,931
Statement of voting on the Directors’ Remuneration Report at the 2024 AGM
For Against
Number of
abstentions
Directors’ Remuneration Report
97.7% 2.3% 663,159
151
Strategic report Governance report Financial statements

Implementation of the Policy in 2025
The single total figure of remuneration for Executive Directors for the years ended 31 July 2025 and 31 July 2024 is set out in
the tables below. (Audited
1
)
2025
Salary
£’000
Acting up
allowance
£’000
Benefits
£’000
Pension
£’000
Total fixed
remuneration
£’000
Annual
bonus
2
£’000
Performance
awards
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
Adrian Sainsbury
3
418 – 12 42 472 – – – 472
Mike Morgan
4
807 137 20 80 1,044 – – – 1,044
2024
Salary
£’000
Acting up
allowance
£’000
Benefits
£’000
Pension
£’000
Total fixed
remuneration
£’000
Annual
bonus
2
£’000
Performance
awards
5
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
Adrian Sainsbury
949 – 31 95 1,075 – 92 92 1,167
Mike Morgan
571 – 12 57 640 – 56 56 696
1. All disclosures in the Directors’ Remuneration Report are unaudited unless otherwise stated.
2. 60% of Executive Directors annual bonus is deferred into shares.
3. Adrian Sainsbury stepped down as Group Chief Executive and an Executive Director of the group on 6 January 2025; his remuneration including salary,
benefits, bonus and pension has been time pro-rated accordingly.
4. Mike Morgan received an annual acting up allowance of £423,500, that was time pro-rated whilst in the interim Chief Executive role for the period
10 September 2024 to 6 January 2025. Mike received an annual salary of £583,000 and £968,000 whilst in the roles of Group Finance Director and
Chief Executive respectively that were time pro-rated accordingly.
5. The figures for the performance awards for 2024 have been recalculated using the actual share price on the date of vesting for the LTIP of £3.818. The
three-month average to 31 July 2024 was used for the 2024 report given that the awards were vesting after publication of the report.
Link between reward and performance
During the 2025 financial year, the group’s performance has been impacted by a number of challenging but necessary actions.
These include a provision in respect of motor commissions, a proactive customer remediation programme and associated
provision related to historical deficiencies in certain operational processes linked to the early settlement of loans in Motor
Finance, and the write-down of assets in our Vehicle Hire business. The group has strengthened its capital position in response
to the motor commissions uncertainty, delivering cost actions resulting in annualised savings of around £25 million since
March 2024, and simplifying the group through the sale of CBAM, Winterflood and the Brewery Rentals business. In addition,
we have also decided to exit the group’s Vehicle Hire business. Performance in this business has been impacted by a
challenging market backdrop, particularly post-Covid, and we see limited opportunity to deliver enhanced returns.
We reported a statutory operating loss before tax of £122.4 million (2024: statutory operating profit of £132.7 million), primarily
driven by adjusting items amounting to £266.7 million. On an adjusted basis, excluding the impact from these adjusting items,
which do not reflect the underlying performance of our business and discontinued operations, the group’s operating profit
decreased 14% to £144.3 million (2024: £167.6 million). Partially this result reflects that our capital focus in the year meant we
did not proceed with business, even where it met our credit and pricing requirements.
In Banking, adjusted operating profit reduced to £198.3 million (2024: £212.9 million), as a 2% reduction in income and 1%
growth in costs were partly offset by lower impairment charges. The net interest margin remained strong at 7.2% (2024: 7.4%)
and credit performance remained resilient, with a bad debt ratio of 1.0% (2024: 1.0%), below the long-term average of 1.2%.
We maintained strong capital, funding and liquidity positions. The group’s CET1 capital ratio was 13.8% at 31 July 2025,
reflecting significant progress on our capital actions, and significantly above our applicable requirement of 9.7%. The recently
announced sale of Winterflood is expected to increase the group’s CET1 capital ratio by c.55 basis points over time.
In line with our stated approach, no dividend will be paid in respect of the 2025 financial year.
Applying the performance conditions would have resulted in the 2022 LTIP vesting at 18.5% of the maximum opportunity.
However, recognising that the group performance remains impacted by legacy issues, the Remuneration Committee,
determined that the award should not vest. As there was no annual bonus operated in 2025, there was no payout of any
variable remuneration in the year. The business will look to revert to operating its “ordinary course” annual bonus and
performance LTIP structure in due course.
Additional disclosures on the single total remuneration figure for Executive Directors table (Audited)
The per annum salaries paid during the year are as shown in the single total remuneration figure table above. When reviewing
salary levels, the Remuneration Committee takes into account the individual’s role and experience, pay for the broader
employee population, market and external factors, where applicable. For the 2025 financial year, the Remuneration Committee
applied 2% and 2.1% salary increases to the Chief Executive and the Finance Director, respectively. These base salary
increases are lower than the average salary increase approved for the wider employee population at 3.4%.
Adrian Sainsbury and Mike Morgan received an £18,000 allowance in lieu of a company car (time pro-rated for the period as
Chief Executive). Mike Morgan received an £136,823 acting up allowance whilst in the Interim Chief Executive role. They also
received private health cover. The discount to the share price on grant of SAYE options is included in the year of grant. In line
with disclosure requirements, taxable expenses are included.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
152
Salary
Benefits

Implementation of the Policy in 2025
The single total figure of remuneration for Executive Directors for the years ended 31 July 2025 and 31 July 2024 is set out in
the tables below. (Audited
1
)
2025
Salary
£’000
Acting up
allowance
£’000
Benefits
£’000
Pension
£’000
Total fixed
remuneration
£’000
Annual
bonus
2
£’000
Performance
awards
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
Adrian Sainsbury
3
418 – 12 42 472 – – – 472
Mike Morgan
4
807 137 20 80 1,044 – – – 1,044
2024
Salary
£’000
Acting up
allowance
£’000
Benefits
£’000
Pension
£’000
Total fixed
remuneration
£’000
Annual
bonus
2
£’000
Performance
awards
5
£’000
Total variable
remuneration
£’000
Total
remuneration
£’000
Adrian Sainsbury
949 – 31 95 1,075 – 92 92 1,167
Mike Morgan
571 – 12 57 640 – 56 56 696
1. All disclosures in the Directors’ Remuneration Report are unaudited unless otherwise stated.
2. 60% of Executive Directors annual bonus is deferred into shares.
3. Adrian Sainsbury stepped down as Group Chief Executive and an Executive Director of the group on 6 January 2025; his remuneration including salary,
benefits, bonus and pension has been time pro-rated accordingly.
4. Mike Morgan received an annual acting up allowance of £423,500, that was time pro-rated whilst in the interim Chief Executive role for the period
10 September 2024 to 6 January 2025. Mike received an annual salary of £583,000 and £968,000 whilst in the roles of Group Finance Director and
Chief Executive respectively that were time pro-rated accordingly.
5. The figures for the performance awards for 2024 have been recalculated using the actual share price on the date of vesting for the LTIP of £3.818. The
three-month average to 31 July 2024 was used for the 2024 report given that the awards were vesting after publication of the report.
Link between reward and performance
During the 2025 financial year, the group’s performance has been impacted by a number of challenging but necessary actions.
These include a provision in respect of motor commissions, a proactive customer remediation programme and associated
provision related to historical deficiencies in certain operational processes linked to the early settlement of loans in Motor
Finance, and the write-down of assets in our Vehicle Hire business. The group has strengthened its capital position in response
to the motor commissions uncertainty, delivering cost actions resulting in annualised savings of around £25 million since
March 2024, and simplifying the group through the sale of CBAM, Winterflood and the Brewery Rentals business. In addition,
we have also decided to exit the group’s Vehicle Hire business. Performance in this business has been impacted by a
challenging market backdrop, particularly post-Covid, and we see limited opportunity to deliver enhanced returns.
We reported a statutory operating loss before tax of £122.4 million (2024: statutory operating profit of £132.7 million), primarily
driven by adjusting items amounting to £266.7 million. On an adjusted basis, excluding the impact from these adjusting items,
which do not reflect the underlying performance of our business and discontinued operations, the group’s operating profit
decreased 14% to £144.3 million (2024: £167.6 million). Partially this result reflects that our capital focus in the year meant we
did not proceed with business, even where it met our credit and pricing requirements.
In Banking, adjusted operating profit reduced to £198.3 million (2024: £212.9 million), as a 2% reduction in income and 1%
growth in costs were partly offset by lower impairment charges. The net interest margin remained strong at 7.2% (2024: 7.4%)
and credit performance remained resilient, with a bad debt ratio of 1.0% (2024: 1.0%), below the long-term average of 1.2%.
We maintained strong capital, funding and liquidity positions. The group’s CET1 capital ratio was 13.8% at 31 July 2025,
reflecting significant progress on our capital actions, and significantly above our applicable requirement of 9.7%. The recently
announced sale of Winterflood is expected to increase the group’s CET1 capital ratio by c.55 basis points over time.
In line with our stated approach, no dividend will be paid in respect of the 2025 financial year.
Applying the performance conditions would have resulted in the 2022 LTIP vesting at 18.5% of the maximum opportunity.
However, recognising that the group performance remains impacted by legacy issues, the Remuneration Committee,
determined that the award should not vest. As there was no annual bonus operated in 2025, there was no payout of any
variable remuneration in the year. The business will look to revert to operating its “ordinary course” annual bonus and
performance LTIP structure in due course.
Additional disclosures on the single total remuneration figure for Executive Directors table (Audited)
The per annum salaries paid during the year are as shown in the single total remuneration figure table above. When reviewing
salary levels, the Remuneration Committee takes into account the individual’s role and experience, pay for the broader
employee population, market and external factors, where applicable. For the 2025 financial year, the Remuneration Committee
applied 2% and 2.1% salary increases to the Chief Executive and the Finance Director, respectively. These base salary
increases are lower than the average salary increase approved for the wider employee population at 3.4%.
Adrian Sainsbury and Mike Morgan received an £18,000 allowance in lieu of a company car (time pro-rated for the period as
Chief Executive). Mike Morgan received an £136,823 acting up allowance whilst in the Interim Chief Executive role. They also
received private health cover. The discount to the share price on grant of SAYE options is included in the year of grant. In line
with disclosure requirements, taxable expenses are included.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
152
Salary
Benefits
Adrian Sainsbury and Mike Morgan received a pension allowance equivalent to 10% of base salary, in line with the upper limit
contribution the general employee population can elect to receive.
The overall vesting of the 2022 LTIP grant is outlined in the table below.
Details of the overall vesting for the LTIP
Performance measure
Threshold target
1
Maximum target Actual achieved Overall vesting
Adjusted EPS growth
2
(35% weighting) 10% 30% (53.0)% 0.0%
RoE
3
(35% weighting) 10% 18% 6.0% 0.0%
Risk management objectives (“RMO”) (30% weighting)
n/a n/a 50.0% 18.5%
Overall vesting assessment
18.5%
Discretionary adjustment
(100)%
LTIP overall vesting outcome
0.0%
1. 25% of the awards vest for satisfying the threshold target.
2. Over three years.
3. Average over three-year performance period.
As explained in the Remuneration Committee Chair's letter, the financial metrics were not met and the risk management
objectives over the three years to 2025 were partially met. In recognition of the shareholder experience, the Remuneration
Committee determined that there should be nil vesting on the LTIP.
Details of the assessment of the risk management objectives for the LTIP
The Remuneration Committee considers it to be of critical importance that remuneration arrangements continue to incentivise
discipline in the management of the firm’s capital and balance sheet and in the delivery of the business model. The
Remuneration Committee undertakes a robust assessment of performance against the risk management objectives to ensure
that payments to Executive Directors are fair and appropriate with consideration for individual and corporate performance. In
doing so, the Remuneration Committee assesses performance against a number of key measures in making its determination.
Performance was assessed after each of the three years of the LTIP performance period, with each year’s review carrying a
weighting of one-third towards the overall vesting for the award, ensuring a fair assessment of progress over the three-year
period.
Year one and year two assessments were set out in the 2023 and 2024 Directors’ Remuneration Reports respectively. The year
three performance assessment is detailed below.
Year three performance assessment against risk management objectives
Objective
Measured through reference to
Progress
Objective
achieved?
Risk and operational resilience: 10% of 30% 50%
Consumer
Duty
• Continued annual achievement
of outcome reviews and
maintenance to long-term
goals.
• The Board supported annual assessment of outcomes,
informed by conduct monitoring and reporting.
On track
Corporate
governance
reforms
• Enhance the group’s internal
controls framework and make
material progress on alignment
with UK Corporate Governance
Code 2024 requirements.
• Work progressed well across multiple workstreams to
address Corporate Governance Code 2024
requirements.
• Company-wide investment in enhancing internal controls
documentation, testing and associated attestations on
track to enable relevant attestations.
On track
Cyber
security
• Achieve cyber security targets
for the group in line with rolling
target.
• Sustained the maturity and effectiveness of our cyber
security controls, with assessment confirming the
relevant scores remained in line with agreed targets.
• Conducted risk and threat-led prioritisation of further
investment areas to enable sustained capability.
On track
Operational
resilience
• Ensure full regulatory
compliance with operational
resilience requirements.
• Continue resilience testing and
ensure any new vulnerabilities
are addressed for FY 2026.
• Operational resilience self-assessment agreed in March
2025 in line with regulatory requirements.
• Previously identified vulnerabilities closed, in line with UK
regulatory requirements.
On track
153
Pension
Long-term performance awards
Strategic report Governance report Financial statements

ESG: 10% of 30% 25%
Sustainability
• Define and publish transition
pathways to meet our net zero
ambition.
• Demonstrate measured
emissions reductions progress
towards 2030 net zero
intermediate targets.
• Green initiatives to materially
contribute to growth.
• In our efforts to align our climate positioning more
closely with our business-led strategy of supporting our
customers in their sustainability journeys, we have
decided to:
– move away from intermediate emissions reduction
targets and instead, focus on providing support,
finance and expertise to help customers decarbonise in
ways that are practical and aligned to their own pathways.
• Growth in the energy and battery electric vehicles market
will be led by customer demand rather than by specific
group targets, ensuring our ambitions align closely with
our customers’ transition journeys.
On track
People
• Improve diversity through
meeting defined FY 2025
representation targets for
female senior managers and
managers from an ethnic
minority background:
– 36% female senior managers.
– 14% managers from an
ethnic minority background.
• 29% female senior managers at 31 July 2025.
•
10% managers from an ethnic minority background at 31
July 2025.
Behind
track
Financials: 10% of 30% 75%
Capital
• To maintain a strong and
prudent capital position, in line
with the group's medium-term
CET1 capital target range of
12% to 13%.
• In response to recent developments and motor finance
commissions uncertainties, we have strengthened our
capital position.
• The group's CET1 capital ratio was 13.8% at 31 July
2025 (31 July 2024: 12.8%), significantly above our
applicable requirement of 9.7%.
Ahead of
track
Dividend
• Maintain a progressive dividend
that is sustainable over the
medium term.
• Given the continued uncertainty regarding the outcome
of the FCA’s review of motor finance commission
arrangements and any potential financial impact, the
group decided not to pay a dividend on its ordinary
shares for the 2025 financial year.
Behind
track
Liquidity
• Maintain a prudent amount of
liquid assets over the period to
FY 2026.
• Maintain a prudent level of
headroom to LCR.
• Treasury assets increased 20% to £2.8 billion at 31 July
2025 (31 July 2024: £2.3 billion) and were predominantly
held on deposit with the Bank of England.
• We regularly assess and stress test the group’s liquidity
requirements and continue to exceed the LCR regulatory
requirements, with a 12-month average LCR to 31 July
2025 of 1,012% (31 July 2024: 1,034%).
Ahead of
track
Funding
• Maintain a prudent amount of
term funding.
• Maintain an appropriate net
stable funding ratio.
• We have maintained a prudent maturity profile, with
surplus tenor of allocated funding of three months at 31
July 2025.
• The four-quarter average NSFR to 31 July 2025 was
145.9% (31 July 2024: 134.4%).
On track
The table below summarises the Remuneration Committee’s assessment of performance against the risk management
objectives after each of the three years of the LTIP performance period.
Element
Year one
assessment
Year two
assessment
Year three
assessment
Overall
vesting
Capital and balance sheet management
95.0% 37.5% 75.0% 69.2%
Risk and operational resilience
75.0% 75.0% 50.0% 66.7%
ESG
1
n/a 37.5% 25.0% 31.3%
Overall vesting
2
85.0% 50.0% 50.0% 61.7%
1. The ESG element in year one was incorporated within the risk and operational resilience element, whilst in years two and three it was agreed ESG
would be a separate element.
2. The overall vesting percentage is calculated on the average of the overall vesting per element per year.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
154

ESG: 10% of 30% 25%
Sustainability
• Define and publish transition
pathways to meet our net zero
ambition.
• Demonstrate measured
emissions reductions progress
towards 2030 net zero
intermediate targets.
• Green initiatives to materially
contribute to growth.
• In our efforts to align our climate positioning more
closely with our business-led strategy of supporting our
customers in their sustainability journeys, we have
decided to:
– move away from intermediate emissions reduction
targets and instead, focus on providing support,
finance and expertise to help customers decarbonise in
ways that are practical and aligned to their own pathways.
• Growth in the energy and battery electric vehicles market
will be led by customer demand rather than by specific
group targets, ensuring our ambitions align closely with
our customers’ transition journeys.
On track
People
• Improve diversity through
meeting defined FY 2025
representation targets for
female senior managers and
managers from an ethnic
minority background:
– 36% female senior managers.
– 14% managers from an
ethnic minority background.
• 29% female senior managers at 31 July 2025.
• 10% managers from an ethnic minority background at 31
July 2025.
Behind
track
Financials: 10% of 30% 75%
Capital
• To maintain a strong and
prudent capital position, in line
with the group's medium-term
CET1 capital target range of
12% to 13%.
• In response to recent developments and motor finance
commissions uncertainties, we have strengthened our
capital position.
• The group's CET1 capital ratio was 13.8% at 31 July
2025 (31 July 2024: 12.8%), significantly above our
applicable requirement of 9.7%.
Ahead of
track
Dividend
• Maintain a progressive dividend
that is sustainable over the
medium term.
• Given the continued uncertainty regarding the outcome
of the FCA’s review of motor finance commission
arrangements and any potential financial impact, the
group decided not to pay a dividend on its ordinary
shares for the 2025 financial year.
Behind
track
Liquidity
• Maintain a prudent amount of
liquid assets over the period to
FY 2026.
• Maintain a prudent level of
headroom to LCR.
• Treasury assets increased 20% to £2.8 billion at 31 July
2025 (31 July 2024: £2.3 billion) and were predominantly
held on deposit with the Bank of England.
• We regularly assess and stress test the group’s liquidity
requirements and continue to exceed the LCR regulatory
requirements, with a 12-month average LCR to 31 July
2025 of 1,012% (31 July 2024: 1,034%).
Ahead of
track
Funding
• Maintain a prudent amount of
term funding.
• Maintain an appropriate net
stable funding ratio.
• We have maintained a prudent maturity profile, with
surplus tenor of allocated funding of three months at 31
July 2025.
• The four-quarter average NSFR to 31 July 2025 was
145.9% (31 July 2024: 134.4%).
On track
The table below summarises the Remuneration Committee’s assessment of performance against the risk management
objectives after each of the three years of the LTIP performance period.
Element
Year one
assessment
Year two
assessment
Year three
assessment
Overall
vesting
Capital and balance sheet management
95.0% 37.5% 75.0% 69.2%
Risk and operational resilience
75.0% 75.0% 50.0% 66.7%
ESG
1
n/a 37.5% 25.0% 31.3%
Overall vesting
2
85.0% 50.0% 50.0% 61.7%
1. The ESG element in year one was incorporated within the risk and operational resilience element, whilst in years two and three it was agreed ESG
would be a separate element.
2. The overall vesting percentage is calculated on the average of the overall vesting per element per year.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
154
Implementation of the Policy in 2026
Salary effective
from 1 August
2025 Increase
Chief Executive – Mike Morgan
£968,000 0.00
Group Chief Finance Officer – Fiona McCarthy
1
£500,000 —
1. Fiona McCarthy’s salary is effective from appointment date as an Executive Director, 29 August 2025.
Base salaries were determined with reference to the Executive Director’s role, increases for the broader population and
external factors. For the 2026 financial year, the Remuneration Committee has decided not to apply a salary increase to the
Chief Executive, in line with other members of the Executive Committee. The average salary increase approved for the wider
employee population was2.3%.
Mike Morgan’s allowance in lieu of pension and Fiona McCarthy’s employer pension contributions will be 10% of base salary,
in line with the upper limit contribution the general employee population can elect to receive. The Executive Directors will also
receive benefits in line with those outlined in the Remuneration Policy table on page 161. There will be no other increases to
allowances or benefits other than any potential increase in the cost of providing them.
2025 restricted stock award (for the 2026 to 2028 cycle)
The proposed 2025 restricted stock award due to be granted in October 2025 is shown in the table below.
Chief Executive
Mike Morgan
Group Chief
Finance Officer
Fiona McCarthy
2025 restricted stock award
£726,000
£310,000
2025 restricted stock award as a percentage of 2026 salary
75%
62%
As advised in the Remuneration Committee Chair’s letter, in lieu of the “ordinary course” annual bonus and performance share
LTIP, for 2025, a restricted stock award will be granted over shares with a value at grant of £726,000 for the Chief Executive
and £310,000 for the Group Chief Finance Officer. These are below the maximum opportunity of 80% of their base salary at
75% and 62% respectively. For reference, the combined “ordinary course” annual bonus and performance share LTIP
opportunity is 220% of salary.
The award will be subject to the following performance underpins:
• Individual: At least strong personal performance rating as rated by the Chairman of the Board in consultation with the Board;
• Financial: Company achieving a CET1 of at least 1% above regulatory requirement, calculated on a standardised basis;
• Non-financial: Satisfactory progress against strategic objectives designed to promote the long-term success of the business,
as judged by the Chairman of the Board in consultation with the Board; and
• Risk: No material regulatory censure relating to the Executive Director’s time in office.
Consistent with the current Policy and risk adjustment framework, the Remuneration Committee will continue to have
overriding discretion to adjust vesting outcomes where it considers this appropriate taking into account the wider stakeholder
experience. While the significant discount is intended to proactively address the risk of potential windfall gains, the
Remuneration Committee will nonetheless retain discretion on vesting outcomes in the event of a significant increase in our
share price to ensure the value delivered to the Executive Directors is appropriate in the context of the overall business
performance and the wider stakeholder experience.
The restricted stock awards will vest 100% after year three subject to assessment against the performance underpins. 100%
of the award will also be subject to a two-year holding period.
Clawback periods will continue to be seven years, extendable to 10 years.
Relative spend on pay
The following table shows the total remuneration paid compared to the total distributions to shareholders. No dividend will be
paid in 2025, and the decrease in remuneration paid to employees reflects the reduction in headcount and performance-driven
bonuses.
2025
£ million
2024
1
£ million
Percentage
change
Remuneration paid
238.4 246.9 (3.4)%
Distributions to shareholders
2
– - -
1. Comparative information restated following the classification of CBAM and Winterflood as discontinued operations.
2. For the 2024 and 2025 financial years, no dividend was paid.
155
Base salary
Strategic report Governance report Financial statements

Changes in remuneration of the Directors and all employees
The table below details how the remuneration for the Directors changed compared to employees of the parent company of the
group and the average group-wide employee population for each year between the 2020 and 2025 financialyears.
The year-on-year movement in fees and salary for the Directors, average group employee and average group-wide employee
reflects the annual review implemented in August 2024 and ad hoc salary changes throughout the financial year ended
31July2025. The 2025 average employee figures exclude CBAM.
The average salary increase for group employees reflects a small population and a number of promotions throughout the year.
Adrian Sainsbury's year-on-year salary and benefits decreases are due to him stepping down from his role in January 2025.
Mike Morgan's year-on-year salary and benefits increases relate to his change in role to Chief Executive in January 2025.
Kari Hale’s year-on-year fee increase relates to his change of responsibilities and being the Chair of the Audit Committee for
the full year during the 2025 financial year. Patricia Halliday's year-on-year fee increase relates to her being a member of the
Remuneration Committee effective from the start of the 2025 financial year.
The change to benefits relates to the cost of providing private medical cover and the inclusion of the discount of share price for
a SAYE option granted. Due to the attractive discounted share price, a larger number of employees elected to participate in the
2025 SAYE option scheme.
2025 2024 2023 2022 2021
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Average
group
employee
2
8.7% 20.8% (7.0)% 6.9% 10.7% 1.8% 7.0% 16.2% (11.7)% 5.8% 21.3% 29.5% 2.4% 6.6% 34.3%
Average
employee
3
4.3% 5.6% (13.3)% 3.8% 19.2% 7.9% 4.7% 4.7% (27.6)% 5.7% 5.7% (32.8)% 0.0% 0.0% 21.2%
Executive Directors
4
Adrian
Sainsbury
5,6
(55.9)% (57.4)% 0.0% 2.0% 2.9% 0.0% 0.0% 2.7% (100.0)% 95.7% 62.2% (51.1)% – – –
Mike
Morgan
7,8
41.2% 45.8% 0.0% 2.0% 7.9% 0.0% 0.0% (0.1)% (100.0)% 40.0% 30.8% (54.9)% 0.0% 20.2% 152%
Chairman and Non-executive Directors
9
Mike Biggs
0.0% – – 0.0% – – 0.0% – – 0.0% – – 0.0% – –
Sally
Williams
0.0% – – 2.4% – – 0.0% – – 3.8% – – 0.0% – –
Mark Pain
0.0% – – 1.7% – – 0.0% – – 27.5% – – – – –
Patricia
Halliday
10,11
6.3% – – 0.9% – – 23.9% – – – – – – – –
Tracey
Graham
10
0.0% – – 0.9% – – 23.9% – – – – – – – –
Tesula
Mohindra
0.0% – – 2.4% – – 0.0% – – – – – – – –
Kari Hale
12
7.5% – – 25.5% – – – – – – – – – – –
1. Non-executive Directors have received other benefits that relate to reimbursement for expenses incurred in the course of duties. Reimbursement of
these expenses does not provide an accurate comparison to benefits received by employees and they are therefore not included.
2. Changes for employees of the parent company excluding Executive Directors.
3. Changes for group-wide employees, as this is more representative of changes across the wider workforce, excluding Executive Directors.
4. Calculated using the data from the single figure table in the Annual Report on Remuneration including reimbursement for expenses incurred in the
course of duties.
5. Adrian Sainsbury was appointed Group Chief Executive in September 2020 and his 2021 figures are pro-rated based on part-year. Adrian’s 2022
salary and benefits increase is driven by the part-year in 2021 and the compensation mix adjustment awarded during the 2022 financial year.
6. Adrian Sainsbury stepped down as Group Chief Executive in January 2025 and his 2025 figures are pro-rated based on part-year.
7. Mike Morgan’s 2022 benefits increased 30.8%; this is driven by an increase in pension allowance based on the compensation mix adjustment
awarded during the 2022 financial year.
8. Mike Morgan’s salary and benefits for 2025 are apportioned based on his time as Finance Director and Chief Executive during the year.
9. Calculated using the fees from the single figure table for Non-executive Directors on page 163. Where non-executives have pro-rated fees, the prior
year has either been pro-rated up or down accordingly.
10. Patricia Halliday and Tracey Graham’s fees increased year-on-year between 2022 and 2023; this is driven by their appointment to the Chair of the Risk
Committee and the Chair of the Remuneration Committee respectively during the 2023 financial year.
11. Patricia Halliday’s fees increased year-on-year between 2024 and 2025; this is driven by her appointment as a member of the Remuneration
Committee on 1 August 2024.
12. Kari Hale’s fees have increased year-on-year between 2023 and 2024 and 2024 and 2025; this is driven by his appointment to the Chair of the Audit
Committee during the 2024 financial year.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
156

Changes in remuneration of the Directors and all employees
The table below details how the remuneration for the Directors changed compared to employees of the parent company of the
group and the average group-wide employee population for each year between the 2020 and 2025 financialyears.
The year-on-year movement in fees and salary for the Directors, average group employee and average group-wide employee
reflects the annual review implemented in August 2024 and ad hoc salary changes throughout the financial year ended
31July2025. The 2025 average employee figures exclude CBAM.
The average salary increase for group employees reflects a small population and a number of promotions throughout the year.
Adrian Sainsbury's year-on-year salary and benefits decreases are due to him stepping down from his role in January 2025.
Mike Morgan's year-on-year salary and benefits increases relate to his change in role to Chief Executive in January 2025.
Kari Hale’s year-on-year fee increase relates to his change of responsibilities and being the Chair of the Audit Committee for
the full year during the 2025 financial year. Patricia Halliday's year-on-year fee increase relates to her being a member of the
Remuneration Committee effective from the start of the 2025 financial year.
The change to benefits relates to the cost of providing private medical cover and the inclusion of the discount of share price for
a SAYE option granted. Due to the attractive discounted share price, a larger number of employees elected to participate in the
2025 SAYE option scheme.
2025 2024 2023 2022 2021
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Salary/
Fee Benefits
1
Bonus
Average
group
employee
2
8.7% 20.8% (7.0)% 6.9% 10.7% 1.8% 7.0% 16.2% (11.7)% 5.8% 21.3% 29.5% 2.4% 6.6% 34.3%
Average
employee
3
4.3% 5.6% (13.3)% 3.8% 19.2% 7.9% 4.7% 4.7% (27.6)% 5.7% 5.7% (32.8)% 0.0% 0.0% 21.2%
Executive Directors
4
Adrian
Sainsbury
5,6
(55.9)% (57.4)% 0.0% 2.0% 2.9% 0.0% 0.0% 2.7% (100.0)% 95.7% 62.2% (51.1)% – – –
Mike
Morgan
7,8
41.2% 45.8% 0.0% 2.0% 7.9% 0.0% 0.0% (0.1)% (100.0)% 40.0% 30.8% (54.9)% 0.0% 20.2% 152%
Chairman and Non-executive Directors
9
Mike Biggs
0.0% – – 0.0% – – 0.0% – – 0.0% – – 0.0% – –
Sally
Williams
0.0% – – 2.4% – – 0.0% – – 3.8% – – 0.0% – –
Mark Pain
0.0% – – 1.7% – – 0.0% – – 27.5% – – – – –
Patricia
Halliday
10,11
6.3% – – 0.9% – – 23.9% – – – – – – – –
Tracey
Graham
10
0.0% – – 0.9% – – 23.9% – – – – – – – –
Tesula
Mohindra
0.0% – – 2.4% – – 0.0% – – – – – – – –
Kari Hale
12
7.5% – – 25.5% – – – – – – – – – – –
1. Non-executive Directors have received other benefits that relate to reimbursement for expenses incurred in the course of duties. Reimbursement of
these expenses does not provide an accurate comparison to benefits received by employees and they are therefore not included.
2. Changes for employees of the parent company excluding Executive Directors.
3. Changes for group-wide employees, as this is more representative of changes across the wider workforce, excluding Executive Directors.
4. Calculated using the data from the single figure table in the Annual Report on Remuneration including reimbursement for expenses incurred in the
course of duties.
5. Adrian Sainsbury was appointed Group Chief Executive in September 2020 and his 2021 figures are pro-rated based on part-year. Adrian’s 2022
salary and benefits increase is driven by the part-year in 2021 and the compensation mix adjustment awarded during the 2022 financial year.
6. Adrian Sainsbury stepped down as Group Chief Executive in January 2025 and his 2025 figures are pro-rated based on part-year.
7. Mike Morgan’s 2022 benefits increased 30.8%; this is driven by an increase in pension allowance based on the compensation mix adjustment
awarded during the 2022 financial year.
8. Mike Morgan’s salary and benefits for 2025 are apportioned based on his time as Finance Director and Chief Executive during the year.
9. Calculated using the fees from the single figure table for Non-executive Directors on page 163. Where non-executives have pro-rated fees, the prior
year has either been pro-rated up or down accordingly.
10. Patricia Halliday and Tracey Graham’s fees increased year-on-year between 2022 and 2023; this is driven by their appointment to the Chair of the Risk
Committee and the Chair of the Remuneration Committee respectively during the 2023 financial year.
11. Patricia Halliday’s fees increased year-on-year between 2024 and 2025; this is driven by her appointment as a member of the Remuneration
Committee on 1 August 2024.
12. Kari Hale’s fees have increased year-on-year between 2023 and 2024 and 2024 and 2025; this is driven by his appointment to the Chair of the Audit
Committee during the 2024 financial year.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
156
Pay ratios
The table below compares the Chief Executive’s single total remuneration figure to the remuneration of the group’s UK
employees at 31 July, over the last six financial years. The Committee is satisfied that the median ratio is consistent with the
pay, reward and progression policies for our employee population.
The ratio for 2025 has marginally decreased since 2024; however, the median pay ratio has been similar over the last three
years. This year
’s reduction is largely as a result of no 2022 LTIP award vesting.
Year
Method
25th
percentile Median
75th
percentile
Lower quartile employee Median employee Upper quartile employee
Total
remuneration Salary
Total
remuneration Salary
Total
remuneration Salary
2025
A 27:1 17:1 11:1 £39,952 £33,635 £63,995 £57,096 £98,687 £80,836
2024
A 31:1 19:1 12:1 £38,440 £31,500 £61,270 £55,700 £96,856 £61,730
2023
A 29:1 18:1 11:1 £36,093 £30,000 £59,000 £50,000 £92,969 £72,600
2022
A 48:1 28:1 17:1 £33,571 £26,314 £56,952 £40,983 £93,459 £85,000
2021
A 79:1 37:1 29:1 £32,437 £28,820 £54,729 £38,500 £89,927 £70,000
2020
A 64:1 38:1 23:1 £32,194 £27,167 £54,245 £36,950 £90,029 £75,000
Our ratios have been calculated using the most robust methodology option “A” prescribed under the UK Companies
(Miscellaneous Reporting) Regulations 2018. Under this option, the ratios are calculated using the following:
• the full-time equivalent salaries and allowances for employees in the UK;
• pensions and benefits paid during the financial years;
• annual bonus awarded for the financial years;
• actual and projected gains realised from exercising awards from taxable employee share plans;
• sales incentives paid during the financial years; and
• projection of vested performance awards.
The Chief Executive’s total remuneration over the past 10 years
The chart below illustrates the Chief Executive’s single total remuneration figure over the past 10 years and compares it to the
total shareholder return of the company’s shares and the FTSE 250 over this period. Further detail on the single total
remuneration figure outcomes and how variable pay plans have paid out each year is shown in the table below.
Preben Prebensen Adrian Sainsbury Mike Morgan Close Brothers FTSE 250 Index
Value of £1000 invested
on 31 July 2015
Chief Executive's single
total remuneration figure (£'000)
Preben Prebensen Adrian Sainsbury
Mike
Morgan
2015 2016 2017 2018 2019 2020 2021¹ 2021² 2022³ 2023 2024 2025⁴ 2025⁵
Single figure of
total remuneration
(£’000)
£5,962 £3,995 £3,337 £2,541 £2,770 £2,043 £860 £1,720 £1,602 £1,053 £1,182 £472 £625
Annual bonus
against maximum
opportunity
98% 95% 91% 86% 82% 40% 78% 78% 47% 0% 0% 0% 0%
LTIP, SMP and
Matching Share
Award vesting
6
97% 68% 51% 19% 30% 42% 40% 40% 21% 0% 22% 0% 0%
1. Preben Prebensen’s remuneration for the 2021 financial year was time pro-rated to 21 September 2020, the day he stepped down as Chief Executive.
2. Adrian Sainsbury was appointed Chief Executive on 21 September 2020 and his remuneration included in the single figure for the 2021 financial year
was time pro-rated accordingly.
3. The 2019 LTIP award vested in the 2022 financial year at 20.6%; the assessed outcome before the 25% discretionary reduction was 27.5%.
4. Adrian Sainsbury’s remuneration for the 2025 financial year is time pro-rated to 6 January 2025, the day he stepped down as Chief Executive.
5. Mike Morgan was appointed Chief Executive on 7 January 2025 and his remuneration included in the single for the 2025 financial year is time pro-rated
accordingly.
6. SMP and Matching Share Awards were last granted in the 2016 financial year.
157
31 July
2015
31 July
2016
31 July
2017
31 July
2018
31 July
2019
31 July
2020
31 July
2021
31 July
2021
31 July
2022
31 July
2023
31 July
2024
31 July
2025
31 July
2025
300
200
100
0
6,000
3,000
2,000
1,000
0
5,000
4,000
Strategic report Governance report Financial statements

Scheme interests granted during the year (Audited)
The face value and key details of the share awards granted in the 2025 financial year are shown in the table below. These were
all delivered as nil cost options. The share price used to calculate the number of shares was £4.3184, the average of the
middle market quotations for the five business days from and including the date of the company’s preliminary results
announcement on 19 September 2024.
Name
Award type
1
Vesting period
Performance
conditions
Face value
2,3
£‘000
Percentage
vesting at
threshold
Number of
shares Vesting end date
Adrian Sainsbury
PSA
4,5
3 years Yes 27 N/A 6,203 26 September 2027
Mike Morgan
PSA
4,5
3 years Yes 650 N/A 150,518 26 September 2027
1. The awards are all delivered as nil cost options.
2. Adrian Sainsbury’s PSA was time pro-rated for the period actively working (1 August 2024 to 9 September 2024). The original face value of the award
and number of shares due to be granted were £750,000 and 173,675 respectively.
3. Mike Morgan was granted a PSA of £450,000 as Group Finance Director and an additional top-up PSA of £200,000 was granted when appointed Chief
Executive in January 2025.
4. Performance underpins are detailed in the 2024 Annual Report on page 171.
5. PSAs have an additional two-year holding period.
External appointments
No Executive Directors held external directorships during the financial year.
Payments to departing Directors and past Directors (Audited)
As per the section 430(2B) Companies Act 2006 Statement made on the company’s website, Adrian Sainsbury stepped down
as Group Chief Executive and Executive Director of the group on the 6 January 2025 and remained on medical leave, in
accordance with medical advice, until 9 April 2025. Immediately following this period, Adrian's 12-month notice period
commenced and Adrian was placed on gardening leave for the duration of his notice period, during which time he continues to
receive his basic salary, cash allowances and benefits. During the 2025 financial year, the value of his salary and cash
allowances was £614,975 and the value of his benefits was £2,238.
Under the rules of the Close Brothers Omnibus Share Incentive Plan, Adrian was treated as a good leaver in relation to his
unvested Deferral Annual Bonus awards, 2023 LTIP and 2024 PSA awards. The awards will vest on their original vesting
schedule, subject to time pro-ration and assessment of performance conditions or underpins where applicable. The awards
remain subject to malus and clawback.
Since stepping down, Adrian Sainsbury has called for his outstanding Deferred Annual Bonus Awards relating to 2021 and
2022 and his 2019 LTIP to cover tax liabilities. The total value of the awards on calling was £96,276 and the dividend paid was
£61,318. In line with our Remuneration Policy, Adrian will continue to build his shareholding and will be unable to sell shares
until he either has reached the minimum shareholding of 200% of base salary or after the two-year hold period following
stepping down as an Executive Director.
There were no other payments made to past Directors during the year other than vesting of outstanding share awards as
disclosed in previous remuneration reports.
Executive Directors’ shareholding and share interests (Audited)
The interests of the Directors in the ordinary shares of the group at 31 July 2025 are set out below:
Name
Shareholding
requirement
1
Number of
shares owned
outright
2
Outstanding options not subject
to performance conditions
3
Outstanding options subject to
performance conditions
4
2025 2025 2025 2024 2025 2024
Adrian Sainsbury
5
479,683 166,934 12,921 33,212 246,930 315,931
Mike Morgan
479,683 128,316 10,611 21,874 295,473 190,239
1. Based on the closing mid-market share price of 403.6p on 31 July 2025.
2. This includes shares owned outright by closely associated persons and SIP.
3. This includes DSA and SAYE options.
4. This includes PSA and LTIP awards.
5. Adrian Sainsbury's shareholding is as at 6 January 2025, the day he resigned as an Executive Director.
No Executive Director held shares that were vested but unexercised as at 31 July 2025. There were no changes in notifiable
interests between 1 August 2025 and 16 September 2025.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
158

Scheme interests granted during the year (Audited)
The face value and key details of the share awards granted in the 2025 financial year are shown in the table below. These were
all delivered as nil cost options. The share price used to calculate the number of shares was £4.3184, the average of the
middle market quotations for the five business days from and including the date of the company’s preliminary results
announcement on 19 September 2024.
Name
Award type
1
Vesting period
Performance
conditions
Face value
2,3
£‘000
Percentage
vesting at
threshold
Number of
shares Vesting end date
Adrian Sainsbury
PSA
4,5
3 years Yes 27 N/A 6,203 26 September 2027
Mike Morgan
PSA
4,5
3 years Yes 650 N/A 150,518 26 September 2027
1. The awards are all delivered as nil cost options.
2. Adrian Sainsbury’s PSA was time pro-rated for the period actively working (1 August 2024 to 9 September 2024). The original face value of the award
and number of shares due to be granted were £750,000 and 173,675 respectively.
3. Mike Morgan was granted a PSA of £450,000 as Group Finance Director and an additional top-up PSA of £200,000 was granted when appointed Chief
Executive in January 2025.
4. Performance underpins are detailed in the 2024 Annual Report on page 171.
5. PSAs have an additional two-year holding period.
External appointments
No Executive Directors held external directorships during the financial year.
Payments to departing Directors and past Directors (Audited)
As per the section 430(2B) Companies Act 2006 Statement made on the company’s website, Adrian Sainsbury stepped down
as Group Chief Executive and Executive Director of the group on the 6 January 2025 and remained on medical leave, in
accordance with medical advice, until 9 April 2025. Immediately following this period, Adrian's 12-month notice period
commenced and Adrian was placed on gardening leave for the duration of his notice period, during which time he continues to
receive his basic salary, cash allowances and benefits. During the 2025 financial year, the value of his salary and cash
allowances was £614,975 and the value of his benefits was £2,238.
Under the rules of the Close Brothers Omnibus Share Incentive Plan, Adrian was treated as a good leaver in relation to his
unvested Deferral Annual Bonus awards, 2023 LTIP and 2024 PSA awards. The awards will vest on their original vesting
schedule, subject to time pro-ration and assessment of performance conditions or underpins where applicable. The awards
remain subject to malus and clawback.
Since stepping down, Adrian Sainsbury has called for his outstanding Deferred Annual Bonus Awards relating to 2021 and
2022 and his 2019 LTIP to cover tax liabilities. The total value of the awards on calling was £96,276 and the dividend paid was
£61,318. In line with our Remuneration Policy, Adrian will continue to build his shareholding and will be unable to sell shares
until he either has reached the minimum shareholding of 200% of base salary or after the two-year hold period following
stepping down as an Executive Director.
There were no other payments made to past Directors during the year other than vesting of outstanding share awards as
disclosed in previous remuneration reports.
Executive Directors’ shareholding and share interests (Audited)
The interests of the Directors in the ordinary shares of the group at 31 July 2025 are set out below:
Name
Shareholding
requirement
1
Number of
shares owned
outright
2
Outstanding options not subject
to performance conditions
3
Outstanding options subject to
performance conditions
4
2025 2025 2025 2024 2025 2024
Adrian Sainsbury
5
479,683 166,934 12,921 33,212 246,930 315,931
Mike Morgan
479,683 128,316 10,611 21,874 295,473 190,239
1. Based on the closing mid-market share price of 403.6p on 31 July 2025.
2. This includes shares owned outright by closely associated persons and SIP.
3. This includes DSA and SAYE options.
4. This includes PSA and LTIP awards.
5. Adrian Sainsbury's shareholding is as at 6 January 2025, the day he resigned as an Executive Director.
No Executive Director held shares that were vested but unexercised as at 31 July 2025. There were no changes in notifiable
interests between 1 August 2025 and 16 September 2025.
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
158
Executive Directors’ shareholding (Audited)
The chart below compares the current Executive Director shareholding versus shareholding policy, as a percentage of salary.
At the end of the 2021 financial year, Mike Morgan exceeded the minimum requirement under the Directors’ Remuneration
Policy. Following the implementation of the compensation mix adjustments in response to CRD V in the 2022 financial year and
being promoted to Chief Executive in January 2025, Mike is building up his shareholding over a reasonable time frame to meet
the revised minimum requirement. Mike hasn't sold shares since taking office, except to cover tax liabilities, and has no ability
to do so, until the threshold is met.
Mike Morgan
Policy
Actual
Details of Executive Directors’ share exercises during the year (Audited)
Name
Award type
Held at
1 August
2024 Called
1
Lapsed
Market price on
award
p
Market price on
calling
p
Total value
on calling
1
£
Dividends paid
on vested
shares
£
Mike Morgan
2021 DSA
7,128 7,128 – 1,545.8 241 17,178 12,510
2022 DSA
5,379 5,379 – 923.1 241 12,963 5,998
2019 LTIP
10,569 10,569 – 1,366.4 241 25,471 29,329
1. These are the actual number of shares and values realised on calling. Any variances in totals are due to rounding.
Notes to the details of Executive Directors’ share exercises during the year
The Deferred Share Award (“DSA”) is a mandatory deferral of a portion of the annual bonus.
The DSA and LTIP give Executive Directors the right to call for shares in the company from the employee benefit trust or
Treasury Shares, at nil cost, together with a cash amount representing accrued notional dividends thereon. They may be called
for at any time up to 12 months from the date of vesting. The DSA and LTIP awards may be forfeited in certain circumstances if
the Executive Director leaves employment before the vesting date. The value of the awards is charged to the group’s income
statement in the year to which the award relates for the DSA and spread over the vesting period for the LTIP award.
Details of Executive Directors’ option exercises during the year (Audited)
No Executive Director exercised options during the 2025 financial year.
Single total figure of remuneration for Non-executive Directors (Audited)
Name
2025 2024
Basic
fee
1
£’000
Committee
chair
£’000
Committee
member
£’000
Senior
Independent
Director
£’000
Benefits
2
£’000
Total
£’000
Basic
fee
1
£’000
Committee
chair
£’000
Committee
member
£’000
Senior
Independent
Director
£’000
Benefits
2
£’000
Total
£’000
Mike Biggs
300 – – – 21 321 300 – – – 30 330
Sally Williams
71 – 14 – 2 87 71 – 14 – – 85
Mark Pain
71 – 14 34 1 120 71 – 14 34 1 120
Tesula Mohindra
71 – 14 – 1 86 71 – 14 – 1 86
Patricia Halliday
3
71 34 14 – 1 120 71 34 7 – – 112
Tracey Graham
71 34 7 – 1 113 71 34 7 – 1 113
Kari Hale
4
71 34 7 – 3 115 71 24 9 – 1 105
1. Non-executive Director fees were last increased with effect from 1 August 2021.
2. Benefits include travel-related expenses in respect of attendance at Board meetings which are taxable. Amounts disclosed have been grossed up using
the appropriate tax rate as the company pays the Non-executive Directors’ tax.
3. Patricia Halliday was appointed a member of the Remuneration Committee on 1 August 2024.
4. Kari Hale was appointed Chair of the Audit Committee on 16 November 2023.
159
200%
54%
Strategic report Governance report Financial statements

Notes to the single total figure of remuneration for Non-executive Directors
The fees payable to Non-executive Directors for the 2025 and 2026 financial years are as follows:
Role
2026 2025
Chairman
1
£300,000 £300,000
Non-executive Director
£71,000 £71,000
Supplements
Senior Independent Director
£34,000 £34,000
Chair of Audit Committee
£34,000 £34,000
Chair of Remuneration Committee
£34,000 £34,000
Chair of Risk Committee
£34,000 £34,000
Committee membership
2
£7,000 £7,000
1. The Chairman receives no other fees for chairmanship or membership of Board committees.
2. No fees are payable to the Chairman, or for membership, of the Nomination and Governance Committee.
Non-executive Directors’ share interests (Audited)
The interests of the Non-executive Directors in the ordinary shares of the company are set out below:
Name
Shares held
beneficially at
31 July 2025
Shares held
beneficially at
31 July 2024
Mike Biggs
15,000 6,500
Sally Williams
5,910 1,062
Mark Pain
4,000 4,000
Tesula Mohindra
500 500
Patricia Halliday
500 500
Tracey Graham
1,000 1,000
Kari Hale
— –
There were no changes in notifiable interests between 1 August 2025 and 16 September 2025.
This report was approved by the Board of Directors on 30 September 2025 and signed on its behalf by:
Tracey Graham
Chair of the Remuneration Committee
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
160

Notes to the single total figure of remuneration for Non-executive Directors
The fees payable to Non-executive Directors for the 2025 and 2026 financial years are as follows:
Role
2026 2025
Chairman
1
£300,000 £300,000
Non-executive Director
£71,000 £71,000
Supplements
Senior Independent Director
£34,000 £34,000
Chair of Audit Committee
£34,000 £34,000
Chair of Remuneration Committee
£34,000 £34,000
Chair of Risk Committee
£34,000 £34,000
Committee membership
2
£7,000 £7,000
1. The Chairman receives no other fees for chairmanship or membership of Board committees.
2. No fees are payable to the Chairman, or for membership, of the Nomination and Governance Committee.
Non-executive Directors’ share interests (Audited)
The interests of the Non-executive Directors in the ordinary shares of the company are set out below:
Name
Shares held
beneficially at
31 July 2025
Shares held
beneficially at
31 July 2024
Mike Biggs
15,000 6,500
Sally Williams
5,910 1,062
Mark Pain
4,000 4,000
Tesula Mohindra
500 500
Patricia Halliday
500 500
Tracey Graham
1,000 1,000
Kari Hale
— –
There were no changes in notifiable interests between 1 August 2025 and 16 September 2025.
This report was approved by the Board of Directors on 30 September 2025 and signed on its behalf by:
Tracey Graham
Chair of the Remuneration Committee
Directors’ Remuneration Report continued | Annual Report on Remuneration
Close Brothers Group plc Annual Report 2025
160
Directors’ Remuneration Policy
The Directors’ Remuneration Policy was approved by shareholders at the 2024 AGM on 21 November 2024. It is intended that
the policy will apply for three years up to the 2027 AGM, unless amendments are required, in which case further shareholder
approval will be sought.
The Remuneration Policy included the ability to make awards of Restricted Shares, reflecting the difficulty the business had in
setting targets. The intention is that the business will revert to the “ordinary course” award of Performance Shares and Annual
Bonus for the 2027 financial year.
In developing the Policy, input was sought from the management team, while ensuring that conflicts of interest were suitably
mitigated. An external perspective was provided by our major shareholders and independent advisers.
The policy can be read in full on pages 154 to 164 of the 2024 Annual Report, which is available at www.closebrothers.com/
investor-relations/investor-information/results-reports-and-presentations. A summary of the main elements of the
Remuneration Policy is set out in the table below.
Information on how the Remuneration Policy was applied in 2025 is included in the Annual Report on Remuneration section, on
pages 152 to 154.
Remuneration Policy for Executive Directors (“EDs”)
The below table sets out the “ordinary course” Directors’ Remuneration Policy
Element and how it supports the
group’s short-term and long-term
strategic objectives
Operation and maximum payable
Base salary
Attracts and retains high
calibre employees.
Reflects the employee’s role
and experience.
Reflects the individual’s role and experience and external factors, as applicable. Paid
monthly in cash. Increases will generally not exceed those for the broader employee
population unless there is a change in role, responsibility or the regulatory environment.
Performance framework, recovery and withholding: Not applicable
Benefits
Enables the EDs to perform
their roles effectively by
contributing to their
wellbeing and security.
Provides competitive
benefits consistent with the
role.
Benefits may include private medical cover, health screening, life assurance, income
protection cover and an allowance in lieu of a company car. Other benefits may also be
provided in certain circumstances, such as relocation expenses.
Performance framework, recovery and withholding: Not applicable
Pension
Provides an appropriate and
competitive level of personal
and dependent retirement
benefits.
EDs receive a level of pension contribution (in the form of a cash allowance or contribution
to a pension arrangement) that is in line with the wider workforce.
Performance framework, recovery and withholding: Not applicable
Annual bonus
Rewards good performance.
Motivates employees to
support the group’s goals,
strategies and values over
both the medium and
long-term.
Aligns the interests of senior
employees and executives
with those of key
stakeholders, including
shareholders, and increases
retention for senior
employees, through the use
of deferrals.
60% of the annual bonus will usually be deferred into shares (in the form of nil cost options
or conditional awards) and will usually vest in equal tranches over three years, subject to
remaining in service. The remaining annual bonus will be delivered immediately in cash. The
annual bonus is capped at 95% of base salary. At the Remuneration Committee’s
discretion, dividend equivalents will usually be paid in cash or additional shares when the
deferred awards vest.
Performance framework, recovery and withholding: Individual bonuses are determined
based on both financial and non-financial performance measures in the financial year,
including adherence to relevant risk and control frameworks. At the Remuneration
Committee’s discretion, an element of the bonus may also be based on personal
performance. At least 60% of the annual bonus opportunity will be based on financial
performance. The non-financial element will be determined based on performance
measured against a balanced scorecard, including (but not limited to):
• strategic objectives; and/or
• people and customer metrics; and/or
• risk, conduct and compliance measures.
The Remuneration Committee has overriding discretion to adjust vesting outcomes where it
considers appropriate. The cash element is subject to clawback and the deferred element is
subject to malus and clawback conditions.
161
Strategic report Governance report Financial statements

Long-Term Incentive
Plan
Motivates executives to
achieve the group’s longer-
term strategic objectives.
Aids the attraction and
retention of key staff.
Aligns executive interests
with those of shareholders.
Awards are made in the form of nil cost options or conditional awards and usually vest after
three years subject to achieving performance conditions and remaining in service. On
vesting, awards will usually be subject to a further two-year post-vesting retention period
before options can be exercised by, or conditional awards paid to, EDs. EDs are eligible to
receive an annual award of shares with a face value of up to 125% of base salary, excluding
dividend equivalent.
Performance framework, recovery and withholding: Individual awards vest based on
performance against both financial and non-financial performance measures. At least 70%
of the award will be based on performance against financial measures. The remainder will
be based on non-financial performance. The Remuneration Committee has overriding
discretion to adjust vesting outcomes where it considers appropriate. LTIP awards are
subject to malus and clawback provisions.
Shareholding
requirement
Aligns the interests of
executives with those of
shareholders through building
a shareholding.
EDs are expected to build and maintain a holding of company shares equal to at least
200% of base salary. EDs will normally be expected to maintain a minimum shareholding of
200% of base salary for the first two years after stepping down as an ED.
Performance framework, recovery and withholding: Not applicable
Malus and clawback
Malus and clawback provisions apply to the variable pay that can be earned by EDs. The
specific circumstances in which malus and clawback can be applied are set out in our full
Policy on page 159 of the 2024 Annual Report, which is available on our website.
Interim Remuneration Policy features – extraordinary circumstances
Restricted stock
Interim arrangement to retain
and motivate the EDs during this
period of uncertainty. Restricted
stock will increase the EDs’
equity stake and promote
stewardship to protect our
valuable franchise. This would
be in lieu of the normal course
annual bonus and performance
award LTIP grant in the financial
year.
Awards are made in the form of nil cost options or conditional awards and usually vest
after three years subject to achieving performance underpins and remaining in service. On
vesting, 100% of awards will usually be subject to a further two-year post-vesting
retention period before options can be exercised by, or conditional awards paid to,
executive directors. EDs are eligible to receive an annual award of shares with a face
value of up to 80% of fixed pay, excluding pension and benefits.
Performance framework, recovery and withholding:
Awards would be subject to a performance underpin, which would be assessed at
vesting.
The performance underpins will be based on financial and non-financial performance
metrics.
Consistency of Executive Directors’ remuneration with wider employee population
The pay and terms and conditions of employment of employees within the group were taken into consideration when setting
the Policy and pay of the executive directors. The Remuneration Committee does not formally consult with employees when
setting the Policy, although the employee opinion survey conducted every year includes remuneration as one of the topics
surveyed. The Remuneration Committee also receives feedback from engagement with, and communication to, employees on
matters relating to remuneration issues, which it uses to inform its broader approach to remuneration, including with respect to
the alignment between executive remuneration and the approach to compensation for employees across the group. The
Remuneration Committee frequently reviews a “Remuneration Dashboard” containing metrics, analysis and other information,
which the Committee uses as part of its decision-making, including as part of the annual compensation process. It covers a
wide range of areas throughout the year, such as workforce demographics, pay and reward at different levels across the
group, gender pay and SAYE participation.
The principles of remuneration are applied throughout the group and are designed to support the group’s key attributes across
our businesses, which are expertise, service and relationships. Remuneration structures and arrangements for all employees
are based on the individual’s role, experience, performance and relevant market practice.
Annual bonuses are based on role, business performance, market conditions and individual performance. These bonuses are
not capped; except for EDs and group and bank Material Risk Takers.
A limited group of senior employees typically receive performance award LTIP awards, generally on the same basis as the EDs,
but the maximum face value of these awards is generally materially lower. Restricted Stock awards will be granted in the
coming financial year to senior employees to reflect the current uncertainty impacting the group.
Members of the Executive Committee who are not EDs are required to build and maintain shareholdings of at least one times
base salary.
Employees receive the same level of pension contributions (in the form of a cash allowance or contribution to a pension
arrangement) as EDs.
All UK employees are eligible to participate in the SAYE and SIP plans.
Directors’ Remuneration Report continued | Directors’ Remuneration Policy
Close Brothers Group plc Annual Report 2025
162

Long-Term Incentive
Plan
Motivates executives to
achieve the group’s longer-
term strategic objectives.
Aids the attraction and
retention of key staff.
Aligns executive interests
with those of shareholders.
Awards are made in the form of nil cost options or conditional awards and usually vest after
three years subject to achieving performance conditions and remaining in service. On
vesting, awards will usually be subject to a further two-year post-vesting retention period
before options can be exercised by, or conditional awards paid to, EDs. EDs are eligible to
receive an annual award of shares with a face value of up to 125% of base salary, excluding
dividend equivalent.
Performance framework, recovery and withholding: Individual awards vest based on
performance against both financial and non-financial performance measures. At least 70%
of the award will be based on performance against financial measures. The remainder will
be based on non-financial performance. The Remuneration Committee has overriding
discretion to adjust vesting outcomes where it considers appropriate. LTIP awards are
subject to malus and clawback provisions.
Shareholding
requirement
Aligns the interests of
executives with those of
shareholders through building
a shareholding.
EDs are expected to build and maintain a holding of company shares equal to at least
200% of base salary. EDs will normally be expected to maintain a minimum shareholding of
200% of base salary for the first two years after stepping down as an ED.
Performance framework, recovery and withholding: Not applicable
Malus and clawback
Malus and clawback provisions apply to the variable pay that can be earned by EDs. The
specific circumstances in which malus and clawback can be applied are set out in our full
Policy on page 159 of the 2024 Annual Report, which is available on our website.
Interim Remuneration Policy features – extraordinary circumstances
Restricted stock
Interim arrangement to retain
and motivate the EDs during this
period of uncertainty. Restricted
stock will increase the EDs’
equity stake and promote
stewardship to protect our
valuable franchise. This would
be in lieu of the normal course
annual bonus and performance
award LTIP grant in the financial
year.
Awards are made in the form of nil cost options or conditional awards and usually vest
after three years subject to achieving performance underpins and remaining in service. On
vesting, 100% of awards will usually be subject to a further two-year post-vesting
retention period before options can be exercised by, or conditional awards paid to,
executive directors. EDs are eligible to receive an annual award of shares with a face
value of up to 80% of fixed pay, excluding pension and benefits.
Performance framework, recovery and withholding:
Awards would be subject to a performance underpin, which would be assessed at
vesting.
The performance underpins will be based on financial and non-financial performance
metrics.
Consistency of Executive Directors’ remuneration with wider employee population
The pay and terms and conditions of employment of employees within the group were taken into consideration when setting
the Policy and pay of the executive directors. The Remuneration Committee does not formally consult with employees when
setting the Policy, although the employee opinion survey conducted every year includes remuneration as one of the topics
surveyed. The Remuneration Committee also receives feedback from engagement with, and communication to, employees on
matters relating to remuneration issues, which it uses to inform its broader approach to remuneration, including with respect to
the alignment between executive remuneration and the approach to compensation for employees across the group. The
Remuneration Committee frequently reviews a “Remuneration Dashboard” containing metrics, analysis and other information,
which the Committee uses as part of its decision-making, including as part of the annual compensation process. It covers a
wide range of areas throughout the year, such as workforce demographics, pay and reward at different levels across the
group, gender pay and SAYE participation.
The principles of remuneration are applied throughout the group and are designed to support the group’s key attributes across
our businesses, which are expertise, service and relationships. Remuneration structures and arrangements for all employees
are based on the individual’s role, experience, performance and relevant market practice.
Annual bonuses are based on role, business performance, market conditions and individual performance. These bonuses are
not capped; except for EDs and group and bank Material Risk Takers.
A limited group of senior employees typically receive performance award LTIP awards, generally on the same basis as the EDs,
but the maximum face value of these awards is generally materially lower. Restricted Stock awards will be granted in the
coming financial year to senior employees to reflect the current uncertainty impacting the group.
Members of the Executive Committee who are not EDs are required to build and maintain shareholdings of at least one times
base salary.
Employees receive the same level of pension contributions (in the form of a cash allowance or contribution to a pension
arrangement) as EDs.
All UK employees are eligible to participate in the SAYE and SIP plans.
Directors’ Remuneration Report continued | Directors’ Remuneration Policy
Close Brothers Group plc Annual Report 2025
162
Dates of Executive Directors’ service contracts
1
Name
Date of service contract
Mike Morgan
7 January 2025
Fiona McCarthy
29 August 2025
1. Copies of the Director’ service contracts are available for inspection at the group’s registered office.
Remuneration Policy for the Chairman and Non-executive Directors
Element and how it supports the
group’s short-term and long-term
strategic objectives
Operation and maximum payable
Fees
Attract and retain a Chairman
and independent Non-
executive Directors who have
the requisite skills and
experience to determine the
strategy of the group and
oversee its implementation.
• Fees are paid in cash and are reviewed periodically.
• Fees for the Chairman and Non-executive Directors are set by the board. The
Non-executive Directors do not participate in decisions to set their own remuneration.
• The Chairman of the board receives a fee as Chairman but receives no other fees for
chairmanship or membership of any committees.
• Non-executive Directors receive a base fee.
• The Senior Independent Director receives an additional fee for this role.
• Additional fees are paid for chairmanship of each of the Audit, Remuneration and Risk
Committees.
• Additional fees are paid for membership of committees, with the exception of the
Nomination and Governance Committee, for which no additional fees are payable.
• Additional fees may be payable for other additional board responsibilities and/or time
commitments.
• The Chairman and Non-executive Directors are entitled to claim reimbursement for
reasonable expenses and associated tax liabilities incurred in connection with the
performance of their duties for the company, including travel expenses.
• Overall aggregate fees will remain within the limit as authorised within the articles of
association, which may change from time-to-time.
• There is no performance framework, recovery or withholding.
Non-executive Directors’ appointment letters
1
Name
Date of appointment Current letter of appointment start date
Mike Biggs
14 March 2017 21 November 2023
Mark Pain
1 January 2021 1 January 2024
Kari Hale
28 June 2023 26 June 2024
Tracey Graham
22 March 2022 1 January 2024
Patricia Halliday
1 August 2021 1 August 2024
Tesula Mohindra
15 July 2021 1 January 2024
Sally Williams
1 January 2020 1 January 2024
1. Copies of the Non-executive Directors’ appointment letters are available for inspection at the group’s registered office.
Statement of consideration of shareholder views
The Chairman of the Board and the Chair of the Remuneration Committee consult our major shareholders on a regular basis on
key issues, including remuneration, and welcome feedback from shareholders at any point throughout year. Where the
Committee proposes to make any significant changes to the Remuneration Policy, or the manner in which the Policy is
operated, we would seek major shareholders’ views and take these into account.
A formal consultation exercise was undertaken during 2024 with our major shareholders and shareholder advisory bodies,
whereby we implemented a Director’s Remuneration Policy that included flexibility to operate an interim restricted stock
incentive model. This replaced both the annual bonus and the performance share award grant under the LTIP in 2025. During
2025, we consulted over 20 of our major shareholders of our proposal to extend the restricted stock model for 2026.
163
Strategic report Governance report Financial statements

Directors’ Report
The Directors of the company present their report for the
year ended 31 July 2025.
The Strategic Report, together with the Corporate
Governance Report which includes the reports of the
committees and the Directors’ Remuneration Report, include
information that would otherwise need to be included in this
Directors’ Report. Readers are also referred to the cautionary
statement on page 235 of this Annual Report.
Disclosures by reference
Additional information, which is incorporated into this
Directors’ Report by reference, including information
required by the Companies Act 2006, the Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Disclosure and Transparency
Rule 7.2, and Listing Rule 6.6.4, can be located by page
reference elsewhere in this Annual Report as follows:
Content
Page reference
Strategic Report
Business activities
2
Likely future developments
10 to 11
Business relationships
23 to 25
Employment, human rights and environmental matters
Assessing and monitoring culture
44 and 133
Employment practices and
approach to disabled employees
41 to 45
Employee engagement
23 and 44
Approach to diversity and inclusion
42 to 45
Investing in and rewarding
theworkforce
44
Charitable donations
45
Greenhouse gas emissions
37 to 39
Climate-related financial disclosures
39
Directors
Biographical details
120 to 122
Induction and continuing
professional development
131
Agreements for loss of office
158
Remuneration, including waiver
ofemoluments
147 to 163
Contracts or service agreements
163
Interests in share capital
166
Miscellaneous
Section 172 Statement
22
Going concern
113
Viability Statement
114
Corporate governance statement
116 to 137
Risk management objectives
andpolicies
68 to 112
Credit, market and liquidity risks
86 to 99 and 111 to
112
Financial instruments
Note 13 “Derivative
financial instruments”
Shareholder dividend waivers
166
Results and dividends
The consolidated results for the year are shown on page 177
of the Financial Statements. The Directors do not
recommend a final dividend for the year and did not declare
an interim dividend during the year.
Further information on the Directors’ decision not to pay a
dividend in respect of the financial year can be found on
page 8.
Directors
The names of the Directors of the company at the date of
this report, together with biographical details, are given on
pages 120 to 122. All the Directors listed on those pages
were Directors of the company throughout the year, with the
exception of Fiona McCarthy, who was appointed post year
end on 29 August 2025.
In accordance with the UK Corporate Governance Code, all
serving Directors will retire at the 2025 AGM and offer
themselves for election or re-election at that meeting.
Powers of Directors
The Directors may exercise all powers of the company,
subject to any directions given by special resolution and the
articles of association. The Directors have been authorised to
allot and issue ordinary shares and to make market
purchases of the company’s ordinary shares by virtue of
resolutions passed at the company’s 2024 AGM.
Appointment and removal of Directors
The appointment and removal of Directors is governed by
the company’s articles of association, the Companies Act
2006 and other applicable regulations and policies. Directors
may be elected by shareholders in a general meeting or
appointed by the Board of Directors in accordance with the
provisions of the articles of association. The company’s
articles of association may only be amended by a special
resolution of the shareholders in a general meeting.
Directors’ indemnities and insurance
In accordance with its articles of association, the company
has granted a deed of indemnity to each of its Directors on
terms consistent with the applicable statutory provisions.
The deeds indemnify the Directors in respect of liabilities
(and associated costs and expenses) incurred in connection
with the performance of their duties as Directors of the
company or any associated company. Qualifying third-party
indemnity provisions for the purposes of section 234 of the
Companies Act 2006 were accordingly in force during the
course of the year and at the date of approval of the
Directors’ Report. The company also maintains directors’
and officers’ liability insurance.
Close Brothers Group plc Annual Report 2025
164

Directors’ Report
The Directors of the company present their report for the
year ended 31 July 2025.
The Strategic Report, together with the Corporate
Governance Report which includes the reports of the
committees and the Directors’ Remuneration Report, include
information that would otherwise need to be included in this
Directors’ Report. Readers are also referred to the cautionary
statement on page 235 of this Annual Report.
Disclosures by reference
Additional information, which is incorporated into this
Directors’ Report by reference, including information
required by the Companies Act 2006, the Large and
Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Disclosure and Transparency
Rule 7.2, and Listing Rule 6.6.4, can be located by page
reference elsewhere in this Annual Report as follows:
Content
Page reference
Strategic Report
Business activities
2
Likely future developments
10 to 11
Business relationships
23 to 25
Employment, human rights and environmental matters
Assessing and monitoring culture
44 and 133
Employment practices and
approach to disabled employees
41 to 45
Employee engagement
23 and 44
Approach to diversity and inclusion
42 to 45
Investing in and rewarding
theworkforce
44
Charitable donations
45
Greenhouse gas emissions
37 to 39
Climate-related financial disclosures
39
Directors
Biographical details
120 to 122
Induction and continuing
professional development
131
Agreements for loss of office
158
Remuneration, including waiver
ofemoluments
147 to 163
Contracts or service agreements
163
Interests in share capital
166
Miscellaneous
Section 172 Statement
22
Going concern
113
Viability Statement
114
Corporate governance statement
116 to 137
Risk management objectives
andpolicies
68 to 112
Credit, market and liquidity risks
86 to 99 and 111 to
112
Financial instruments
Note 13 “Derivative
financial instruments”
Shareholder dividend waivers
166
Results and dividends
The consolidated results for the year are shown on page 177
of the Financial Statements. The Directors do not
recommend a final dividend for the year and did not declare
an interim dividend during the year.
Further information on the Directors’ decision not to pay a
dividend in respect of the financial year can be found on
page 8.
Directors
The names of the Directors of the company at the date of
this report, together with biographical details, are given on
pages 120 to 122. All the Directors listed on those pages
were Directors of the company throughout the year, with the
exception of Fiona McCarthy, who was appointed post year
end on 29 August 2025.
In accordance with the UK Corporate Governance Code, all
serving Directors will retire at the 2025 AGM and offer
themselves for election or re-election at that meeting.
Powers of Directors
The Directors may exercise all powers of the company,
subject to any directions given by special resolution and the
articles of association. The Directors have been authorised to
allot and issue ordinary shares and to make market
purchases of the company’s ordinary shares by virtue of
resolutions passed at the company’s 2024 AGM.
Appointment and removal of Directors
The appointment and removal of Directors is governed by
the company’s articles of association, the Companies Act
2006 and other applicable regulations and policies. Directors
may be elected by shareholders in a general meeting or
appointed by the Board of Directors in accordance with the
provisions of the articles of association. The company’s
articles of association may only be amended by a special
resolution of the shareholders in a general meeting.
Directors’ indemnities and insurance
In accordance with its articles of association, the company
has granted a deed of indemnity to each of its Directors on
terms consistent with the applicable statutory provisions.
The deeds indemnify the Directors in respect of liabilities
(and associated costs and expenses) incurred in connection
with the performance of their duties as Directors of the
company or any associated company. Qualifying third-party
indemnity provisions for the purposes of section 234 of the
Companies Act 2006 were accordingly in force during the
course of the year and at the date of approval of the
Directors’ Report. The company also maintains directors’
and officers’ liability insurance.
Close Brothers Group plc Annual Report 2025
164
Share capital
The company’s share capital comprises one class of ordinary
share with a nominal value of 25p per share.
At 31 July 2025, 152,060,290 ordinary shares were in issue,
of which 1,569,766 were held by the company in treasury (31
July 2024: 152,060,290 ordinary shares were in issue, of
which 1,572,747 were held by the company in treasury).
Under section 551 of the Companies Act 2006, the
Directors may allot equity securities only with the express
authorisation of shareholders which may be given in general
meeting, but which cannot last more than five years. Under
section 561 of the Companies Act 2006, the Board may not
allot shares for cash (otherwise than pursuant to an
employee share scheme) without first making an offer to
existing shareholders to allot such shares to them on the
same or more favourable terms in proportion to their
respective shareholdings, unless this requirement is waived
by a special resolution of the shareholders.
Details of Directors’ authorities approved by shareholders at
the 2024 AGM can be found in the 2024 Notice of AGM and
subsequent results announcement.
Since the date of the company’s 2024 AGM, with the
exception of the authority to make market purchases, the
Directors have not used these authorities. Details of market
purchases of the company’s ordinary shares during the year
can be found in the purchase of own shares section below.
The existing authorities to allot and purchase shares given to
the company at the last AGM will expire at the conclusion of
the forthcoming AGM. At this AGM, shareholders will be
asked to renew these authorities. Details of the relevant
resolutions to be proposed will be included in the 2025
Notice of AGM.
New issues of share capital
No ordinary shares were allotted or issued during the year.
Specifically, no ordinary shares were allotted or issued
during the year to satisfy option exercises. Full details of
options exercised, the weighted average option exercise
price and the weighted average market price at the date of
exercise can be found in Note 24 “Share-based awards” of
the Financial Statements.
Rights attaching to shares
The company’s articles of association set out the rights and
obligations attaching to the company’s ordinary shares. All of
the ordinary shares rank equally in all respects. On a show of
hands, each member has the right to one vote at general
meetings of the company. On a poll, each member would be
entitled to one vote for every share held. The shares carry no
rights to fixed income. No person has any special rights of
control over the company’s share capital and all shares are
fully paid.
The articles of association and applicable legislation provide
that the company can decide to restrict the rights attaching
to ordinary shares in certain circumstances (such as the right
to attend or vote at a shareholders’ meeting), including
where a person has failed to comply with a notice issued by
the company under section 793 of the Companies Act 2006.
Restrictions on the transfer of shares
There are no specific restrictions on the transfer of the
company’s shares which are governed by the general
provisions of the articles of association and prevailing
legislation. The articles of association set out certain
circumstances in which the Directors of the company can
refuse to register a transfer of ordinary shares.
The company is not aware of any arrangements between its
shareholders that may result in restrictions on the transfer of
shares and/or voting rights.
Directors and employees of the group are required to comply
with applicable legislation relating to dealing in the
company’s shares as well as the company’s share dealing
rules. These rules restrict employees’ and Directors’ ability to
deal in ordinary shares at certain times, and require the
employee or Director to obtain permission prior to dealing.
Some of the group’s employee share plans also contain
restrictions on the transfer of shares held within those plans.
Purchase of own shares
Under section 724 of the Companies Act 2006, a company
may purchase its own shares to be held in treasury
(“Treasury Shares”).
The existing authority given to the company at the last AGM
to purchase Treasury Shares of up to 10% of its issued share
capital will expire at the conclusion of the next AGM.
The Board considers it would be appropriate to renew this
authority and intends to seek shareholder approval to
purchase Treasury Shares of up to 10% of its issued share
capital at the forthcoming AGM in line with current investor
sentiment. Details of the resolution renewing the authority
will be included in the 2025 Notice of AGM.
Awards under the company’s employee share plans have
historically been met from shares purchased in the market
(and held either in treasury or in the employee share trust),
however the company’s share hedging procedures are kept
under review.
During the year, the company did not make any market
purchases of Treasury Shares. It transferred 2,981 shares out
of treasury to satisfy share option awards, with an aggregate
nominal value of £745 and representing 0.00% of the
company's issued share capital, for a total consideration of
£11,000.
At 31 July 2025, the company held 1,569,766 Treasury
Shares with a nominal value of £0.39 million and
representing 1.03% of its issued share capital. The maximum
number of Treasury Shares held at any time during the year
was 1,572,747, with a nominal value of £0.39 million and
representing 1.03% of its issued share capital.
165
Strategic report Governance report Financial statements

Significant shareholdings
The table below sets out details of the interests in voting
rights notified to the company under the provisions of the
Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules. Information provided by the company
pursuant to the Disclosure Guidance and Transparency
Rules is publicly available via the regulatory information
services and on the company’s website.
23 September
2025
Voting rights
31 July 2025
Voting rights
abrdn plc
8.45% 8.49%
Jupiter Fund Management PLC
5.59% 5.59%
FIL Limited
5.12% 5.12%
Royal London Asset
Management
4.88% 4.88%
M&G plc
4.85% 4.85%
Substantial shareholders do not have different voting rights
from those of other shareholders.
Employee Share Trust
Ocorian Trustees (Jersey) Limited is the trustee of the Close
Brothers Group Employee Share Trust, an independent trust
which holds shares for the benefit of employees and former
employees of the group. The trustee will only vote on those
shares in accordance with the instructions given to the
trustee and in accordance with the terms of the trust deed.
The trustee has agreed to satisfy a number of awards under
the employee share plans. As part of these arrangements the
company funds the trust from time to time, to enable the
trustee to acquire shares to satisfy these awards, details of
which are set out in Note 24 “Share-based awards” of the
Financial Statements. The trustee has waived its right to
dividends on all shares held within the trust. During the year,
the Close Brothers Group Employee Share Trust made
market purchases of 550,000 ordinary shares.
Auditor
PricewaterhouseCoopers LLP (“PwC”) has expressed its
willingness to continue in office as the company’s external
auditor. Resolutions to reappoint PwC and to determine its
remuneration will be proposed at the forthcoming AGM. The
full text of the relevant resolutions will be set out in the 2025
Notice of AGM.
Significant agreements affected by a change
of control
A change of control of the company, following a takeover
bid, may cause a number of agreements to which the
company is a party to take effect, alter or terminate. These
include certain insurance policies, bank facility agreements
and employee share plan rules.
The group had committed facilities totalling £1.0 billion at
31July 2025 which contain clauses requiring lender consent
for any change of control. Should consent not be given, a
change of control would trigger mandatory repayment of
those facilities.
All of the company’s employee share plan rules contain
provisions relating to a change of control. Outstanding
awards and options may vest and become exercisable on a
change of control, subject, where applicable, to the
satisfaction of any performance conditions at that time and
pro-rating of awards.
Research and development activities
During the normal course of business, the group continues to
invest in new technology and systems and to develop new
products and services to improve operating efficiency and
strengthen its customer proposition.
Acquisitions and disposals
Information on a disposal made during the year is contained
in note 29 to the Group Financial Statements.
Post balance sheet events
On 31 August 2025, the group completed the sale of Close
Brewery Rentals Limited ("CBRL") to MML Keystone,
following the agreement announced on 15 July 2025. Further
details can be found in Note 30: “Post balance sheet event”.
Political donations
No political donations were made during the year (2024: £nil).
Branches
The company has no branches outside the UK.
Disclosure of information to the auditor
Each of the persons who are Directors at the date of
approval of this Annual Report confirms that: so far as the
Director is aware, there is no relevant audit information of
which the company’s auditor is unaware; and they have
taken all the reasonable steps that 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 auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the
Companies Act 2006.
The Directors’ Report has been approved by the Board and
signed by order of the Board by:
Sarah Peazer-Davies
Company Secretary
30 September 2025
Directors’ Report continued
Close Brothers Group plc Annual Report 2025
166

Significant shareholdings
The table below sets out details of the interests in voting
rights notified to the company under the provisions of the
Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules. Information provided by the company
pursuant to the Disclosure Guidance and Transparency
Rules is publicly available via the regulatory information
services and on the company’s website.
23 September
2025
Voting rights
31 July 2025
Voting rights
abrdn plc
8.45% 8.49%
Jupiter Fund Management PLC
5.59% 5.59%
FIL Limited
5.12% 5.12%
Royal London Asset
Management
4.88% 4.88%
M&G plc
4.85% 4.85%
Substantial shareholders do not have different voting rights
from those of other shareholders.
Employee Share Trust
Ocorian Trustees (Jersey) Limited is the trustee of the Close
Brothers Group Employee Share Trust, an independent trust
which holds shares for the benefit of employees and former
employees of the group. The trustee will only vote on those
shares in accordance with the instructions given to the
trustee and in accordance with the terms of the trust deed.
The trustee has agreed to satisfy a number of awards under
the employee share plans. As part of these arrangements the
company funds the trust from time to time, to enable the
trustee to acquire shares to satisfy these awards, details of
which are set out in Note 24 “Share-based awards” of the
Financial Statements. The trustee has waived its right to
dividends on all shares held within the trust. During the year,
the Close Brothers Group Employee Share Trust made
market purchases of 550,000 ordinary shares.
Auditor
PricewaterhouseCoopers LLP (“PwC”) has expressed its
willingness to continue in office as the company’s external
auditor. Resolutions to reappoint PwC and to determine its
remuneration will be proposed at the forthcoming AGM. The
full text of the relevant resolutions will be set out in the 2025
Notice of AGM.
Significant agreements affected by a change
of control
A change of control of the company, following a takeover
bid, may cause a number of agreements to which the
company is a party to take effect, alter or terminate. These
include certain insurance policies, bank facility agreements
and employee share plan rules.
The group had committed facilities totalling £1.0 billion at
31July 2025 which contain clauses requiring lender consent
for any change of control. Should consent not be given, a
change of control would trigger mandatory repayment of
those facilities.
All of the company’s employee share plan rules contain
provisions relating to a change of control. Outstanding
awards and options may vest and become exercisable on a
change of control, subject, where applicable, to the
satisfaction of any performance conditions at that time and
pro-rating of awards.
Research and development activities
During the normal course of business, the group continues to
invest in new technology and systems and to develop new
products and services to improve operating efficiency and
strengthen its customer proposition.
Acquisitions and disposals
Information on a disposal made during the year is contained
in note 29 to the Group Financial Statements.
Post balance sheet events
On 31 August 2025, the group completed the sale of Close
Brewery Rentals Limited ("CBRL") to MML Keystone,
following the agreement announced on 15 July 2025. Further
details can be found in Note 30: “Post balance sheet event”.
Political donations
No political donations were made during the year (2024: £nil).
Branches
The company has no branches outside the UK.
Disclosure of information to the auditor
Each of the persons who are Directors at the date of
approval of this Annual Report confirms that: so far as the
Director is aware, there is no relevant audit information of
which the company’s auditor is unaware; and they have
taken all the reasonable steps that 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 auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the
Companies Act 2006.
The Directors’ Report has been approved by the Board and
signed by order of the Board by:
Sarah Peazer-Davies
Company Secretary
30 September 2025
Directors’ Report continued
Close Brothers Group plc Annual Report 2025
166
Statement of Directors’ responsibilities in
respect of the Financial Statements
The Directors, whose names and functions are listed on
pages 120 to 122, are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare Financial
Statements for each financial year. Under that law, the
Directors have prepared the group Financial Statements in
accordance with UK-adopted international accounting
standards and the company Financial Statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable
law).
Under company law, 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
company and of the profit or loss of the group and the
company for that period. In preparing the Financial
Statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• state whether applicable UK-adopted international
accounting standards have been followed for the group
Financial Statements, and United Kingdom Accounting
Standards comprising FRS 102 have been followed for the
company Financial Statements, subject to any material
departures disclosed and explained in the Financial
Statements;
• make judgements and accounting estimates that are
reasonable and prudent; and
• prepare the group and company Financial Statements on
the going concern basis unless it is inappropriate to
presume that the group and company will continue in
business.
The Directors are responsible for safeguarding the assets of
the group and company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the group’s and company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
group and company and enable them to ensure that the
Financial Statements and the Directors’ Remuneration
Report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
Financial Statements may differ from legislation in other
jurisdictions.
Directors’ confirmations
Each of the current Directors, whose names and functions
are listed on pages 120 to 122, confirms that, to the best of
his or her knowledge:
• the group Financial Statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the group;
• the company Financial Statements, which have been
prepared in accordance with United Kingdom Accounting
Standards comprising FRS 102, give a true and fair view of
the assets, liabilities, financial position and profit of the
company;
• the Strategic Report, together with the Directors’ Report
and the Corporate Governance Report, includes a fair
review of the development and performance of the
business and the position of the group and company,
together with a description of the principal risks and
uncertainties that they face; and
• the Annual Report and Financial Statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
group’s and company’s position and performance,
business model and strategy.
Signed on behalf of the Board by:
Mike Morgan Fiona McCarthy
Chief Executive Group Chief Finance Officer
30 September 2025
167
Strategic report Governance report Financial statements

Report on the audit of the financialstatements
Opinion
In our opinion:
• Close Brothers Group plc’s group financial statements and company financial statements (the “financial statements”) give a
true and fair view of the state of the group’s and of the company’s affairs as at 31 July 2025 and of the group’s loss and the
group’s cash flows for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report 2025 (“Annual Report”), which comprise: the
consolidated and company balance sheets as at 31 July 2025; the consolidated income statement, the consolidated statement
of comprehensive income, the consolidated cash flow statement, and the consolidated and company statement of changes in
equity for the year then ended; and the notes to the financial statements, comprising material accounting policy information
and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in note 5, we have provided no non-audit services to the company or its controlled undertakings in
the period under audit.
Our audit approach
Overview
Audit scope
• The scope of our audit and the nature, timing and extent of audit procedures performed were determined by our risk
assessment, the financial significance of components and other qualitative factors (including history of misstatement through
fraud or error).
• We performed audit procedures over components considered to be significant due to risk or size in the context of the group
(full scope audit) or in the context of individual primary statement account balances (audit of specific account balances).
• We performed other procedures including analytical review procedures to mitigate the risk of material misstatement in the
balances not subject to our other audit procedures.
Key audit matters
• Determination of expected credit losses (‘ECL’) on loans and advances to customers (group)
• Assessment of impairment in relation to valuation of goodwill held by the group in relation to the Cash Generating Units
(CGUs) of Close Brothers Limited (group)
• Assessment of the provision in relation to the FCA’s review of historical motor finance commission arrangements (group)
• Assessment of the going concern basis of preparation, specifically in relation to capital (group and parent)
Materiality
• Overall group materiality: £8.0m (2024: £10.6m) based on 5% of 3 year average adjusted profit before tax (“PBT”) (2024: 5%
of 4 year average adjusted PBT).
• Overall company materiality: £12.5m (2024: £13.8m) based on 1% of Total Assets.
• Performance materiality: £6.0m (2024: £8.0m) (group) and £9.4m (2024: £10.35m) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Independent auditors’ report to the members of Close Brothers Group plc
Close Brothers Group plc Annual Report 2025
168

Report on the audit of the financialstatements
Opinion
In our opinion:
• Close Brothers Group plc’s group financial statements and company financial statements (the “financial statements”) give a
true and fair view of the state of the group’s and of the company’s affairs as at 31 July 2025 and of the group’s loss and the
group’s cash flows for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the Companies Act 2006;
• the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and applicable law); and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report 2025 (“Annual Report”), which comprise: the
consolidated and company balance sheets as at 31 July 2025; the consolidated income statement, the consolidated statement
of comprehensive income, the consolidated cash flow statement, and the consolidated and company statement of changes in
equity for the year then ended; and the notes to the financial statements, comprising material accounting policy information
and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not
provided.
Other than those disclosed in note 5, we have provided no non-audit services to the company or its controlled undertakings in
the period under audit.
Our audit approach
Overview
Audit scope
• The scope of our audit and the nature, timing and extent of audit procedures performed were determined by our risk
assessment, the financial significance of components and other qualitative factors (including history of misstatement through
fraud or error).
• We performed audit procedures over components considered to be significant due to risk or size in the context of the group
(full scope audit) or in the context of individual primary statement account balances (audit of specific account balances).
• We performed other procedures including analytical review procedures to mitigate the risk of material misstatement in the
balances not subject to our other audit procedures.
Key audit matters
• Determination of expected credit losses (‘ECL’) on loans and advances to customers (group)
• Assessment of impairment in relation to valuation of goodwill held by the group in relation to the Cash Generating Units
(CGUs) of Close Brothers Limited (group)
• Assessment of the provision in relation to the FCA’s review of historical motor finance commission arrangements (group)
• Assessment of the going concern basis of preparation, specifically in relation to capital (group and parent)
Materiality
• Overall group materiality: £8.0m (2024: £10.6m) based on 5% of 3 year average adjusted profit before tax (“PBT”) (2024: 5%
of 4 year average adjusted PBT).
• Overall company materiality: £12.5m (2024: £13.8m) based on 1% of Total Assets.
• Performance materiality: £6.0m (2024: £8.0m) (group) and £9.4m (2024: £10.35m) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Independent auditors’ report to the members of Close Brothers Group plc
Close Brothers Group plc Annual Report 2025
168
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, including 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, and any comments we
make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Determination of expected credit losses (‘ECL’) on loans
and advances to customers (group)
As at 31 July 2025, the group has gross loans and advances
to customers at amortised cost of £9,697.3m, with ECL
provisions of £249.7m held against them.
The determination of ECL provisions is inherently
judgemental and involves setting assumptions using forward
looking information reflecting the group’s view of potential
future economic events. This can give rise to increased
estimation uncertainty.
ECL provisions by their nature are uncertain, and plausible
fluctuations in the economy may impact the credit
performance of the lending book.
Models are used to collectively assess and determine ECL
allowances on loans and advances. We consider the
following elements of the determination of modelled ECL to
be significant:
• The application of forward-looking economic scenarios
used in the models and the weightings assigned to those
scenarios;
• The Loss Given Default (“LGD”) component for the Asset
Finance and Leasing business, given that the LGD model
was developed over a period with more benign
macroeconomic conditions than the expected conditions
over the forecast period.
ECL provisions on individually large exposures to
counterparties who are in default at the reporting date, are
estimated on an individual basis. We consider that only the
individually assessed loans of the Property business
constitute a significant risk in the current year. The risk
relates to the assumptions made on the amount and timing
of the expected future cash flows under multiple probability
weighted scenarios.
Relevant disclosure references:
• Note 2 - Critical accounting judgements and estimates;
and
• Note 10 - Loans and advances to customers.
With the support of our credit risk modelling specialists and
economics experts, we performed the following procedures:
For collectively assessed ECL provisions:
• We understood and critically assessed the
appropriateness of the ECL accounting policy and model
methodologies used by management;
• We independently replicated ECL models for the Asset,
Leasing, Motor Finance, Property and Invoice businesses,
using management’s model methodology and
assumptions and tested the input of critical data elements
into the ECL models;
• We tested model performance through review and
replication of key model monitoring tests. We assessed the
performance of key model elements, and considered if
they indicated that the models continued to perform
appropriately or if any post-model adjustments were
required;
• We critically assessed the reasonableness of
management’s selected economic scenarios and
associated scenario weightings, giving specific
consideration to current and future economic uncertainty.
We assessed their reasonableness against known or likely
economic events;
• We compared the severity and magnitude of certain
assumptions used in certain base scenarios to external
forecasts and historic trends;
• We assessed whether the deviations of the upside and
downside scenario assumptions from the base scenario
are reasonable and consistent with generally accepted
economic expectations;
• Based on our knowledge and understanding of the
limitations in management’s models and emerging industry
risks, we evaluated the completeness and sufficiency of the
post model adjustments proposed by management; and
• We evaluated the LGD model performance for the Asset
Finance & Leasing business and the sufficiency of the
extent to which LGD is impacted by macroeconomic
factors.
Individually assessed provisions:
For a sample of individually assessed loans in default and
related ECL allowances in the Property business, we:
• Evaluated the basis on which the allowances were
determined and the evidence supporting the analysis
performed by management;
169
Strategic report Governance report Financial statements

Key audit matter How our audit addressed the key audit matter
• Independently challenged whether the key assumptions
used, such as the recovery strategies, timing of the
expected future cash flows, collateral values and ranges of
potential outcomes were appropriate given the borrower’s
circumstances;
• Re-performed management’s provision calculation and
critically assessed key inputs including expected future
cash flows, discount rates, valuations of collateral held and
the weightings applied to scenario outcomes.
We tested and evaluated the reasonableness of relevant
disclosures made in the financial statements.
Assessment of impairment in relation to valuation of
goodwill held by the group in relation to the Cash
Generating Units (CGUs) of Close Brothers Limited
(group)
The group has a total goodwill balance of £34.1m relating to
Close Brothers Limited (the “Bank”).
The group has a number of CGUs under IAS 36 Impairment
of Assets (“IAS 36”) which require annual impairment
assessments of the goodwill associated for each CGU.
In relation to the Bank goodwill, management performs the
assessment by comparing the recoverable amount of each
CGU with the current carrying value of the CGU (including
the goodwill associated with the CGU). Management
estimated the recoverable amount using the higher of value
in use (“ViU”) and fair value less cost to sell.
The depressed market value of the group provides a
potential indicator of impairment within the group, including
in relation to the Motor Finance CGU. The methodology used
to estimate the recoverable amount is dependent on various
assumptions, both short term and long term in nature. These
assumptions, which are subject to estimation uncertainty,
are derived from a combination of management’s judgement
and market data.
The significant assumptions where we focused our audit
were those with greater levels of management judgement
and for which variations had the most significant impact on
the recoverable amount. These included the Bank’s five- or
seven-year cash flow forecasts (as applicable to each CGU),
in particular loan book growth and cost assumptions within
the Motor Finance CGU.
Relevant disclosure references:
• Note 2 - Critical accounting judgements and estimates;
and
• Note 14 - Intangible assets.
We performed the following audit procedures over the
significant assumptions of the group’s models:
• With the support of our valuation and accounting
specialists, we evaluated management’s impairment
methodology with reference to IFRS requirements for a ViU
model. This included adjustments made to the cash flow
forecasts to comply with IAS 36;
• We assessed the reasonableness of management’s
allocation of central costs;
• We performed a look-back analysis comparing the cash
flow projections made in prior years to the actual results
achieved to assess the accuracy of the budgeting and
forecasting process;
• We obtained an understanding of management’s capital
and board approved forecasts;
• We critically assessed the reasonableness of the
assumptions underlying management’s cash flow
forecasts, in particular relating to loan book growth and
cost assumptions in the Motor Finance CGU. For this CGU
this included evaluating external data for the UK motor
finance market, inflation forecasts, and considering other
supporting internal and external evidence. We challenged
whether certain risks were adequately captured and
performed sensitivity analysis to evaluate whether
reasonably possible changes lead to an impairment of the
Motor CGU; and
• We engaged our regulatory experts in assessing the
reasonableness of the risk weighted asset and capital
requirements included in management’s forecasts.
In addition, we performed the following tests of details,
amongst others on the group’s models:
• We obtained evidence of Board approval of the three-year
plan and agreed these plans were appropriately reflected
in the cash flow forecasts in management’s models;
• Where cash flow forecasts extend beyond Board-
approved plans, we critically assessed the reasonableness
of assumptions in the period of extension;
• With support of our internal experts, we evaluated the
appropriateness of the discount rate range determined by
management’s expert and the long-term growth rate
applied;
• We verified the mathematical accuracy of the goodwill
impairment assessments, including the discounted cash
flow projections; and
• We verified the appropriate application of management’s
accounting policy and the adequacy of the information
disclosed in the consolidated financial statements.
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
170

Key audit matter How our audit addressed the key audit matter
• Independently challenged whether the key assumptions
used, such as the recovery strategies, timing of the
expected future cash flows, collateral values and ranges of
potential outcomes were appropriate given the borrower’s
circumstances;
• Re-performed management’s provision calculation and
critically assessed key inputs including expected future
cash flows, discount rates, valuations of collateral held and
the weightings applied to scenario outcomes.
We tested and evaluated the reasonableness of relevant
disclosures made in the financial statements.
Assessment of impairment in relation to valuation of
goodwill held by the group in relation to the Cash
Generating Units (CGUs) of Close Brothers Limited
(group)
The group has a total goodwill balance of £34.1m relating to
Close Brothers Limited (the “Bank”).
The group has a number of CGUs under IAS 36 Impairment
of Assets (“IAS 36”) which require annual impairment
assessments of the goodwill associated for each CGU.
In relation to the Bank goodwill, management performs the
assessment by comparing the recoverable amount of each
CGU with the current carrying value of the CGU (including
the goodwill associated with the CGU). Management
estimated the recoverable amount using the higher of value
in use (“ViU”) and fair value less cost to sell.
The depressed market value of the group provides a
potential indicator of impairment within the group, including
in relation to the Motor Finance CGU. The methodology used
to estimate the recoverable amount is dependent on various
assumptions, both short term and long term in nature. These
assumptions, which are subject to estimation uncertainty,
are derived from a combination of management’s judgement
and market data.
The significant assumptions where we focused our audit
were those with greater levels of management judgement
and for which variations had the most significant impact on
the recoverable amount. These included the Bank’s five- or
seven-year cash flow forecasts (as applicable to each CGU),
in particular loan book growth and cost assumptions within
the Motor Finance CGU.
Relevant disclosure references:
• Note 2 - Critical accounting judgements and estimates;
and
• Note 14 - Intangible assets.
We performed the following audit procedures over the
significant assumptions of the group’s models:
• With the support of our valuation and accounting
specialists, we evaluated management’s impairment
methodology with reference to IFRS requirements for a ViU
model. This included adjustments made to the cash flow
forecasts to comply with IAS 36;
• We assessed the reasonableness of management’s
allocation of central costs;
• We performed a look-back analysis comparing the cash
flow projections made in prior years to the actual results
achieved to assess the accuracy of the budgeting and
forecasting process;
• We obtained an understanding of management’s capital
and board approved forecasts;
• We critically assessed the reasonableness of the
assumptions underlying management’s cash flow
forecasts, in particular relating to loan book growth and
cost assumptions in the Motor Finance CGU. For this CGU
this included evaluating external data for the UK motor
finance market, inflation forecasts, and considering other
supporting internal and external evidence. We challenged
whether certain risks were adequately captured and
performed sensitivity analysis to evaluate whether
reasonably possible changes lead to an impairment of the
Motor CGU; and
• We engaged our regulatory experts in assessing the
reasonableness of the risk weighted asset and capital
requirements included in management’s forecasts.
In addition, we performed the following tests of details,
amongst others on the group’s models:
• We obtained evidence of Board approval of the three-year
plan and agreed these plans were appropriately reflected
in the cash flow forecasts in management’s models;
• Where cash flow forecasts extend beyond Board-
approved plans, we critically assessed the reasonableness
of assumptions in the period of extension;
• With support of our internal experts, we evaluated the
appropriateness of the discount rate range determined by
management’s expert and the long-term growth rate
applied;
• We verified the mathematical accuracy of the goodwill
impairment assessments, including the discounted cash
flow projections; and
• We verified the appropriate application of management’s
accounting policy and the adequacy of the information
disclosed in the consolidated financial statements.
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
170
Key audit matter How our audit addressed the key audit matter
Assessment of the provision in relation to the FCA’s
review of historical motor finance commission
arrangements (group)
Refer to note 16 (Other assets and liabilities), where the
group has disclosed a provision of £163.9m in accordance
with IAS 37 Provisions, Contingent Liabilities and Contingent
Assets in relation to the ongoing Financial Conduct Authority
(“FCA”) review of the motor commission arrangements.
Included within Provisions is the group’s best estimate of the
cost of present obligations related to past events, including
the impact of regulatory investigations in relation to motor
dealer commissions. Significant judgement is required by the
group in determining the amount recorded as the best
estimate to settle the obligation. These judgements are
based on the specific facts available and involve evaluating
and interpreting the available information. There is a high
degree of estimation uncertainty with a wide and material
range of potential outcomes.
The disclosures regarding management's approach to
determining the provision are important to understanding the
judgements taken, assumptions made and sensitivity of the
provision to changes in assumptions.
The provisions and disclosures in respect of this exposure
represent a key audit matter.
Relevant disclosure references:
• Note 16 - Other assets and liabilities.
We evaluated and challenged management’s assessment in
the context of the requirements of IAS 37 Provisions,
Contingent liabilities and Contingent Assets. Our work
included the following:
• We understood the risks facing the group in relation to this
matter and the status of the investigations;
• We performed sensitivity analysis to identify the most
material judgements, estimates and key assumptions
within management’s model to estimate a provision;
• We evaluated management’s assessment of potential
outcomes and associated probabilities, reviewing the
reasonableness of the judgements, estimates and key
assumptions, and developing alternative reasonable
scenarios;
• We examined correspondence with and, where necessary,
made direct inquiries with the group’s regulators;
• We held discussions with the Group's in-house and
external legal experts to confirm our understanding of their
views on certain judgements applied by management;
• We tested the data inputs and mathematical accuracy of
the model;
• We assessed whether the disclosures in the financial
statements accurately represent the facts and key sources
of estimation uncertainties; and
• We reviewed reports provided to governance committees
and we discussed the status of the key matters with the
Board Audit Committee.
Given the uncertainty associated with the estimation of the
provision, we evaluated the disclosures made in the financial
statements. We considered the completeness of the
information disclosed. In particular, we focused on
challenging management on the substantial judgement
needed to estimate the timing and value of future
settlements, ensuring that the approach to recognising,
estimating, and disclosing the provision is appropriate.
Assessment of the going concern basis of preparation,
specifically in relation to capital (group and parent)
On 11th January 2024, the FCA announced a review of
historical motor finance commission arrangements.
As described in the Key Audit Matter on motor finance
commission, there is significant uncertainty due to the
ongoing FCA review, and the timing, scope and quantum of
any potential financial impact.
Whilst the extent of risk to the group has reduced following
the judgments made by the Supreme Court, there remains a
wide range of uncertainty associated with the FCA's ongoing
review of motor commissions.
See section on Going concern below in the audit opinion
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Strategic report Governance report Financial statements

Key audit matter How our audit addressed the key audit matter
In performing their assessment of going concern the
directors have utilised judgement in determining the extent of
risk relating to a severe but plausible outcome in relation to
the FCA review of motor commissions for the group, along
with sensitivities to that scenario, and considering the impact
on capital headroom. Within these scenarios the directors’
have considered a range of forward-looking scenario
analyses and evaluated related risks, including the group and
company's ability to manage liquidity events, should these
occur, and other downsides associated with credit risk.
Given the significant uncertainty as to the range of possible
outcomes in respect of motor finance commissions, the
directors considered a ‘severe but plausible’ redress
provision in the stressed going concern scenario derived by
stressing the assumptions used to calculate the existing
provision relating to motor finance commissions.
The directors’ have set out their critical judgments in their
going concern disclosures.
Relevant disclosure references:
• Strategic Report - Going concern and Note 1b - Material
accounting policies
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
We performed a risk assessment, giving consideration to relevant external and internal factors, including economic risks,
relevant accounting and regulatory developments, as well as the group’s strategy. We also considered our knowledge and
experience obtained in prior year audits. We continually assessed the risks and updated the scope of our audit where
necessary.
The group is structured into two (formerly three) primary components being the Close Brothers Limited Group (also referred to
as the Bank) and Winterflood Securities. The sale of Close Brothers Asset Management was completed during the year and the
results of this business are now reflected as Discontinued Operations in the consolidated financial statements. The
consolidated financial statements are a consolidation of these primary components. The Bank is a subgroup of Retail,
Commercial and Property business segments.
In establishing the overall approach to the group audit, we determined the type of work that is required to be performed over
the components by us, as the group engagement team, or auditors operating under our instruction (‘component auditors’).
Where the work was performed by component auditors, we determined the level of involvement we needed to have in their
audit work to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion
on the consolidated financial statements as a whole. This included regular communication with the component auditors
throughout the audit, the issuance of instructions and a review of the results of their work on the key audit matters.
Any components which were considered to be significant due to risk or size in the context of the group’s consolidated financial
statements were considered full scope components. We considered the relative financial significance of other components in
relation to primary statement account balances. Our scoping also considered the presence of any significant audit risks and
other qualitative factors (including history of misstatements through fraud or error).
For our group audit, the Bank is the only significant component due to risk or size. Specific account balances and disclosures
were scoped in for Winterflood Securities and Close Brothers Asset Management based on their financial significance and risk.
Certain account balances were audited centrally by the group engagement team mainly where the processes are centralised.
We also performed other procedures including analytical review procedures to mitigate the risk of material misstatement in the
balances not subject to our other audit procedures.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
Group’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of
climate risk. As part of considering the impact of climate change in our risk assessment, we evaluated management's
assessment of the impact of climate risk, which is set out in the Sustainability Report, and their conclusion that there is no
material impact on the financial statements. In particular, we considered management’s assessment of the impact on ECL on
loans and advances to customers, being the financial statement line item we determined to be most likely to be impacted by
climate risk. Management’s assessment gave consideration to a number of matters, including the exposure of underlying
portfolios to transition risk. Management’s conclusion that there is no material impact is consistent with our audit findings.
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
172

Key audit matter How our audit addressed the key audit matter
In performing their assessment of going concern the
directors have utilised judgement in determining the extent of
risk relating to a severe but plausible outcome in relation to
the FCA review of motor commissions for the group, along
with sensitivities to that scenario, and considering the impact
on capital headroom. Within these scenarios the directors’
have considered a range of forward-looking scenario
analyses and evaluated related risks, including the group and
company's ability to manage liquidity events, should these
occur, and other downsides associated with credit risk.
Given the significant uncertainty as to the range of possible
outcomes in respect of motor finance commissions, the
directors considered a ‘severe but plausible’ redress
provision in the stressed going concern scenario derived by
stressing the assumptions used to calculate the existing
provision relating to motor finance commissions.
The directors’ have set out their critical judgments in their
going concern disclosures.
Relevant disclosure references:
• Strategic Report - Going concern and Note 1b - Material
accounting policies
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
We performed a risk assessment, giving consideration to relevant external and internal factors, including economic risks,
relevant accounting and regulatory developments, as well as the group’s strategy. We also considered our knowledge and
experience obtained in prior year audits. We continually assessed the risks and updated the scope of our audit where
necessary.
The group is structured into two (formerly three) primary components being the Close Brothers Limited Group (also referred to
as the Bank) and Winterflood Securities. The sale of Close Brothers Asset Management was completed during the year and the
results of this business are now reflected as Discontinued Operations in the consolidated financial statements. The
consolidated financial statements are a consolidation of these primary components. The Bank is a subgroup of Retail,
Commercial and Property business segments.
In establishing the overall approach to the group audit, we determined the type of work that is required to be performed over
the components by us, as the group engagement team, or auditors operating under our instruction (‘component auditors’).
Where the work was performed by component auditors, we determined the level of involvement we needed to have in their
audit work to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion
on the consolidated financial statements as a whole. This included regular communication with the component auditors
throughout the audit, the issuance of instructions and a review of the results of their work on the key audit matters.
Any components which were considered to be significant due to risk or size in the context of the group’s consolidated financial
statements were considered full scope components. We considered the relative financial significance of other components in
relation to primary statement account balances. Our scoping also considered the presence of any significant audit risks and
other qualitative factors (including history of misstatements through fraud or error).
For our group audit, the Bank is the only significant component due to risk or size. Specific account balances and disclosures
were scoped in for Winterflood Securities and Close Brothers Asset Management based on their financial significance and risk.
Certain account balances were audited centrally by the group engagement team mainly where the processes are centralised.
We also performed other procedures including analytical review procedures to mitigate the risk of material misstatement in the
balances not subject to our other audit procedures.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the extent of the potential impact of climate risk on the
Group’s financial statements, and we remained alert when performing our audit procedures for any indicators of the impact of
climate risk. As part of considering the impact of climate change in our risk assessment, we evaluated management's
assessment of the impact of climate risk, which is set out in the Sustainability Report, and their conclusion that there is no
material impact on the financial statements. In particular, we considered management’s assessment of the impact on ECL on
loans and advances to customers, being the financial statement line item we determined to be most likely to be impacted by
climate risk. Management’s assessment gave consideration to a number of matters, including the exposure of underlying
portfolios to transition risk. Management’s conclusion that there is no material impact is consistent with our audit findings.
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
172
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - group
Financial statements - company
Overall
materiality
£8.0m (2024: £10.6m). £12.5m (2024: £13.8m).
How we
determined it
5% of 3 year average adjusted profit before tax (“PBT”) (2024: 5%
of 4 year average adjusted PBT)
1% of Total Assets
Rationale for
benchmark
applied
PBT is a primary measure used by the shareholders in assessing
the performance of the group and is a generally accepted
benchmark for determining audit materiality. We have determined it
appropriate to select the 3 year average adjusted PBT from
continuing operations (2024: 4 year average adjusted PBT from
continuing operations ) as the most appropriate benchmark
considering that it normalises the trading performance volatility
experienced in recent years across the group. We have used PBT
from continuing operations to exclude discontinued operations in
both the current and prior years when performing the average, and
removed the impact of certain adjusted items in relation to
amortisation of intangible assets on acquisition; restructuring
costs; provision for Borrowers in Financial Difficulty (“BiFD”)
review; provision in relation to early settlements in Motor Finance;
impairment of operating lease assets in Vehicle Hire; provision in
relation to motor commissions; and complaints handling and other
operational costs associated with the FCA's review of historical
motor finance commission arrangements.
We have selected total assets
as an appropriate benchmark
for company materiality, as it is
an investment holding
company, consistent with the
prior year.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was between £3.8m and £7.6m. Certain components were audited to a
local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £6.0m (2024:
£8.0m) for the group financial statements and £9.4m (2024: £10.35m) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £0.4m
(group audit) (2024: £0.5m) and £0.4m (company audit) (2024: £0.5m) as well as misstatements below those amounts that, in
our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern
basis of accounting included:
• Understanding the Directors’ going concern assessment process, including the preparation and approval of the Board
approved forecast covering the period of the going concern assessment to December 2026. We evaluated the forecasting
method adopted by the Directors in assessing going concern, including considering a severe but plausible downside
scenario and sensitivities to that scenario;
• Evaluation of management’s financial and regulatory capital forecasts. We checked the mathematical accuracy of the
forecasts and evaluated the key assumptions using our understanding of the group and external evidence where
appropriate. We used our Prudential Regulatory experts to consider the Bank's risk weighted assets and forecast capital
requirement assumptions. We also considered historic budgeting accuracy;
• Evaluation of the appropriateness of management’s severe but plausible scenarios using our understanding of the group and
the external environment. Our evaluation included considering the capital capacity projected for the Bank and Group, and
the ability to absorb a severe but plausible outcome and the capacity to absorb losses and increases in risk weighted assets
beyond the impacts modelled, in particular in relation to the FCA review of motor commissions. We considered the
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mitigating actions that management identified, including loan book moderation, and assessed whether these were in the
control of management and possible in the going concern period of assessment;
• Considering management's stress testing of liquidity. We substantiated the liquid resources held, and liquidity facilities
available to the group, for example, with the Bank of England. We also assessed the risks associated with credit rating
downgrades on the funding structure of the group and considered the group's funding strategy.
• Reviewing correspondence between the group and its regulators, with a focus on communications that may influence the
going concern assessment and highlight potential capital or liquidity concerns. During the audit, we met with the PRA to gain
an understanding of their views on the group’s risk profile and capital position; and
• Assessing the adequacy of disclosures in the Going Concern statement in the group’s consolidated and company’s
Financial Statements and within the related section of the Strategic Report and found these to be appropriate.
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 the 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 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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and
the company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have 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.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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
audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. 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 based
on these responsibilities.
With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic Report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and
Directors' Report for the year ended 31 July 2025 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Directors' Remuneration
In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement, included within the Corporate Governance Report is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
174

mitigating actions that management identified, including loan book moderation, and assessed whether these were in the
control of management and possible in the going concern period of assessment;
• Considering management's stress testing of liquidity. We substantiated the liquid resources held, and liquidity facilities
available to the group, for example, with the Bank of England. We also assessed the risks associated with credit rating
downgrades on the funding structure of the group and considered the group's funding strategy.
• Reviewing correspondence between the group and its regulators, with a focus on communications that may influence the
going concern assessment and highlight potential capital or liquidity concerns. During the audit, we met with the PRA to gain
an understanding of their views on the group’s risk profile and capital position; and
• Assessing the adequacy of disclosures in the Going Concern statement in the group’s consolidated and company’s
Financial Statements and within the related section of the Strategic Report and found these to be appropriate.
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 the 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 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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's and
the company's ability to continue as a going concern.
In relation to the directors’ reporting on how they have 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.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements does
not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise
explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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
audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. 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 based
on these responsibilities.
With respect to the Strategic Report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic Report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic Report and
Directors' Report for the year ended 31 July 2025 is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Directors' Remuneration
In our opinion, the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part
of the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review. Our additional responsibilities with respect to the corporate governance statement
as other information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement, included within the Corporate Governance Report is materially consistent with the financial statements
and our knowledge obtained during the audit, and we have nothing material to add or draw attention to in relation to:
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
174
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s
ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group's and company’s prospects, the period this assessment
covers and why the period is appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in
scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial statements and our knowledge and understanding of the
group and company and their environment obtained in the course of the audit.
In addition, 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 that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and
provides the information necessary for the members to assess the group’s and company's position, performance, business
model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems;
and
• The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities in respect of the financial statements, the directors are
responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied
that they give a true and fair view. The directors are also 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.
In preparing the financial statements, the directors are responsible for assessing the group’s and the 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 company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ 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 auditors’ 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.
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.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to breaches of laws and regulations, principally those determined by the Prudential Regulatory Authority
(“PRA”) and the Financial Conduct Authority (“FCA”), and we considered the extent to which non-compliance might have a
material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006, UK tax legislation and the Listing Rules of the FCA. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of
override of controls), and determined that the principal risks were related to posting inappropriate manual journal entries to
manipulate financial performance, management bias in the application of judgements and assumptions in significant
accounting estimates and significant one-off or unusual transactions. The group engagement team shared this risk assessment
with the component auditors so that they could include appropriate audit procedures in response to such risks in their work.
Audit procedures performed by the group engagement team and/or component auditors included:
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• Enquiries with management, compliance, internal audit and those charged with governance including consideration of
known or suspected instances of non-compliance with laws and regulations and fraud;
• Evaluation of the completeness of matters which may impact financial reporting identified by management through the
Group's whistleblowing helpline and management's investigation of such matters;
• Evaluating assumptions and judgements made by management in their significant accounting estimates, in particular in
relation to the allowance for ECL, certain impairment assessments for non-financial assets and considering the provision in
relation to the FCA’s review of historical motor finance commission arrangements and other redress provisions;
• Identifying and testing higher risk journal entries;
• Incorporating unpredictability into the nature, timing and/or extent of our testing; and
• Reviewing key correspondence with the FCA and PRA in relation to compliance with regulatory requirements.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
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 auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on 17 May 2017 to audit the
financial statements for the year ended 31 July 2018 and subsequent financial periods. The period of total uninterrupted
engagement is 8 years, covering the years ended 31 July 2018 to 31 July 2025.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R -
4.1.18R and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no
assurance over whether the structured digital format annual financial report has been prepared in accordance with those
requirements.
Heather Varley (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
30 September 2025
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
176

• Enquiries with management, compliance, internal audit and those charged with governance including consideration of
known or suspected instances of non-compliance with laws and regulations and fraud;
• Evaluation of the completeness of matters which may impact financial reporting identified by management through the
Group's whistleblowing helpline and management's investigation of such matters;
• Evaluating assumptions and judgements made by management in their significant accounting estimates, in particular in
relation to the allowance for ECL, certain impairment assessments for non-financial assets and considering the provision in
relation to the FCA’s review of historical motor finance commission arrangements and other redress provisions;
• Identifying and testing higher risk journal entries;
• Incorporating unpredictability into the nature, timing and/or extent of our testing; and
• Reviewing key correspondence with the FCA and PRA in relation to compliance with regulatory requirements.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-
compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
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 auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the directors on 17 May 2017 to audit the
financial statements for the year ended 31 July 2018 and subsequent financial periods. The period of total uninterrupted
engagement is 8 years, covering the years ended 31 July 2018 to 31 July 2025.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R -
4.1.18R and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no
assurance over whether the structured digital format annual financial report has been prepared in accordance with those
requirements.
Heather Varley (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
30 September 2025
Independent auditors’ report to the members of Close Brothers Group plc continued
Close Brothers Group plc Annual Report 2025
176
2024
1
Interest income
4
1,111.7
1,133.2
Interest expense
4
(542.9)
(552.5)
Net interest income
568.8
580.7
Fee and commission income
4
103.5
104.2
Fee and commission expense
4
(16.7)
(19.8)
Other income
4
118.5
129.7
Depreciation of operating lease assets and other direct costs
15
(84.6)
(81.4)
Impairment of operating lease assets
15
(30.0)
—
Non-interest income
90.7
132.7
Operating income
659.5
713.4
Provision in relation to motor finance commissions
16
(165.0)
—
Complaints handling and other operational and legal costs incurred in relation to motor
finance commissions
16
(18.7)
(6.9)
Provision in relation to early settlements in Motor Finance
16
(33.0)
—
Provision in relation to the Borrowers in Financial Difficulty (“BiFD”) review
—
(17.2)
Other administrative expenses
4
(472.4)
(457.7)
Total administrative expenses
4
(689.1)
(481.8)
Impairment losses on financial assets
10
(92.8)
(98.9)
Total operating expenses
(781.9)
(580.7)
Operating (loss)/profit before tax
(122.4)
132.7
Tax
6
(4.7)
(37.4)
(Loss)/profit after tax from continuing operations
(127.1)
95.3
Profit from discontinued operations, net of tax
29
49.2
5.1
(Loss)/profit after tax
(77.9)
100.4
Attributable to
Shareholders
(100.2)
89.3
Other equity owners
20
22.3
11.1
(77.9)
100.4
From continuing operations
Basic earnings per share
7
(99.8) p
56.2p
Diluted earnings per share
7
(99.8) p
56.1p
From continuing and discontinued operations
Basic earnings per share
7
(66.9) p
59.7p
Diluted earnings per share
7
(66.9)p
59.5p
Interim dividend per share
8
—
—
Final dividend per share
8
—
—
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood Securities as discontinued
operations. See Notes 3 and 29.
Consolidated income statement
For the year ended 31July 2025
177
Strategic report Governance report Financial statements

(Loss)/profit after tax
(77.9)
100.4
Items that may be reclassified to income statement
Currency translation gains/(losses)
0.5
(0.5)
Losses on cash flow hedging
(12.7)
(29.8)
Losses on financial instruments classified at fair value through other comprehensive income
(4.2)
(3.6)
Tax relating to items that may be reclassified
4.3
9.8
(12.1)
(24.1)
Items that will not be reclassified to income statement
Defined benefit pension scheme losses
(0.1)
—
Other comprehensive expense, net of tax
(12.2)
(24.1)
Total comprehensive (loss)/income
(90.1)
76.3
Attributable to
Shareholders
(112.4)
65.2
Other equity owners
20
22.3
11.1
(90.1)
76.3
Consolidated statement of comprehensive income
For the year ended 31July 2025
Close Brothers Group plc Annual Report 2025
178

Note
2025
£ million
2024
£ million
(Loss)/profit after tax
(77.9) 100.4
Items that may be reclassified to income statement
Currency translation gains/(losses)
0.5 (0.5)
Losses on cash flow hedging
(12.7) (29.8)
Losses on financial instruments classified at fair value through other comprehensive income
(4.2) (3.6)
Tax relating to items that may be reclassified
4.3 9.8
(12.1) (24.1)
Items that will not be reclassified to income statement
Defined benefit pension scheme losses
(0.1) —
Other comprehensive expense, net of tax
(12.2) (24.1)
Total comprehensive (loss)/income
(90.1) 76.3
Attributable to
Shareholders
(112.4) 65.2
Other equity owners
20 22.3 11.1
(90.1) 76.3
Consolidated statement of comprehensive income
For the year ended 31July 2025
Close Brothers Group plc Annual Report 2025
178
Assets
Cash and balances at central banks
1,917.0
1,584.0
Settlement balances
—
627.5
Loans and advances to banks
9
161.7
293.7
Loans and advances to customers
10
9,459.4
9,830.8
Debt securities
11
859.2
740.5
Equity shares
12
—
27.4
Loans to money brokers against stock advanced
—
22.5
Derivative financial instruments
13
103.1
101.4
Intangible assets
14
166.3
266.0
Property, plant and equipment
15
209.4
349.6
Current tax assets
44.2
36.4
Deferred tax assets
6
31.0
14.3
Prepayments, accrued income and other assets
16
186.6
186.7
Assets classified as held for sale
29
934.0
—
Total assets
14,071.9
14,080.8
Liabilities
Settlement balances and short positions
17
—
614.9
Deposits by banks
18
88.1
138.4
Deposits by customers
18
8,799.3
8,693.6
Loans and overdrafts from banks
18
1.5
165.6
Debt securities in issue
18
1,991.3
1,986.4
Loans from money brokers against stock advanced
—
16.7
Derivative financial instruments
13
104.7
129.0
Provisions
16
210.3
32.3
Accruals, deferred income and other liabilities
16
172.3
274.2
Subordinated loan capital
19
195.5
187.2
Liabilities directly associated with assets classified as held for sale
29
773.4
—
Total liabilities
12,336.4
12,238.3
Equity
Called up share capital
20
38.0
38.0
Retained earnings
1,532.3
1,634.4
Other equity instrument
20
197.6
197.6
Other reserves
(32.4)
(27.5)
Total shareholders' and other equity owners' equity
1,735.5
1,842.5
Total equity
1,735.5
1,842.5
Total equity and liabilities
14,071.9
14,080.8
The consolidated financial statements were approved and authorised for issue by the Board of Directors on 30 September
2025 and signed on its behalf by:
Michael B. Morgan
Chief Executive
Fiona McCarthy
Group Chief Finance Officer
Registered number: 520241
Consolidated balance sheet
At 31July 2025
179
Strategic report Governance report Financial statements

At 1 August 2023
38.0
1,608.5
—
(2.7)
(32.0)
(1.3)
34.4
1,644.9
1,644.9
Profit for the year
—
100.4
—
—
—
—
—
100.4
100.4
Other comprehensive
expense
—
—
—
(2.6)
—
(0.1)
(21.4)
(24.1)
(24.1)
Total comprehensive
income for the year
—
100.4
—
(2.6)
—
(0.1)
(21.4)
76.3
76.3
Dividends paid (Note 8)
—
(67.1)
—
—
—
—
—
(67.1)
(67.1)
Shares purchased
—
—
—
—
(3.5)
—
—
(3.5)
(3.5)
Shares released
—
—
—
—
4.6
—
—
4.6
4.6
Other equity instrument
issued (Note 20)
—
—
197.6
—
—
—
—
197.6
197.6
Coupon paid on other
equity instrument (Note
20)
—
(11.1)
—
—
—
—
—
(11.1)
(11.1)
Other movements
—
3.7
—
—
(2.9)
—
—
0.8
0.8
At 31 July 2024
38.0
1,634.4
197.6
(5.3)
(33.8)
(1.4)
13.0
1,842.5
1,842.5
Loss for the year
—
(77.9)
—
—
—
—
—
(77.9)
(77.9)
Other comprehensive
(expense)/income
—
(0.1)
—
(3.0)
—
0.1
(9.2)
(12.2)
(12.2)
Total comprehensive
(expense)/income for the
year
—
(78.0)
—
(3.0)
—
0.1
(9.2)
(90.1)
(90.1)
Dividends paid (Note 8)
—
—
—
—
—
—
—
—
—
Shares purchased
—
—
—
—
(1.6)
—
—
(1.6)
(1.6)
Shares released
—
—
—
—
9.2
—
—
9.2
9.2
Other equity instrument
issued (Note 20)
—
—
—
—
—
—
—
—
—
Coupon paid on other
equity instrument (Note
20)
—
(22.3)
—
—
—
—
—
(22.3)
(22.3)
Other movements
—
(1.8)
—
—
(0.4)
—
—
(2.2)
(2.2)
At 31 July 2025
38.0
1,532.3
197.6
(8.3)
(26.6)
(1.3)
3.8
1,735.5
1,735.5
Consolidated statement of changes in equity
For the year ended 31July 2025
Close Brothers Group plc Annual Report 2025
180

Other reserves
Total
attributable to
shareholders
and other
equity owners
£ million
Total equity
£ million
Called up
share
capital
£ million
Retained
earnings
£ million
Other equity
instrument
£ million
FVOCI
reserve
£ million
Share-
based
payments
reserve
£ million
Exchange
movements
reserve
£ million
Cash flow
hedging
reserve
£ million
At 1 August 2023
38.0 1,608.5 — (2.7) (32.0) (1.3) 34.4 1,644.9 1,644.9
Profit for the year
— 100.4 — — — — — 100.4 100.4
Other comprehensive
expense
— — — (2.6) — (0.1) (21.4) (24.1) (24.1)
Total comprehensive
income for the year
— 100.4 — (2.6) — (0.1) (21.4) 76.3 76.3
Dividends paid (Note 8)
— (67.1) — — — — — (67.1) (67.1)
Shares purchased
— — — — (3.5) — — (3.5) (3.5)
Shares released
— — — — 4.6 — — 4.6 4.6
Other equity instrument
issued (Note 20)
— — 197.6 — — — — 197.6 197.6
Coupon paid on other
equity instrument (Note
20)
— (11.1) — — — — — (11.1) (11.1)
Other movements
— 3.7 — — (2.9) — — 0.8 0.8
At 31 July 2024
38.0 1,634.4 197.6 (5.3) (33.8) (1.4) 13.0 1,842.5 1,842.5
Loss for the year
— (77.9) — — — — — (77.9) (77.9)
Other comprehensive
(expense)/income
— (0.1) — (3.0) — 0.1 (9.2) (12.2) (12.2)
Total comprehensive
(expense)/income for the
year
— (78.0) — (3.0) — 0.1 (9.2) (90.1) (90.1)
Dividends paid (Note 8)
— — — — — — — — —
Shares purchased
— — — — (1.6) — — (1.6) (1.6)
Shares released
— — — — 9.2 — — 9.2 9.2
Other equity instrument
issued (Note 20)
— — — — — — — — —
Coupon paid on other
equity instrument (Note
20)
— (22.3) — — — — — (22.3) (22.3)
Other movements
— (1.8) — — (0.4) — — (2.2) (2.2)
At 31 July 2025
38.0 1,532.3 197.6 (8.3) (26.6) (1.3) 3.8 1,735.5 1,735.5
Consolidated statement of changes in equity
For the year ended 31July 2025
Close Brothers Group plc Annual Report 2025
180
Net cash inflow/(outflow) from operating activities
25(a)
241.2
(382.0)
Net cash (outflow)/inflow from investing activities
Purchase of:
Property, plant and equipment
(5.3)
(14.2)
Intangible assets – software
(24.5)
(30.3)
Subsidiaries, net of cash acquired
25(b)
(0.5)
(15.4)
Sale of:
Equity shares held for investment
1.8
0.2
Subsidiaries, net of cash disposed
25(c)
104.0
0.9
75.5
(58.8)
Net cash inflow/(outflow) before financing activities
316.7
(440.8)
Financing activities
Purchase of own shares for employee share award schemes
(1.6)
(3.5)
Equity dividends paid
—
(67.1)
Interest paid on subordinated loan capital and debt financing
(23.4)
(23.4)
Payment of lease liabilities
(12.1)
(16.5)
Issuance of Additional Tier 1 (“AT1”) capital securities
—
200.0
Costs arising on issue of AT1
—
(2.4)
AT1 coupon payment
(22.3)
(11.1)
Net increase/(decrease) in cash
257.3
(364.8)
Cash and cash equivalents at beginning of year
1,844.5
2,209.3
Cash and cash equivalents at end of year
25(d)
2,101.8
1,844.5
Cash and cash equivalents per the balance sheet
2,046.8
1,844.5
Cash and cash equivalents within the assets of the disposal group classified as held for sale
29
55.0
—
2,101.8
1,844.5
Consolidated cash flow statement
For the year ended 31July 2025
181
Strategic report Governance report Financial statements

Note
31 July 2025
£ million
31 July 2024
£ million
Fixed assets
Property, plant and equipment
15 6.5 7.7
Investment in subsidiary
28 487.0 487.0
493.5 494.7
Current assets
Amounts owed by subsidiaries due within one year
420.8 465.3
Amounts owed by subsidiaries due after more than one year
199.7 199.3
Corporation tax receivable
5.9 1.6
Deferred tax asset
6 0.4 0.2
Other debtors
3.0 3.8
Cash at bank
4.8 3.8
634.6 674.0
Creditors: Amounts falling due within one year
Debt securities in issue
18 2.1 2.5
Subordinated loan capital
19 1.5 1.5
Provisions
16 0.2 0.8
Other creditors
1.5 1.5
Accruals
6.7 7.8
12.0 14.1
Net current assets
622.6 659.9
Total assets less current liabilities
1,116.1 1,154.6
Creditors: Amounts falling due after more than one year
Debt securities in issue
18 249.2 248.3
Subordinated loan capital
19 199.7 199.3
Provisions
16 0.8 0.8
Net assets
666.4 706.2
Capital and reserves
Called up share capital
20 38.0 38.0
Other equity instrument
20 200.0 200.0
Other reserves
(26.6) (33.8)
Profit and loss account
455.0 502.0
Shareholders' and other equity owners' funds
666.4 706.2
The company reported a loss for the financial year ended 31July 2025 of £20.7 million (2024: £24.1 million loss).
The company financial statements were approved and authorised for issue by the Board of Directors on 30September 2025
and signed on its behalf by:
Michael B. Morgan
Chief Executive
Fiona McCarthy
Group Chief Finance Officer
Company balance sheet
At 31July 2025
Close Brothers Group plc Annual Report 2025
182

Note
31 July 2025
£ million
31 July 2024
£ million
Fixed assets
Property, plant and equipment
15 6.5 7.7
Investment in subsidiary
28 487.0 487.0
493.5 494.7
Current assets
Amounts owed by subsidiaries due within one year
420.8 465.3
Amounts owed by subsidiaries due after more than one year
199.7 199.3
Corporation tax receivable
5.9 1.6
Deferred tax asset
6 0.4 0.2
Other debtors
3.0 3.8
Cash at bank
4.8 3.8
634.6 674.0
Creditors: Amounts falling due within one year
Debt securities in issue
18 2.1 2.5
Subordinated loan capital
19 1.5 1.5
Provisions
16 0.2 0.8
Other creditors
1.5 1.5
Accruals
6.7 7.8
12.0 14.1
Net current assets
622.6 659.9
Total assets less current liabilities
1,116.1 1,154.6
Creditors: Amounts falling due after more than one year
Debt securities in issue
18 249.2 248.3
Subordinated loan capital
19 199.7 199.3
Provisions
16 0.8 0.8
Net assets
666.4 706.2
Capital and reserves
Called up share capital
20 38.0 38.0
Other equity instrument
20 200.0 200.0
Other reserves
(26.6) (33.8)
Profit and loss account
455.0 502.0
Shareholders' and other equity owners' funds
666.4 706.2
The company reported a loss for the financial year ended 31July 2025 of £20.7 million (2024: £24.1 million loss).
The company financial statements were approved and authorised for issue by the Board of Directors on 30September 2025
and signed on its behalf by:
Michael B. Morgan
Chief Executive
Fiona McCarthy
Group Chief Finance Officer
Company balance sheet
At 31July 2025
Close Brothers Group plc Annual Report 2025
182
Other reserves
Total
attributable to
shareholders
and other
equity owners
£ million
Share capital
£ million
Other equity
instrument
£ million
Profit and loss
account
£ million
Share-based
payments
reserve
£ million
At 1 August 2023
38.0 — 602.4 (32.0) 608.4
Loss for the year
— — (24.1) — (24.1)
Other comprehensive expense
— — (0.1) — (0.1)
Total comprehensive loss for the year
— — (24.2) — (24.2)
Dividends paid (Note 8)
— — (67.1) — (67.1)
Shares purchased
— — — (3.5) (3.5)
Shares released
— — — 4.6 4.6
Other equity instrument issued (Note 20)
— 200.0 — — 200.0
Coupon paid on other equity instrument (Note 20)
— — (11.1) — (11.1)
Other movements
— — 2.0 (2.9) (0.9)
At 31 July 2024
38.0 200.0 502.0 (33.8) 706.2
Loss for the year
— — (20.7) — (20.7)
Other comprehensive income
— — (0.1) — (0.1)
Total comprehensive loss for the year
— — (20.8) — (20.8)
Dividends paid (Note 8)
— — — — —
Shares purchased
— — — (1.6) (1.6)
Shares issued
— — — — —
Shares released
— — — 9.2 9.2
Other equity instrument issued (Note 20)
— — — —
—
Coupon paid on other equity instrument (Note 20)
— — (22.3) — (22.3)
Other movements
— — (3.9) (0.4) (4.3)
At 31 July 2025
38.0 200.0 455.0 (26.6) 666.4
Company statement of changes in equity
For the year ended 31July 2025
183
Strategic report Governance report Financial statements

1. Material accounting policies
(a) Reporting entity
Close Brothers Group plc (“the company”), a public limited
company by shares incorporated and domiciled in the UK
(England), together with its subsidiaries (collectively, “the
group”), operates through three (2024: five) operating
segments: Commercial, Retail, and Property, and is primarily
located within the UK.
(b) Basis of preparation
The consolidated financial statements have been prepared in
accordance with UK-adopted International Accounting
Standards (“IAS”).
The company financial statements have been prepared in
compliance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102 “The Financial
Reporting Standard applicable in the United Kingdom and
the Republic of Ireland” (“FRS 102”) and the Companies Act
2006, under the provision of the Large and Medium-sized
Companies and Groups (Accounts and Financial
Instruments: Recognition and Measurement Reports)
Regulations 2008 (SI 2008/410).
As permitted by FRS 102, the company has chosen to adopt
IFRS 9 Financial Instruments where applicable and taken
advantage of the disclosure exemptions available under that
standard in relation to the presentation of a cash flow
statement, share-based payments and related party
transactions. Where required, equivalent disclosures are
given in the consolidated financial statements of the group.
The company has also taken advantage of the exemption in
section 408 of the Companies Act 2006 not to present its
company income statement and related notes.
Where relevant, the accounting policies of the company are
the same as those of the group set out in this note except for
(l) Leases. For the company, rental costs under operating
leases are charged to the income statement in equal
instalments over the period of the lease. Amounts owed by
subsidiaries due within one year on the company balance
sheet include cash held with Close Brothers Limited.
The consolidated and company financial statements have been
prepared on a going concern basis and under the historical cost
convention, except for financial assets and liabilities held at fair
value through profit or loss and financial assets held at fair value
through other comprehensive income. Further information on
going concern can be found within the Strategic Report.
Items relevant to understanding financial performance are
presented on the consolidated income statement under IAS
1. Adjusting items and administrative expenses before
adjusting items are not presented on the consolidated
income statement this year to provide more clarity in relation
to the statutory figures. Prior year comparatives have been
re-presented on the same basis.
(c) Accounting developments
Standards adopted during the year
The accounting standards applied this financial year are
consistent with those of the previous financial year.
Future accounting developments
Minor amendments to IFRSs issued by the IASB are effective
for the group from 1 August 2025. These changes are
expected to have no or an immaterial impact on the group.
Amendments to the Classification and Measurement of
Financial Instruments, which amend IFRS 9 "Financial
Instruments" and IFRS 7 "Financial Instruments: Disclosures",
are effective for the group from 1 August 2026. These
amendments clarify certain classification and measurement
and related disclosure requirements. IFRS 18 "Presentation
and Disclosure in Financial Statements" is effective for the
group from 1 August 2027. The impact of these accounting
standard changes is currently under assessment.
(d) Consolidation and investment in subsidiaries
Subsidiaries
Subsidiaries are all entities over which the group has control.
The group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power
over the entity. Such power generally accompanies a
shareholding of more than one half of the voting rights.
Subsidiaries are fully consolidated from the date on which
the group effectively obtains control. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for
the acquisition of subsidiaries. Under the acquisition method
of accounting, with some limited exceptions, the assets,
liabilities and contingent liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any
non-controlling interest is measured either at fair value or at
the non-controlling interest’s proportion of the net assets
acquired. Acquisition related costs are accounted for as
expenses when incurred, unless directly related to the issue of
debt or equity securities. Any excess of the cost of acquisition
over net assets is capitalised as goodwill. All intra-group
balances, transactions, income and expenses are eliminated.
The company’s investment in its subsidiary is valued at cost
less any accumulated impairment losses.
(e) Foreign currency translation
For the company and those subsidiaries whose balance
sheets are denominated in sterling, which is the company’s
functional and presentation currency, monetary assets and
liabilities denominated in foreign currencies are translated
into sterling at the closing rates of exchange at the balance
sheet date. Foreign currency transactions are translated into
sterling at the average rates of exchange at the date of the
transaction and exchange differences arising are taken to the
consolidated income statement.
The balance sheets of subsidiaries denominated in foreign
currencies are translated into sterling at the closing rates.
The income statements for these subsidiaries are translated
at the average rates and exchange differences arising are
taken to equity. Such exchange differences are reclassified
to the consolidated income statement in the period in which
the subsidiary is disposed of.
(f) Revenue recognition
Interest income
Interest on loans and advances made by the group, and fee
income and expense and other direct costs relating to loan
origination, restructuring or commitments are recognised in
the consolidated income statement using the effective
interest rate method.
The effective interest rate method applies a rate that
discounts estimated future cash payments or receipts over
the expected life of a financial instrument to the gross
carrying amount of a financial asset or to the amortised cost
of a financial liability. The cash flows take into account all
contractual terms of the financial instrument including
transaction costs and all other premiums or discounts but
not future credit losses. Interest income is recognised on a
contractual basis where it is not possible to reliably estimate
the cash flows or expected life of a financial instrument.
The Notes
Close Brothers Group plc Annual Report 2025
184

1. Material accounting policies
(a) Reporting entity
Close Brothers Group plc (“the company”), a public limited
company by shares incorporated and domiciled in the UK
(England), together with its subsidiaries (collectively, “the
group”), operates through three (2024: five) operating
segments: Commercial, Retail, and Property, and is primarily
located withinthe UK.
(b) Basis of preparation
The consolidated financial statements have been prepared in
accordance with UK-adopted International Accounting
Standards (“IAS”).
The company financial statements have been prepared in
compliance with United Kingdom Accounting Standards,
including Financial Reporting Standard 102 “The Financial
Reporting Standard applicable in the United Kingdom and
the Republic of Ireland” (“FRS 102”) and the Companies Act
2006, under the provision of the Large and Medium-sized
Companies and Groups (Accounts and Financial
Instruments: Recognition and Measurement Reports)
Regulations 2008 (SI 2008/410).
As permitted by FRS102, the company has chosen to adopt
IFRS 9 Financial Instruments where applicable and taken
advantage of the disclosure exemptions available under that
standard in relation to the presentation of a cash flow
statement, share-based payments and related party
transactions. Where required, equivalent disclosures are
given in the consolidated financial statements of the group.
The company has also taken advantage of the exemption in
section 408 of the Companies Act 2006 not to present its
company income statement and related notes.
Where relevant, the accounting policies of the company are
the same as those of the group set out in this note except for
(l) Leases. For the company, rental costs under operating
leases are charged to the income statement in equal
instalments over the period of the lease. Amounts owed by
subsidiaries due within one year on the company balance
sheet include cash held with Close Brothers Limited.
The consolidated and company financial statements have been
prepared on a going concern basis and under the historical cost
convention, except for financial assets and liabilities held at fair
value through profit or loss and financial assets held at fair value
through other comprehensive income. Further information on
going concern can be found within the Strategic Report.
Items relevant to understanding financial performance are
presented on the consolidated income statement under IAS
1. Adjusting items and administrative expenses before
adjusting items are not presented on the consolidated
income statement this year to provide more clarity in relation
to the statutory figures. Prior year comparatives have been
re-presented on the same basis.
(c) Accounting developments
Standards adopted during the year
The accounting standards applied this financial year are
consistent with those of the previous financial year.
Future accounting developments
Minor amendments to IFRSs issued by the IASB are effective
for the group from 1 August 2025. These changes are
expected to have no or an immaterial impact on the group.
Amendments to the Classification and Measurement of
Financial Instruments, which amend IFRS 9 "Financial
Instruments" and IFRS 7 "Financial Instruments: Disclosures",
are effective for the group from 1 August 2026. These
amendments clarify certain classification and measurement
and related disclosure requirements. IFRS 18 "Presentation
and Disclosure in Financial Statements" is effective for the
group from 1 August 2027. The impact of these accounting
standard changes is currently under assessment.
(d) Consolidation and investment in subsidiaries
Subsidiaries
Subsidiaries are all entities over which the group has control.
The group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power
over the entity. Such power generally accompanies a
shareholding of more than one half of the voting rights.
Subsidiaries are fully consolidated from the date on which
the group effectively obtains control. They are de-
consolidated from the date that control ceases.
The acquisition method of accounting is used to account for
the acquisition of subsidiaries. Under the acquisition method
of accounting, with some limited exceptions, the assets,
liabilities and contingent liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any
non-controlling interest is measured either at fair value or at
the non-controlling interest’s proportion of the net assets
acquired. Acquisition related costs are accounted for as
expenses when incurred, unless directly related to the issue of
debt or equity securities. Any excess of the cost of acquisition
over net assets is capitalised as goodwill. All intra-group
balances, transactions, income and expenses are eliminated.
The company’s investment in its subsidiary is valued at cost
less any accumulated impairment losses.
(e) Foreign currency translation
For the company and those subsidiaries whose balance
sheets are denominated in sterling, which is the company’s
functional and presentation currency, monetary assets and
liabilities denominated in foreign currencies are translated
into sterling at the closing rates of exchange at the balance
sheet date. Foreign currency transactions are translated into
sterling at the average rates of exchange at the date of the
transaction and exchange differences arising are taken to the
consolidated income statement.
The balance sheets of subsidiaries denominated in foreign
currencies are translated into sterling at the closing rates.
The income statements for these subsidiaries are translated
at the average rates and exchange differences arising are
taken to equity. Such exchange differences are reclassified
to the consolidated income statement in the period in which
the subsidiary is disposed of.
(f) Revenue recognition
Interest income
Interest on loans and advances made by the group, and fee
income and expense and other direct costs relating to loan
origination, restructuring or commitments are recognised in
the consolidated income statement using the effective
interest rate method.
The effective interest rate method applies a rate that
discounts estimated future cash payments or receipts over
the expected life of a financial instrument to the gross
carrying amount of a financial asset or to the amortised cost
of a financial liability. The cash flows take into account all
contractual terms of the financial instrument including
transaction costs and all other premiums or discounts but
not future credit losses. Interest income is recognised on a
contractual basis where it is not possible to reliably estimate
the cash flows or expected life of a financial instrument.
The Notes
Close Brothers Group plc Annual Report 2025
184
Fees and commissions
Where fees that have not been included within the effective
interest rate method are earned on the execution of a
significant act at a point in time, such as fees arising from
negotiating or arranging a transaction for a third party, they
are recognised as revenue when that act has been
completed and the performance obligation has been met.
Fees and corresponding expenses in respect of other
services are recognised in the consolidated income
statement as the right to consideration or payment accrues
over time when services are performed and obligations are
met. To the extent that fees and commissions are recognised
in advance of billing they are included as accrued income or
expense.
Dividends
Dividend income is recognised when the right to receive
payment is established.
Gains less losses arising from dealing in securities
Non-interest income includes net realised and unrealised
gains arising from the buying and selling of securities and
from positions held in securities, including related interest
income and dividends.
(g) Adjusted measures
Adjusted measures are management measures presented on
a basis consistent with prior periods and exclude adjusting
items which do not reflect underlying trading performance
and which may be recurring. Adjusted measures also
exclude exceptional items.
Adjusting items this year comprise amortisation of intangible
assets on acquisition, restructuring costs, provision in
relation to motor finance commissions, complaints handling
and other operational and legal costs incurred in relation to
motor finance commissions, provision in relation to early
settlements in Motor Finance, operating loss of Close
Brewery Rentals, and operating loss of Close Brothers
Vehicle Hire.
Amortisation of intangible assets on acquisition is excluded
to present the performance of the group’s acquired
businesses consistent with its other businesses. The other
adjusting items do not reflect underlying trading
performance.
Exceptional items are income and expense items that are
material by size and/or nature and are non-recurring.
(h) Financial assets and liabilities (excluding
derivatives)
Classification and measurement
Financial assets are classified at initial recognition on the
basis of the business model within which they are managed
and their contractual cash flow characteristics. The
classification categories are amortised cost, fair value
through other comprehensive income (“FVOCI”) and fair
value through profit or loss (“FVTPL”).
Financial assets that are held to collect contractual cash
flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Initial
recognition is at fair value plus directly attributable
transaction costs. Interest income is accounted for using the
effective interest rate method.
Financial assets that are held to collect contractual cash
flows and for subsequent sale, where the assets’ cash flows
represent solely payments of principal and interest, are
classified at FVOCI. Directly attributable transaction costs
are added to the initial fair value. Gains and losses are
recognised in other comprehensive income, except for
impairment gains and losses, until the financial asset is either
sold or matures, at which time the cumulative gain or loss is
recognised in the income statement. Impairment gains and
losses are recognised in the income statement.
Financial assets are classified at FVTPL where they do not
meet the criteria to be measured at amortised cost or FVOCI
or where they are designated at FVTPL to reduce an
accounting mismatch. Financial assets at FVTPL are
recognised at fair value. Transaction costs are immediately
recognised in profit or loss on initial recognition. Gains and
losses that subsequently arise on changes in fair value are
recognised in the income statement.
Financial liabilities are classified at initial recognition at
amortised cost except for the following instruments which
are classified at FVTPL: derivatives; financial liabilities held
for trading; and financial liabilities designated as FVTPL to
eliminate an accounting mismatch.
Financial liabilities at amortised cost are measured at fair
value less directly attributable transaction costs on initial
recognition. Interest expense is accounted for using the
effective interest rate method. Financial liabilities at FVTPL
are measured at fair value on initial recognition. Transaction
costs are immediately recognised in profit or loss on initial
recognition. Subsequent changes in fair value are recognised
in the income statement except for financial liabilities
designated at FVTPL; changes in fair value attributable to
changes in credit risk are recognised in other comprehensive
income.
The fair values of quoted financial assets or financial
liabilities in active markets are based on bid or offer prices. If
the market for a financial asset or financial liability is not
active, or they relate to unlisted securities, the group
establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions,
discounted cash flow analysis and other valuation
techniques commonly used by market participants.
Derecognition
Financial assets are derecognised when the contractual
rights to receive cash flows from the financial assets have
expired or where the group has transferred the contractual
rights to receive cash flows and transferred substantially all
risks and rewards of ownership. If substantially all the risks
and rewards have been neither retained nor transferred the
assets continue to be recognised to the extent of the group’s
continuing involvement. Financial liabilities are derecognised
when they are extinguished.
Modifications
The terms or cash flows of a financial asset or liability may
be modified due to renegotiation or otherwise. If the terms or
cash flows are substantially different to the original, then the
financial asset or liability is derecognised and a new financial
asset or liability is recognised at fair value. If the terms or
cash flows are not substantially different to the original, then
the financial asset or liability carrying value is adjusted to
reflect the present value of modified cash flows discounted
at the original EIR. The adjustment is recognised within
income on the income statement.
185
Strategic report Governance report Financial statements

1. Material accounting policies (continued)
(i) Impairment of financial assets
Expected credit losses
In accordance with IFRS 9, expected credit losses (“ECL”)
are recognised for loans and advances to customers and
banks, other financial assets held at amortised cost, financial
assets measured at FVOCI, loan commitments and financial
guarantee contracts. The impairment charge in the income
statement includes the change in expected credit losses.
At initial recognition, financial assets are considered to be in
Stage 1 and a provision is recognised for 12 months of
expected credit losses. If a significant increase in credit risk
since initial recognition occurs, these financial assets are
considered to be in Stage 2 and a provision is made for the
lifetime expected credit losses. As a backstop, all financial
assets 30 days past due are considered to have experienced
a significant increase in credit risk and are transferred to
Stage 2.
A financial asset will remain classified as Stage 2 until the
credit risk has improved and it can be returned to Stage 1 or
until it deteriorates such that it meets the criteria to move to
Stage 3.
Where a financial asset no longer represents a significant
increase in credit risk since origination it can move from
Stage 2 back to Stage 1. As a minimum this means that all
payments must be up-to-date, the quantitative probability of
default assessment trigger is no longer met, and the account
is not evidencing qualitative assessment triggers.
When objective evidence exists that a financial asset is credit
impaired, such as the occurrence of a credit default event or
identification of an unlikeliness to pay indicator, the financial
asset is considered to be in Stage 3. As a backstop, all
financial assets 90 days or more past due are considered to
be credit impaired and transferred to Stage 3.
Cure definitions are in operation where certain financial
assets in Stage 3 can move back to Stage 2, subject to
Stage 3 indicators no longer being in effect, and meeting the
appropriate cure period.
In all circumstances, loans and advances to customers are
written off against the related provisions when there are no
reasonable expectations of further recovery. This is typically
following realisation of all associated collateral and available
recovery actions against the customer. Subsequent
recoveries of amounts previously written off decrease the
amount of impairment losses recorded in the income
statement.
The calculation of expected credit losses for loans and
advances to customers, either on a 12-month or lifetime
basis, is based on the probability of default (“PD”), the
exposure at default (“EAD”) and the loss given default
(“LGD”), and includes forward-looking macroeconomic
information where appropriate. Further information on this
calculation methodology can be found in the “Use of
estimates” section of the Risk Report.
The calculation of expected credit losses for some loan
portfolios and receivables relating to operating lease assets
is based on a simplified lifetime only expected credit loss
approach. Under the simplified approach, stage
classification represents management’s internal assessment
of credit risk.
Expected credit losses are assessed against actual loss
experience via a series of provision adequacy reviews. These
reviews also incorporate management judgement to ensure
that our ECL coverage ratios remain appropriate.
(j) Settlement accounts
Settlement balance debtors and creditors are the amounts
due to and from counterparties in respect of the group’s
market-making activities and are measured at fair value on
initial recognition and carried at amortised cost. The
balances are short term in nature, do not earn interest and
are recorded at the amount receivable or payable.
(k) Loans to and from money brokers against stock
advanced
Loans to money brokers against stock advanced is the cash
collateral provided to these institutions for stock borrowing
by the group’s market-making activities and is measured at
fair value on initial recognition and carried at amortised cost.
Interest is paid on the stock borrowed and earned on the
cash deposits advanced. The stock borrowing to which the
cash deposits relate is short term in nature and is recorded
at the amount receivable. Loans from money brokers against
stock collateral provided are recorded at the amount
payable. Interest is paid on the loans.
(l) Leases
Lessor
A finance lease is a lease or hire purchase contract that
transfers substantially all the risks and rewards incidental to
ownership of an asset to the lessee. Finance leases are
recognised as loans at an amount equal to the gross
investment in the lease, which comprises the lease payments
receivable and any unguaranteed residual value, discounted
at its implicit interest rate. Finance charges on finance leases
are taken to income in proportion to the net funds invested.
An operating lease is a lease that does not transfer
substantially all the risks and rewards incidental to ownership
of an asset to the lessee. Rental income from operating
leases is recognised in equal instalments over the period of
the leases and included in other income in the consolidated
income statement.
Lessee
A lease liability and right of use asset are recognised on the
balance sheet at the lease commencement date. The lease
liability is measured at the present value of future lease
payments. The discount rate is the rate implicit in the lease,
or if that cannot be determined, the group’s incremental
borrowing rate appropriate for the right of use asset. The
right of use asset is measured at cost, comprising the initial
lease liability, payments made at or before the
commencement date less lease incentives received, initial
direct costs, and estimated costs of restoring the underlying
asset to the condition required by the lease.
Lease payments are allocated between the liability and
finance cost. The finance cost relating to the lease liability is
charged to the consolidated income statement over the lease
term. The right of use asset is depreciated over the shorter of
the asset’s useful life and the lease term on a straight-line
basis.
As set out in Note 1(b), the company has a different
accounting policy for leases under FRS 102. Rental costs
under operating leases are charged to the income statement
in equal instalments over the period of the lease.
The Notes continued
Close Brothers Group plc Annual Report 2025
186

1. Material accounting policies (continued)
(i) Impairment of financial assets
Expected credit losses
In accordance with IFRS 9, expected credit losses (“ECL”)
are recognised for loans and advances to customers and
banks, other financial assets held at amortised cost, financial
assets measured at FVOCI, loan commitments and financial
guarantee contracts. The impairment charge in the income
statement includes the change in expected credit losses.
At initial recognition, financial assets are considered to be in
Stage 1 and a provision is recognised for 12 months of
expected credit losses. If a significant increase in credit risk
since initial recognition occurs, these financial assets are
considered to be in Stage 2 and a provision is made for the
lifetime expected credit losses. As a backstop, all financial
assets 30 days past due are considered to have experienced
a significant increase in credit risk and are transferred to
Stage 2.
A financial asset will remain classified as Stage 2 until the
credit risk has improved and it can be returned to Stage 1 or
until it deteriorates such that it meets the criteria to move to
Stage 3.
Where a financial asset no longer represents a significant
increase in credit risk since origination it can move from
Stage 2 back to Stage 1. As a minimum this means that all
payments must be up-to-date, the quantitative probability of
default assessment trigger is no longer met, and the account
is not evidencing qualitative assessment triggers.
When objective evidence exists that a financial asset is credit
impaired, such as the occurrence of a credit default event or
identification of an unlikeliness to pay indicator, the financial
asset is considered to be in Stage 3. As a backstop, all
financial assets 90 days or more past due are considered to
be credit impaired and transferred to Stage3.
Cure definitions are in operation where certain financial
assets in Stage 3 can move back to Stage 2, subject to
Stage 3 indicators no longer being in effect, and meeting the
appropriate cure period.
In all circumstances, loans and advances to customers are
written off against the related provisions when there are no
reasonable expectations of further recovery. This is typically
following realisation of all associated collateral and available
recovery actions against the customer. Subsequent
recoveries of amounts previously written off decrease the
amount of impairment losses recorded in the income
statement.
The calculation of expected credit losses for loans and
advances to customers, either on a 12-month or lifetime
basis, is based on the probability of default (“PD”), the
exposure at default (“EAD”) and the loss given default
(“LGD”), and includes forward-looking macroeconomic
information where appropriate. Further information on this
calculation methodology can be found in the “Use of
estimates” section of the Risk Report.
The calculation of expected credit losses for some loan
portfolios and receivables relating to operating lease assets
is based on a simplified lifetime only expected credit loss
approach. Under the simplified approach, stage
classification represents management’s internal assessment
of credit risk.
Expected credit losses are assessed against actual loss
experience via a series of provision adequacy reviews. These
reviews also incorporate management judgement to ensure
that our ECL coverage ratios remain appropriate.
(j) Settlement accounts
Settlement balance debtors and creditors are the amounts
due to and from counterparties in respect of the group’s
market-making activities and are measured at fair value on
initial recognition and carried at amortised cost. The
balances are short term in nature, do not earn interest and
are recorded at the amount receivable or payable.
(k) Loans to and from money brokers against stock
advanced
Loans to money brokers against stock advanced is the cash
collateral provided to these institutions for stock borrowing
by the group’s market-making activities and is measured at
fair value on initial recognition and carried at amortised cost.
Interest is paid on the stock borrowed and earned on the
cash deposits advanced. The stock borrowing to which the
cash deposits relate is short term in nature and is recorded
at the amount receivable. Loans from money brokers against
stock collateral provided are recorded at the amount
payable. Interest is paid on the loans.
(l) Leases
Lessor
A finance lease is a lease or hire purchase contract that
transfers substantially all the risks and rewards incidental to
ownership of an asset to the lessee. Finance leases are
recognised as loans at an amount equal to the gross
investment in the lease, which comprises the lease payments
receivable and any unguaranteed residual value, discounted
at its implicit interest rate. Finance charges on finance leases
are taken to income in proportion to the net funds invested.
An operating lease is a lease that does not transfer
substantially all the risks and rewards incidental to ownership
of an asset to the lessee. Rental income from operating
leases is recognised in equal instalments over the period of
the leases and included in other income in the consolidated
income statement.
Lessee
A lease liability and right of use asset are recognised on the
balance sheet at the lease commencement date. The lease
liability is measured at the present value of future lease
payments. The discount rate is the rate implicit in the lease,
or if that cannot be determined, the group’s incremental
borrowing rate appropriate for the right of use asset. The
right of use asset is measured at cost, comprising the initial
lease liability, payments made at or before the
commencement date less lease incentives received, initial
direct costs, and estimated costs of restoring the underlying
asset to the condition required by the lease.
Lease payments are allocated between the liability and
finance cost. The finance cost relating to the lease liability is
charged to the consolidated income statement over the lease
term. The right of use asset is depreciated over the shorter of
the asset’s useful life and the lease term on a straight-line
basis.
As set out in Note 1(b), the company has a different
accounting policy for leases under FRS 102. Rental costs
under operating leases are charged to the income statement
in equal instalments over the period of the lease.
The Notes continued
Close Brothers Group plc Annual Report 2025
186
(m) Sale and repurchase agreements and other
secured lending and borrowings
Securities may be sold subject to a commitment to
repurchase them. Such securities are retained on the
consolidated balance sheet when substantially all the risks
and rewards of ownership remain with the group. The
transactions are treated as collateralised borrowing and the
counterparty liability is included within loans and overdrafts
from banks. Similar secured borrowing transactions,
including securities lending transactions and collateralised
short-term notes, are treated and presented in the same
way. These secured financing transactions are initially
recognised at fair value, and subsequently valued at
amortised cost, using the effective interest rate method.
(n) Securitisation transactions
The group securitises its own financial assets via the sale of
these assets to special purpose entities, which in turn issue
securities to investors. All financial assets continue to be
held on the group’s consolidated balance sheet together
with debt securities in issue recognised for the funding.
The group has a forward flow arrangement with a third party.
In this arrangement, financial assets were originated and
recognised on the balance sheet and simultaneously
derecognised on sale of the assets.
See Note 1(h) for the derecognition accounting policy.
(o) Offsetting financial instruments
Financial assets and financial liabilities are offset and the net
amount presented on the consolidated balance sheet if there
is a legally enforceable right to set off the recognised
amounts and there is an intention to settle on a net basis, or
to realise an asset and settle the liability simultaneously.
(p) Derivatives and hedge accounting
On adoption of IFRS 9 Financial Instruments in 2018, the
group elected to continue applying hedge accounting under
IAS 39 Financial Instruments: Recognition and Measurement.
In general, derivatives are used to minimise the impact of
interest rate and currency exchange rate movements on the
group’s financial instruments. They are carried on the
consolidated balance sheet at fair value which is obtained
from quoted market prices in active markets, including
recent market transactions and discounted cash flow
models.
On acquisition, certain derivatives are designated as a hedge
and the group formally documents the relationship between
these derivatives and the hedged item. The group also
documents its assessment, both at hedge inception and on
an ongoing basis, of whether the derivative is highly effective
in offsetting changes in fair values or cash flows of hedged
items. If a hedge was deemed partially ineffective but
continues to qualify for hedge accounting, the amount of the
ineffectiveness, taking into account the timing of the
expected cash flows where relevant, would be recorded in
the consolidated income statement. If the hedge is not, or
has ceased to be highly effective, the group discontinues
hedge accounting.
For fair value hedges, changes in the fair value are
recognised in the consolidated income statement, together
with changes in the fair value of the hedged item. For cash
flow hedges, the fair value gain or loss associated with the
effective proportion of the cash flow hedge is recognised
initially directly in equity and recycled to the consolidated
income statement in the period when the hedged item
affects income.
(q) Intangible assets
Computer software (acquired and costs associated with
development) and intangible assets on acquisition (excluding
goodwill) are stated at cost less accumulated amortisation
and provisions for impairment which are reviewed at least
annually. Amortisation is calculated to write off their cost on
a straight-line basis over the estimated useful lives as
follows:
Computer software 3 to 10 years
Intangible assets on acquisition 8 to 20 years
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill is assessed annually for
impairment and carried at cost less any accumulated
impairment.
(r) Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and provisions for impairment
which are reviewed at least annually. Depreciation is
calculated to write off their cost on a straight-line basis over
their estimated useful lives as follows:
Long leasehold property
40 years
Short leasehold property
Over the length of the lease
Fixtures, fittings and
equipment
3 to 5 years
Assets held under operating
leases
1 to 20 years
Motor vehicles
1 to 5 years
(s) Share capital and other equity
Share issue costs
Incremental costs directly attributable to the issue of new
shares or options, including those issued on the acquisition
of a business, are shown in equity as a deduction, net of tax,
from the proceeds.
Dividends on ordinary shares
Dividends on ordinary shares are recognised in equity in the
period in which they are paid or, if earlier, approved by
shareholders.
Treasury shares
Where the company or any member of the group purchases
the company’s share capital, the consideration paid is
deducted from shareholders’ equity as treasury shares until
they are cancelled. Where such shares are subsequently sold
or reissued, any consideration received is included in
shareholders’ equity.
Other equity
Financial instruments are classified as equity when there is
no contractual obligation to deliver cash, another financial
asset, or a variable number of the group’s own equity
instruments to another entity. The instrument is measured at
cost less transaction costs and distributions are recognised
as a deduction from retained earnings when they become
irrevocable.
187
Strategic report Governance report Financial statements

1. Material accounting policies (continued)
(t) Employee benefits
The group operates a defined contribution pension scheme
for eligible employees as well as a defined benefit pension
scheme which is closed to new members and further
accrual.
Under the defined contribution scheme the group pays fixed
contributions into a fund separate from the group’s assets.
Contributions are charged in the consolidated income
statement when they become payable.
The expected cost of providing pensions within the funded
defined benefit scheme, determined on the basis of annual
valuations using the projected unit method, is charged to the
consolidated income statement. Actuarial gains and losses
are recognised in full in the period in which they occur and
recognised in other comprehensive income.
The retirement benefit obligation recognised in the balance
sheet represents the present value of the defined benefit
obligation, as adjusted for unrecognised past service cost,
and as reduced by the fair value of scheme assets at the
balance sheet date. Both the return on investment expected
in the period and the expected financing cost of the liability,
as estimated at the beginning of the period, are recognised
in the results for the period. Any variances against these
estimates in the year form part of the actuarial gain or loss.
The assets of the scheme are held separately from those of
the group in an independently managed fund.
The scheme entered into a buy-in transaction with an
insurance company covering all members of the scheme. A
buy-in is a bulk annuity policy that matches the scheme’s
assets and liabilities. The pension surplus on the group’s
balance sheet relates to the cash held by the scheme with
the fair value of the insurance policy matched to the fair
value of the scheme’s liabilities, which remains subject to
changes in actuarial valuations.
(u) Share-based payments to employees
The group operates three (2024: three) share-based award
schemes: the Deferred Share Awards (“DSA”) scheme, the
Long Term Incentive Plan (“LTIP”), and the HMRC approved
Save As You Earn (“SAYE”) scheme.
The value of the DSA share award at the grant date is
charged to the group’s consolidated income statement in the
year to which the award relates.
The costs of LTIP and SAYE are based on the fair value of
awards on the date of grant. Fair values of share-based
awards are determined using the Black-Scholes pricing
model, with the exception of fair values for market-based
performance conditions, which are determined using Monte
Carlo simulation. Both models take into account the exercise
price of the option, the current share price, the risk-free
interest rate, the expected volatility of the company’s share
price over the life of the option award and other relevant
factors. For non-market-based performance conditions,
vesting conditions are not taken into account when
measuring fair value, but are reflected by adjusting the
number of shares in each award such that the amount
recognised reflects the number that are expected to, and
then actually do, vest. The fair value is expensed in the
consolidated income statement on a straight-line basis over
the vesting period, with a corresponding credit to the share-
based payments reserve. At the end of the vesting period, or
upon exercise, lapse or forfeit if earlier, this credit is
transferred to retained earnings. Further information on the
group’s schemes is provided in Note 24 and in the Directors’
Remuneration Report.
(v) Provisions and contingent liabilities
Provisions are recognised in respect of present obligations
arising from past events where it is probable that outflows of
resources will be required to settle the obligations and they
can be reliably estimated. Provisions include costs directly
attributable to the settlement of obligations.
Contingent liabilities are possible obligations whose
existence depends on the outcome of uncertain future
events or those present obligations where the outflows of
resources are uncertain or cannot be measured reliably.
Contingent liabilities are not recognised in the financial
statements but are disclosed unless they are deemed
remote.
(w) Taxes, including deferred taxes
Current tax is the expected tax payable on the taxable profit
for the year. Taxable profit differs from net profit as reported
in the consolidated income statement because it excludes
items of income and expense that are taxable or deductible
in other years and items that are never taxable or deductible.
The group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the
balance sheet date.
To enable the tax charge to be based on the profit for the
year, deferred tax is provided in full on temporary timing
differences, at the rates of tax expected to apply when these
differences crystallise. Deferred tax assets are recognised
only to the extent that it is probable that sufficient taxable
profits will be available against which temporary differences
can be set. Deferred tax liabilities are offset against deferred
tax assets when there is both a legal right to set off and an
intention to settle on a net basis.
(x) Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash
equivalents comprises cash and demand deposits with
banks, together with short-term highly liquid investments that
are readily convertible to known amounts of cash.
(y) Segmental reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Executive
Committee, which is considered the group’s chief operating
decision maker. All transactions between business segments
are conducted on an arm’s length basis, with intra-segment
revenue and costs being eliminated on consolidation.
Income and expenses directly associated with each segment
are included in determining business segment performance.
(z) Discontinued operations
The results of discontinued operations are shown as:
• a single amount on the face of the consolidated income
statement comprising the post-tax profit or loss of
discontinued operations; and
• post-tax gain or loss recognised either on measurement to
fair value less costs to sell or on the disposal of the
discontinued operation.
A discontinued operation is a cash generating unit (“CGU”)
or a group of CGUs that either has been disposed of, or is
classified as held for sale, and represents a separate major
line of business or geographical area of operations, is part of
a single coordinated plan to dispose of a separate major line
of business or geographical area of operations or is a
subsidiary acquired exclusively with a view to resale.
Intercompany transactions between continuing and
discontinued operations have been eliminated on
consolidation in the consolidated income statement.
The Notes continued
Close Brothers Group plc Annual Report 2025
188

1. Material accounting policies (continued)
(t) Employee benefits
The group operates a defined contribution pension scheme
for eligible employees as well as a defined benefit pension
scheme which is closed to new members and further
accrual.
Under the defined contribution scheme the group pays fixed
contributions into a fund separate from the group’s assets.
Contributions are charged in the consolidated income
statement when they become payable.
The expected cost of providing pensions within the funded
defined benefit scheme, determined on the basis of annual
valuations using the projected unit method, is charged to the
consolidated income statement. Actuarial gains and losses
are recognised in full in the period in which they occur and
recognised in other comprehensive income.
The retirement benefit obligation recognised in the balance
sheet represents the present value of the defined benefit
obligation, as adjusted for unrecognised past service cost,
and as reduced by the fair value of scheme assets at the
balance sheet date. Both the return on investment expected
in the period and the expected financing cost of the liability,
as estimated at the beginning of the period, are recognised
in the results for the period. Any variances against these
estimates in the year form part of the actuarial gain or loss.
The assets of the scheme are held separately from those of
the group in an independently managed fund.
The scheme entered into a buy-in transaction with an
insurance company covering all members of the scheme. A
buy-in is a bulk annuity policy that matches the scheme’s
assets and liabilities. The pension surplus on the group’s
balance sheet relates to the cash held by the scheme with
the fair value of the insurance policy matched to the fair
value of the scheme’s liabilities, which remains subject to
changes in actuarial valuations.
(u) Share-based payments to employees
The group operates three (2024: three) share-based award
schemes: the Deferred Share Awards (“DSA”) scheme, the
Long Term Incentive Plan (“LTIP”), and the HMRC approved
Save As You Earn (“SAYE”) scheme.
The value of the DSA share award at the grant date is
charged to the group’s consolidated income statement in the
year to which the award relates.
The costs of LTIP and SAYE are based on the fair value of
awards on the date of grant. Fair values of share-based
awards are determined using the Black-Scholes pricing
model, with the exception of fair values for market-based
performance conditions, which are determined using Monte
Carlo simulation. Both models take into account the exercise
price of the option, the current share price, the risk-free
interest rate, the expected volatility of the company’s share
price over the life of the option award and other relevant
factors. For non-market-based performance conditions,
vesting conditions are not taken into account when
measuring fair value, but are reflected by adjusting the
number of shares in each award such that the amount
recognised reflects the number that are expected to, and
then actually do, vest. The fair value is expensed in the
consolidated income statement on a straight-line basis over
the vesting period, with a corresponding credit to the share-
based payments reserve. At the end of the vesting period, or
upon exercise, lapse or forfeit if earlier, this credit is
transferred to retained earnings. Further information on the
group’s schemes is provided in Note 24 and in the Directors’
Remuneration Report.
(v) Provisions and contingent liabilities
Provisions are recognised in respect of present obligations
arising from past events where it is probable that outflows of
resources will be required to settle the obligations and they
can be reliably estimated. Provisions include costs directly
attributable to the settlement of obligations.
Contingent liabilities are possible obligations whose
existence depends on the outcome of uncertain future
events or those present obligations where the outflows of
resources are uncertain or cannot be measured reliably.
Contingent liabilities are not recognised in the financial
statements but are disclosed unless they are deemed
remote.
(w) Taxes, including deferred taxes
Current tax is the expected tax payable on the taxable profit
for the year. Taxable profit differs from net profit as reported
in the consolidated income statement because it excludes
items of income and expense that are taxable or deductible
in other years and items that are never taxable or deductible.
The group’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the
balance sheet date.
To enable the tax charge to be based on the profit for the
year, deferred tax is provided in full on temporary timing
differences, at the rates of tax expected to apply when these
differences crystallise. Deferred tax assets are recognised
only to the extent that it is probable that sufficient taxable
profits will be available against which temporary differences
can be set. Deferred tax liabilities are offset against deferred
tax assets when there is both a legal right to set off and an
intention to settle on a net basis.
(x) Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash
equivalents comprises cash and demand deposits with
banks, together with short-term highly liquid investments that
are readily convertible to known amounts of cash.
(y) Segmental reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Executive
Committee, which is considered the group’s chief operating
decision maker. All transactions between business segments
are conducted on an arm’s length basis, with intra-segment
revenue and costs being eliminated on consolidation.
Income and expenses directly associated with each segment
are included in determining business segment performance.
(z) Discontinued operations
The results of discontinued operations are shown as:
• a single amount on the face of the consolidated income
statement comprising the post-tax profit or loss of
discontinued operations; and
• post-tax gain or loss recognised either on measurement to
fair value less costs to sell or on the disposal of the
discontinued operation.
A discontinued operation is a cash generating unit (“CGU”)
or a group of CGUs that either has been disposed of, or is
classified as held for sale, and represents a separate major
line of business or geographical area of operations, is part of
a single coordinated plan to dispose of a separate major line
of business or geographical area of operations or is a
subsidiary acquired exclusively with a view to resale.
Intercompany transactions between continuing and
discontinued operations have been eliminated on
consolidation in the consolidated income statement.
The Notes continued
Close Brothers Group plc Annual Report 2025
188
Disposal groups are classified as held for sale when their
carrying amounts will be recovered principally through a sale
rather than continuing use, and the sale is highly probable
within 12 months. They are measured at the lower of carrying
amount and fair value less costs to sell, with impairment
losses, as needed, recognised in the income statement on
initial classification and subsequent remeasurement.
Financial assets and liabilities within a disposal group
continue to be measured under IFRS 9.
2. Critical accounting judgements and
estimates
The reported results of the group are sensitive to the
judgements, estimates and assumptions that underlie the
application of its accounting policies and preparation of its
financial statements. UK company law and IFRS require the
directors, in preparing the group’s financial statements, to
select suitable accounting policies, apply them consistently
and make judgements, estimates and assumptions that are
reasonable.
The group’s estimates and assumptions are based on
historical experience and reasonable expectations of future
events and are reviewed on an ongoing basis. Actual results
in the future may differ from the amounts estimated due to
the inherent uncertainty.
The group’s critical accounting judgements, made in
applying its accounting policies as described in Note 1, and
the key sources of estimation uncertainty that may have a
significant risk of causing a material adjustment within the
next financial year are set out below. There are no critical
accounting judgements or key sources of estimation
uncertainty relating to the company.
The impact of climate change on the group’s judgements,
estimates and assumptions has been considered in
preparing these financial statements. While no material
impact has been identified, climate risk continues to be
monitored on an ongoing basis as set out in the Risk Report.
Critical accounting judgements
The critical accounting judgements of the group, which relate
to expected credit loss provisions under IFRS 9 and motor
finance commissions, are as follows:
• Establishing the criteria for a significant increase in credit
risk;
• Determining the appropriate definition of default;
• Determining the impact of the FCA's motor commissions
review on the goodwill impairment assessment; and
• Determining the affected customers in the motor finance
commissions provisioning assessment, with further
judgement and estimation then applied on the level of
compensation and appropriate scenarios.
Further information on the first two judgements can be found
in the “Use of judgements” section in the Risk Report, while
further information on the third and fourth judgements can be
found in Note 14 and Note 16 respectively.
Key sources of estimation uncertainty
The key sources of estimation uncertainty of the group,
which relate to expected credit loss provisions, value in use
calculations, and motor finance commissions, are as follows:
• Forward-looking macroeconomic information incorporated
into expected credit loss models. This was also a key
estimate in the prior year;
• Adjustments by management to model calculated
expected credit losses due to limitations in the group’s
expected credit loss models or input data, which may be
identified through ongoing model monitoring and validation
of models. This was also a key estimate in the prior year;
• Estimate of future cash flow forecasts in the calculation of
value in use for the testing of goodwill for impairment in
relation to the Banking division cash generating units, in
particular Motor Finance, due to lower cash flow forecasts.
This was also a key estimate in the prior year;
• Estimates of the expected rental incomes and disposal
values in the calculation of value in use for the operating
lease assets of Close Brothers Vehicle Hire; and
• Estimates and assumptions applied in the calculation of
the provision relating to motor finance commissions. These
assumptions are the total cost of credit thresholds
(“TCC”), which is a key factor in determining affected
customers, claim rates and scenario weightings. Claim rate
is defined as the estimated cost of customer remediation
(based on customer engagement with redress invitation) as
a percentage of the estimated cost of the eligible in scope
population.
Additional disclosures on the estimation uncertainty relating
to forward-looking macroeconomic information, model
adjustments, operating lease assets, goodwill and motor
finance commissions can be found in the Risk Report (“Use
of estimates” and “Use of Adjustments” sections), Note 14,
Note 15, and Note 16 respectively.
189
Strategic report Governance report Financial statements

3. Segmental Analysis
The directors manage the group by class of business and present the segmental analysis on that basis. The group’s activities
are presented in three (2024: five) operating segments: Commercial, Retail, and Property.
In the segmental reporting information that follows, Group consists of central functions as well as various non-trading head
office companies and consolidation adjustments and is set out in order that the information presented reconciles to the
consolidated income statement. The Group balance sheet primarily includes treasury assets and liabilities comprising cash and
balances at central banks, debt securities, customer deposits and other borrowings.
Divisions continue to charge market prices for the limited services rendered to other parts of the group. Funding charges
between segments take into account commercial demands. More than 90% of the group’s activities, revenue and assets are
located in the UK.
Continuing
operations
1
Summary income statement for the
year ended 31 July 2025
Net interest income/(expense)
228.1
224.5
128.3
(12.1)
568.8
—
568.8
Impairment of operating lease assets
(30.0)
—
—
—
(30.0)
—
(30.0)
Other non-interest income
95.8
22.2
2.3
0.4
120.7
—
120.7
Operating income/(expense)
293.9
246.7
130.6
(11.7)
659.5
—
659.5
Provision in relation to motor finance
commissions
—
(165.0)
—
—
(165.0)
—
(165.0)
Complaints handling and other
operational and legal costs incurred in
relation to motor finance commissions
—
(18.7)
—
—
(18.7)
—
(18.7)
Provision in relation to early
settlements in Motor Finance
—
(33.0)
—
—
(33.0)
—
(33.0)
Depreciation and amortisation
(26.8)
(20.0)
(4.5)
(2.8)
(54.1)
—
(54.1)
Other administrative expenses
(185.0)
(164.1)
(29.7)
(39.5)
(418.3)
—
(418.3)
Impairment losses on financial assets
(18.8)
(44.5)
(29.5)
—
(92.8)
—
(92.8)
Total operating expenses
(230.6)
(445.3)
(63.7)
(42.3)
(781.9)
—
(781.9)
Operating profit/(loss) from
continuing operations
63.3
(198.6)
66.9
(54.0)
(122.4)
—
(122.4)
Operating profit before tax from
discontinued operations
—
—
—
46.3
46.3
4.9
51.2
External operating income/(expense)
491.4
364.3
215.1
(411.3)
659.5
—
659.5
Inter segment operating (expense)/
income
(197.5)
(117.6)
(84.5)
399.6
—
—
—
Segment operating income/(expense)
293.9
246.7
130.6
(11.7)
659.5
—
659.5
1. Discontinued operations comprise Asset Management, sold on 28 February 2025, and Winterflood, classified as held for sale. See Note 29.
The Commercial operating segment above includes Novitas, which ceased lending to new customers in July 2021 following a
strategic review. Novitas recorded an operating profit of £16.1 million (2024: loss of £0.1 million), including an impairment
credit of £6.8 million (2024: £6.4 million impairment losses).
Novitas’ income was £13.3 million (2024: £11.0 million) and expenses were £4.0 million (2024: £4.8 million). In line with IFRS
9’s requirement to recognise interest income on Stage 3 loans on a net basis, income includes the partial unwinding over time
of the expected credit loss recognised. Further information on Novitas can be found in the Credit Risk section of the Risk
Report.
As set out in Note 29 “Discontinued operations and assets and liabilities classified as held for sale”, the group announced it
entered into an agreement to sell Close Brothers Asset Management (“CBAM”), one of the group’s operating segments, to
Oaktree Capital Management, L.P. on 19 September 2024 following a comprehensive strategic review, and completed the sale
on 28 February 2025. CBAM's financial results are presented within this note as discontinued operations. On 25 July 2025, the
group also announced the sale of Winterflood Securities, an execution services and securities business, to Marex Group plc.
The sale is expected to complete in early 2026 and its financial results are also presented within this note as discontinued
operations.
The Notes continued
Close Brothers Group plc Annual Report 2025
190

3. Segmental Analysis
The directors manage the group by class of business and present the segmental analysis on that basis. The group’s activities
are presented in three (2024: five) operating segments: Commercial, Retail, and Property.
In the segmental reporting information that follows, Group consists of central functions as well as various non-trading head
office companies and consolidation adjustments and is set out in order that the information presented reconciles to the
consolidated income statement. The Group balance sheet primarily includes treasury assets and liabilities comprising cash and
balances at central banks, debt securities, customer deposits and other borrowings.
Divisions continue to charge market prices for the limited services rendered to other parts of the group. Funding charges
between segments take into account commercial demands. More than 90% of the group’s activities, revenue and assets are
located in theUK.
Banking
Commercial
£ million
Retail
£ million
Property
£ million
Group
£ million
Continuing
operations
£ million
Discontinued
operations
1
£ million
Total
£ million
Summary income statement for the
year ended 31 July 2025
Net interest income/(expense)
228.1 224.5 128.3 (12.1) 568.8 — 568.8
Impairment of operating lease assets
(30.0) — — — (30.0) — (30.0)
Other non-interest income
95.8 22.2 2.3 0.4 120.7 — 120.7
Operating income/(expense)
293.9 246.7 130.6 (11.7) 659.5 — 659.5
Provision in relation to motor finance
commissions
— (165.0) — — (165.0) — (165.0)
Complaints handling and other
operational and legal costs incurred in
relation to motor finance commissions
— (18.7) — — (18.7) — (18.7)
Provision in relation to early
settlements in Motor Finance
— (33.0) — — (33.0) — (33.0)
Depreciation and amortisation
(26.8) (20.0) (4.5) (2.8) (54.1) — (54.1)
Other administrative expenses
(185.0) (164.1) (29.7) (39.5) (418.3) — (418.3)
Impairment losses on financial assets
(18.8) (44.5) (29.5) — (92.8) — (92.8)
Total operating expenses
(230.6) (445.3) (63.7) (42.3) (781.9) — (781.9)
Operating profit/(loss) from
continuing operations
63.3 (198.6) 66.9 (54.0) (122.4) — (122.4)
Operating profit before tax from
discontinued operations
— — — 46.3 46.3 4.9 51.2
External operating income/(expense)
491.4 364.3 215.1 (411.3) 659.5 — 659.5
Inter segment operating (expense)/
income
(197.5) (117.6) (84.5) 399.6 — — —
Segment operating income/(expense)
293.9 246.7 130.6 (11.7) 659.5 — 659.5
1. Discontinued operations comprise Asset Management, sold on 28 February 2025, and Winterflood, classified as held for sale. See Note 29.
The Commercial operating segment above includes Novitas, which ceased lending to new customers in July 2021 following a
strategic review. Novitas recorded an operating profit of £16.1 million (2024: loss of £0.1 million), including an impairment
credit of £6.8 million (2024: £6.4 million impairment losses).
Novitas’ income was £13.3 million (2024: £11.0 million) and expenses were £4.0 million (2024: £4.8 million). In line with IFRS
9’s requirement to recognise interest income on Stage 3 loans on a net basis, income includes the partial unwinding over time
of the expected credit loss recognised. Further information on Novitas can be found in the Credit Risk section of the Risk
Report.
As set out in Note 29 “Discontinued operations and assets and liabilities classified as held for sale”, the group announced it
entered into an agreement to sell Close Brothers Asset Management (“CBAM”), one of the group’s operating segments, to
Oaktree Capital Management, L.P. on 19 September 2024 following a comprehensive strategic review, and completed the sale
on 28 February 2025. CBAM's financial results are presented within this note as discontinued operations. On 25 July 2025, the
group also announced the sale of Winterflood Securities, an execution services and securities business, to Marex Group plc.
The sale is expected to complete in early 2026 and its financial results are also presented within this note as discontinued
operations.
The Notes continued
Close Brothers Group plc Annual Report 2025
190
Continuing
Group
2
operations
3
Summary balance sheet information at
31 July 2025
Total assets¹
2,878.9
1,852.5
3,567.3
13,193.0
878.9
14,071.9
Total liabilities
—
—
—
11,548.1
11,548.1
788.3
12,336.4
1. Total assets for the Banking operating segments comprise the loan book and operating lease assets only. The Commercial operating segment
includes the net loan book of Novitas of £nil.
2. Balance sheet includes £3,117.6 million assets and £11,353.5 million liabilities attributable to the Banking division primarily comprising the treasury
balances described in the second paragraph of this note.
3. Discontinued operations on the balance sheet comprise Winterflood Securities. See Note 29. The assets and liabilities of Winterflood Securities
presented in this table include intercompany balances for the purposes of segmental reporting.
Equity is allocated across the group as set out below. Banking division equity, which is managed as a whole rather than on a
segmental basis, reflects loan book and operating lease assets of £9,625.7 million, in addition to assets and liabilities of
£3,521.9 million and £11,556.2 million respectively primarily comprising treasury balances which are included within the Group
column above.
Continuing
Equity at
31 July 2025
Equity
1,591.4
53.5
1,644.9
90.6
1,735.5
Continuing
Commercial
Retail
Property
Group
operations
Total
Other segment information for the year
ended 31 July 2025
Employees (average number)¹
1,417
1,154
172
88
2,831
765
3,596
1.
Banking segments include a central function headcount allocation. The company’s average number of employees is equivalent to the Group number.
191
Strategic report Governance report Financial statements

3. Segmental Analysis (continued)
operations
1
Summary income statement for the year
ended 31 July 2024
Net interest income/(expense)
228.8
234.4
129.0
(11.5)
580.7
—
580.7
Impairment of operating lease assets
—
—
—
—
—
—
—
Other non-interest income
100.8
28.0
3.9
—
132.7
—
132.7
Operating income/(expense)
329.6
262.4
132.9
(11.5)
713.4
—
713.4
Provision in relation to the Borrowers in
Financial Difficulty ("BiFD") review
(0.6)
(16.6)
—
—
(17.2)
—
(17.2)
Complaints handling and other
operational and legal costs incurred in
relation to motor finance commissions
—
(6.9)
—
—
(6.9)
—
(6.9)
Depreciation and amortisation
(26.1)
(20.8)
(4.9)
(2.3)
(54.1)
—
(54.1)
Other administrative expenses
(184.5)
(157.3)
(30.3)
(31.5)
(403.6)
—
(403.6)
Impairment losses on financial assets
(31.7)
(47.2)
(20.0)
—
(98.9)
—
(98.9)
Total operating expenses
(242.9)
(248.8)
(55.2)
(33.8)
(580.7)
—
(580.7)
Operating profit/(loss) from continuing
operations
86.7
13.6
77.7
(45.3)
132.7
—
132.7
Operating profit before tax from
discontinued operations
1
—
—
—
—
9.3
9.3
External operating income/(expense)
517.0
376.7
224.7
(404.1)
714.3
—
714.3
Inter segment operating (expense)/
income
(187.4)
(114.3)
(91.8)
392.6
(0.9)
—
(0.9)
Segment operating income/(expense)
329.6
262.4
132.9
(11.5)
713.4
—
713.4
1. Discontinued operations represent the Asset Management division sold on 28 February 2025 and Winterflood shown as held for sale - see Note 29.
Group
²
operations
3
Summary balance sheet information at 31
July 2024
Total assets¹
5,101.6
3,041.9
1,955.2
2,965.1
13,063.8
1,017.0
14,080.8
Total liabilities
—
—
—
11,433.5
11,433.5
804.8
12,238.3
1. Total assets for the Banking operating segments comprise the loan book and operating lease assets only. The Commercial operating segment includes
the net loan book of Novitas of £62.4 million.
2. Balance sheet includes £2,970.1 million assets and £11,358.1 million liabilities attributable to the Banking division primarily comprising the treasury
balances described in the second paragraph of this note.
3. Discontinued operations on the balance sheet comprise Winterflood Securities and Close Brothers Asset Management. See Note 29. The assets and
liabilities presented in this table include intercompany balances for the purposes of segmental reporting.
Equity is allocated across the group as set out below. Banking division equity, which is managed as a whole rather than on a
segmental basis, reflects loan book and operating lease assets of £10,098.7 million, in addition to assets and liabilities of
£2,970.1 million and £11,358.1 million respectively primarily comprising treasury balances which are included within the Group
column above.
Equity at 31 July 2024
Equity
1,710.7
(80.4)
1,630.3
212.2
1,842.5
The Notes continued
Close Brothers Group plc Annual Report 2025
192

3. Segmental Analysis (continued)
Banking
Commercial
£ million
Retail
£ million
Property
£ million
Group
£ million
Continuing
operations
£ million
Discontinued
operations
1
£ million
Total
£ million
Summary income statement for the year
ended 31 July 2024
Net interest income/(expense)
228.8 234.4 129.0 (11.5) 580.7 — 580.7
Impairment of operating lease assets
— — — — — — —
Other non-interest income
100.8 28.0 3.9 — 132.7 — 132.7
Operating income/(expense)
329.6 262.4 132.9 (11.5) 713.4 — 713.4
Provision in relation to the Borrowers in
Financial Difficulty ("BiFD") review
(0.6) (16.6) — — (17.2) — (17.2)
Complaints handling and other
operational and legal costs incurred in
relation to motor finance commissions
— (6.9) — — (6.9) — (6.9)
Depreciation and amortisation
(26.1) (20.8) (4.9) (2.3) (54.1) — (54.1)
Other administrative expenses
(184.5) (157.3) (30.3) (31.5) (403.6) — (403.6)
Impairment losses on financial assets
(31.7) (47.2) (20.0) — (98.9) — (98.9)
Total operating expenses
(242.9) (248.8) (55.2) (33.8) (580.7) — (580.7)
Operating profit/(loss) from continuing
operations
86.7 13.6 77.7 (45.3) 132.7 — 132.7
Operating profit before tax from
discontinued operations
1
— — — — 9.3 9.3
External operating income/(expense)
517.0 376.7 224.7 (404.1) 714.3 — 714.3
Inter segment operating (expense)/
income
(187.4) (114.3) (91.8) 392.6 (0.9) — (0.9)
Segment operating income/(expense)
329.6 262.4 132.9 (11.5) 713.4 — 713.4
1. Discontinued operations represent the Asset Management division sold on 28 February 2025 and Winterflood shown as held for sale - see Note 29.
Banking
Commercial
£ million
Retail
£ million
Property
£ million
Group
²
£ million
Continuing
operations
£ million
Discontinued
operations
3
£ million
Total
£ million
Summary balance sheet information at 31
July 2024
Total assets¹
5,101.6 3,041.9 1,955.2 2,965.1 13,063.8 1,017.0 14,080.8
Total liabilities
— — — 11,433.5 11,433.5 804.8 12,238.3
1. Total assets for the Banking operating segments comprise the loan book and operating lease assets only. The Commercial operating segment includes
the net loan book of Novitas of £62.4 million.
2. Balance sheet includes £2,970.1 million assets and £11,358.1 million liabilities attributable to the Banking division primarily comprising the treasury
balances described in the second paragraph of this note.
3. Discontinued operations on the balance sheet comprise Winterflood Securities and Close Brothers Asset Management. See Note 29. The assets and
liabilities presented in this table include intercompany balances for the purposes of segmental reporting.
Equity is allocated across the group as set out below. Banking division equity, which is managed as a whole rather than on a
segmental basis, reflects loan book and operating lease assets of £10,098.7 million, in addition to assets and liabilities of
£2,970.1 million and £11,358.1million respectively primarily comprising treasury balances which are included within the Group
column above.
Equity at 31 July 2024
Banking
£ million
Group
£ million
Continuing
operations
£ million
Discontinued
operations
£ million
Total
£ million
Equity
1,710.7 (80.4) 1,630.3 212.2 1,842.5
The Notes continued
Close Brothers Group plc Annual Report 2025
192
Other segmental information for the year
ended 31 July 2024
Employees (average number)¹
1,461
1,195
199
87
2,942
1,183
4,125
1.
Banking segments include a central function headcount allocation. The company’s average number of employees is equivalent to the Group number.
4. Operating profit before tax
2024
1
Interest income
2
Cash and balances at central banks
86.7
98.5
Loans and advances to banks
3.4
8.1
Loans and advances to customers
991.2
1,006.8
Other interest income
30.4
19.8
1,111.7
1,133.2
Interest expense
Deposits from banks
(4.3)
(5.8)
Deposits by customers
(405.9)
(387.2)
Borrowings
(80.8)
(108.0)
Other interest expense
3
(51.9)
(51.5)
(542.9)
(552.5)
Net interest income
568.8
580.7
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2.
Interest income calculated using the effective interest method.
3.
Other interest expense includes interest expense of £26.9 million relating to derivative assets and liabilities (2024: £26.7 million interest income).
2024
1
Fee and commission income
2
Banking
103.5
104.2
Fee and commission expense
2
(16.7)
(19.8)
Net fee and commission income
86.8
84.4
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Fee income and expense relates to financial instruments which are not at fair value through profit or loss. There is no fee income or expense arising
from trust and other fiduciary activities (2024: £nil).
2024
1
Other income
Operating lease assets rental income
91.6
92.3
Other
2
26.9
37.4
118.5
129.7
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Includes income from the amortisation of de-designated cash flow and fair value hedges totalling
£11.4 million (2024: £27.9 million), and services
provided in relation to operating lease assets.
193
Strategic report Governance report Financial statements

4. Operating profit before tax (continued)
2024
1
Administrative expenses
Staff costs:
Wages and salaries
194.0
203.4
Social security costs
26.7
26.5
Share-based awards
3.8
3.2
Pension costs
13.9
13.7
238.4
246.8
Depreciation and amortisation
54.1
54.1
Other administrative expenses
2
396.6
180.9
689.1
481.8
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Other administrative expenses of £396.6 million (2024: £180.9 million) include the following items which have been separately disclosed on the
consolidated income statement: provision in relation to motor finance commissions of £165.0 million (2024: £nil), complaints handling and other
operational and legal costs incurred in relation to motor finance commissions of £18.7 million (2024: £6.9 million), and provision in relation to early
settlements in Motor Finance of £33.0 million (2024: £nil).
Staff costs of the company total £18.6 million (2024: £16.9 million) comprising largely of wages and salaries of £13.8 million
(2024: £12.9 million).
5. Information regarding the auditors
2025
1
2024
1
Fees payable
Audit of the company's annual accounts
1.3
1.0
Audit of the company's subsidiaries pursuant to legislation
4.8
4.0
Audit related services
0.3
0.7
Other services
0.6
0.7
7.0
6.4
1. During the year, an additional audit fee of £0.8 million (2024: £0.3 million) was paid to the auditors in relation to scope changes in the prior year audit,
which is not included above.
The auditors of the group were PricewaterhouseCoopers LLP (2024: PricewaterhouseCoopers LLP).
The Notes continued
Close Brothers Group plc Annual Report 2025
194

4. Operating profit before tax (continued)
2025
£ million
2024
1
£ million
Administrative expenses
Staff costs:
Wages and salaries
194.0 203.4
Social security costs
26.7 26.5
Share-based awards
3.8 3.2
Pension costs
13.9 13.7
238.4 246.8
Depreciation and amortisation
54.1 54.1
Other administrative expenses
2
396.6 180.9
689.1 481.8
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Other administrative expenses of £396.6 million (2024: £180.9 million) include the following items which have been separately disclosed on the
consolidated income statement: provision in relation to motor finance commissions of £165.0 million (2024: £nil), complaints handling and other
operational and legal costs incurred in relation to motor finance commissions of £18.7 million (2024: £6.9 million), and provision in relation to early
settlements in Motor Finance of £33.0 million (2024: £nil).
Staff costs of the company total £18.6 million (2024: £16.9 million) comprising largely of wages and salaries of £13.8 million
(2024:£12.9 million).
5. Information regarding the auditors
2025
1
£ million
2024
1
£ million
Fees payable
Audit of the company's annual accounts
1.3 1.0
Audit of the company's subsidiaries pursuant to legislation
4.8 4.0
Audit related services
0.3 0.7
Other services
0.6 0.7
7.0 6.4
1. During the year, an additional audit fee of £0.8 million (2024: £0.3 million) was paid to the auditors in relation to scope changes in the prior year audit,
which is not included above.
The auditors of the group were PricewaterhouseCoopers LLP (2024: PricewaterhouseCoopers LLP).
The Notes continued
Close Brothers Group plc Annual Report 2025
194
6. Taxation
2024
1
Tax charged/(credited) to the income statement
Current tax:
UK corporation tax
15.0
38.8
Foreign tax
1.0
0.9
Adjustments in respect of previous years
(1.3)
(4.9)
14.7
34.8
Deferred tax:
Deferred tax credit for the current year
(11.6)
(2.5)
Adjustments in respect of previous years
1.6
5.1
4.7
37.4
Tax on items not (credited)/charged to the income statement
Current tax relating to:
Acquisitions and disposals
3.7
(0.4)
Deferred tax relating to:
Cash flow hedging
(3.5)
(8.4)
Financial instruments classified as fair value through other comprehensive income
(1.2)
(1.0)
Currency translation gains/(losses)
0.4
(0.4)
Acquisitions and disposals
1.7
(0.3)
1.1
(10.5)
Reconciliation to tax expense
UK corporation tax for the period at 25% (2024: 25%) on operating (loss)/profit
(30.6)
33.2
Disallowable items and other permanent differences
2
40.6
6.8
Banking surcharge
—
—
Tax relief on coupon on other equity instruments
(5.6)
(2.8)
Prior period tax provision
0.3
0.2
4.7
37.4
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Disallowable items and other permanent differences largely relate to the non-deductible provision in relation to motor finance commissions.
The standard UK corporation tax rate for the financial year is 25.0% (2024: 25.0%). An additional 3.0% (2024: 3.0%) surcharge
applies to banking company profits as defined in legislation, but only above a threshold amount which is not exceeded by the
current year banking company profits. The effective tax rate of (3.8)% (2024: 28.2%), which relates to a £4.7 million charge on
an operating loss before tax of £122.4 million, differs to the UK corporation tax rate primarily due to disallowable expenditure,
which more than offsets the tax relief on coupons on the group's AT1 instrument.
The UK government has implemented the Pillar Two global minimum tax rate of 15% and a UK domestic minimum top-up tax
with effect from the group’s financial year commencing 1 August 2024. The jurisdictions in relation to which Pillar Two tax
liabilities are expected to potentially arise for the group are the Republic of Ireland, Jersey and Guernsey. The current tax
charge for the period includes £nil in respect of Pillar Two income taxes. The group has adopted the IAS 12 exemption from
recognition and disclosure regarding the impact on deferred tax assets and liabilities arising from this legislation. The company
has adopted the same exemption under FRS 102.
195
Strategic report Governance report Financial statements

6. Taxation (continued)
Movements in deferred tax assets and liabilities were as follows:
Group
At 1 August 2023
12.9
(0.3)
8.7
5.9
(13.4)
(0.9)
(2.1)
10.8
(Charge)/credit to the
income statement
(8.2)
0.1
(1.5)
0.1
—
0.3
3.5
(5.7)
Credit to other
comprehensive income
0.4
—
—
—
8.4
—
1.0
9.8
Charge to equity
—
—
—
—
—
—
—
—
Acquisitions
—
—
—
—
—
(1.5)
0.9
(0.6)
At 31 July 2024
5.1
(0.2)
7.2
6.0
(5.0)
(2.1)
3.3
14.3
Credit/(charge) to the
income statement
8.3
0.1
(1.0)
(0.6)
—
—
1.6
8.4
(Charge)/credit to other
comprehensive income
(0.4)
—
—
—
3.5
—
1.2
4.3
Charge to equity
—
—
—
—
—
—
—
—
Disposals
(0.1)
—
(3.2)
—
—
1.6
—
(1.7)
Reclassification to assets
held for sale
6.2
—
(0.8)
—
—
—
0.3
5.7
At 31 July 2025
19.1
(0.1)
2.2
5.4
(1.5)
(0.5)
6.4
31.0
The group’s deferred tax asset comprises £5.7 million (31 July 2024: £4.8 million) due within one year and £25.3 million (31 July
2024: £9.5 million) due after more than one year.
Company
At 1 August 2023
(0.4)
(0.3)
1.1
0.4
Credit to the income statement
0.2
0.1
(0.5)
(0.2)
Credit to other comprehensive income
—
—
—
—
At 31 July 2024
(0.2)
(0.2)
0.6
0.2
Charge to the income statement
0.2
0.1
(0.1)
0.2
Credit to other comprehensive income
—
—
—
—
At 31 July 2025
—
(0.1)
0.5
0.4
The company’s deferred tax asset comprises £0.1 million (31 July 2024: £0.2 million) due within one year and £0.3 million
(31 July 2024: £nil) due after more than one year.
As the group has been and is expected to continue to be consistently taxpaying, the full deferred tax assets have been
recognised. However, deferred tax assets of £0.5 million (31 July 2024: £0.5 million) have not been recognised in respect of
certain carried forward tax losses. It is currently uncertain whether the group will be able to utilise these losses.
7. Earnings per share
The calculation of basic earnings per share is based on the profit attributable to shareholders and the number of basic
weighted average shares. When calculating the diluted earnings per share, the weighted average number of shares in issue is
adjusted for the effects of all dilutive share options and awards.
Continuing operations
2025
2024
1
Basic
(99.8)p
56.2p
Diluted
(99.8)p
56.1p
Adjusted basic
2
59.3p
75.8p
Adjusted diluted
2
59.3p
75.6p
The Notes continued
Close Brothers Group plc Annual Report 2025
196

6. Taxation (continued)
Movements in deferred tax assets and liabilities were as follows:
Capital
allowances
£ million
Pension
scheme
£ million
Share-based
payments and
deferred
compensation
£ million
Impairment
losses
£ million
Cash flow
hedging
£ million
Intangible
assets
£ million
Other
£ million
Total
£ million
Group
At 1 August 2023
12.9 (0.3) 8.7 5.9 (13.4) (0.9) (2.1) 10.8
(Charge)/credit to the
income statement
(8.2) 0.1 (1.5) 0.1 — 0.3 3.5 (5.7)
Credit to other
comprehensive income
0.4 — — — 8.4 — 1.0 9.8
Charge to equity
— — — — — — — —
Acquisitions
— — — — — (1.5) 0.9 (0.6)
At 31 July 2024
5.1 (0.2) 7.2 6.0 (5.0) (2.1) 3.3 14.3
Credit/(charge) to the
income statement
8.3 0.1 (1.0) (0.6) — — 1.6 8.4
(Charge)/credit to other
comprehensive income
(0.4) — — — 3.5 — 1.2 4.3
Charge to equity
— — — — — — — —
Disposals
(0.1) — (3.2) — — 1.6 — (1.7)
Reclassification to assets
held for sale
6.2 — (0.8) — — — 0.3 5.7
At 31 July 2025
19.1 (0.1) 2.2 5.4 (1.5) (0.5) 6.4 31.0
The group’s deferred tax asset comprises £5.7 million (31July 2024: £4.8 million) due within one year and £25.3 million (31July
2024: £9.5 million) due after more than one year.
Capital
allowances
£ million
Pension
scheme
£ million
Share-based
payments and
deferred
compensation
£ million
Total
£ million
Company
At 1 August 2023
(0.4) (0.3) 1.1 0.4
Credit to the income statement
0.2 0.1 (0.5) (0.2)
Credit to other comprehensive income
— — — —
At 31 July 2024
(0.2) (0.2) 0.6 0.2
Charge to the income statement
0.2 0.1 (0.1) 0.2
Credit to other comprehensive income
— — — —
At 31 July 2025
— (0.1) 0.5 0.4
The company’s deferred tax asset comprises £0.1 million (31July 2024: £0.2 million) due within one year and £0.3 million
(31July 2024: £nil) due after more than one year.
As the group has been and is expected to continue to be consistently taxpaying, the full deferred tax assets have been
recognised. However, deferred tax assets of £0.5 million (31 July 2024: £0.5 million) have not been recognised in respect of
certain carried forward tax losses. It is currently uncertain whether the group will be able to utilise these losses.
7. Earnings per share
The calculation of basic earnings per share is based on the profit attributable to shareholders and the number of basic
weighted average shares. When calculating the diluted earnings per share, the weighted average number of shares in issue is
adjusted for the effects of all dilutive share options and awards.
Continuing operations
2025 2024
1
Basic
(99.8)p 56.2p
Diluted
(99.8)p 56.1p
Adjusted basic
2
59.3p 75.8p
Adjusted diluted
2
59.3p 75.6p
The Notes continued
Close Brothers Group plc Annual Report 2025
196
Discontinued operations
Basic
32.9p
3.5p
Diluted
32.9p
3.4p
Continuing and discontinued operations
Basic
(66.9) p
59.7p
Diluted
(66.9)p
59.5p
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
2. Excludes the adjusting items set out in the table below and the associated tax effect.
2024
1
(Loss)/profit attributable to shareholders
(100.2)
89.3
Less profit from discontinued operations, net of tax
(49.2)
(5.1)
(Loss)/profit attributable to shareholders on continuing operations
(149.4)
84.2
Adjustments:
Provision in relation to motor finance commissions
165.0
—
Complaints handling and other operational and legal costs incurred in relation to motor finance
commissions
18.7
6.9
Provision in relation to early settlements in Motor Finance
33.0
—
Provision in relation to the Borrowers in Financial Difficulty ("BiFD") review
—
17.2
Restructuring costs
2.3
3.1
Amortisation of intangible assets on acquisition
0.2
0.2
Operating loss before tax of Close Brewery Rentals
4.1
2.1
Operating loss before tax of Close Brothers Vehicle Hire
43.4
5.4
Tax effect of adjustments
(28.6)
(5.7)
Adjusted profit attributable to shareholders on continuing operations
88.7
113.4
1. Comparative information restated following the classification of Close Brothers Asset Management and Winterflood as discontinued operations. See
Notes 3 and 29.
The tax rate on adjusting items is 10.7% (2024: 16.3%), which differs to the standard UK corporation tax rate for the financial
year of 25.0% (2024: 25.0%). This is primarily due to £150.0 million of the provisions in relation to motor finance commissions
and early settlements in Motor Finance comprising disallowable expenditure (2024: primarily due to £14.0 million of the
provision in relation to the BiFD review comprising disallowable expenditure).
2025
2024
Average number of shares
Basic weighted
149.7
149.7
Effect of dilutive share options and awards
0.2
0.3
Diluted weighted
149.9
150.0
8. Dividends
For each ordinary share
Final dividend for previous financial year paid in November 2024: £nil (November 2023: 45.0p)
—
67.1
Interim dividend for current financial year paid in April 2025: £nil (April 2024: £nil)
—
—
—
67.1
Given the continued uncertainty regarding the outcome of the FCA’s review of motor finance commission arrangements and
any potential financial impact, the group will not pay a final dividend on its ordinary shares for the 2025 financial year. As
previously stated, the decision to reinstate dividends will be reviewed by the board once there is further clarity on the financial
impact of the FCA review of motor finance commissions.
197
Strategic report Governance report Financial statements

9. Loans and advances to banks
At 31 July 2025
135.2
1.3
3.5
14.2
7.5
161.7
At 31 July 2024
269.2
0.1
4.3
16.4
3.7
293.7
10. Loans and advances to customers
(a) Maturity and classification analysis of loans and advances to customers
The following tables set out the maturity and IFRS 9 classification analysis of loans and advances to customers. At 31 July
2025, loans and
advances to customers with a maturity of two years or less was £7,346.3 million (31 July 2024: £7,733.6
million) representing 75.7% (31 July 2024: 75.3%) of total gross loans and advances to customers:
At 31 July 2025
85.1
2,984.1
2,512.4
1,764.7
2,220.7
142.1
9,709.1
(249.7)
9,459.4
At 31 July 2024
88.5
2,888.2
2,654.9
2,102.0
2,399.1
143.9
10,276.6
(445.8)
9,830.8
Gross loans and advances to customers
Held at amortised cost
9,697.3
10,264.8
Held at fair value through profit or loss
11.8
11.8
9,709.1
10,276.6
(b) Loans and advances to customers held at amortised cost and impairment provisions by stage
Gross loans and advances to customers held at amortised cost by stage and the corresponding impairment provisions and
provision coverage ratios are set out below:
At 31 July 2025
Gross loans and advances to customers held at
amortised cost
Commercial
3,717.5
925.1
39.0
964.1
108.1
4,789.7
Of which: Commercial excluding Novitas
3,717.5
924.6
39.0
963.6
105.8
4,786.9
Of which: Novitas
—
0.5
—
0.5
2.3
2.8
Retail
2,611.1
252.6
15.1
267.7
95.2
2,974.0
Property
1,585.6
15.7
43.5
59.2
288.8
1,933.6
7,914.2
1,193.4
97.6
1,291.0
492.1
9,697.3
Impairment provisions
Commercial
21.7
10.8
5.2
16.0
35.8
73.5
Of which: Commercial excluding Novitas
21.7
10.3
5.2
15.5
33.5
70.7
Of which: Novitas
—
0.5
—
0.5
2.3
2.8
Retail
25.3
13.9
2.7
16.6
53.2
95.1
Property
3.6
1.0
—
1.0
76.5
81.1
50.6
25.7
7.9
33.6
165.5
249.7
Provision coverage ratio
Commercial
0.6%
1.2%
13.3%
1.7%
33.1%
1.5%
Within which: Commercial excluding Novitas
0.6%
1.1%
13.3%
1.6%
31.7%
1.5%
Within which: Novitas
—%
100.0%
—%
100.0%
100.0%
100.0%
Retail
1.0%
5.5%
17.9%
6.2%
55.9%
3.2%
Property
0.2%
6.4%
—%
1.7%
26.5%
4.2%
0.6%
2.2%
8.1%
2.6%
33.6%
2.6%
The Notes continued
Close Brothers Group plc Annual Report 2025
198

9. Loans and advances to banks
On demand
£ million
Within three
months
£ million
Between
three months
and one year
£ million
Between one
and two
years
£ million
Between two
and five years
£ million
Total
£ million
At 31 July 2025 135.2 1.3 3.5 14.2 7.5 161.7
At 31 July 2024 269.2 0.1 4.3 16.4 3.7 293.7
10. Loans and advances to customers
(a) Maturity and classification analysis of loans and advances to customers
The following tables set out the maturity and IFRS 9 classification analysis of loans and advances to customers. At 31July
2025, loans and advances to customers with a maturity of two years or less was £7,346.3 million (31July 2024: £7,733.6
million) representing 75.7% (31July 2024: 75.3%) of total gross loans and advances to customers:
On demand
£ million
Within three
months
£ million
Between
three
months and
one year
£ million
Between
one and two
years
£ million
Between
two and five
years
£ million
After more
than five
years
£ million
Total gross
loans and
advances to
customers
£ million
Impairment
provisions
£ million
Total net loans
and advances
to customers
£ million
At 31 July 2025
85.1 2,984.1 2,512.4 1,764.7 2,220.7 142.1 9,709.1 (249.7) 9,459.4
At 31 July 2024
88.5 2,888.2 2,654.9 2,102.0 2,399.1 143.9 10,276.6 (445.8) 9,830.8
31July 2025
£ million
31July 2024
£ million
Gross loans and advances to customers
Held at amortised cost
9,697.3 10,264.8
Held at fair value through profit or loss
11.8 11.8
9,709.1 10,276.6
(b) Loans and advances to customers held at amortised cost and impairment provisions by stage
Gross loans and advances to customers held at amortised cost by stage and the corresponding impairment provisions and
provision coverage ratios are set out below:
Stage 2
Stage 1
£ million
Less than
30 days past
due
£ million
Greater
than or
equal to 30
days past
due
£ million
Total
£ million
Stage 3
£ million
Total
£ million
At 31 July 2025
Gross loans and advances to customers held at
amortised cost
Commercial
3,717.5 925.1 39.0 964.1 108.1 4,789.7
Of which: Commercial excluding Novitas 3,717.5 924.6 39.0 963.6 105.8 4,786.9
Of which: Novitas — 0.5 — 0.5 2.3 2.8
Retail
2,611.1 252.6 15.1 267.7 95.2 2,974.0
Property
1,585.6 15.7 43.5 59.2 288.8 1,933.6
7,914.2 1,193.4 97.6 1,291.0 492.1 9,697.3
Impairment provisions
Commercial
21.7 10.8 5.2 16.0 35.8 73.5
Of which: Commercial excluding Novitas 21.7 10.3 5.2 15.5 33.5 70.7
Of which: Novitas — 0.5 — 0.5 2.3 2.8
Retail
25.3 13.9 2.7 16.6 53.2 95.1
Property
3.6 1.0 — 1.0 76.5 81.1
50.6 25.7 7.9 33.6 165.5 249.7
Provision coverage ratio
Commercial
0.6% 1.2% 13.3% 1.7% 33.1% 1.5%
Within which: Commercial excluding Novitas 0.6% 1.1% 13.3% 1.6% 31.7% 1.5%
Within which: Novitas —% 100.0% —% 100.0% 100.0% 100.0%
Retail
1.0% 5.5% 17.9% 6.2% 55.9% 3.2%
Property
0.2% 6.4% —% 1.7% 26.5% 4.2%
0.6% 2.2% 8.1% 2.6% 33.6% 2.6%
The Notes continued
Close Brothers Group plc Annual Report 2025
198
At 31 July 2024
Gross loans and advances to customers held at
amortised cost
Commercial
3,877.8
801.5
33.1
834.6
400.2
5,112.6
Of which: Commercial excluding Novitas
3,877.8
800.5
33.1
833.6
118.1
4,829.5
Of which: Novitas
—
1.0
—
1.0
282.1
283.1
Retail
2,815.7
221.2
9.9
231.1
90.0
3,136.8
Property
1,717.0
9.8
53.3
63.1
235.3
2,015.4
8,410.5
1,032.5
96.3
1,128.8
725.5
10,264.8
Impairment provisions
Commercial
20.9
9.6
4.2
13.8
256.0
290.7
Of which: Commercial excluding Novitas
20.9
8.6
4.2
12.8
36.3
70.0
Of which: Novitas
—
1.0
—
1.0
219.7
220.7
Retail
27.7
14.8
2.2
17.0
50.2
94.9
Property
3.6
0.2
0.3
0.5
56.1
60.2
52.2
24.6
6.7
31.3
362.3
445.8
Provision coverage ratio
Commercial
0.5%
1.2%
12.7%
1.7%
64.0%
5.7%
Within which: Commercial excluding Novitas
0.5%
1.1%
12.7%
1.5%
30.7%
1.4%
Within which: Novitas
—%
100.0%
—
100.0%
77.9%
78.0%
Retail
1.0%
6.7%
22.2%
7.4%
55.8%
3.0%
Property
0.2%
2.0%
0.6%
0.8%
23.8%
3.0%
0.6%
2.4%
7.0%
2.8%
49.9%
4.3%
Stage allocation of loans and advances to customers has been applied in line with the definitions set out in Note 1(i).
Additional disclosures on the stage allocation and movements of loans and advances to customers can be found in the Risk
Report.
(c) Adjustments
By their nature, limitations in the group’s expected credit loss models or input data may be identified through ongoing model
monitoring and validation of models. In certain circumstances, management make appropriate adjustments to model-
calculated expected credit losses. Adjustments have been identified as a key source of estimation uncertainty as set out in
Note 2 “Critical accounting judgements and estimates”.
(d) Reconciliation of loans and advances to customers held at amortised cost and impairment provisions
Reconciliation of gross loans and advances to customers and associated impairment provisions are set out below.
New financial assets originate in Stage 1 only, and the amount presented represents the value at origination.
Subsequently, a loan may transfer between stages, and the presentation of such transfers is based on a comparison of the
loan at the beginning of the year (or at origination if this occurred during the year) and the end of the year (or just prior to final
repayment or write off).
Repayments relating to loans which transferred between stages during the year are presented within the transfers between
stages lines. Such transfers do not represent overnight reclassification from one stage to another. All other repayments are
presented in a separate line.
ECL model methodologies may be updated or enhanced from time to time and the impacts of such changes are presented on
a separate line.
Enhancements to our model suite are a contributory factor to ECL movements and such factors have been taken into
consideration when assessing any required adjustments to modelled output and ensuring appropriate provision coverage
levels.
A loan is written off when there is no reasonable expectation of further recovery following realisation of all associated collateral
and available recovery actions against the customer.
199
Strategic report Governance report Financial statements

10. Loans and advances to customers (continued)
Gross loans and advances to customers held at amortised cost
At 1 August 2024
8,410.5
1,128.8
725.5
10,264.8
New financial assets originated
5,766.1
—
—
5,766.1
Transfers to Stage 1
200.4
(289.4)
(5.2)
(94.2)
Transfers to Stage 2
(1,381.4)
1,112.6
(4.5)
(273.3)
Transfers to Stage 3
(274.4)
(146.1)
321.9
(98.6)
Net transfer between stages and repayments¹
(1,455.4)
677.1
312.2
(466.1)
Repayments while stage remained unchanged and final repayments
(4,852.2)
(464.3)
(223.7)
(5,540.2)
Changes to model methodologies
48.3
(48.3)
—
—
Write offs
(3.1)
(2.3)
(321.9)
(327.3)
At 31 July 2025
7,914.2
1,291.0
492.1
9,697.3
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
Gross loans and advances to customers held at amortised cost
At 1 August 2023
7,990.2
1,062.0
583.4
9,635.6
New financial assets originated
6,695.5
—
—
6,695.5
Transfers to Stage 1
138.2
(205.2)
(7.6)
(74.6)
Transfers to Stage 2
(1,165.5)
904.8
(8.4)
(269.1)
Transfers to Stage 3
(310.2)
(130.8)
329.1
(111.9)
Net transfer between stages and repayments
1
(1,337.5)
568.8
313.1
(455.6)
Repayments while stage remained unchanged and final repayments
(4,936.3)
(501.2)
(114.4)
(5,551.9)
Write offs
(1.4)
(0.8)
(56.6)
(58.8)
At 31 July 2024
8,410.5
1,128.8
725.5
10,264.8
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
The gross carrying amount before modification of loans and advances to customers which were modified during the year while
in Stage 2 or 3 was
£259.5 million (2024: £283.1 million). £0.1 million loss (2024: £nil) was recognised as a result of these
modifications. The gross carrying amount at 31 July 2025 of modified loans and advances to customers which transferred from
Stage 2 or 3 to Stage 1 during the year was £20.9 million (31 July 2024: £38.7 million). The accounting policy for modifications
is set out in Note 1(i).
Impairment provisions on loans and advances to customers held at
amortised cost
At 1 August 2024
52.2
31.3
362.3
445.8
New financial assets originated
46.0
—
—
46.0
Transfers to Stage 1
1.1
(4.3)
(1.0)
(4.2)
Transfers to Stage 2
(13.4)
30.6
(1.4)
15.8
Transfers to Stage 3
(4.3)
(11.4)
88.0
72.3
Net remeasurement of expected credit losses arising from transfer of stages
and repayments
1
(16.6)
14.9
85.6
83.9
Repayments and ECL movements while stage remained unchanged and final
repayments
(29.5)
(10.9)
27.0
(13.4)
Changes to model methodologies
1.4
0.5
(0.4)
1.5
Charge to the income statement
1.3
4.5
112.2
118.0
Write offs
(2.9)
(2.2)
(309.0)
(314.1)
At 31 July 2025
50.6
33.6
165.5
249.7
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
The Notes continued
Close Brothers Group plc Annual Report 2025
200

10. Loans and advances to customers (continued)
Stage 1
£ million
Stage 2
£ million
Stage 3
£ million
Total
£ million
Gross loans and advances to customers held at amortised cost
At 1 August 2024
8,410.5 1,128.8 725.5 10,264.8
New financial assets originated
5,766.1 — — 5,766.1
Transfers to Stage 1 200.4 (289.4) (5.2) (94.2)
Transfers to Stage 2 (1,381.4) 1,112.6 (4.5) (273.3)
Transfers to Stage 3 (274.4) (146.1) 321.9 (98.6)
Net transfer between stages and repayments¹
(1,455.4) 677.1 312.2 (466.1)
Repayments while stage remained unchanged and final repayments
(4,852.2) (464.3) (223.7) (5,540.2)
Changes to model methodologies
48.3 (48.3) — —
Write offs
(3.1) (2.3) (321.9) (327.3)
At 31 July 2025
7,914.2 1,291.0 492.1 9,697.3
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
Stage 1
£ million
Stage 2
£ million
Stage 3
£ million
Total
£ million
Gross loans and advances to customers held at amortised cost
At 1 August 2023
7,990.2 1,062.0 583.4 9,635.6
New financial assets originated
6,695.5 — — 6,695.5
Transfers to Stage 1 138.2 (205.2) (7.6) (74.6)
Transfers to Stage 2 (1,165.5) 904.8 (8.4) (269.1)
Transfers to Stage 3 (310.2) (130.8) 329.1 (111.9)
Net transfer between stages and repayments
1
(1,337.5) 568.8 313.1 (455.6)
Repayments while stage remained unchanged and final repayments
(4,936.3) (501.2) (114.4) (5,551.9)
Write offs
(1.4) (0.8) (56.6) (58.8)
At 31 July 2024
8,410.5 1,128.8 725.5 10,264.8
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
The gross carrying amount before modification of loans and advances to customers which were modified during the year while
in Stage 2 or 3 was £259.5 million (2024: £283.1 million). £0.1 million loss (2024: £nil) was recognised as a result of these
modifications. The gross carrying amount at 31July 2025 of modified loans and advances to customers which transferred from
Stage 2 or 3 to Stage 1 during the year was £20.9million (31July 2024: £38.7 million). The accounting policy for modifications
is set out in Note 1(i).
Stage 1
£ million
Stage 2
£ million
Stage 3
£ million
Total
£ million
Impairment provisions on loans and advances to customers held at
amortised cost
At 1 August 2024
52.2 31.3 362.3 445.8
New financial assets originated
46.0 — — 46.0
Transfers to Stage 1 1.1 (4.3) (1.0) (4.2)
Transfers to Stage 2 (13.4) 30.6 (1.4) 15.8
Transfers to Stage 3 (4.3) (11.4) 88.0 72.3
Net remeasurement of expected credit losses arising from transfer of stages
and repayments
1
(16.6) 14.9 85.6 83.9
Repayments and ECL movements while stage remained unchanged and final
repayments
(29.5) (10.9) 27.0 (13.4)
Changes to model methodologies
1.4 0.5 (0.4) 1.5
Charge to the income statement
1.3 4.5 112.2 118.0
Write offs
(2.9) (2.2) (309.0) (314.1)
At 31 July 2025 50.6 33.6 165.5 249.7
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
The Notes continued
Close Brothers Group plc Annual Report 2025
200
Impairment provisions on loans and advances to customers held at
amortised cost
At 1 August 2023
58.1
32.2
290.3
380.6
New financial assets originated
51.7
—
—
51.7
Transfers to Stage 1
0.6
(3.9)
(0.7)
(4.0)
Transfers to Stage 2
(13.4)
31.4
(1.1)
16.9
Transfers to Stage 3
(5.9)
(12.0)
98.7
80.8
Net remeasurement of expected credit losses arising from transfer of stages
and repayments
1
(18.7)
15.5
96.9
93.7
Repayments and ECL movements while stage remained unchanged and final
repayments
(37.7)
(15.6)
26.6
(26.7)
Changes to model methodologies
—
—
—
—
Charge to the income statement
(4.7)
(0.1)
123.5
118.7
Write offs
(1.2)
(0.8)
(51.5)
(53.5)
At 31 July 2024
52.2
31.3
362.3
445.8
1. Repayments relate only to financial assets which transferred between stages during the year. Other repayments are shown in the line below.
Impairment losses relating to loans and advances to customers held at amortised cost:
Charge to income statement arising from movement in impairment provisions
118.0
118.7
Amounts written off directly to income statement and other costs, net of discount unwind on Stage 3
loans to interest income, and recoveries
(29.9)
(21.7)
88.1
97.0
Impairment losses relating to other financial assets
4.7
1.8
Impairment losses on financial assets recognised in income statement
92.8
98.8
Impairment losses on financial assets of £92.8 million (2024: £98.8 million) include an impairment credit of £6.8 million in
relation to Novitas (2024: impairment charge of £6.4 million).
The contractual amount outstanding at 31 July 2025 on financial assets that were written off during the period and are still
subject to recovery activity is £27.1 million (31 July 2024: £22.1 million).
(e) Finance lease and hire purchase agreement receivables
Net loans and advances to customers comprise
Hire purchase agreement receivables
3,613.4
3,749.8
Finance lease receivables
945.6
896.7
Other loans and advances
4,900.4
5,184.3
9,459.4
9,830.8
201
Strategic report Governance report Financial statements

10. Loans and advances to customers (continued)
The following table shows a reconciliation between gross investment in finance lease and hire purchase agreement receivables
included in the net loans and advances to customers table above to present value of minimum lease and hire purchase
payments.
Gross investment in finance leases and hire purchase agreement receivables due:
One year or within one year
1,983.2
1,987.6
>One to two years
>Two to three years
>Three to four years
>Four to five years
More than five years
Unearned finance income
Present value of minimum lease and hire purchase agreement payments
Of which due:
One year or within one year
>One to two years
>Two to three years
>Three to four years
>Four to five years
More than five years
The aggregate cost of assets acquired for the purpose of letting under finance leases and hire purchase agreements was
£
7,848.3 million (2024: £7,898.6 million). The average effective interest rate on finance leases approximates to 12.4% (2024:
12.2%). The present value of minimum lease and hire purchase agreement payments reflects the fair value of finance lease and
hire purchase agreement receivables before deduction of impairment provisions.
11. Debt securities
Fair value
Fair value through other
through profit
or loss
£ million
Sovereign and central bank debt
—
601.6
—
601.6
Supranational, sub-sovereigns and agency ("SSA") bonds
—
146.2
—
146.2
Covered bonds
—
105.6
—
105.6
Long trading positions in debt securities
—
—
—
—
Other debt securities
1.1
—
4.7
5.8
At 31 July 2025
1.1
853.4
4.7
859.2
Fair value
Fair value through other
through profit
or loss
£ million
Sovereign and central bank debt
—
383.7
—
383.7
Supranational, sub-sovereigns and agency ("SSA") bonds
—
145.5
—
145.5
Covered bonds
—
187.7
—
187.7
Long trading positions in debt securities
16.0
—
—
16.0
Other debt securities
0.8
—
6.8
7.6
At 31 July 2024
16.8
716.9
6.8
740.5
The Notes continued
Close Brothers Group plc Annual Report 2025
202

10. Loans and advances to customers (continued)
The following table shows a reconciliation between gross investment in finance lease and hire purchase agreement receivables
included in the net loans and advances to customers table above to present value of minimum lease and hire purchase
payments.
31July 2025
£ million
31July 2024
£ million
Gross investment in finance leases and hire purchase agreement receivables due:
One year or within one year
1,983.2 1,987.6
>One to two years
1,535.1
1,573.2
>Two to three years
1,155.3
1,168.2
>Three to four years
647.7
692.0
>Four to five years
225.0
222.6
More than five years
41.2
46.4
5,587.5
5,690.0
Unearned finance income
(884.5)
(904.5)
Present value of minimum lease and hire purchase agreement payments
4,703.0
4,785.5
Of which due:
One year or within one year
1,661.0
1,671.1
>One to two years
1,292.2
1,326.6
>Two to three years
974.2
982.6
>Three to four years
547.9
579.4
>Four to five years
191.9
185.9
More than five years
35.8
39.9
4,703.0
4,785.5
The aggregate cost of assets acquired for the purpose of letting under finance leases and hire purchase agreements was
£7,848.3million (2024: £7,898.6 million). The average effective interest rate on finance leases approximates to 12.4% (2024:
12.2%). The present value of minimum lease and hire purchase agreement payments reflects the fair value of finance lease and
hire purchase agreement receivables before deduction of impairment provisions.
11. Debt securities
Fair value
through profit
or loss
£ million
Fair value
through other
comprehensive
income
£ million
Amortised
cost
£ million
Total
£ million
Sovereign and central bank debt
— 601.6 — 601.6
Supranational, sub-sovereigns and agency ("SSA") bonds
— 146.2 — 146.2
Covered bonds
— 105.6 — 105.6
Long trading positions in debt securities
— — — —
Other debt securities
1.1 — 4.7 5.8
At 31 July 2025
1.1 853.4 4.7 859.2
Fair value
through profit
or loss
£ million
Fair value
through other
comprehensive
income
£ million
Amortised
cost
£ million
Total
£ million
Sovereign and central bank debt
— 383.7 — 383.7
Supranational, sub-sovereigns and agency ("SSA") bonds
— 145.5 — 145.5
Covered bonds
— 187.7 — 187.7
Long trading positions in debt securities
16.0 — — 16.0
Other debt securities
0.8 — 6.8 7.6
At 31 July 2024
16.8 716.9 6.8 740.5
The Notes continued
Close Brothers Group plc Annual Report 2025
202
Movements on the book value of sovereign and central bank debt comprise:
Sovereign and central bank debt at 1 August
383.7
186.1
Additions
512.4
194.2
Redemptions
(299.1)
—
Currency translation differences
2.2
(1.5)
Movement in value
2.4
4.9
Sovereign and central bank debt at 31 July
601.6
383.7
Movements on the book value of SSA bonds comprise:
SSA bonds at 1 August
Additions
Redemptions
Currency translation differences
Movement in value
SSA bonds at 31 July
Movements on the book value of covered bonds comprise:
Covered bonds 1 August
Additions
Redemptions/disposals
Currency translation differences
Movement in value
Covered bonds at 31 July
12. Equity shares
Long trading positions
—
25.8
Other equity shares
—
1.6
—
27.4
Equity shares at 31 July 2024 related to Winterflood Securities. At 31 July 2025, the assets and liabilities of Winterflood
Securities have been classified as held for sale. See Note 29 for more detail.
13. Derivative financial instruments
The group enters into derivative contracts with a number of financial institutions for risk management purposes to hedge
exposures to interest rate and exchange rate movements. Derivatives are classified as held for trading unless they are
designated as being in a hedge accounting relationship. The group’s total derivative asset and liability position as reported on
the consolidated balance sheet is as follows.
31 July 2025
31 July 2024
Exchange rate contracts
376.3
0.1
7.3
275.3
2.3
0.4
Interest rate contracts
7,012.4
103.0
97.4
7,202.6
99.1
128.6
7,388.7
103.1
104.7
7,477.9
101.4
129.0
Interest rate contracts are held for interest rate risk management and interest margin stabilisation purposes.
203
Strategic report Governance report Financial statements

13. Derivative financial instruments (continued)
Included in the derivatives above are the following cash flow and fair value hedges:
31 July 2025
31 July 2024
Cash flow hedges
Interest rate contracts
658.7
4.9
1.7
514.4
4.8
0.6
Fair value hedges
Interest rate contracts
4,775.6
89.5
88.5
4,431.7
78.8
116.3
Where derivatives are designated as being in a hedge accounting relationship, the group applies fair value and cash flow
hedging if the relevant transaction meets the required documentation and hedge effectiveness criteria.
Fair value hedge accounting
Fair value hedges seek to hedge the exposure to changes in the fair value of recognised assets and liabilities or firm
commitments. For fair value hedges of interest rate risk, changes in the benchmark interest rate are considered the largest
component of the overall change in fair value. Other risks such as credit risk are managed but excluded from the hedge
accounting relationship. Changes in the fair value of derivatives in a fair value hedge are recorded in the income statement,
along with changes in the fair value of the hedged item (asset or liability) attributable to the hedged risk. If the hedged item is
measured at amortised cost, the fair value changes due to the hedged risk adjust the carrying amount of the hedged asset or
liability. If the hedge no longer qualifies for hedge accounting, changes in the fair value of the hedged item attributable to the
hedged risk are no longer recognised in the income statement and the cumulative adjustment to the carrying amount of the
hedged item is amortised to the income statement over the period to maturity. For micro fair value hedges, this is applied using
a straight-line method over the period to maturity.
Cash flow hedge accounting
Cash flow hedges seek to hedge the exposure to variability in future cash flows due to movements in the relevant benchmark
interest rate with interest rate swaps. These future cash flows relate to future interest payments or receipts on recognised
financial instruments and on forecast transactions for periods of five (2024: six) years. The effective portion of changes in the
fair value of qualifying cash flow hedges is recognised in other comprehensive income within the cash flow hedging reserve.
The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in
equity are reclassified to the income statement in the periods when the hedged item affects profit or loss. When a hedging
instrument expires, is sold, or no longer meets the criteria for hedge accounting, any cumulative gain or loss in equity remains
there until the forecast transaction is recognised in the income statement. If the forecast transaction is no longer expected to
occur, the cumulative gain or loss in equity is immediately transferred to the income statement. The group applies portfolio
cash flow hedging for interest rate risk exposures on a portfolio of actual and forecast variable interest rate cash flows arising
from variable rate borrowings. Cash flow hedge accounting is applied when hedging interest rate risk exposures on floating
rate assets.
To assess hedge effectiveness the change in fair value or cash flows of the hedging instruments is compared with the change
in fair value or cash flows of the hedged item attributable to the hedged risk. A hedge is considered highly effective if the
results are within a ratio of 80%-125%.
The main sources of hedge ineffectiveness can include, but are not limited to, basis mismatch, maturity mismatch, credit
valuation adjustments and cash flow timing mismatch between the hedged item and the hedging instrument.
The maturity profiles for the notional amounts of the group’s cash flow and fair value hedges are set out as follows.
Cash flow hedges
Interest rate risk
31 July 2025
—
5.8
0.5
13.1
619.8
19.5
658.7
31 July 2024
—
6.1
1.4
3.2
482.0
21.7
514.4
Fair value hedges
Interest rate risk
31 July 2025
—
543.7
737.2
1,502.0
1,308.1
684.6
4,775.6
31 July 2024
—
516.1
672.3
1,080.7
1,446.5
716.1
4,431.7
Cash flow hedges have an average fixed rate of 4.0% (31 July 2024: 4.0%). Fair value hedges have an average fixed rate of
3.3% (31 July 2024: 3.7%).
Details of the hedging instruments for the group’s hedge ineffectiveness assessment are set out as follows.
The Notes continued
Close Brothers Group plc Annual Report 2025
204

13. Derivative financial instruments (continued)
Included in the derivatives above are the following cash flow and fair value hedges:
31 July 2025 31 July 2024
Notional
value
£ million
Assets
£ million
Liabilities
£ million
Notional
value
£ million
Assets
£ million
Liabilities
£ million
Cash flow hedges
Interest rate contracts
658.7 4.9 1.7 514.4 4.8 0.6
Fair value hedges
Interest rate contracts
4,775.6 89.5 88.5 4,431.7 78.8 116.3
Where derivatives are designated as being in a hedge accounting relationship, the group applies fair value and cash flow
hedging if the relevant transaction meets the required documentation and hedge effectiveness criteria.
Fair value hedge accounting
Fair value hedges seek to hedge the exposure to changes in the fair value of recognised assets and liabilities or firm
commitments. For fair value hedges of interest rate risk, changes in the benchmark interest rate are considered the largest
component of the overall change in fair value. Other risks such as credit risk are managed but excluded from the hedge
accounting relationship. Changes in the fair value of derivatives in a fair value hedge are recorded in the income statement,
along with changes in the fair value of the hedged item (asset or liability) attributable to the hedged risk. If the hedged item is
measured at amortised cost, the fair value changes due to the hedged risk adjust the carrying amount of the hedged asset or
liability. If the hedge no longer qualifies for hedge accounting, changes in the fair value of the hedged item attributable to the
hedged risk are no longer recognised in the income statement and the cumulative adjustment to the carrying amount of the
hedged item is amortised to the income statement over the period to maturity. For micro fair value hedges, this is applied using
a straight-line method over the period to maturity.
Cash flow hedge accounting
Cash flow hedges seek to hedge the exposure to variability in future cash flows due to movements in the relevant benchmark
interest rate with interest rate swaps. These future cash flows relate to future interest payments or receipts on recognised
financial instruments and on forecast transactions for periods of five (2024: six) years. The effective portion of changes in the
fair value of qualifying cash flow hedges is recognised in other comprehensive income within the cash flow hedging reserve.
The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in
equity are reclassified to the income statement in the periods when the hedged item affects profit or loss. When a hedging
instrument expires, is sold, or no longer meets the criteria for hedge accounting, any cumulative gain or loss in equity remains
there until the forecast transaction is recognised in the income statement. If the forecast transaction is no longer expected to
occur, the cumulative gain or loss in equity is immediately transferred to the income statement. The group applies portfolio
cash flow hedging for interest rate risk exposures on a portfolio of actual and forecast variable interest rate cash flows arising
from variable rate borrowings. Cash flow hedge accounting is applied when hedging interest rate risk exposures on floating
rate assets.
To assess hedge effectiveness the change in fair value or cash flows of the hedging instruments is compared with the change
in fair value or cash flows of the hedged item attributable to the hedged risk. A hedge is considered highly effective if the
results are within a ratio of 80%-125%.
The main sources of hedge ineffectiveness can include, but are not limited to, basis mismatch, maturity mismatch, credit
valuation adjustments and cash flow timing mismatch between the hedged item and the hedging instrument.
The maturity profiles for the notional amounts of the group’s cash flow and fair value hedges are set out as follows.
On demand
£ million
Within three
months
£ million
Between
three and six
months
£ million
Between six
months and
one year
£ million
Between one
and five years
£ million
After more
than five
years
£ million
Total
£ million
Cash flow hedges
Interest rate risk
31 July 2025
— 5.8 0.5 13.1 619.8 19.5 658.7
31 July 2024
— 6.1 1.4 3.2 482.0 21.7 514.4
Fair value hedges
Interest rate risk
31 July 2025
— 543.7 737.2 1,502.0 1,308.1 684.6 4,775.6
31 July 2024
— 516.1 672.3 1,080.7 1,446.5 716.1 4,431.7
Cash flow hedges have an average fixed rate of 4.0% (31July 2024: 4.0%). Fair value hedges have an average fixed rate of
3.3% (31July 2024: 3.7%).
Details of the hedging instruments for the group’s hedge ineffectiveness assessment are set out as follows.
The Notes continued
Close Brothers Group plc Annual Report 2025
204
Cash flow hedges
Interest rate risk
(1.2)
(0.1)
(0.9)
—
Fair value hedges
Interest rate risk
33.9
0.1
50.9
—
The carrying amount of hedging interest rate swaps is held within derivative financial instruments and the hedge
ineffectiveness is held within other income. Details of the hedged exposures covered by the group’s hedging strategies are set
out as follows.
At 31 July 2025
Fair value hedges
Assets
Debt securities
424.0
(20.1)
(4.9)
Loans and advances to customers and undrawn commitments
163.6
(8.1)
1.3
587.6
(28.2)
(3.6)
Liabilities
Deposits by customers
3,342.1
7.3
3.1
Debt securities in issue
615.8
(76.4)
19.3
Subordinated loan capital
195.5
(5.6)
7.8
4,153.4
(74.7)
30.2
At 31 July 2024
Fair value hedges
Assets
Debt securities
355.7
(15.2)
11.8
Loans and advances to customers and undrawn commitments
146.8
(9.3)
4.1
502.5
(24.5)
15.9
Liabilities
Deposits by customers
3,092.2
4.2
8.1
Debt securities in issue
596.3
(95.7)
46.8
Subordinated loan capital
187.2
(13.3)
11.8
3,875.7
(104.8)
66.7
Details of the impact of hedging relationships on the income statement and other comprehensive income are set out as follows.
income statement
1
Cash flow hedges
Interest rate risk
31 July 2025
1.0
2.9
(1.1)
12.3
31 July 2024
1.0
14.4
(0.9)
28.9
1. Following de-designation of hedge relationships, the amounts previously recognised in the cash flow hedge reserve have been reclassified to other
income to the extent that the hedged cash flows occurred during the year.
205
Strategic report Governance report Financial statements

14. Intangible assets
Cost
At 1 August 2023
142.5
333.2
50.4
526.1
0.2
Additions
8.3
28.1
7.3
43.7
0.1
Disposals
—
(12.6)
(0.3)
(12.9)
—
At 31 July 2024
150.8
348.7
57.4
556.9
0.3
Additions
—
25.6
—
25.6
—
Disposals
—
(6.1)
—
(6.1)
—
Disposal of subsidiaries
1
(46.9)
(16.6)
(51.7)
(115.2)
—
Reclassification to assets held for sale
2
(67.7)
(20.4)
—
(88.1)
—
At 31 July 2025
36.2
331.2
5.7
373.1
0.3
Accumulated amortisation and impairments
At 1 August 2023
47.9
167.8
46.7
262.4
0.2
Amortisation charge for the year
—
38.9
1.4
40.3
0.1
Disposals
—
(11.4)
(0.4)
(11.8)
—
At 1 August 2024
47.9
195.3
47.7
290.9
0.3
Amortisation charge for the year
—
38.3
0.8
39.1
—
Impairment charge for the year
16.6
2.0
—
18.6
—
Disposals
—
(5.3)
—
(5.3)
—
Disposal of subsidiaries
1
(3.5)
(9.2)
(46.0)
(58.7)
—
Reclassification to assets held for sale
2
(58.9)
(18.9)
—
(77.8)
—
At 31 July 2025
2.1
202.2
2.5
206.8
0.3
Net book value at 31 July 2025
34.1
129.0
3.2
166.3
—
Net book value at 31 July 2024
102.9
153.4
9.7
266.0
—
Net book value at 1 August 2023
94.6
165.4
3.7
263.7
—
1. Close Brothers Asset Management was sold to Oaktree Capital Management, L.P. on 28 February 2025 – see Note 29.
2. Intangible assets relating to Winterflood Securities and Close Brewery Rentals have been reclassified to assets held for sale – see Note 29.
Goodwill additions of £8.3 million and intangible assets on acquisition additions of £7.3 million in the prior year ended 31 July
2024 relate to the group’s acquisition of the 100% shareholdings of Close Brothers Finance Designated Activity Company
(goodwill of £4.7 million and intangible assets on acquisition of £3.6 million) and Bottriell Adams LLP (“Bottriell Adams”)
(goodwill of £3.6 million and intangible assets on acquisition of £3.7 million).
Software includes assets under development of £30.6 million (31 July 2024: £35.4 million).
Intangible assets on acquisition relate to broker and customer relationships and are amortised over a period of eight to
20 years.
In the 2025 financial year, £0.2 million (2024: £0.2 million) of the amortisation charge is included in amortisation of intangible
assets on acquisition and £37.2 million (2024: £36.6 million) of the amortisation charge is included in administrative expenses
shown in the consolidated income statement.
Impairment tests for goodwill and other intangible assets
Overview
At 31 July 2025, goodwill has been allocated to eight (31 July 2024: nine) individual cash generating units (“CGUs”). Seven
(July 2024: seven) are within the Banking division and one is the Winterflood Securities division (“Winterflood”). At 31 July
2024, the Asset Management division was also a CGU. However, as disclosed in Note 29, the group completed the sale of
Asset Management on 28 February 2025 and therefore the CGU and associated goodwill have been derecognised from the
balance sheet.
Also as disclosed in Note 29, the group announced on 25 July 2025 its agreement to sell Winterflood to Marex Group plc with
the transaction expected to complete in early 2026. As a result, Winterflood was classified as held for sale on the balance
sheet in line with IFRS 5. A goodwill impairment of £14.5 million was recognised, reflecting the requirement to hold the
The Notes continued
Close Brothers Group plc Annual Report 2025
206

14. Intangible assets
Goodwill
£ million
Software
£ million
Intangible
assets on
acquisition
£ million
Group total
£ million
Company
software
£ million
Cost
At 1 August 2023
142.5 333.2 50.4 526.1 0.2
Additions
8.3 28.1 7.3 43.7 0.1
Disposals
— (12.6) (0.3) (12.9) —
At 31 July 2024
150.8 348.7 57.4 556.9 0.3
Additions
— 25.6 — 25.6 —
Disposals
— (6.1) — (6.1) —
Disposal of subsidiaries
1
(46.9) (16.6) (51.7) (115.2) —
Reclassification to assets held for sale
2
(67.7) (20.4) — (88.1) —
At 31 July 2025
36.2 331.2 5.7 373.1 0.3
Accumulated amortisation and impairments
At 1 August 2023
47.9 167.8 46.7 262.4 0.2
Amortisation charge for the year
— 38.9 1.4 40.3 0.1
Disposals
— (11.4) (0.4) (11.8) —
At 1 August 2024
47.9 195.3 47.7 290.9 0.3
Amortisation charge for the year
— 38.3 0.8 39.1 —
Impairment charge for the year
16.6 2.0 — 18.6 —
Disposals
— (5.3) — (5.3) —
Disposal of subsidiaries
1
(3.5) (9.2) (46.0) (58.7) —
Reclassification to assets held for sale
2
(58.9) (18.9) — (77.8) —
At 31 July 2025
2.1 202.2 2.5 206.8 0.3
Net book value at 31 July 2025
34.1 129.0 3.2 166.3 —
Net book value at 31 July 2024
102.9 153.4 9.7 266.0 —
Net book value at 1 August 2023
94.6 165.4 3.7 263.7 —
1. Close Brothers Asset Management was sold to Oaktree Capital Management, L.P. on 28 February 2025 – see Note 29.
2. Intangible assets relating to Winterflood Securities and Close Brewery Rentals have been reclassified to assets held for sale – see Note 29.
Goodwill additions of £8.3 million and intangible assets on acquisition additions of £7.3 million in the prior year ended 31 July
2024 relate to the group’s acquisition of the 100% shareholdings of Close Brothers Finance Designated Activity Company
(goodwill of £4.7 million and intangible assets on acquisition of £3.6 million) and Bottriell Adams LLP (“Bottriell Adams”)
(goodwill of £3.6 million and intangible assets on acquisition of £3.7 million).
Software includes assets under development of £30.6 million (31July 2024: £35.4 million).
Intangible assets on acquisition relate to broker and customer relationships and are amortised over a period of eight to
20years.
In the 2025 financial year, £0.2 million (2024: £0.2 million) of the amortisation charge is included in amortisation of intangible
assets on acquisition and £37.2 million (2024: £36.6 million) of the amortisation charge is included in administrative expenses
shown in the consolidated income statement.
Impairment tests for goodwill and other intangible assets
Overview
At 31 July 2025, goodwill has been allocated to eight (31 July 2024: nine) individual cash generating units (“CGUs”). Seven
(July 2024: seven) are within the Banking division and one is the Winterflood Securities division (“Winterflood”). At 31 July
2024, the Asset Management division was also a CGU. However, as disclosed in Note 29, the group completed the sale of
Asset Management on 28 February 2025 and therefore the CGU and associated goodwill have been derecognised from the
balance sheet.
Also as disclosed in Note 29, the group announced on 25 July 2025 its agreement to sell Winterflood to Marex Group plc with
the transaction expected to complete in early 2026. As a result, Winterflood was classified as held for sale on the balance
sheet in line with IFRS 5. A goodwill impairment of £14.5 million was recognised, reflecting the requirement to hold the
The Notes continued
Close Brothers Group plc Annual Report 2025
206
business at the lower of carrying value and fair value less costs to sell. At 31 July 2025, the goodwill classified as held for sale
in relation to Winterflood is £8.8 million (31 July 2024: £23.3 million).
As disclosed at half year 2025, two additional CGUs, namely the group's Vehicle Hire and Brewery Rentals businesses, were
separated out from an existing Banking CGU. This allowed a more accurate position of the CGUs to be presented. The
intangible assets of these two new CGUs totalled £4.1 million, comprising £2.1 million of goodwill and £2.0 million of software.
Following a review at half year, a full impairment of these intangible assets was subsequently recognised. Brewery Rentals met
the held for sale criteria under IFRS 5 in the second half of the year.
Goodwill is allocated to the CGU in which the historical acquisition occurred and hence the goodwill originated. Further
information on the performance of each division can be found in Note 3 “Segmental Analysis”. Goodwill impairment reviews
are carried out at least annually by assessing the recoverable amount of the group’s CGUs, which is the higher of fair value
less costs to sell and value in use. Goodwill impairment reviews have been performed for 31 July 2025 in light of the current
trading and regulatory environment.
Methodology
The recoverable amounts for all CGUs except Winterflood are measured based on value in use. A value in use calculation uses
discounted cash flow forecasts based on the most recent three-year strategy plans. The value in use calculations are sensitive
primarily to changes in the assumptions for future cash flows, which include consideration for future capital requirements and
appropriate allocation of overhead costs, as well as discount rates.
The most relevant assumptions underlying management’s strategy plans for the Banking CGUs, which are based on past
experience and forecast market conditions, are expected loan book growth rates, net return on loan book, future costs and
future capital requirements. While these assumptions are relevant to management's plans, they may not all be key
assumptions in the goodwill impairment test. In addition, while Banking CGUs are not individually regulated, for the purposes
of an impairment assessment, theoretical capital requirements have been taken into consideration in calculating a CGU's value
in use and carrying value to ensure that capital constraints on free cash flows are appropriately reflected and the carrying value
is on a comparable basis.
Beyond the group’s three-year planning horizon, estimates of future cash flows in the fourth and fifth years, and longer where
appropriate, are made by management with due consideration given to the relevant assumptions set out above. After the final
year, a terminal value is calculated using an annual growth rate of 2%, which is consistent with the UK government’s long-term
inflation target.
The cash flows are discounted using a pre-tax estimated weighted average cost of capital as set out in the following table. The
methodology used to derive the discount rates is fundamentally consistent with the prior year and the discount rates used are
also consistent with the prior year. However, they differ across the CGUs, reflecting the nature of the CGUs’ business and the
current market returns appropriate to the CGU that investors would require for a similar asset.
Assessment overview
At 31 July 2025, the results of the review indicate there is no goodwill impairment except in relation to the Winterflood, Vehicle
Hire and Brewery Rentals CGUs as noted above. Having performed stress test value in use calculations, the group believes
that any reasonably possible change in the key assumptions which have been used would not lead to the carrying value of any
remaining CGU to exceed its recoverable amount except Motor Finance.
Assessment of CGUs
The Motor Finance CGU, which includes goodwill of £3.0 million and other intangible assets of £10.7 million, relates to the
group's UK motor finance business. Cash flows for this CGU have been estimated for seven years to ensure an appropriate
value in use is calculated given a period of strategic change in the shorter term. Consistent with the prior year, the value in use
calculation for this CGU has been identified as a key source of estimation uncertainty. The value in use of Motor Finance
excludes the £163.9 million balance sheet provision in relation to motor finance commissions and £33.0 million provision in
relation to early settlements, both as described in Note 16, in line with the requirements of IAS 36.
The key source of estimation uncertainty within the Motor Finance value in use calculation relates to the expected future cash
flows, which include consideration for the CGU's strategic growth plans, as well as forecast costs and capital charge. While, as
noted previously, the cash flows exclude the provision in relation to motor finance commissions, the cash flows may
nevertheless be impacted by the uncertainty surrounding, and outcome of, the FCA's review and the group's strategic and
capital actions response. As described in Note 2, determining the impact on goodwill of this matter is a critical accounting
judgement. It also represents a key assumption for the Motor Finance goodwill impairment assessment.
The value in use of Motor Finance is calculated to be 133% (31 July 2024: 121%) of carrying value, which represents a
headroom of £53 million (31 July 2024: £35 million). Management's future growth expectations are in part dependent on
assumptions relating to funding, capital and customer demand. To demonstrate the sensitivity to lower cash flows or a delay in
future growth, a 33% reduction in the annual cash flows to perpetuity would result in the full reduction of the available
headroom. However, this outcome reflects the CGU's sensitivity and does not include all possible management actions which
may affect capital and cash flow forecasts for each CGU of the Banking division if any further response were required in
respect of the FCA review. Separately, the pre-tax discount rate used is 14.9% (31 July 2024: 15.2%) and an absolute increase
of 2.5% in the discount rate would result in the full reduction of the available headroom.
207
Strategic report Governance report Financial statements

14. Intangible Assets (continued)
The Asset Finance and Leasing (“AF&L”) CGU includes goodwill of £9.8 million, which is significant in comparison to total
goodwill following the disposal of Asset Management and classification of Winterflood as held for sale. The value in use of
AF&L is calculated to be 122% (31 July 2024: 135%) of carrying value. The value in use calculation is also dependent on
management's assumptions for future cash flows. To demonstrate the sensitivity to cash flows, a 10% reduction in the annual
cash flows to perpetuity would result in a 46% reduction in the available headroom.
These scenarios for Motor Finance and AF&L are a demonstration of sensitivity only and do not represent management's base
case scenarios where, as stated, value in use remains above carrying value.
Details of the CGUs in which the goodwill carrying amount is significant in comparison with total goodwill, together with the
pre-tax discount rate used in determining value in use, are disclosed separately in the table below:
31 July 2025
31 July 2024
Cash generating unit
Winterflood Securities
—
—
23.3
14.8
Asset Finance and Leasing
9.8
14.9
9.8
15.2
Other Banking division CGUs
24.3
14.4-15.2
26.3
14.5-15.4
34.1
59.4
15. Property, plant and equipment
Group
Cost
At 1 August 2023
21.5
65.5
449.1
0.4
94.0
630.5
Additions
1.3
12.9
64.7
—
10.0
88.9
Disposals
(0.4)
(13.3)
(71.9)
—
(11.1)
(96.7)
At 31 July 2024
22.4
65.1
441.9
0.4
92.9
622.7
Additions
3.2
2.7
40.3
10.3
56.5
Disposals
(13.3)
(4.2)
(75.9)
(26.5)
(119.9)
Disposal of subsidiaries
2
(5.1)
(6.8)
—
—
(7.5)
(19.4)
Reclassification to assets held for sale
3
(0.7)
(21.9)
(80.1)
(0.1)
(19.1)
(121.9)
At 31 July 2025
6.5
34.9
326.2
0.3
50.1
418.0
Accumulated depreciation and impairments
At 1 August 2023
15.0
40.9
177.9
0.2
39.4
273.4
Depreciation and impairment charges for the year
2.3
9.1
44.4
0.1
15.5
71.4
Disposals
(0.3)
(13.4)
(48.3)
—
(9.7)
(71.7)
At 31 July 2024
17.0
36.6
174.0
0.3
45.2
273.1
Depreciation and impairment charges for the year
1.3
8.2
78.3
—
13.3
101.1
Disposals
(13.0)
(4.1)
(53.3)
—
(25.1)
(95.5)
Disposal of subsidiaries
2
(3.2)
(4.7)
—
—
(3.4)
(11.3)
Reclassification to assets held for sale
3
(0.6)
(13.8)
(39.1)
(0.1)
(5.2)
(58.8)
At 31 July 2025
1.5
22.2
159.9
0.2
24.8
208.6
Net book value at 31 July 2025
5.0
12.7
166.3
0.1
25.3
209.4
Net book value at 31 July 2024
5.4
28.5
267.9
0.1
47.7
349.6
Net book value at 1 August 2023
6.5
24.6
271.2
0.2
54.6
357.1
1. Right of use assets primarily relate to the group’s leasehold properties.
2. Close Brothers Asset Management was sold to Oaktree Capital Management, L.P. on 28 February 2025 - see Note 29.
3. Property, plant and equipment relating to Winterflood Securities and Close Brewery Rentals have been reclassified to assets held for sale - see Note 29.
The Notes continued
Close Brothers Group plc Annual Report 2025
208

14. Intangible Assets (continued)
The Asset Finance and Leasing (“AF&L”) CGU includes goodwill of £9.8 million, which is significant in comparison to total
goodwill following the disposal of Asset Management and classification of Winterflood as held for sale. The value in use of
AF&L is calculated to be 122% (31 July 2024: 135%) of carrying value. The value in use calculation is also dependent on
management's assumptions for future cash flows. To demonstrate the sensitivity to cash flows, a 10% reduction in the annual
cash flows to perpetuity would result in a 46% reduction in the available headroom.
These scenarios for Motor Finance and AF&L are a demonstration of sensitivity only and do not represent management's base
case scenarios where, as stated, value in use remains above carrying value.
Details of the CGUs in which the goodwill carrying amount is significant in comparison with total goodwill, together with the
pre-tax discount rate used in determining value in use, are disclosed separately in the table below:
31 July 2025 31 July 2024
Cash generating unit
Goodwill
£ million
Pre-tax
discount rate
%
Goodwill
£ million
Pre-tax
discount rate
%
Winterflood Securities
— — 23.3 14.8
Asset Finance and Leasing
9.8 14.9 9.8 15.2
Other Banking division CGUs
24.3 14.4-15.2 26.3 14.5-15.4
34.1 59.4
15. Property, plant and equipment
Leasehold
property
£ million
Fixtures,
fittings and
equipment
£ million
Assets held
under
operating
leases
£ million
Motor
vehicles
£ million
Right of use
assets¹
£ million
Total
£ million
Group
Cost
At 1 August 2023
21.5 65.5 449.1 0.4 94.0 630.5
Additions
1.3 12.9 64.7 — 10.0 88.9
Disposals
(0.4) (13.3) (71.9) — (11.1) (96.7)
At 31 July 2024
22.4 65.1 441.9 0.4 92.9 622.7
Additions
3.2 2.7 40.3
—
10.3 56.5
Disposals
(13.3) (4.2) (75.9)
—
(26.5) (119.9)
Disposal of subsidiaries
2
(5.1) (6.8) — — (7.5) (19.4)
Reclassification to assets held for sale
3
(0.7) (21.9) (80.1) (0.1) (19.1) (121.9)
At 31 July 2025
6.5 34.9 326.2 0.3 50.1 418.0
Accumulated depreciation and impairments
At 1 August 2023
15.0 40.9 177.9 0.2 39.4 273.4
Depreciation and impairment charges for the year
2.3 9.1 44.4 0.1 15.5 71.4
Disposals
(0.3) (13.4) (48.3) — (9.7) (71.7)
At 31 July 2024
17.0 36.6 174.0 0.3 45.2 273.1
Depreciation and impairment charges for the year
1.3 8.2 78.3 — 13.3 101.1
Disposals
(13.0) (4.1) (53.3) — (25.1) (95.5)
Disposal of subsidiaries
2
(3.2) (4.7) — — (3.4) (11.3)
Reclassification to assets held for sale
3
(0.6) (13.8) (39.1) (0.1) (5.2) (58.8)
At 31 July 2025
1.5 22.2 159.9 0.2 24.8 208.6
Net book value at 31 July 2025
5.0 12.7 166.3 0.1 25.3 209.4
Net book value at 31 July 2024
5.4 28.5 267.9 0.1 47.7 349.6
Net book value at 1 August 2023
6.5 24.6 271.2 0.2 54.6 357.1
1. Right of use assets primarily relate to the group’s leasehold properties.
2. Close Brothers Asset Management was sold to Oaktree Capital Management, L.P. on 28 February 2025 - see Note 29.
3. Property, plant and equipment relating to Winterflood Securities and Close Brewery Rentals have been reclassified to assets held for sale - see Note 29.
The Notes continued
Close Brothers Group plc Annual Report 2025
208
The net book value of assets held under operating leases includes £0.1 million (31 July 2024: £0.6 million) relating to vehicles
held in inventories. There was a loss of £2.0 million from the sale of assets held under operating leases for the year ended
31 July 2025 (2024: gain of £0.4 million).
Assets held under operating leases primarily relate to vehicles owned by the group's Vehicle Hire business, which is part of the
Commercial operating segment. At 31 July 2025, the carrying value of the operating lease assets in relation to this business
was £165.0 million (31 July 2024: £222.4 million). The group has decided to exit this business with performance impacted by a
challenging market backdrop, particularly post-Covid, and there is limited opportunity to deliver enhanced returns. To realise
maximum value and ensure we continue to support our customers in line with contractual terms, the exit will be phased over
time, with the business being managed down over the next three to five years.
As a result of this decision and the recent decline in asset values in this sector, an impairment charge of £30.0 million in
relation to the operating lease assets has been recognised within operating income in the consolidated income statement. The
impairment follows a value in use (“VIU”) assessment under IAS 36 “Impairment of Assets” based on management's exit plan.
The key sources of estimation uncertainty in the VIU calculation relates to the expected rental incomes and disposal values of
the vehicles. At 31 July 2025, a 7.5% absolute increase or decrease in expected rental incomes would decrease or increase
the impairment charge by £10.2 million or £10.3 million respectively. Separately, a 15% absolute increase or decrease in the
disposal values would decrease or increase the impairment charge by £12.7 million or £13.2 million respectively. The discount
rate is not a key assumption in the VIU calculation.
Vehicle Hire's operating loss before tax of £43.4 million is presented as an adjusting item. This includes the £30.0 million asset
impairment charge, a £10.9 million underlying loss and £2.5 million impairment of intangible assets, of which £1.5 million
relates to the full impairment of the goodwill associated with the business.
At 31 July 2024, assets held under operating leases of £267.9 million largely comprised vehicles owned by the Vehicle Hire
business of £222.4 million, and brewery containers owned by Close Brewery Rentals Limited (“CBRL”) of £44.5 million. During
the current year, CBRL met the relevant IFRS 5 criteria and the business' assets held under operating leases totalling £41.0
million have been reclassified to assets held for sale on the balance sheet. See Note 29 for further detail.
Future minimum lease rentals receivable under non-cancellable operating leases
One year or within one year
50.5
51.0
>One to two years
39.1
36.1
>Two to three years
30.3
28.2
>Three to four years
15.4
19.1
>Four to five years
5.9
6.7
More than five years
2.9
2.1
144.1
143.2
Company
Cost
At 1 August 2023
0.3
11.8
12.1
Additions
—
—
—
At 31 July 2024
0.3
11.8
12.1
Additions
—
—
—
At 31 July 2025
0.3
11.8
12.1
Depreciation
At 1 August 2023
0.1
3.1
3.2
Charge for the year
—
1.2
1.2
At 31 July 2024
0.1
4.3
4.4
Charge for the year
—
1.2
1.2
At 31 July 2025
0.1
5.5
5.6
Net book value at 31 July 2025
0.2
6.3
6.5
Net book value at 31 July 2024
0.2
7.5
7.7
Net book value at 1 August 2023
0.2
8.7
8.9
209
Strategic report Governance report Financial statements

15. Property, plant and equipment
The net book value of leasehold property comprises:
Group
Company
Long leasehold property
0.2
1.1
0.2
0.2
Short leasehold property
4.8
4.3
—
—
5.0
5.4
0.2
0.2
16. Other assets and liabilities
Prepayments, accrued income and other assets
Prepayments
92.0
110.7
Accrued income
3.1
21.1
Trade and other receivables
1
91.5
54.9
186.6
186.7
Accruals, deferred income and other liabilities
Accruals
87.1
118.0
Deferred income
5.0
7.5
Trade and other payables
80.2
148.7
Provisions
2
210.3
32.3
382.6
306.5
1. Trade and other receivables include an insurance settlement receivable (see Credit risk section of the Risk Report) and £21.1 million (31 July 2024:
£nil) of contingent deferred consideration relating to the disposal of Close Brothers Asset Management (see Note 29).
2. Provisions have been separated out on the consolidated balance sheet for the current and prior year to provide additional clarity.
Group provisions
At 1 August 2023
2.3
8.1
8.8
19.2
Additions
19.1
1.4
3.5
24.0
Utilisation
(1.8)
(1.0)
(6.5)
(9.3)
Released
—
(0.6)
(1.0)
(1.6)
At 31 July 2024
19.6
7.9
4.8
32.3
Additions
204.0
0.8
1.0
205.8
Utilisation
(20.5)
(0.1)
(0.9)
(21.5)
Released
—
(0.3)
—
(0.3)
Reclassification to liabilities held for sale
—
(3.0)
(3.0)
(6.0)
At 31 July 2025
203.1
5.3
1.9
210.3
Company provisions
At 1 August 2023
0.4
2.0
2.4
Additions
—
0.3
0.3
Utilisation
—
(0.7)
(0.7)
Released
—
(0.4)
(0.4)
At 31 July 2024
0.4
1.2
1.6
Additions
—
0.1
0.1
Utilisation
—
(0.5)
(0.5)
Released
(0.2)
—
(0.2)
At 31 July 2025
0.2
0.8
1.0
The Notes continued
Close Brothers Group plc Annual Report 2025
210

15. Property, plant and equipment
The net book value of leasehold property comprises:
Group Company
31July 2025
£ million
31July 2024
£ million
31July 2025
£ million
31July 2024
£ million
Long leasehold property
0.2 1.1 0.2 0.2
Short leasehold property
4.8 4.3 — —
5.0 5.4 0.2 0.2
16. Other assets and liabilities
31July 2025
£ million
31July 2024
£ million
Prepayments, accrued income and other assets
Prepayments
92.0 110.7
Accrued income
3.1 21.1
Trade and other receivables
1
91.5 54.9
186.6 186.7
Accruals, deferred income and other liabilities
Accruals
87.1 118.0
Deferred income
5.0 7.5
Trade and other payables
80.2 148.7
Provisions
2
210.3 32.3
382.6 306.5
1. Trade and other receivables include an insurance settlement receivable (see Credit risk section of the Risk Report) and £21.1 million (31 July 2024:
£nil) of contingent deferred consideration relating to the disposal of Close Brothers Asset Management (see Note 29).
2. Provisions have been separated out on the consolidated balance sheet for the current and prior year to provide additional clarity.
Legal and
regulatory
£ million
Property
£ million
Other
£ million
Total
£ million
Group provisions
At 1 August 2023
2.3 8.1 8.8 19.2
Additions
19.1 1.4 3.5 24.0
Utilisation
(1.8) (1.0) (6.5) (9.3)
Released
— (0.6) (1.0) (1.6)
At 31 July 2024
19.6 7.9 4.8 32.3
Additions
204.0 0.8 1.0 205.8
Utilisation
(20.5) (0.1) (0.9) (21.5)
Released
— (0.3) — (0.3)
Reclassification to liabilities held for sale
— (3.0) (3.0) (6.0)
At 31 July 2025
203.1 5.3 1.9 210.3
Property
£ million
Other
£ million
Total
£ million
Company provisions
At 1 August 2023
0.4 2.0 2.4
Additions
— 0.3 0.3
Utilisation
— (0.7) (0.7)
Released
— (0.4) (0.4)
At 31 July 2024
0.4 1.2 1.6
Additions
— 0.1 0.1
Utilisation
— (0.5) (0.5)
Released
(0.2) — (0.2)
At 31 July 2025
0.2 0.8 1.0
The Notes continued
Close Brothers Group plc Annual Report 2025
210
Provisions are made for claims and other items which arise in the normal course of business. Claims may arise in respect of
legal and regulatory matters, while other items largely relate to property dilapidations and employee benefits. A provision is
recognised where it is determined that there is a legal or constructive present obligation arising from a past event, payment is
probable, and the amount can be estimated reliably. The timing and/or outcome of these claims and other items are uncertain.
Provision in relation to motor commissions
An overview of developments in relation to motor finance commissions including the Supreme Court’s judgment, the FCA’s
review, related updates and other claims and complaints is set out in the 'FCA’s review of historical motor finance commission
arrangements' section of the Strategic Report. In the previous financial year, it was concluded that this matter was a
contingent liability under IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”. At half year 2025, a further detailed
assessment against IAS 37 was performed, which determined that the criteria for a provision had been met and a provision of
£165.0 million was recognised. During the second half of the financial year, the provision decreased slightly to £163.9 million,
reflecting some utilisation in relation to costs, partly offset by an unwinding of the discount relating to the time value of money.
Taking into account all available information, and recognising there have been significant developments since the half year,
including the Supreme Court’s judgment and the FCA’s subsequent market statements, the provision on the balance sheet has
been reassessed and remains unchanged at £163.9 million. This includes estimates of the potential redress for affected
customers, as well as relevant directly attributable operational and legal costs. The estimated provision is based on probability
weighted scenarios using various assumptions, which may differ across the scenarios, relating to potential outcomes of the
FCA review and any redress scheme proposed. All scenarios selected assume a certain level of compensation based on
management’s assessment of affected customers in light of the Supreme Court judgment and are considered to represent an
appropriate range of potential outcomes. Other assumptions include, for example, claim rates, time periods in scope of any
remediation scheme and the costs to deliver any remediation.
The Supreme Court in the Johnson v FirstRand Bank Limited case noted that the test for customer unfairness is highly fact sensitive
and takes into account a broad range of factors. These factors include, for example, commission size relative to the charge for credit,
nature of the commission, characteristics of the customer, compliance with regulations and disclosures made to the customer.
In management’s provisioning assessment, significant judgement has been applied in determining the affected customers, the
level of compensation and the appropriate scenarios. These represent areas of critical accounting judgement for the group.
In addition, a number of assumptions have been applied in the calculation of the provision, with certain assumptions
representing key sources of estimation uncertainty. These relate to the total cost of credit (“TCC”) thresholds used in
determining the affected population of customers, claim rates and the weightings applied to the scenarios. A 10% relative
increase or decrease in the TCC thresholds would result in a decrease of £25 million or increase of £31 million respectively in
the estimated provision. Separately, a 10% relative increase or decrease in the assumed claim rates would result in a £14.7
million increase or decrease in the estimated provision. Changes in other assumptions, including scenario weightings, may also
result in material changes to the estimated provision.
The estimated provision is the outcome of a thorough assessment, representing the group’s current evaluation based on
available information and recent developments. There remains significant uncertainty over the FCA’s proposals in relation to a
redress scheme which will be subject to public consultation, and therefore the ultimate cost to the group could be materially
higher or lower than the provision taken. During the year, the group incurred £18.7 million (2024: £6.9 million) of complaints
handling expenses and other operational and legal costs in relation to motor commissions. This included increased resourcing
to manage complaints and legal expenses, notably those related to the Supreme Court appeal, as well as the subsequent
discount unwind of the original £165 million provision described above. These costs, as well as £165.0 million recognised in
the income statement relating to the initial provision, do not reflect underlying trading performance and therefore have been
presented as separate adjusting items and excluded from adjusted operating profit by management.
Provision in relation to early settlements in Motor Finance
Following the identification of historical deficiencies in certain operational processes related to early settlement of loans in the
Motor Finance business, the group recognised a separate provision of £33.0 million at 31 July 2025 in relation to a proactive
customer remediation programme to be implemented by the group. The provision reflects management's best estimate of the
cost of remediation in relation to impacted customers, including compensatory interest and associated administrative costs,
based on the information currently available and will be refined as the scope and design of the remediation programme are
finalised. Since identification of the issue, the group has acted quickly to amend the relevant processes and implemented
additional controls to prevent recurrence. The group is fully committed to ensuring that affected customers are appropriately
compensated and expects to contact customers in early 2026.
17. Settlement balances and short positions
Settlement balances
—
600.1
Short positions in:
Debt securities
—
5.5
Equity shares
—
9.3
—
14.8
—
614.9
Settlement balances and short positions at 31 July 2024 related to Winterflood Securities. At 31 July 2025, the assets and
liabilities of Winterflood Securities have been classified as held for sale. See Note 29 for more detail.
211
Strategic report Governance report Financial statements

18. Financial liabilities
three
Deposits by banks
9.3
78.8
—
—
—
—
Deposits by customers
1,161.4
2,640.3
3,533.7
852.9
611.0
Loans and overdrafts from banks
1.5
—
—
—
—
Debt securities in issue
56.5
124.1
974.2
503.2
333.3
1,991.3
At 31 July 2025
1,172.2
2,775.6
3,657.8
1,827.1
1,114.2
333.3
10,880.2
Within three
Deposits by banks
0.9
53.0
84.5
—
—
—
138.4
Deposits by customers
706.6
2,320.7
3,397.9
1,685.2
583.2
—
8,693.6
Loans and overdrafts from banks
46.6
9.0
—
110.0
—
—
165.6
Debt securities in issue
—
21.9
246.6
799.0
595.3
323.6
1,986.4
At 31 July 2024
754.1
2,404.6
3,729.0
2,594.2
1,178.5
323.6
10,984.0
At 31 July 2025, the parent company had £251.3 million (31 July 2024: £250.8 million) of non-instalment debt securities in
issue with an interest rate of 7.75% and a final maturity date of 2028.
As outlined in Note 26(c), at 31 July 2025 the group accessed £nil (31 July 2024: £110.0 million) and £nil (31 July 2024: £nil)
cash under the Bank of England’s Term Funding Scheme with Additional Incentives for SMEs (“TFSME”) and Indexed Long-
Term Repo (“ILTR”) respectively. During the year, the group made an early repayment of £110.0 million (31 July 2024: £490.0
million) against the TFSME. Cash from these schemes is included within loans and overdrafts from banks. Residual maturities
of the schemes, which include accrued interest, are as follows:
At 31 July 2025
—
—
—
—
—
—
—
At 31 July 2024
—
0.5
—
110.0
—
—
110.5
19. Subordinated loan capital
Final maturity date
2031
2026
2.00%
195.5
187.2
195.5
187.2
At 31 July 2025, the parent company had £201.2 million (31 July 2024: £200.8 million) of subordinated loan capital with an
interest rate of 2.00% and a final maturity date of 2031.
20. Called up share capital, distributable reserves and other equity instrument
31 July 2025
31 July 2024
million
£ million
million
£ million
Group and company
Ordinary shares of 25p each (allotted, issued and fully paid)
152.1
38.0
152.1
38.0
At 31 July 2025, the company’s reserves available for distribution under section 830(2) and 831(2) of the Companies Act 2006
were £259.8 million (2024: £299.6 million). The directors have applied the guidance provided by ICAEW TECH 02/17 in
determining this.
Other equity instrument comprises the group’s £200.0 million Fixed Rate Reset Perpetual Subordinated Contingent Convertible
Securities, or Additional Tier 1 capital (“AT1”), issued on 29 November 2023. These AT1 securities are classified as an equity
instrument under IAS 32 “Financial Instruments: Presentation” with the proceeds recognised in equity net of transaction costs
of £2.4 million.
These securities carry a coupon of 11.125%, payable semi-annually on 29 May and 29 November of each year, and have a first
reset date on 29 May 2029. Two coupon payments totalling £22.3 million were made in the year. The securities include, among
The Notes continued
Close Brothers Group plc Annual Report 2025
212

18. Financial liabilities
On demand
£ million
Within
three
months
£ million
Between
three
months and
one year
£ million
Between
one and two
years
£ million
Between
two and five
years
£ million
After more
than five
years
£ million
Total
£ million
Deposits by banks
9.3 78.8 —
— — —
88.1
Deposits by customers
1,161.4 2,640.3 3,533.7 852.9 611.0
—
8,799.3
Loans and overdrafts from banks
1.5 — — — —
—
1.5
Debt securities in issue
—
56.5 124.1 974.2 503.2 333.3 1,991.3
At 31 July 2025
1,172.2 2,775.6 3,657.8 1,827.1 1,114.2 333.3 10,880.2
On demand
£ million
Within three
months
£ million
Between
three months
and one year
£ million
Between one
and two
years
£ million
Between two
and five years
£ million
After more
than five
years
£ million
Total
£ million
Deposits by banks
0.9 53.0 84.5 — — — 138.4
Deposits by customers
706.6 2,320.7 3,397.9 1,685.2 583.2 — 8,693.6
Loans and overdrafts from banks
46.6 9.0 — 110.0 — — 165.6
Debt securities in issue
— 21.9 246.6 799.0 595.3 323.6 1,986.4
At 31 July 2024
754.1 2,404.6 3,729.0 2,594.2 1,178.5 323.6 10,984.0
At 31July 2025, the parent company had £251.3 million (31July 2024: £250.8 million) of non-instalment debt securities in
issue with an interest rate of 7.75% and a final maturity date of 2028.
As outlined in Note 26(c), at 31July 2025 the group accessed £nil (31July 2024: £110.0 million) and £nil (31July 2024: £nil)
cash under the Bank of England’s Term Funding Scheme with Additional Incentives for SMEs (“TFSME”) and Indexed Long-
Term Repo (“ILTR”) respectively. During the year, the group made an early repayment of £110.0 million (31 July 2024: £490.0
million) against the TFSME. Cash from these schemes is included within loans and overdrafts from banks. Residual maturities
of the schemes, which include accrued interest, are as follows:
On demand
£ million
Within three
months
£ million
Between
three months
and one year
£ million
Between one
and two
years
£ million
Between two
and five years
£ million
After more
than five
years
£ million
Total
£ million
At 31 July 2025
— — — — — — —
At 31 July 2024
— 0.5 — 110.0 — — 110.5
19. Subordinated loan capital
Prepayment
date
Initial
interest
rate
31July 2025
£ million
31July 2024
£ million
Final maturity date
2031
2026 2.00% 195.5 187.2
195.5 187.2
At 31July 2025, the parent company had £201.2 million (31July 2024: £200.8 million) of subordinated loan capital with an
interest rate of 2.00% and a final maturity date of 2031.
20. Called up share capital, distributable reserves and other equity instrument
31 July 2025 31 July 2024
million £ million million £ million
Group and company
Ordinary shares of 25p each (allotted, issued and fully paid)
152.1 38.0 152.1 38.0
At 31July 2025, the company’s reserves available for distribution under section 830(2) and 831(2) of the Companies Act 2006
were £259.8 million (2024: £299.6 million). The directors have applied the guidance provided by ICAEW TECH 02/17 in
determining this.
Other equity instrument comprises the group’s £200.0 million Fixed Rate Reset Perpetual Subordinated Contingent Convertible
Securities, or Additional Tier 1 capital (“AT1”), issued on 29 November 2023. These AT1 securities are classified as an equity
instrument under IAS 32 “Financial Instruments: Presentation” with the proceeds recognised in equity net of transaction costs
of £2.4 million.
These securities carry a coupon of 11.125%, payable semi-annually on 29 May and 29 November of each year, and have a first
reset date on 29 May 2029. Two coupon payments totalling £22.3 million were made in the year. The securities include, among
The Notes continued
Close Brothers Group plc Annual Report 2025
212
other things, a conversion trigger of 7.0% Common Equity Tier 1 capital ratio and are callable any time in the six-month period
prior to and including the first reset date or on each reset date occurring every five years thereafter.
Additional disclosures on the group’s capital position and capital risk can be found on pages 81 to 83 in the Capital risk
section of the Risk Report.
21. Guarantees, commitments and contingent liabilities
Guarantees
Group
Company
Earliest period in which guarantee could be called
Within one year
96.4
137.7
87.3
130.0
More than one year
2.1
3.7
—
—
98.5
141.4
87.3
130.0
Guarantees arise in the normal course of business and include performance guarantees issued by certain businesses. Where
the group undertakes to make a payment on behalf of its subsidiaries for guarantees issued, such as bank facilities or property
leases, or as irrevocable letters of credit for which an obligation to make a payment to a third party has not arisen at the
reporting date, they are included in these consolidated financial statements.
Commitments
Undrawn facilities, credit lines and other commitments to lend – revocable and irrevocable
Within one year
823.0
1,038.2
After more than one year
—
9.5
823.0
1,047.7
Other commitments
Subsidiaries had contracted capital and other financial commitments of £31.2 million (2024: £46.5 million).
Operating lease commitments
During the year, the company recognised lease payments as an expense of £2.1 million (2024: £2.1 million). At 31 July 2025,
the company had future minimum lease payments under non-cancellable operating leases relating to property of £0.8 million
within one year, £12.2 million between one and five years, and £nil after more than five years, totalling £13.0 million (31 July
2024: £2.1 million, £8.3 million, and £2.2 million respectively, totalling £12.6 million).
Contingent liabilities
In the normal course of the group’s business, there may be other contingent liabilities relating to complaints, legal proceedings
or regulatory reviews. These cases are not currently expected to have a material impact on the group.
22. Related party transactions
Transactions with key management
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of an entity. The group’s key management are the members of the group’s Board and Executive Committee, which
include all Executive Directors and Non-Executive Directors. The related parties of the group include its key management and
their close family members. Details of Directors’ remuneration and interests in shares are disclosed in the Directors’
Remuneration Report. The table below details, on an aggregated basis, the group's key management emoluments:
Emoluments
Salaries and fees
5.3
6.0
Benefits and allowances
2.1
0.8
Performance related awards in respect of the current year:
Cash
—
1.7
7.4
8.5
Termination benefits
0.9
—
Post-employment benefits
0.1
—
Share-based awards
1.1
0.7
9.5
9.2
213
Strategic report Governance report Financial statements

22. Related party transactions (continued)
Gains upon exercise of options by the group's key management, expensed to the income statement in previous years, totalled
£0.4 million (2024: £1.8 million).
Amounts included in deposits by customers at 31 July 2025 attributable, in aggregate, to the group's key management were
£0.3 million (31 July 2024: £0.3 million). These relationships are undertaken on standard commercial terms.
23. Pensions
The group operates defined contribution pension schemes for eligible employees as well as a defined benefit pension scheme
which is closed to new members and further accrual. Assets of all schemes are held separately from those of the group.
Defined contribution schemes
During the year the charge to the consolidated income statement for the group’s defined contribution pension schemes was
£13.4 million (2024: £13.2 million), representing contributions payable by the group and is included in administrative expenses.
Defined benefit pension scheme
The group’s only defined benefit pension scheme (“the scheme”) is a final salary scheme which operates under trust law. The
scheme is managed and administered in accordance with the scheme’s Trust Deed and Rules and all relevant legislation by a
trustee board made up of trustees nominated by both the company and the members.
The pension surplus on the group’s balance sheet is £0.2 million (31 July 2024: £0.8 million) relating to the cash held by the
scheme, with the fair value of the insurance policy matched to the fair value of the scheme’s liabilities, which remains subject
to changes in actuarial valuations as presented in this note.
The scheme was closed to new entrants in August 1996 and closed to further accrual during 2012. At 31 July 2025 this
scheme had
15 (31 July 2024: 21) deferred members, 63 (31 July 2024: 58) pensioners and dependents and 8 (31 July 2024: 8)
insured annuitants.
Funding position
The scheme’s most recent triennial actuarial valuation at 31 July 2021 showed that the scheme was fully funded. As such, no
further contributions are scheduled.
IAS 19 valuation
The following disclosures are reported in accordance with IAS 19. Significant actuarial assumptions are as follows:
Inflation rate (Retail Price Index)
3.2
3.4
Inflation rate (CPI)
2.8
3.0
Discount rate for scheme liabilities¹
5.6
4.9
Expected interest/expected long-term return on plan assets
5.6
4.9
Mortality assumptions²:
Existing pensioners from age 65, life expectancy (years):
Men
23.2
22.9
Women
25.0
24.8
Non-retired members currently aged 50, life expectancy from age 65 (years):
Men
24.0
23.6
Women
26.3
26.1
1. Based on market yields at 31 July 2025 and 2024 on high quality sterling-denominated corporate bonds, adjusted to be consistent with the
estimated term of the post-employment benefit obligation, using the Willis Towers Watson model “Global RATE:Link”.
2. Based on standard tables SAPS S2 Light (2024: SAPS S2 Light) produced by the CMI Bureau of the Institute and Faculty of Actuaries with adjusted
mortality multipliers for pensioners and non-pensioners, together with projected future improvements in line with the CMI 2024 (2024: CMI 2023)
core projection model with a long-term trend of 1.5% per annum.
The scheme has been accounted for in the company and the surplus has been recognised as an asset on the company and
group’s balance sheet within “Trade and other receivables”.
The group has the unconditional right to any surpluses that arise within the scheme once all benefits have been secured in full.
As such no asset ceiling has been applied, and accordingly the scheme surplus is recognised on the consolidated balance sheet.
The Notes continued
Close Brothers Group plc Annual Report 2025
214

22. Related party transactions (continued)
Gains upon exercise of options by the group's key management, expensed to the income statement in previous years, totalled
£0.4million (2024: £1.8 million).
Amounts included in deposits by customers at 31July 2025 attributable, in aggregate, to the group's key management were
£0.3million (31July 2024: £0.3 million). These relationships are undertaken on standard commercial terms.
23. Pensions
The group operates defined contribution pension schemes for eligible employees as well as a defined benefit pension scheme
which is closed to new members and further accrual. Assets of all schemes are held separately from those of the group.
Defined contribution schemes
During the year the charge to the consolidated income statement for the group’s defined contribution pension schemes was
£13.4million (2024: £13.2 million), representing contributions payable by the group and is included in administrative expenses.
Defined benefit pension scheme
The group’s only defined benefit pension scheme (“the scheme”) is a final salary scheme which operates under trust law. The
scheme is managed and administered in accordance with the scheme’s Trust Deed and Rules and all relevant legislation by a
trustee board made up of trustees nominated by both the company and the members.
The pension surplus on the group’s balance sheet is £0.2 million (31July 2024: £0.8 million) relating to the cash held by the
scheme, with the fair value of the insurance policy matched to the fair value of the scheme’s liabilities, which remains subject
to changes in actuarial valuations as presented in this note.
The scheme was closed to new entrants in August 1996 and closed to further accrual during 2012. At 31July 2025 this
scheme had 15 (31July 2024: 21) deferred members, 63 (31July 2024: 58) pensioners and dependents and 8 (31July 2024: 8)
insured annuitants.
Funding position
The scheme’s most recent triennial actuarial valuation at 31 July 2021 showed that the scheme was fully funded. As such, no
further contributions are scheduled.
IAS 19 valuation
The following disclosures are reported in accordance with IAS 19. Significant actuarial assumptions are as follows:
2025
%
2024
%
Inflation rate (Retail Price Index)
3.2 3.4
Inflation rate (CPI)
2.8 3.0
Discount rate for scheme liabilities¹
5.6 4.9
Expected interest/expected long-term return on plan assets
5.6 4.9
Mortality assumptions²:
Existing pensioners from age 65, life expectancy (years):
Men
23.2 22.9
Women
25.0 24.8
Non-retired members currently aged 50, life expectancy from age 65 (years):
Men
24.0 23.6
Women
26.3 26.1
1. Based on market yields at 31July 2025 and 2024 on high quality sterling-denominated corporate bonds, adjusted to be consistent with the
estimated term of the post-employment benefit obligation, using the Willis Towers Watson model “Global RATE:Link”.
2. Based on standard tables SAPS S2 Light (2024: SAPS S2 Light) produced by the CMI Bureau of the Institute and Faculty of Actuaries with adjusted
mortality multipliers for pensioners and non-pensioners, together with projected future improvements in line with the CMI 2024 (2024: CMI 2023)
core projection model with a long-term trend of 1.5% per annum.
The scheme has been accounted for in the company and the surplus has been recognised as an asset on the company and
group’s balance sheet within “Trade and other receivables”.
The group has the unconditional right to any surpluses that arise within the scheme once all benefits have been secured in full.
Assuch no asset ceiling has been applied, and accordingly the scheme surplus is recognised on the consolidated balance sheet.
The Notes continued
Close Brothers Group plc Annual Report 2025
214
Fair value of scheme assets¹
Equities
—
—
—
—
9.4
Bonds
—
—
—
30.3
33.6
Cash
0.2
0.9
1.4
3.5
0.2
Insured annuities
21.5
23.2
22.4
1.0
—
Total assets
21.7
24.1
23.8
34.8
43.2
Fair value of liabilities
(21.5)
(23.3)
(22.5)
(27.6)
(35.6)
Surplus
0.2
0.8
1.3
7.2
7.6
1. There are no amounts included within the fair value of scheme assets relating to the financial instruments of Close Brothers Group plc.
Movement in the present value of scheme liabilities during the year:
Carrying amount at 1 August
(23.3)
(22.5)
Interest expense
(1.1)
(1.1)
Benefits paid
1.4
1.3
Actuarial gain/(loss)
1.5
(1.0)
Carrying amount at 31 July
(21.5)
(23.3)
Movement in the fair value of scheme assets during the year:
Carrying amount at 1 August
24.1
23.8
Interest income
1.1
1.2
Benefits paid
(1.4)
(1.2)
Administrative costs paid
(0.5)
(0.6)
(Losses)/returns on scheme assets, excluding interest income
(1.6)
0.9
Carrying amount at 31 July
21.7
24.1
Historical experience of actuarial gains/(losses) are shown below:
Returns/(losses) on scheme assets
(1.6)
0.9
(10.6)
(8.7)
1.9
Experience (losses)/gains on scheme liabilities
—
(0.4)
(0.9)
0.4
—
Impact of changes in assumptions
1.5
(0.5)
5.8
8.2
(1.4)
Total actuarial changes in liabilities
1.5
(0.9)
4.9
8.6
(1.4)
Total actuarial gains/(losses)
(0.1)
—
(5.7)
(0.1)
0.5
Actuarial movements would be recognised in other comprehensive income. Income of £nil (2024: £0.1 million) from the interest
on the scheme surplus has been recognised within administrative expenses in the consolidated income statement. The group’s
policy is not to allocate the net defined benefit cost between group entities participating in the scheme.
The valuation of the scheme’s liabilities is sensitive to the key assumptions used in the valuation. The effect of a change in
those assumptions in 2025 and 2024 is set out below. The analysis reflects the variation of the individual assumptions. The
variation in price inflation includes all inflation-linked pension increases in deferment and in payment.
2025
2024
Key assumption
Sensitivity
%
£ million
%
£ million
Discount rate
0.25% decrease
2.5
0.5
2.8
0.6
Price inflation (RPI)
0.25% increase
1.4
0.3
1.3
0.3
Mortality
Increase in life expectancy at age 65 by one year
2.8
0.6
2.7
0.6
215
Strategic report Governance report Financial statements

23. Pensions (continued)
The company is exposed to a number of risks relating to the scheme, including assumptions not being borne out in practice.
Some of the most significant risks are as follows, although the list is not exhaustive.
• Change in bond yields: A decrease in corporate bond yields will increase the value placed on the scheme’s defined benefit
obligation (“DBO”), although following the buy-in transaction this will be largely offset by an increase in the value of the
scheme’s assets.
• Asset volatility: There is a risk that a fall in asset values is not matched by a corresponding reduction in the value placed on
the scheme’s DBO. This risk has been significantly reduced by the purchase of an insurance policy to cover the scheme’s
liabilities.
• Inflation risk: The majority of the scheme’s DBO is linked to inflation, where higher inflation will lead to a higher value being
placed on the DBO. Some of the scheme’s non-buy-in assets are either unaffected by inflation or loosely correlated with
inflation (e.g. growth assets), meaning that an increase in inflation will generally decrease the surplus. The value of the buy-in
asset will vary with inflation broadly in line with the changes to the scheme’s DBO.
• Life expectancy: An increase in life expectancy will lead to an increased value being placed on the scheme’s DBO and on
the insurance policy assets. Future mortality rates cannot be predicted with certainty. The impact on the DBO would be very
closely matched by the impact on the buy-in asset value.
The weighted average duration of the benefit payments reflected in the scheme liabilities
is 10 years (2024: 11 years).
The Virgin Media Ltd v NTL Pension Trustees II decision, handed down by the High Court on 16 June 2023 (upheld by the
Court of Appeal in July 2024), considered the implications of section 37 of the Pension Schemes Act 1993, with the potential to
cause a significant impact on the pensions industry. The trustees will investigate the possible implications in due course, but it
is not possible at present to estimate the potential impact, if any, on the scheme.
24. Share-based awards
The Save As You Earn (“SAYE”), Long Term Incentive Plan (“LTIP”) and Deferred Share Awards (“DSA”) share-based awards
have been granted under the group’s share schemes. The general terms and conditions for these share-based awards are
described on pages 156 to 158 in the Directors’ Remuneration Report.
In order to satisfy a number of the awards below, the company has purchased company shares into Treasury and the Close
Brothers Group Employee Share Trust has purchased company shares. At 31 July 2025, 1.6 million (31 July 2024: 1.6 million)
and 1.3 million (31 July 2024: 1.7 million) of these shares were held respectively and in total £31.3 million (2024: £38.9 million)
was recognised within the share-based payments reserve. During the year £9.2 million (2024: £4.6 million) of these shares were
released to satisfy share-based awards to employees. The share-based payments reserve as shown in the consolidated
statement of changes in equity also includes the cumulative position in relation to unvested share-based awards charged to
the consolidated income statement of £4.7 million (2024: £5.1 million). The share-based awards charge of £5.0 million (2024:
£4.6 million) is included in administrative expenses shown in the consolidated income statement.
Movements in the number of share-based awards outstanding and their weighted average share prices are as follows:
SAYE
LTIP
DSA
exercise price
Number
exercise price
Number
At 1 August 2023
2,804,727
—
1,352,840
—
491,948
—
Granted
371.0p
655,791
—
282,309
—
Exercised
813.9p
(122,788)
—
(239,280)
—
Forfeited
754.9p
(97,255)
—
(1,836)
—
Lapsed
(803,600)
828.7p
(466,854)
—
(939)
—
At 31 July 2024
3,911,767
—
1,321,734
—
532,202
—
Granted
243.0p
390,601
—
459,578
—
Exercised
371.0p
(57,429)
—
(765,039)
—
Forfeited
393.7p
(300,733)
—
(13,102)
—
Lapsed
964.4p
—
—
(65)
—
At 31 July 2025
4,713,175
—
1,354,173
—
213,574
—
Exercisable at:
31 July 2025
18,933
957.2p
63,904
—
121,541
—
31 July 2024
17,017
1,213.3p
61,733
—
205,654
—
The Notes continued
Close Brothers Group plc Annual Report 2025
216

23. Pensions (continued)
The company is exposed to a number of risks relating to the scheme, including assumptions not being borne out in practice.
Some of the most significant risks are as follows, although the list is not exhaustive.
• Change in bond yields: A decrease in corporate bond yields will increase the value placed on the scheme’s defined benefit
obligation (“DBO”), although following the buy-in transaction this will be largely offset by an increase in the value of the
scheme’s assets.
• Asset volatility: There is a risk that a fall in asset values is not matched by a corresponding reduction in the value placed on
the scheme’s DBO. This risk has been significantly reduced by the purchase of an insurance policy to cover the scheme’s
liabilities.
• Inflation risk: The majority of the scheme’s DBO is linked to inflation, where higher inflation will lead to a higher value being
placed on the DBO. Some of the scheme’s non-buy-in assets are either unaffected by inflation or loosely correlated with
inflation (e.g. growth assets), meaning that an increase in inflation will generally decrease the surplus. The value of the buy-in
asset will vary with inflation broadly in line with the changes to the scheme’s DBO.
• Life expectancy: An increase in life expectancy will lead to an increased value being placed on the scheme’s DBO and on
the insurance policy assets. Future mortality rates cannot be predicted with certainty. The impact on the DBO would be very
closely matched by the impact on the buy-in asset value.
The weighted average duration of the benefit payments reflected in the scheme liabilities is 10 years (2024: 11 years).
The Virgin Media Ltd v NTL Pension Trustees II decision, handed down by the High Court on 16 June 2023 (upheld by the
Court of Appeal in July 2024), considered the implications of section 37 of the Pension Schemes Act 1993, with the potential to
cause a significant impact on the pensions industry. The trustees will investigate the possible implications in due course, but it
is not possible at present to estimate the potential impact, if any, on the scheme.
24. Share-based awards
The Save As You Earn (“SAYE”), Long Term Incentive Plan (“LTIP”) and Deferred Share Awards (“DSA”) share-based awards
have been granted under the group’s share schemes. The general terms and conditions for these share-based awards are
described on pages 156 to 158 in the Directors’ Remuneration Report.
In order to satisfy a number of the awards below, the company has purchased company shares into Treasury and the Close
Brothers Group Employee Share Trust has purchased company shares. At 31July 2025, 1.6 million (31July 2024: 1.6 million)
and 1.3 million (31July 2024: 1.7 million) of these shares were held respectively and in total £31.3 million (2024: £38.9 million)
was recognised within the share-based payments reserve. During the year £9.2 million (2024: £4.6 million) of these shares were
released to satisfy share-based awards to employees. The share-based payments reserve as shown in the consolidated
statement of changes in equity also includes the cumulative position in relation to unvested share-based awards charged to
the consolidated income statement of £4.7 million (2024: £5.1 million). The share-based awards charge of £5.0 million (2024:
£4.6 million) is included in administrative expenses shown in the consolidated income statement.
Movements in the number of share-based awards outstanding and their weighted average share prices are as follows:
SAYE LTIP DSA
Number
Weighted
average
exercise price Number
Weighted
average
exercise price Number
Weighted
average
exercise price
At 1 August 2023
2,804,727 — 1,352,840 — 491,948 —
Granted
3,597,558
371.0p 655,791 — 282,309 —
Exercised
(28,728)
813.9p (122,788) — (239,280) —
Forfeited
(1,658,190)
754.9p (97,255) — (1,836) —
Lapsed
(803,600) 828.7p (466,854) — (939) —
At 31 July 2024
3,911,767 — 1,321,734 — 532,202 —
Granted
3,297,025
243.0p 390,601 — 459,578 —
Exercised
(2,981)
371.0p (57,429) — (765,039) —
Forfeited
(2,431,561)
393.7p (300,733) — (13,102) —
Lapsed
(61,075)
964.4p — — (65) —
At 31 July 2025
4,713,175 — 1,354,173 — 213,574 —
Exercisable at:
31 July 2025
18,933 957.2p 63,904 — 121,541 —
31 July 2024
17,017 1,213.3p 61,733 — 205,654 —
The Notes continued
Close Brothers Group plc Annual Report 2025
216
The table below shows the weighted average market price at the date of exercise:
2025
2024
SAYE
410.0p
798.3p
LTIP
342.8p
807.3p
DSA
336.0p
660.8p
The range of exercise prices and weighted average remaining contractual life of awards and options outstanding are as
follows:
3,226,727
3.4
—
—
1,345,831
1.6
3,557,353
3.4
111,847
1.0
265,843
2.4
2,565
0.3
10,130
1.3
20,573
0.4
34,705
1.6
—
—
3,651
0.8
Between £11 and £12
—
—
2,091
0.3
Between £12 and £13
5,087
1.2
24,785
1.3
Between £13 and £14
545
—
13,209
0.5
Nil
1,337,923
3.5
1,305,484
3.6
Nil
229,824
1.4
548,452
1.7
Total
6,280,922
2.9
5,765,703
3.2
217
Strategic report Governance report Financial statements

24. Share-based awards (continued)
For the share-based awards granted during the year, the weighted average fair value of those options at 31 July 2025 was
167.1p (31 July 2024: 251.0p). The main assumptions for the valuation of these share-based awards comprised:
Risk free
SAYE
1 Jul 2028 to 30 Dec 2028
303.8p
243.0p
55.0%
3
7.3%
4.0%
LTIP
26 Sep 2027 to 26 Sep 2028
—
50.0%
3
4.6%
4.0%
26 Sep 2027 to 26 Sep 2030
—
53.0%
2
3.9%
4.2%
26 Sep 2027 to 26 Sep 2030
—
50.0%
3
4.6%
4.3%
DSA
26 Sep 2026 to 26 Sep 2027
—
—
—
—
—
26 Sep 2027 to 26 Sep 2028
431.8p
—
—
—
—
—
SAYE
1 December 2025 to 31 May 2026
918.8p
735.0p
36.0%
3
7.2%
3.6%
1 December 2027 to 31 May 2028
918.8p
735.0p
31.0%
5
7.2%
4.0%
1 June 2026 to 30 November 2026
896.3p
717.0p
33.0%
3
7.4%
3.7%
1 June 2028 to 30 November 2028
896.3p
717.0p
32.0%
5
7.4%
3.6%
1 June 2027 to 30 December 2027
463.8p
371.0p
41.0%
3
7.3%
4.3%
LTIP
11 October 2025 to 10 October 2026
—
36.0%
3
7.2%
3.6%
11 October 2026 to 10 October 2027
—
33.0%
4
7.2%
3.6%
4 October 2026 to 3 October 2027
—
31.0%
3
7.9%
4.7%
4 October 2026 to 3 October 2027
—
31.0%
3
7.9%
4.7%
1 May 2027 to 30 April 2028
380.2p
—
41.0%
3
7.5%
4.1%
DSA
10 October 2024 to 9 October 2025
923.1p
—
—
—
—
—
28 September 2023 to 26 September 2024
965.0p
—
—
—
—
—
21 September 2023 to 19 September 2024
965.0p
—
—
—
—
—
28 September 2024 to 27 September 2025
965.0p
—
—
—
—
—
29 September 2025 to 27 September 2026
965.0p
—
—
—
—
—
4 October 2025 to 3 October 2026
871.9p
—
—
—
—
—
8 March 2024 to 7 March 2025
808.0p
—
—
—
—
—
4 June 2024 to 3 June 2025
808.0p
—
—
—
—
—
7 March 2025 to 6 March 2026
808.0p
—
—
—
—
—
1 June 2025 to 31 May 2026
808.0p
—
—
—
—
—
10 March 2026 to 09 Mar 2027
808.0p
—
—
—
—
—
Expected volatility was determined mainly by reviewing share price volatility for the expected life of each option up to the date
of grant.
The Notes continued
Close Brothers Group plc Annual Report 2025
218

24. Share-based awards (continued)
For the share-based awards granted during the year, the weighted average fair value of those options at 31July 2025 was
167.1p (31July 2024: 251.0p). The main assumptions for the valuation of these share-based awards comprised:
At 31 July 2025
Exercise period
Share price
at issue
Exercise
price
Expected
volatility
Expected
option life in
years
Dividend
yield
Risk free
interest rate
SAYE
1 Jul 2028 to 30 Dec 2028
303.8p 243.0p
55.0% 3 7.3% 4.0%
LTIP
26 Sep 2027 to 26 Sep 2028
431.8p
— 50.0% 3 4.6% 4.0%
26 Sep 2027 to 26 Sep 2030
431.8p
— 53.0% 2 3.9% 4.2%
26 Sep 2027 to 26 Sep 2030
431.8p
— 50.0% 3 4.6% 4.3%
DSA
26 Sep 2026 to 26 Sep 2027
431.8p
— — — — —
26 Sep 2027 to 26 Sep 2028
431.8p — — — — —
At 31 July 2024
Exercise period of awards granted in 2024 and 2023
Share price
at issue
Exercise
price
Expected
volatility
Expected
option
life in years
Dividend
yield
Risk free
interest rate
SAYE
1 December 2025 to 31 May 2026
918.8p 735.0p
36.0% 3 7.2% 3.6%
1 December 2027 to 31 May 2028
918.8p 735.0p
31.0% 5 7.2% 4.0%
1 June 2026 to 30 November 2026
896.3p 717.0p
33.0% 3 7.4% 3.7%
1 June 2028 to 30 November 2028
896.3p 717.0p
32.0% 5 7.4% 3.6%
1 June 2027 to 30 December 2027
463.8p 371.0p
41.0% 3 7.3% 4.3%
LTIP
11 October 2025 to 10 October 2026
1110.0p
— 36.0% 3 7.2% 3.6%
11 October 2026 to 10 October 2027
923.0p
— 33.0% 4 7.2% 3.6%
4 October 2026 to 3 October 2027
871.9p
— 31.0% 3 7.9% 4.7%
4 October 2026 to 3 October 2027
871.9p
— 31.0% 3 7.9% 4.7%
1 May 2027 to 30 April 2028
380.2p — 41.0% 3 7.5% 4.1%
DSA
10 October 2024 to 9 October 2025
923.1p — — — — —
28 September 2023 to 26 September 2024
965.0p — — — — —
21 September 2023 to 19 September 2024
965.0p — — — — —
28 September 2024 to 27 September 2025
965.0p — — — — —
29 September 2025 to 27 September 2026
965.0p — — — — —
4 October 2025 to 3 October 2026
871.9p — — — — —
8 March 2024 to 7 March 2025
808.0p — — — — —
4 June 2024 to 3 June 2025
808.0p — — — — —
7 March 2025 to 6 March 2026
808.0p — — — — —
1 June 2025 to 31 May 2026
808.0p — — — — —
10 March 2026 to 09 Mar 2027
808.0p — — — — —
Expected volatility was determined mainly by reviewing share price volatility for the expected life of each option up to the date
of grant.
The Notes continued
Close Brothers Group plc Annual Report 2025
218
25. Consolidated cash flow statement reconciliation
(a) Reconciliation of operating (loss)/profit before tax to net cash inflow from operating activities
Operating (loss)/profit before tax from continuing operations
(122.4)
132.7
Operating profit before tax from discontinued operations
51.2
9.3
Tax paid
(28.1)
(29.6)
Depreciation, amortisation and impairment
159.4
111.7
Impairment losses on financial assets
92.7
98.8
Provision in relation to motor finance commissions excluding cash paid
161.4
—
Complaints handling and other operational and legal costs incurred excluding cash paid in relation to
motor finance commissions
5.6
—
Provision in relation to early settlements in Motor Finance
33.0
—
Gain on disposal of CBAM excluding cash paid in relation to transaction costs
(67.6)
—
Amortisation of de-designated cash flow hedges
(11.4)
(27.9)
Decrease/(increase) in:
Interest receivable and prepaid expenses
4.8
5.5
Net settlement balances and trading positions
3.8
(0.3)
Net money broker loans against stock advanced
(7.7)
27.0
Decrease in interest payable and accrued expenses
(0.8)
(12.7)
Net cash (outflow)/inflow from trading activities
273.9
314.5
Cash (outflow)/inflow arising from changes in:
Loans and advances to banks not repayable on demand
1.4
24.0
Loans and advances to customers
196.8
(699.4)
Assets let under operating leases
(20.3)
(41.1)
Sovereign and central bank debt
(213.3)
(194.2)
SSA bonds
—
(140.2)
Covered bonds
81.9
(80.7)
Deposits by banks
(52.1)
(1.3)
Deposits by customers
100.1
975.1
Loans and overdrafts from banks
(148.8)
(492.2)
Debt securities in issue (net)
(18.4)
(67.6)
Derivative financial instruments (net)
1.0
—
Other assets less other liabilities
39.0
21.1
Net cash inflow/(outflow) from operating activities
241.2
(382.0)
(b) Analysis of net cash outflow in respect of the purchase of subsidiaries
Purchase of subsidiaries, net of cash acquired
(0.5)
(15.4)
(c) Analysis of net cash inflow in respect of the sale of subsidiaries
Cash consideration received
146.4
0.9
Cash and cash equivalents disposed of
(42.4)
—
104.0
0.9
(d) Analysis of cash and cash equivalents
1
Cash and balances at central banks
1,917.2
1,584.2
Loans and advances to banks
184.6
260.3
2,101.8
1,844.5
1. Excludes £31.9 million (2024: £33.2 million) of cash reserve accounts and cash held in trust.
During the year ended 31 July 2025, the non-cash changes on debt financing amounted to £32.2 million (31 July 2024: £35.9
million) arising largely from interest accretion and fair value hedging movements.
219
Strategic report Governance report Financial statements

26. Financial risk management
The group faces a number of risks in the normal course of its business. To manage these effectively, a consistent approach is
adopted based on a set of overarching principles, namely:
• adhering to our established and proven business model;
• implementing an integrated risk management approach based on the concept of three lines of defence; and
• setting and operating within clearly defined risk appetites, monitored with defined metrics and limits.
The group’s Enterprise Risk Management Framework details the core risk management components and structures, and
defines a consistent and measurable approach to identifying, assessing, controlling and mitigating, reviewing and monitoring,
and reporting risk.
The Board retains overall responsibility for overseeing the maintenance of a system of internal control, which ensures that an
effective risk management framework and oversight process operate across the group, while risk management across the
group is overseen by the Risk Committee.
The Risk Report provides more information on the group’s approach to risk management. As a financial services group,
financial instruments are central to the group’s activities. The risk associated with financial instruments represents a significant
component of those faced by the group and is analysed in more detail below.
Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in Note 1.
(a) Classification
The following tables analyse the group’s assets and liabilities in accordance with the categories of financial instruments in IFRS
9. Derivatives designated as hedging instruments are classified as fair value through profit or loss.
Fair value
Fair value through other
through profit
or loss
£ million
At 31 July 2025
Assets
Cash and balances at central banks
—
—
—
1,917.0
1,917.0
Settlement balances
—
—
—
—
—
Loans and advances to banks
—
—
—
161.7
161.7
Loans and advances to customers
—
11.8
—
9,447.6
9,459.4
Debt securities
—
1.1
853.4
4.7
859.2
Equity shares
—
—
—
—
—
Loans to money brokers against stock advanced
—
—
—
—
—
Derivative financial instruments
94.4
8.7
—
—
103.1
Other financial assets
—
21.1
—
63.6
84.7
94.4
42.7
853.4
11,594.6
12,585.1
Liabilities
Settlement balances and short positions
—
—
—
—
—
Deposits by banks
—
—
—
88.1
88.1
Deposits by customers
—
—
—
8,799.3
8,799.3
Loans and overdrafts from banks
—
—
—
1.5
1.5
Debt securities in issue
—
—
—
1,991.3
1,991.3
Loans from money brokers against stock advanced
—
—
—
—
—
Subordinated loan capital
—
—
—
195.5
195.5
Derivative financial instruments
90.2
14.5
—
—
104.7
Other financial liabilities
—
—
—
103.5
103.5
90.2
14.5
—
11,179.2
11,283.9
The Notes continued
Close Brothers Group plc Annual Report 2025
220

26. Financial risk management
The group faces a number of risks in the normal course of its business. To manage these effectively, a consistent approach is
adopted based on a set of overarching principles, namely:
• adhering to our established and proven business model;
• implementing an integrated risk management approach based on the concept of three lines of defence; and
• setting and operating within clearly defined risk appetites, monitored with defined metrics and limits.
The group’s Enterprise Risk Management Framework details the core risk management components and structures, and
defines a consistent and measurable approach to identifying, assessing, controlling and mitigating, reviewing and monitoring,
and reporting risk.
The Board retains overall responsibility for overseeing the maintenance of a system of internal control, which ensures that an
effective risk management framework and oversight process operate across the group, while risk management across the
group is overseen by the Risk Committee.
The Risk Report provides more information on the group’s approach to risk management. As a financial services group,
financial instruments are central to the group’s activities. The risk associated with financial instruments represents a significant
component of those faced by the group and is analysed in more detail below.
Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument are disclosed in Note 1.
(a) Classification
The following tables analyse the group’s assets and liabilities in accordance with the categories of financial instruments in IFRS
9. Derivatives designated as hedging instruments are classified as fair value through profit or loss.
Derivatives
designated as
hedging
instruments
£ million
Fair value
through profit
or loss
£ million
Fair value
through other
comprehensive
income
£ million
Amortised
cost
£ million
Total
£ million
At 31 July 2025
Assets
Cash and balances at central banks
— — — 1,917.0 1,917.0
Settlement balances
— — — — —
Loans and advances to banks
— — — 161.7 161.7
Loans and advances to customers
— 11.8 — 9,447.6 9,459.4
Debt securities
— 1.1 853.4 4.7 859.2
Equity shares
— — — — —
Loans to money brokers against stock advanced
— — — — —
Derivative financial instruments
94.4 8.7 — — 103.1
Other financial assets
— 21.1 — 63.6 84.7
94.4 42.7 853.4 11,594.6 12,585.1
Liabilities
Settlement balances and short positions
— — — — —
Deposits by banks
— — — 88.1 88.1
Deposits by customers
— — — 8,799.3 8,799.3
Loans and overdrafts from banks
— — — 1.5 1.5
Debt securities in issue
— — — 1,991.3 1,991.3
Loans from money brokers against stock advanced
— — — — —
Subordinated loan capital
— — — 195.5 195.5
Derivative financial instruments
90.2 14.5 — — 104.7
Other financial liabilities
— — — 103.5 103.5
90.2 14.5 — 11,179.2 11,283.9
The Notes continued
Close Brothers Group plc Annual Report 2025
220
Fair value
Fair value through other
through profit
or loss
£ million
At 31 July 2024
Assets
Cash and balances at central banks
—
—
—
1,584.0
1,584.0
Settlement balances
—
—
—
627.5
627.5
Loans and advances to banks
—
—
—
293.7
293.7
Loans and advances to customers
—
11.8
—
9,819.0
9,830.8
Debt securities
—
16.8
716.9
6.8
740.5
Equity shares
—
27.4
—
—
27.4
Loans to money brokers against stock advanced
—
—
—
22.5
22.5
Derivative financial instruments
83.6
17.8
—
—
101.4
Other financial assets
—
1.2
—
102.4
103.6
83.6
75.0
716.9
12,455.9
13,331.4
Liabilities
Settlement balances and short positions
—
14.8
—
600.1
614.9
Deposits by banks
—
—
—
138.4
138.4
Deposits by customers
—
—
—
8,693.6
8,693.6
Loans and overdrafts from banks
—
—
—
165.6
165.6
Debt securities in issue
—
—
—
1,986.4
1,986.4
Loans from money brokers against stock advanced
—
—
—
16.7
16.7
Subordinated loan capital
—
—
—
187.2
187.2
Derivative financial instruments
116.9
12.1
—
—
129.0
Other financial liabilities
—
—
—
189.9
189.9
116.9
26.9
—
11,977.9
12,121.7
(b) Valuation
The fair values of the group’s subordinated loan capital and debt securities in issue are set out below.
31 July 2025
31 July 2024
Subordinated loan capital
193.5
195.5
179.4
187.2
Debt securities in issue
2,013.2
1,991.3
1,998.5
1,986.4
The fair value of gross loans and advances to customers at 31 July 2025 is estimated to be £9,543.4 million (31 July 2024:
£9,806.4 million), with a carrying value of £9,459.4 million (31 July 2024: £9,830.8 million). The fair value of deposits by
customers is estimated to be £8,798.2 million (31 July 2024: £8,691.8 million), with a carrying value of £8,799.3 million (31 July
2024: £8,693.6 million). These estimates are based on highly simplified assumptions and inputs and may differ to actual
amounts received or paid. The differences between fair value and carrying value are not considered to be significant, and are
consistent with management’s expectations given the nature of the Banking business and the short average tenor of the
instruments. However, the differences have increased in comparison to the prior year in line with market interest rates.
Valuation hierarchy
The group holds financial instruments that are measured at fair value subsequent to initial recognition. Each instrument has
been categorised within one of three levels using a fair value hierarchy that reflects the significance of the inputs used in
making the measurements. These levels are based on the degree to which the fair value is observable and are defined as
follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
liabilities where prices are readily available and represent actual and regularly occurring market transactions on an arm’s
length basis. An active market is one in which transactions occur with sufficient frequency to provide ongoing pricing
information;
• Level 2 fair value measurements are those derived from quoted prices in less active markets for identical assets or liabilities
or those derived from inputs other than quoted prices that are observable for the asset or liability, either directly as prices or
indirectly derived from prices; and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that
are not based on observable market data (“unobservable inputs”).
Instruments classified as Level 1 predominantly comprise sovereign and central bank debt, SSA bonds, covered bonds and
liquid listed debt securities. The fair value of these instruments is derived from quoted prices in active markets.
221
Strategic report Governance report Financial statements

26. Financial risk management (continued)
Instruments classified as Level 2 predominantly comprise less liquid listed equity shares, investment grade corporate bonds
and over-the-counter derivatives. The fair value of equity shares and bonds are derived from quoted prices in less active
markets in comparison to Level 1. Over-the-counter derivatives largely relate to interest rate and exchange rate contracts (see
Note 13 for further information). The valuation of such derivatives includes the use of discounted future cash flow models, with
the most significant input into these models being interest rate yield curves developed from quoted rates.
Instruments classified as Level 3 predominantly comprise loans and advances to customers, over-the-counter derivatives and
contingent consideration payable and receivable in relation to the acquisition and disposal of subsidiaries.
The valuation of Level 3 derivatives is similar to Level 2 derivatives and includes the use of discounted future cash flow models,
with the most significant input into these models being interest rate yield curves developed from quoted rates.
The valuation of Level 3 loans and advances to customers is determined on a discounted expected cash flow basis net of
expected credit losses. The discount rate used in the valuation is the interest rate charged on the loan, which reflects an arm's
length rate chargeable on similar transactions.
The valuation of Level 3 contingent consideration is determined on a discounted expected cash flow basis.
The group believes that there is no reasonably possible change to the inputs used in the valuation of these positions which
would have a material effect on the group’s consolidated income statement.
During the year, there were no transfers from Level 1 and 2 to 3.
The tables below show the classification of financial instruments held at fair value into the valuation hierarchy.
At 31 July 2025
Assets
Loans and advances to customers held at FVTPL
—
—
11.8
11.8
Debt securities:
Sovereign and central bank debt
601.6
—
—
601.6
SSA bonds
146.2
—
—
146.2
Covered bonds
—
—
Derivative financial instruments
99.1
4.0
Contingent consideration
—
21.1
Other assets
—
—
1.1
1.1
853.4
99.1
38.0
990.5
Liabilities
Short positions:
Derivative financial instruments
—
100.5
4.2
104.7
—
100.5
4.2
104.7
The Notes continued
Close Brothers Group plc Annual Report 2025
222

26. Financial risk management (continued)
Instruments classified as Level 2 predominantly comprise less liquid listed equity shares, investment grade corporate bonds
and over-the-counter derivatives. The fair value of equity shares and bonds are derived from quoted prices in less active
markets in comparison to Level 1. Over-the-counter derivatives largely relate to interest rate and exchange rate contracts (see
Note 13 for further information). The valuation of such derivatives includes the use of discounted future cash flow models, with
the most significant input into these models being interest rate yield curves developed from quoted rates.
Instruments classified as Level 3 predominantly comprise loans and advances to customers, over-the-counter derivatives and
contingent consideration payable and receivable in relation to the acquisition and disposal of subsidiaries.
The valuation of Level 3 derivatives is similar to Level 2 derivatives and includes the use of discounted future cash flow models,
with the most significant input into these models being interest rate yield curves developed from quoted rates.
The valuation of Level 3 loans and advances to customers is determined on a discounted expected cash flow basis net of
expected credit losses. The discount rate used in the valuation is the interest rate charged on the loan, which reflects an arm's
length rate chargeable on similar transactions.
The valuation of Level 3 contingent consideration is determined on a discounted expected cash flow basis.
The group believes that there is no reasonably possible change to the inputs used in the valuation of these positions which
would have a material effect on the group’s consolidated income statement.
During the year, there were no transfers from Level 1 and 2 to 3.
The tables below show the classification of financial instruments held at fair value into the valuation hierarchy.
Level 1
£ million
Level 2
£ million
Level 3
£ million
Total
£ million
At 31 July 2025
Assets
Loans and advances to customers held at FVTPL
— — 11.8 11.8
Debt securities:
Sovereign and central bank debt
601.6 — — 601.6
SSA bonds
146.2 — — 146.2
Covered bonds
105.6
— —
105.6
Derivative financial instruments
—
99.1 4.0
103.1
Contingent consideration
—
— 21.1
21.1
Other assets
— — 1.1 1.1
853.4 99.1 38.0 990.5
Liabilities
Short positions:
Derivative financial instruments
— 100.5 4.2 104.7
— 100.5 4.2 104.7
The Notes continued
Close Brothers Group plc Annual Report 2025
222
At 31 July 2024
Assets
Loans and advances to customers held at FVTPL
—
—
11.8
11.8
Debt securities:
Sovereign and central bank debt
383.7
—
—
383.7
SSA bonds
145.5
—
—
145.5
Covered bonds
187.7
—
—
187.7
Long trading positions in debt securities
13.8
2.2
—
16.0
Equity shares
5.9
21.4
0.1
27.4
Derivative financial instruments
—
95.3
6.1
101.4
Contingent consideration
—
—
1.2
1.2
Other assets
—
—
0.8
0.8
736.6
118.9
20.0
875.5
Liabilities
Short positions:
Debt securities
3.3
2.2
—
5.5
Equity shares
2.2
7.1
—
9.3
Derivative financial instruments
—
122.6
6.4
129.0
Contingent consideration
—
—
3.0
3.0
5.5
131.9
9.4
146.8
Movements in financial instruments categorised as Level 3 were:
At 1 August 2023
—
11.1
(11.2)
0.2
(0.8)
—
(0.7)
Total (losses)/gains recognised in the
consolidated income statement
—
(5.0)
4.8
—
0.4
—
0.2
Purchases, issues, originations and
transfers in
11.8
—
—
—
(0.5)
0.8
12.1
Sales, settlements and transfers out
—
—
—
(0.1)
(0.9)
—
(1.0)
At 31 July 2024
11.8
6.1
(6.4)
0.1
(1.8)
0.8
10.6
Total gains/(losses) recognised in the
consolidated income statement
1.5
(2.1)
2.2
—
—
—
1.6
Purchases, issues, originations and
transfers in
3.6
—
—
—
—
0.3
3.9
Sales, settlements and transfers out
(5.1)
—
—
(0.1)
22.9
—
17.7
Reclassification to liabilities held for sale
—
—
—
—
—
—
—
At 31 July 2025
11.8
4.0
(4.2)
—
21.1
1.1
33.8
The gains recognised in the consolidated income statement relating to Level 3 instruments held at 31 July 2025 amounted to
£1.6 million (2024: gains of £0.2 million).
223
Strategic report Governance report Financial statements

26. Financial risk management (continued)
(c) Credit risk
Credit risk is the risk of a reduction in earnings and/or value, as a result of the failure of a counterparty or associated party, with
whom the group has contracted, to meet its obligations as they fall due. Credit risk across the group mainly arises through the
lending and treasury activities of the Banking division.
Maximum exposure to credit risk
The table below presents the group’s maximum exposure to credit risk, before taking account of any collateral and credit risk
mitigation, arising from its on balance sheet and off balance sheet financial instruments. For off balance sheet instruments, the
maximum exposure to credit risk represents the contractual nominal amounts.
On balance sheet
Cash and balances at central banks
Settlement balances
Loans and advances to banks
Loans and advances to customers
Debt securities
Loans to money brokers against stock advanced
Derivative financial instruments
Other financial assets
Off balance sheet
Irrevocable undrawn commitments
Total maximum exposure to credit risk
Assets pledged and received as collateral
The group pledges assets for repurchase agreements and securities borrowing agreements which are generally conducted
under terms that are customary to standard borrowing contracts.
The group is a participant of the Bank of England’s Term Funding Scheme with Additional Incentives for SMEs (“TFSME”),
Short-Term Repo (“STR”), Indexed Long Term Repo (“ILTR”) and Discount Window Facility (“DWF”).
Under these schemes, asset finance loan receivables of £nil (31 July 2024: £404.8 million) and retained notes relating to motor
finance loan receivables of £nil (31 July 2024: £34.4 million) were positioned as collateral with the Bank of England, against
which £nil (31 July 2024: £110.0 million) of cash was drawn from the TFSME. During the year, the group early repaid £110.0
million (31 July 2024: £490.0 million) against the TFSME.
The group has securitised without recourse and restrictions £1,544.8 million (31 July 2024: £1,657.0 million) of its insurance
premium and motor loan receivables in return for cash and asset-backed securities in issue of £1,323.4 million (31 July 2024:
£1,453.7 million), of which £245.9 million (31 July 2024: £359.1 million) is retained by the group. This includes the £nil (31 July
2024: £34.4 million) retained notes positioned as collateral with the Bank of England.
As the group has retained exposure to substantially all the risk and rewards of the above receivables, it continues to recognise
these assets in loans and advances to customers on its consolidated balance sheet.
The majority of loans and advances to customers are secured against specific assets. Consistent and prudent lending criteria
are applied across the whole loan book with emphasis on the quality of the security provided.
At 31 July 2025, Winterflood had pledged equity and debt securities of £nil (31 July 2024: £18.3 million) in the normal course of
business.
The Notes continued
Close Brothers Group plc Annual Report 2025
224

26. Financial risk management (continued)
(c) Credit risk
Credit risk is the risk of a reduction in earnings and/or value, as a result of the failure of a counterparty or associated party, with
whom the group has contracted, to meet its obligations as they fall due. Credit risk across the group mainly arises through the
lending and treasury activities of the Banking division.
Maximum exposure to credit risk
The table below presents the group’s maximum exposure to credit risk, before taking account of any collateral and credit risk
mitigation, arising from its on balance sheet and off balance sheet financial instruments. For off balance sheet instruments, the
maximum exposure to credit risk represents the contractual nominal amounts.
31July 2025
£ million
31July 2024
£ million
On balance sheet
Cash and balances at central banks
1,917.0
1,584.0
Settlement balances
—
627.5
Loans and advances to banks
161.7
293.7
Loans and advances to customers
9,459.4
9,830.8
Debt securities
859.2
740.5
Loans to money brokers against stock advanced
—
22.5
Derivative financial instruments
103.1
101.4
Other financial assets
84.7
103.6
12,585.1
13,304.0
Off balance sheet
Irrevocable undrawn commitments
211.6
281.8
Total maximum exposure to credit risk
12,796.7
13,585.8
Assets pledged and received as collateral
The group pledges assets for repurchase agreements and securities borrowing agreements which are generally conducted
under terms that are customary to standard borrowing contracts.
The group is a participant of the Bank of England’s Term Funding Scheme with Additional Incentives for SMEs (“TFSME”),
Short-Term Repo (“STR”), Indexed Long Term Repo (“ILTR”) and Discount Window Facility (“DWF”).
Under these schemes, asset finance loan receivables of £nil (31July 2024: £404.8 million) and retained notes relating to motor
finance loan receivables of £nil (31July 2024: £34.4 million) were positioned as collateral with the Bank of England, against
which £nil (31July 2024: £110.0 million) of cash was drawn from the TFSME. During the year, the group early repaid £110.0
million (31 July 2024: £490.0 million) against the TFSME.
The group has securitised without recourse and restrictions £1,544.8 million (31July 2024: £1,657.0 million) of its insurance
premium and motor loan receivables in return for cash and asset-backed securities in issue of £1,323.4 million (31July 2024:
£1,453.7 million), of which £245.9 million (31 July 2024: £359.1 million) is retained by the group. This includes the £nil (31July
2024: £34.4 million) retained notes positioned as collateral with the Bank of England.
Asthe group has retained exposure to substantially all the risk and rewards of the above receivables, it continues to recognise
these assets in loans and advances to customers on its consolidated balance sheet.
The majority of loans and advances to customers are secured against specific assets. Consistent and prudent lending criteria
are applied across the whole loan book with emphasis on the quality of the securityprovided.
At 31 July 2025, Winterflood had pledged equity and debt securities of £nil (31 July 2024: £18.3 million) in the normal course of
business.
The Notes continued
Close Brothers Group plc Annual Report 2025
224
Financial assets: Loans and advances to customers
The group’s approach to managing credit risk relating to loans and advances to customers is set out in the “Credit risk”
section of the Risk Report.
Information on the group’s internal credit risk reporting can be found in the “Credit risk” section of the Risk Report, including an
analysis of gross loans and advances to customers, trade receivables and undrawn facilities by the group’s internal credit risk grading.
Information on the collateral held in relation to loans and advances to customers can also be found in the “Credit risk” section
of the Risk Report, including analyses of gross loans and advances to customers by LTV ratio.
Financial assets: Treasury assets
The credit risk presented by the group’s treasury assets is low. Immaterial impairment provisions are recognised for cash and
balances at central banks, sovereign and central bank debt, SSA bonds and covered bonds. These financial assets are
investment grade and in Stage 1.
Financial assets: Settlement balances and loans to money brokers against stock advanced
The credit risk presented by settlement balances in the Securities division is limited, as such balances represent delivery
versus payment transactions where delivery of securities occurs simultaneously with payment. The credit risk is therefore
limited to the change in market price of a security between trade date and settlement date and not the absolute value of the
trade. Winterflood is a market maker and trades on a principal-only basis with regulated counterparties including stockbrokers,
wealth managers, institutions and hedge funds who are either authorised and regulated by the PRA and/or FCA or equivalent
regulator in the respective country.
Counterparty exposure and settlement failure monitoring controls are in place as part of an overall risk management framework
and settlement balances past due are actively managed.
Loans to money brokers against stock advanced of £nil (31 July 2024: £22.5 million) is the cash collateral provided to these
institutions, for stock borrowing by Winterflood. The stock borrowing to which the cash deposits relate is short term in nature
and is recorded at the amount payable. The credit risk of this financial asset is therefore limited.
Settlement balances in relation to Winterflood have been classified as held for sale at 31 July 2025. The following table shows
the ageing of Winterflood settlement balances at 31 July 2024:
At 31 July 2024
Not past due
599.9
—
—
—
599.9
Less than 30 days past due
24.6
—
—
—
24.6
More than 30 days but less than 90 days past due
—
2.5
—
—
2.5
More than 90 days past due
—
—
0.5
—
0.5
624.5
2.5
0.5
—
627.5
Company financial assets: Amounts owed by subsidiaries
Amounts owed by subsidiaries on the company balance sheet largely relate to Close Brothers Limited and Close Brothers
Holdings Limited, and the credit risk presented by these financial assets is immaterial.
(d) Market risk
Interest rate risk
Additional disclosures on the group’s interest rate risk can be found in the “Non-traded market risk” section of the Risk Report.
Foreign exchange risk
Additional disclosures on the group’s foreign exchange risk can be found in the “Non-traded market risk” section of the Risk
Report.
Market price risk
Trading financial instruments: Equity shares and debt securities
The group’s trading activities relate to Winterflood. Additional disclosures on Winterflood’s market price risk can be found in
the “Traded market risk” section of the Risk Report.
Non-trading financial instruments
Net gains and losses on non-trading financial instruments are disclosed in Note 11.
225
Strategic report Governance report Financial statements

26. Financial risk management (continued)
(e) Liquidity risk
Liquidity risk is the risk that liabilities cannot be met when they fall due or can only be met at an uneconomic price and arises
mainly in the Banking division. The following table analyses the contractual maturities of the group’s on balance sheet financial
liabilities on an undiscounted cash flow basis. Additional disclosures on the group’s liquidity risk can be found on pages 101 to
102 of the Risk Report.
At 31 July 2025
Settlement balances
—
—
—
—
—
—
Deposits by banks
9.3
78.9
—
—
—
—
Deposits by customers
1,161.7
2,625.6
1,570.5
2,070.3
1,614.3
Loans and overdrafts from banks
1.5
—
—
—
—
Debt securities in issue
—
71.2
84.3
114.5
1,577.6
403.3
2,250.9
Loans from money brokers against stock
advanced
—
—
—
—
—
—
—
Subordinated loan capital
—
2.0
3.0
15.0
205.0
225.0
Derivative financial instruments
0.2
47.2
33.9
45.3
182.2
68.2
377.0
Lease liabilities
0.2
1.4
1.5
3.3
24.1
1.9
32.4
Other financial liabilities
24.3
47.0
0.3
1.2
2.6
0.3
75.7
Total
1,197.2
2,873.3
1,690.5
2,237.6
3,415.8
678.7
12,093.1
At 31 July 2024
Settlement balances
—
600.1
—
—
—
—
600.1
Deposits by banks
0.9
53.2
86.1
—
—
—
140.2
Deposits by customers
708.9
2,309.5
1,502.1
2,008.7
2,474.8
—
9,004.0
Loans and overdrafts from banks
46.7
9.9
1.4
2.7
111.7
—
172.4
Debt securities in issue
—
40.0
119.3
195.4
1,541.7
409.8
2,306.2
Loans from money brokers against stock
advanced
16.7
—
—
—
—
—
16.7
Subordinated loan capital
—
2.0
—
2.0
16.0
209.0
229.0
Derivative financial instruments
0.3
47.3
37.0
50.6
183.0
86.8
405.0
Lease liabilities
0.2
3.2
2.7
3.9
29.6
18.1
57.7
Other financial liabilities
22.6
101.0
1.3
10.9
27.1
2.5
165.4
Total
796.3
3,166.2
1,749.9
2,274.2
4,383.9
726.2
13,096.7
Derivative financial instruments in the table above include net currency swaps. The following table shows the currency swaps
on a gross basis:
At 31 July 2025
5.0
183.5
105.2
206.5
180.8
68.2
749.2
At 31 July 2024
0.9
259.9
37.0
49.8
178.6
86.8
613.0
The Notes continued
Close Brothers Group plc Annual Report 2025
226

26. Financial risk management (continued)
(e) Liquidity risk
Liquidity risk is the risk that liabilities cannot be met when they fall due or can only be met at an uneconomic price and arises
mainly in the Banking division. The following table analyses the contractual maturities of the group’s on balance sheet financial
liabilities on an undiscounted cash flow basis. Additional disclosures on the group’s liquidity risk can be found on pages 101 to
102 of the Risk Report.
On
demand
£ million
In less
than three
months
£ million
In more than
three months
but not more
than six months
£ million
In more than
six months
but not more
than one
year
£ million
In more than
one year but
not more
than five
years
£ million
In more
than five
years
£ million
Total
£ million
At 31 July 2025
Settlement balances
— — —
— — —
—
Deposits by banks
9.3 78.9 —
— — —
88.2
Deposits by customers
1,161.7 2,625.6 1,570.5 2,070.3 1,614.3
—
9,042.4
Loans and overdrafts from banks
1.5 — — — —
—
1.5
Debt securities in issue
— 71.2 84.3 114.5 1,577.6 403.3 2,250.9
Loans from money brokers against stock
advanced
— — — — — — —
Subordinated loan capital
— 2.0
—
3.0 15.0 205.0 225.0
Derivative financial instruments
0.2 47.2 33.9 45.3 182.2 68.2 377.0
Lease liabilities
0.2 1.4 1.5 3.3 24.1 1.9 32.4
Other financial liabilities
24.3 47.0 0.3 1.2 2.6 0.3 75.7
Total
1,197.2 2,873.3 1,690.5 2,237.6 3,415.8 678.7
12,093.1
On
demand
£ million
In less than
three
months
£ million
In more than
three months but
not more than six
months
£ million
In more than
six months
but not more
than one year
£ million
In more than
one year but
not more
than five
years
£ million
In more
than five
years
£ million
Total
£ million
At 31 July 2024
Settlement balances
— 600.1 — — — — 600.1
Deposits by banks
0.9 53.2 86.1 — — — 140.2
Deposits by customers
708.9 2,309.5 1,502.1 2,008.7 2,474.8 — 9,004.0
Loans and overdrafts from banks
46.7 9.9 1.4 2.7 111.7 — 172.4
Debt securities in issue
— 40.0 119.3 195.4 1,541.7 409.8 2,306.2
Loans from money brokers against stock
advanced
16.7 — — — — — 16.7
Subordinated loan capital
— 2.0 — 2.0 16.0 209.0 229.0
Derivative financial instruments
0.3 47.3 37.0 50.6 183.0 86.8 405.0
Lease liabilities
0.2 3.2 2.7 3.9 29.6 18.1 57.7
Other financial liabilities
22.6 101.0 1.3 10.9 27.1 2.5 165.4
Total
796.3 3,166.2 1,749.9 2,274.2 4,383.9 726.2
13,096.7
Derivative financial instruments in the table above include net currency swaps. The following table shows the currency swaps
on a gross basis:
On
demand
£ million
In less than
three
months
£ million
In more than
three months but
not more than six
months
£ million
In more than
six months
but not more
than one year
£ million
In more than
one year but
not more
than five
years
£ million
In more
than five
years
£ million
Total
£ million
At 31 July 2025
5.0 183.5 105.2 206.5 180.8 68.2 749.2
At 31 July 2024
0.9 259.9 37.0 49.8 178.6 86.8 613.0
The Notes continued
Close Brothers Group plc Annual Report 2025
226
(f) Offsetting
The following table shows the impact on derivative financial assets and liabilities which have not been offset but for which the
group has enforceable master netting arrangements in place with counterparties. The net amounts show the exposure to
counterparty credit risk after offsetting benefits and collateral, and are not intended to represent the group’s actual exposure to
credit risk.
Master netting arrangements allow outstanding transactions with the same counterparty to be offset and settled net, either
unconditionally or following a default or other predetermined event. Financial collateral on derivative financial instruments
consists of cash settled, typically daily, to mitigate the mark to market exposures.
collateral
1
offsetting
1
At 31 July 2025
Derivative financial assets
103.1
(95.5)
27.9
35.5
Derivative financial liabilities
104.7
(95.5)
(5.1)
4.1
At 31 July 2024
Derivative financial assets
101.4
(97.9)
(0.8)
2.7
Derivative financial liabilities
129.0
(97.9)
(67.5)
(36.4)
1. Financial collateral and net amounts after offsetting include initial margin of £35.2 million (31 July 2024: £38.7 million).
27. Interest in unconsolidated structured entities
Structured entities are those entities that have been designed so that voting or similar rights are not the dominant factor in
deciding who has control, such as when any voting rights relate to administrative tasks only, or when the relevant activities are
directed by means of contractual arrangements.
In February 2025, the group disposed of its Asset Management division, which had interests in structured entities as a result of
contractual arrangements arising from the management of assets on behalf of its clients . These structured entities consisted
of unitised vehicles such as Authorised Unit Trusts (“AUTs”) and Open Ended Investment Companies (“OEICs”) which entitled
investors to a percentage of the vehicles' net asset value. The structured entities were financed by the purchase of units or
shares by investors. The group did not hold direct investments in its structured entities.
The assets under management of unconsolidated structured entities managed by the group were £nil at 31 July 2025 (31 July
2024: £5,434.0 million). There is no management fee income from unconsolidated structured entities managed by the group
(2024: £nil) within the revenue of continuing operations in the consolidated income statement.
28. Investments in subsidiaries
In accordance with section 409 of the Companies Act 2006, the following is a list of the group’s subsidiaries at 31 July 2025,
which are all wholly owned and incorporated in the UK unless otherwise stated.
The investment in subsidiary of £487.0 million (31 July 2024: £487.0 million) in the company balance sheet relates to a 100%
shareholding in Close Brothers Holdings Limited of £287.0 million (31 July 2024: £287.0 million) and an investment in the AT1
securities of Close Brothers Limited of £200.0 million (31 July 2024: £200.0 million). The company issued AT1 securities of
£200.0 million on 29 November 2023 as described in Note 20 and simultaneously entered into a back-to-back transaction with
its subsidiary Close Brothers Limited.
There was no impairment of these investments in this and the prior year albeit indicators of impairment exist in light of the
FCA's motor commissions review. The impairment assessment of the investment in Close Brothers Holdings Limited, based on
a discounted cash flow analysis of expected future dividends, which includes consideration for the potential impact of the
FCA's motor commissions review, demonstrated that its value in use remains above its carrying value.
227
Strategic report Governance report Financial statements

28. Investments in subsidiaries (continued)
Group
Close Brothers Holdings Limited
1
Banking
Air and General Finance Limited
1
Arrow Audit Services Limited
1
Close Asset Finance Limited
1
Close Brewery Rentals Limited
2
Close Brothers Asset Finance GmbH
3
(Germany)
Close Brothers DAC
4
(Ireland)
Close Brothers Factoring GmbH
3
(Germany)
Close Brothers Finance Designated Activity Company
5
(Ireland)
Close Brothers Finance plc
1
Close Brothers Limited
1
Close Brothers Motor Finance Payments Limited
5
(Ireland)
Close Brothers Premium DAC
4
(Ireland)
Close Brothers Retention Holdings Designated Activity
Company
5
(Ireland)
Close Brothers Technology Services Limited
1
Close Brothers Vehicle Hire Limited
6
Close Business Finance Limited
1
Close Credit Management (Holdings) Limited
1
Close Finance (CI) Limited
7
(Jersey)
Close Invoice Finance Limited
1
Close Leasing Limited
8
Close PF Funding I Limited
9, 15
Commercial Acceptances Limited
1
Commercial Finance Credit Limited
1
Corporate Asset Solutions Limited
10
Delta Funding 2025 Limited
9,15
Finance for Industry Limited
1
Finance for Industry Services Limited
1
Kingston Asset Finance Limited
1
Kingston Asset Leasing Limited
1
Novitas Loans Limited
1
Novitas (Salisbury) Limited
1
Orbita Funding 2022-1 plc
9,15
Orbita Funding 2023-1 plc
9,15
Orbita Funding 2024-1 plc
9,15
Surrey Asset Finance Limited
1
Topaz Asset Finance 2019-1 DAC
11,15
Topaz Asset Finance 2020-1 DAC
11,15
Securities
W.S. (Nominees) Limited
12
Winterflood Client Nominees Limited
12
Winterflood Gilts Limited
12
Winterflood Jersey Limited
13
Winterflood Jersey Nominees Limited
13
Winterflood Securities Holdings Limited
12
Winterflood Securities Limited
12
Winterflood Securities US Corporation
14
(Delaware, USA)
Registered office addresses:
1. 10 Crown Place, London EC2A 4FT, United Kingdom.
2. Unit 9B, Albion Drive, Thurnscoe, Rotherham, South Yorkshire S63 0BA, United Kingdom.
3. Grosse Bleiche 35-39, 55116, Mainz, Germany.
4. Swift Square, Building 1, Santry Demesne, Northwood, Dublin D09 A0E4, Ireland.
5. Unit 18, Northwood House, Northwood Business Campus, Dublin D09 A0E4, Ireland.
6. Lows Lane, Stanton-By-Dale, Ilkeston, Derbyshire DE7 4QU, United Kingdom.
7. Conway House, Conway Street, St Helier JE4 5SR, Jersey.
8. Jackson House, Sibson Road, Sale M33 7RR, United Kingdom.
9. 10th Floor, 5 Churchill Place, London E14 5HU, United Kingdom.
10. 30 Finsbury Square, London EC2A 1AG, United Kingdom.
11. 1-2 Victoria Buildings, Haddington Road, Dublin D04 XN32, Ireland.
12. Riverbank House, 2 Swan Lane, London EC4R 3GA, United Kingdom.
13. 28 Esplanade, St Helier JE2 3QA, Jersey.
14. 1209 Orange Street, Wilmington 19801, New Castle, Delaware, USA
.
Subsidiaries by virtue of control:
15. The related undertakings are included in the consolidated financial statements as they are controlled by the group.
The Notes continued
Close Brothers Group plc Annual Report 2025
228

28. Investments in subsidiaries (continued)
Group
Close Brothers Holdings Limited
1
Banking
Air and General Finance Limited
1
Arrow Audit Services Limited
1
Close Asset Finance Limited
1
Close Brewery Rentals Limited
2
Close Brothers Asset Finance GmbH
3
(Germany)
Close Brothers DAC
4
(Ireland)
Close Brothers Factoring GmbH
3
(Germany)
Close Brothers Finance Designated Activity Company
5
(Ireland)
Close Brothers Finance plc
1
Close Brothers Limited
1
Close Brothers Motor Finance Payments Limited
5
(Ireland)
Close Brothers Premium DAC
4
(Ireland)
Close Brothers Retention Holdings Designated Activity
Company
5
(Ireland)
Close Brothers Technology Services Limited
1
Close Brothers Vehicle Hire Limited
6
Close Business Finance Limited
1
Close Credit Management (Holdings) Limited
1
Close Finance (CI) Limited
7
(Jersey)
Close Invoice Finance Limited
1
Close Leasing Limited
8
Close PF Funding I Limited
9, 15
Commercial Acceptances Limited
1
Commercial Finance Credit Limited
1
Corporate Asset Solutions Limited
10
Delta Funding 2025 Limited
9,15
Finance for Industry Limited
1
Finance for Industry Services Limited
1
Kingston Asset Finance Limited
1
Kingston Asset Leasing Limited
1
Novitas Loans Limited
1
Novitas (Salisbury) Limited
1
Orbita Funding 2022-1 plc
9,15
Orbita Funding 2023-1 plc
9,15
Orbita Funding 2024-1 plc
9,15
Surrey Asset Finance Limited
1
Topaz Asset Finance 2019-1 DAC
11,15
Topaz Asset Finance 2020-1 DAC
11,15
Securities
W.S. (Nominees) Limited
12
Winterflood Client Nominees Limited
12
Winterflood Gilts Limited
12
Winterflood Jersey Limited
13
Winterflood Jersey Nominees Limited
13
Winterflood Securities Holdings Limited
12
Winterflood Securities Limited
12
Winterflood Securities US Corporation
14
(Delaware, USA)
Registered office addresses:
1. 10 Crown Place, London EC2A 4FT, United Kingdom.
2. Unit 9B, Albion Drive, Thurnscoe, Rotherham, South Yorkshire S63 0BA, United Kingdom.
3. Grosse Bleiche 35-39, 55116, Mainz, Germany.
4. Swift Square, Building 1, Santry Demesne, Northwood, Dublin D09 A0E4, Ireland.
5. Unit 18, Northwood House, Northwood Business Campus, Dublin D09 A0E4, Ireland.
6. Lows Lane, Stanton-By-Dale, Ilkeston, Derbyshire DE7 4QU, United Kingdom.
7. Conway House, Conway Street, St Helier JE4 5SR, Jersey.
8. Jackson House, Sibson Road, Sale M33 7RR, United Kingdom.
9. 10th Floor, 5 Churchill Place, London E14 5HU, United Kingdom.
10. 30 Finsbury Square, London EC2A 1AG, United Kingdom.
11. 1-2 Victoria Buildings, Haddington Road, Dublin D04 XN32, Ireland.
12. Riverbank House, 2 Swan Lane, London EC4R 3GA, United Kingdom.
13. 28 Esplanade, St Helier JE2 3QA, Jersey.
14. 1209 Orange Street, Wilmington 19801, New Castle, Delaware, USA
.
Subsidiaries by virtue of control:
15. The related undertakings are included in the consolidated financial statements as they are controlled by the group.
The Notes continued
Close Brothers Group plc Annual Report 2025
228
29. Discontinued operations and assets and liabilities classified as held for sale
At 31 July 2025, the group's discontinued operations comprised Close Brothers Asset Management (“CBAM”) and Winterflood
Securities (“Winterflood”). Close Brewery Rentals Limited (“CBRL”) has been classified as held for sale at 31 July 2025 but the
business does not meet the criteria to be classified as discontinued operations under IFRS 5.
Close Brothers Asset Management
On 19 September 2024, the group announced that it had entered into an agreement to sell its wealth management business,
Close Brothers Asset Management (“CBAM”), one of the group's operating segments, to funds managed by Oaktree Capital
Management, L.P. (“Oaktree”). The sale completed on 28 February 2025.
CBAM relates to the group's 100% shareholding in Close Asset Management Holdings Limited (“CAMHL”) and its subsidiaries.
The business is a well-regarded UK wealth management franchise and the transaction will strengthen the group's capital base
and enhance its position to navigate the current uncertain environment.
In the group's 2025 Half Year Results, the business fulfilled the requirements of IFRS 5 to be classified as discontinued
operations in the consolidated income statement. In addition, the assets and liabilities of the business were presented as held
for sale in the consolidated balance sheet. On completion, the assets and liabilities were derecognised and a gain on disposal
was recognised as follows.
Results of discontinued operations
Operating income
95.4
157.8
Operating expenses
(90.8)
(146.8)
Trading profit
4.6
11.0
Gain on disposal
60.8
—
Operating profit before tax
65.4
11.0
Tax
1
(1.5)
(3.6)
Profit after tax
63.9
7.4
1.
The tax charge of £1.5 million relates to the trading profit of the business prior to disposal. The gain on disposal is not taxable.
Cash flow from discontinued operations
Net cash flow from operating activities
(1.5)
17.4
Net cash flow from investing activities
(3.5)
(9.7)
Net cash flow from financing activities
(1.7)
(2.9)
Consolidated gain on disposal
Cash consideration received
Contingent deferred consideration
Total consideration
Disposal transaction costs
Net assets on completion date
Consolidated gain on disposal
Cash consideration of £146.4 million was received on completion. The contingent deferred consideration is in the form of
preference shares, redeemable no later than Oaktree’s exit, for an amount of up to £28.0 million plus interest at a rate of 8%
per annum, stepping up to 12% after five years.
The contingent deferred consideration is subject to potential deductions, including in relation to retention of key individuals and
certain potential regulatory costs and separation cost overruns. The preference shares are measured at fair value through profit
or loss under IFRS 9. The fair value is calculated to be £21.1 million based on a discounted expected cash flow method, with
the main assumptions relating to the expected time until redemption and the aforementioned potential deductions.
229
Strategic report Governance report Financial statements

29. Discontinued operations and assets and liabilities classified as held for sale (continued)
Winterflood Securities
As announced on 25 July 2025, the group agreed to the sale of Winterflood Securities, an execution services and securities
business and one of the group's operating segments, to Marex Group plc. The sale is expected to complete in early 2026,
upon receipt of the customary regulatory approvals. The business has fulfilled the requirements of IFRS 5 to be classified as
discontinued operations in the consolidated income statement with comparative information restated. In addition, the assets
and liabilities of the business have been presented as held for sale in the consolidated balance sheet.
Assets and liabilities held for sale
The major classes of assets and liabilities classified as held for sale, which exclude intercompany balances eliminated on
consolidation, are as follows:
Intangible assets
10.3
Property, plant and equipment
20.2
Loans and advances to banks
54.8
Settlement balances
726.4
Equity shares
28.3
Debt securities and loans
32.8
Other assets
14.2
Total assets classified as held for sale
887.0
Bank loans and overdrafts
15.3
Settlement balances
698.2
Equity shares
10.4
Debt securities and loans
14.8
Accruals and deferred income
8.5
Other liabilities
20.2
Total liabilities classified as held for sale
767.4
Results of discontinued operations
Operating income
77.3
73.0
Operating expenses
(77.1)
(74.8)
Impairment credit on financial assets
0.1
0.1
Goodwill impairment recognised on remeasurement of disposal group as held for sale
(14.5)
—
Operating loss before tax
(14.2)
(1.7)
Tax
(0.5)
(0.6)
Loss after tax
(14.7)
(2.3)
Cash flow from discontinued operations
Net cash flow from operating activities
(8.3)
53.0
Net cash flow from investing activities
0.1
(9.0)
Net cash flow from financing activities
(0.5)
(1.5)
The Notes continued
Close Brothers Group plc Annual Report 2025
230

29. Discontinued operations and assets and liabilities classified as held for sale (continued)
Winterflood Securities
As announced on 25 July 2025, the group agreed to the sale of Winterflood Securities, an execution services and securities
business and one of the group's operating segments, to Marex Group plc. The sale is expected to complete in early 2026,
upon receipt of the customary regulatory approvals. The business has fulfilled the requirements of IFRS 5 to be classified as
discontinued operations in the consolidated income statement with comparative information restated. In addition, the assets
and liabilities of the business have been presented as held for sale in the consolidated balance sheet.
Assets and liabilities held for sale
The major classes of assets and liabilities classified as held for sale, which exclude intercompany balances eliminated on
consolidation, are as follows:
31 July 2025
£ million
Balance sheet
Intangible assets 10.3
Property, plant and equipment 20.2
Loans and advances to banks 54.8
Settlement balances 726.4
Equity shares 28.3
Debt securities and loans 32.8
Other assets 14.2
Total assets classified as held for sale 887.0
Bank loans and overdrafts 15.3
Settlement balances 698.2
Equity shares 10.4
Debt securities and loans 14.8
Accruals and deferred income 8.5
Other liabilities 20.2
Total liabilities classified as held for sale 767.4
Results of discontinued operations
Year ended
31 July 2025
£ million
Year ended
31 July 2024
£ million
Operating income 77.3 73.0
Operating expenses (77.1) (74.8)
Impairment credit on financial assets 0.1 0.1
Goodwill impairment recognised on remeasurement of disposal group as held for sale (14.5) —
Operating loss before tax (14.2) (1.7)
Tax (0.5) (0.6)
Loss after tax (14.7) (2.3)
Cash flow from discontinued operations
Year ended
31 July 2025
£ million
Year ended
31 July 2024
£ million
Net cash flow from operating activities
(8.3) 53.0
Net cash flow from investing activities
0.1 (9.0)
Net cash flow from financing activities
(0.5) (1.5)
The Notes continued
Close Brothers Group plc Annual Report 2025
230
Close Brewery Rentals Limited
As announced on 15 July 2025, the group agreed to the sale of its brewery container rentals business, CBRL, to MML
Keystone, a fund managed by MML Capital. The sale was subsequently completed on 31 August 2025, as disclosed in Note
30. At 31 July 2025, the assets and liabilities of the business have been classified as held for sale but it does not meet the
criteria to be classified as discontinued operations under IFRS 5. The results of CBRL are therefore included within continuing
operations.
Assets and liabilities held for sale
The major classes of assets and liabilities classified as held for sale, which exclude intercompany balances eliminated on
consolidation, are as follows:
Property, plant and equipment
42.8
Loans and advances to banks
0.2
Other assets
4.0
Total assets classified as held for sale
47.0
Accruals and deferred income
0.7
Other liabilities
5.3
Total liabilities classified as held for sale
6.0
30. Post balance sheet event
Close Brewery Rentals Limited
On 31 August 2025, the group completed the sale of Close Brewery Rentals Limited (“CBRL”) to MML Keystone, following the
agreement announced on 15 July 2025. As disclosed in Note 29, the business was classified as held for sale at 31 July 2025.
The completion of this sale, which resulted in an immaterial gain on disposal, is a non-adjusting event under the requirements
of IAS 10 “Events after the reporting period”.
231
Strategic report Governance report Financial statements

Glossary and definition of key terms
Additional Tier 1 (“AT1”) capital Additional regulatory capital that along with CET1 capital makes up a bank’s or banking
group’s Tier 1 regulatory capital. Includes the group’s perpetual subordinated contingent
convertible securities classified as other equity instruments under IAS 32
Adjusted Adjusted measures are presented on a basis consistent with prior periods and exclude
any exceptional and adjusting items which do not reflect underlying trading performance
Adjusted Earnings per Share
(“AEPS”)
Adjusted operating profit less tax and AT1 coupons divided by basic weighted average
number of ordinary shares in issue
Applicable requirements Applicable capital ratio requirements consist of the Pillar 1 requirement as defined by the
CRR, the Pillar 2a requirement set by the PRA, and the capital conservation buffer and
countercyclical buffer as defined by the PRA Rulebook. Any applicable PRA buffer is
excluded
Average maturity of funding
allocated to the loan book
Simple weighted average of the applicable funding allocated to the loan book. The
applicable funding excludes equity (except AT1 instruments) and deducts funding held
for liquidity purposes
Bad debt ratio (Adjusted) impairment losses in the year as a percentage of average net loans and
advances to customers and operating lease assets excluding Vehicle Hire, which is in
wind-down, and Brewery Rentals, which has been classified as held for sale on the
group's balance sheet
Basic earnings per share
(“EPS”)
Total profit attributable to ordinary shareholders divided by basic weighted average
number of ordinary shares in issue
Basic earnings per share
(“EPS”) continuing operations
Operating profit from continuing operations less tax and AT1 coupons, divided by basic
weighted average number of ordinary shares in issue
Buy As You Earn (“BAYE”) The HM Revenue & Customs-approved Share Incentive Plan that gives all employees the
opportunity to become shareholders in the group
Capital Requirements Directive
(“CRD”)
European Union regulation implementing the Basel III requirements in Europe, alongside
CRR II
Capital Requirements
Regulation (“CRR”)
Regulation 575/2013/EU, as it forms part of the assimilated law of the United Kingdom
CDP Formerly the “Carbon Disclosure Project”, a leading, internationally recognised
independent rating agency and assessor of corporate carbon emissions disclosures and
actions
CET1 capital ratio Measure of the group’s CET1 capital as a percentage of risk weighted assets, as
required by CRR
Common Equity Tier 1 (“CET1”)
capital
Measure of capital as defined by the CRR. CET1 capital consists of the highest quality
capital including ordinary shares, related share premium account, retained earnings and
other reserves, less goodwill and certain intangible assets and other regulatory
adjustments
Compensation ratio Total staff costs as a percentage of adjusted operating income
Cost of funds Interest expense incurred to support lending activities excluding Vehicle Hire and
Brewery Rentals divided by the average net loans and advances to customers and
operating lease assets excluding Vehicle Hire and Brewery Rentals
Credit-impaired Where one or more events that have a detrimental impact on the estimated future cash
flows of a loan have occurred. Credit-impaired events are more severe than significant
increase in credit risk triggers. Accounts which are credit-impaired will be allocated to
Stage 3
Customer satisfaction score
(“CSAT”)
A measure of customer satisfaction expressed as a percentage of positive responses
from the total of those surveyed
Discounting The process of determining the present value of future payments
Dividend per share (“DPS”) Comprises the final dividend proposed for the respective year, together with the interim
dividend declared and paid in the year
Effective interest rate (“EIR”) The interest rate at which revenue is recognised on loans and discounted to their
carrying value over the life of the financial asset
Effective tax rate (“ETR”) Tax on operating profit/(loss) as a percentage of operating profit/(loss) on ordinary
activities before tax
Expected credit loss (“ECL”) The unbiased probability-weighted average credit loss determined by evaluating a range
of possible outcomes and future economic conditions
Expense/income ratio (Adjusted) operating expenses divided by (adjusted) operating income
Exposure at default (“EAD”) The capital outstanding at the point of default
Financial Conduct Authority
(“FCA”)
A financial regulatory body in the UK, regulating financial firms and maintaining integrity
of the UK’s financial market
Close Brothers Group plc Annual Report 2025
232

Glossary and definition of key terms
Additional Tier 1 (“AT1”) capital Additional regulatory capital that along with CET1 capital makes up a bank’s or banking
group’s Tier 1 regulatory capital. Includes the group’s perpetual subordinated contingent
convertible securities classified as other equity instruments under IAS 32
Adjusted Adjusted measures are presented on a basis consistent with prior periods and exclude
any exceptional and adjusting items which do not reflect underlying trading performance
Adjusted Earnings per Share
(“AEPS”)
Adjusted operating profit less tax and AT1 coupons divided by basic weighted average
number of ordinary shares in issue
Applicable requirements Applicable capital ratio requirements consist of the Pillar 1 requirement as defined by the
CRR, the Pillar 2a requirement set by the PRA, and the capital conservation buffer and
countercyclical buffer as defined by the PRA Rulebook. Any applicable PRA buffer is
excluded
Average maturity of funding
allocated to the loan book
Simple weighted average of the applicable funding allocated to the loan book. The
applicable funding excludes equity (except AT1 instruments) and deducts funding held
for liquidity purposes
Bad debt ratio (Adjusted) impairment losses in the year as a percentage of average net loans and
advances to customers and operating lease assets excluding Vehicle Hire, which is in
wind-down, and Brewery Rentals, which has been classified as held for sale on the
group's balance sheet
Basic earnings per share
(“EPS”)
Total profit attributable to ordinary shareholders divided by basic weighted average
number of ordinary shares in issue
Basic earnings per share
(“EPS”) continuing operations
Operating profit from continuing operations less tax and AT1 coupons, divided by basic
weighted average number of ordinary shares in issue
Buy As You Earn (“BAYE”) The HM Revenue & Customs-approved Share Incentive Plan that gives all employees the
opportunity to become shareholders in the group
Capital Requirements Directive
(“CRD”)
European Union regulation implementing the Basel III requirements in Europe, alongside
CRR II
Capital Requirements
Regulation (“CRR”)
Regulation 575/2013/EU, as it forms part of the assimilated law of the United Kingdom
CDP Formerly the “Carbon Disclosure Project”, a leading, internationally recognised
independent rating agency and assessor of corporate carbon emissions disclosures and
actions
CET1 capital ratio Measure of the group’s CET1 capital as a percentage of risk weighted assets, as
required by CRR
Common Equity Tier 1 (“CET1”)
capital
Measure of capital as defined by the CRR. CET1 capital consists of the highest quality
capital including ordinary shares, related share premium account, retained earnings and
other reserves, less goodwill and certain intangible assets and other regulatory
adjustments
Compensation ratio Total staff costs as a percentage of adjusted operating income
Cost of funds Interest expense incurred to support lending activities excluding Vehicle Hire and
Brewery Rentals divided by the average net loans and advances to customers and
operating lease assets excluding Vehicle Hire and Brewery Rentals
Credit-impaired Where one or more events that have a detrimental impact on the estimated future cash
flows of a loan have occurred. Credit-impaired events are more severe than significant
increase in credit risk triggers. Accounts which are credit-impaired will be allocated to
Stage 3
Customer satisfaction score
(“CSAT”)
A measure of customer satisfaction expressed as a percentage of positive responses
from the total of those surveyed
Discounting The process of determining the present value of future payments
Dividend per share (“DPS”) Comprises the final dividend proposed for the respective year, together with the interim
dividend declared and paid in the year
Effective interest rate (“EIR”) The interest rate at which revenue is recognised on loans and discounted to their
carrying value over the life of the financial asset
Effective tax rate (“ETR”) Tax on operating profit/(loss) as a percentage of operating profit/(loss) on ordinary
activities before tax
Expected credit loss (“ECL”) The unbiased probability-weighted average credit loss determined by evaluating a range
of possible outcomes and future economic conditions
Expense/income ratio (Adjusted) operating expenses divided by (adjusted) operating income
Exposure at default (“EAD”) The capital outstanding at the point of default
Financial Conduct Authority
(“FCA”)
A financial regulatory body in the UK, regulating financial firms and maintaining integrity
of the UK’s financial market
Close Brothers Group plc Annual Report 2025
232
Financial Ombudsman Service
(“FOS”)
The Financial Ombudsman Service settles complaints between consumers and
businesses that provide financial services
Financial Reporting Council
(“FRC”)
An independent regulatory body responsible for promoting high quality corporate
governance and reporting amongst UK companies
Forbearance Forbearance occurs when a customer is experiencing financial difficulty in meeting their
financial commitments and a concession is granted, by changing the terms of the
financial arrangement, which would not otherwise be considered
General Data Protection
Regulation (“GDPR”)
Regulation intended to strengthen and unify data protection for all individuals within the
European Union
Gross carrying amount Loan book before expected credit loss provision
Growth Guarantee Scheme
(“GGS”)
The successor scheme to the Recovery Loan Scheme, the Growth Guarantee Scheme
launched in July 2024 and is designed to support access to finance for UK small
businesses as they look to invest and grow
High quality liquid assets
(“HQLAs”)
Assets which qualify for regulatory liquidity purposes, including Bank of England
deposits and sovereign and central bank debt
HM Revenue & Customs
(“HMRC”)
The UK’s tax, payments and customs authority
Independent financial adviser
(“IFA”)
Professional offering independent, whole of market advice to clients including
investments, pensions, protection and mortgages
Internal Capital Adequacy
Assessment Process (“ICAAP”)
An annual self-assessment of a bank’s material risks and the associated level of capital
needed to be held, and undertaking appropriate stress testing of capital adequacy
Internal Liquidity Adequacy
Assessment Process (“ILAAP”)
The processes for the identification, measurement, management and monitoring of
liquidity
Internal ratings based (“IRB”)
approach
A supervisor-approved method using internal models, rather than standardised risk
weightings, to calculate regulatory capital requirements for credit risk
International Accounting
Standards (“IAS”)
Older set of standards issued by the International Accounting Standards Council, setting
up accounting principles and rules for preparation of financial statements. IAS are being
superseded by IFRS
International Financial
Reporting Standards (“IFRS”)
Globally accepted accounting standards issued by the IFRS Foundation and the
International Accounting Standards Board
Leverage ratio Tier 1 capital as a percentage of non-risk-weighted total exposures, adjusted for certain
capital deductions, including intangible assets, and off-balance sheet exposures
Lifetime expected credit loss
provision (“Lifetime ECL”)
Losses that result from default events occurring within the lifetime of the loan
Liquidity coverage ratio
(“LCR”)
Measure of the group’s HQLAs as a percentage of expected net cash outflows over the
next 30 days in a stressed scenario
Loan to value (“LTV”) ratio For a secured or structurally protected loan, the loan balance as a percentage of the
total value of the asset
Long-term bad debt ratio Long-term bad debt ratio is calculated using IAS 39 until the change to IFRS 9 in FY19.
Long-term average bad debt ratio of 1.2% based on the average bad debt ratio for
FY08-FY25, excluding Novitas from FY21 onwards and Rentals businesses from FY24
Loss given default (“LGD”) The amount lost on a loan if a customer defaults
Net asset value (“NAV”) per
share
Total assets less total liabilities and AT1, divided by the number of ordinary shares in
issue excluding own shares
Net interest margin (“NIM”) Banking (adjusted) operating income divided by average net loans and advances to
customers and operating lease assets excluding Vehicle Hire and Brewery Rentals
Net stable funding ratio
(“NSFR”)
Regulatory measure of the group’s weighted funding as a percentage of weighted assets
Net zero Target of completely negating the amount of greenhouse gases produced by reducing
emissions or implementing methods for their removal
Paris Agreement International treaty on climate change, adopted in 2015, with a goal to limit global
warming to well below 2ºC, and preferably to 1.5ºC, compared to pre-industrial levels
Personal Contract Plan (“PCP”) PCP is a form of vehicle finance where the customer defers a significant portion of credit
to the final repayment at the end of the agreement, thereby lowering the monthly
repayments compared to a standard hire-purchase arrangement. At the final repayment
date, the customer has the option to: (a) pay the final payment and take the ownership of
the vehicle; (b) return the vehicle and not pay the final repayment; or (c) part-exchange
the vehicle with any equity being put towards the cost of a new vehicle
Probability of default (“PD”) Probability that a customer will default on their loan
Prudential Regulation Authority
(“PRA”)
A financial regulatory body, responsible for regulating and supervising banks and other
financial institutions in the UK
Return on assets Adjusted operating profit less tax and AT1 coupons divided by average total assets for
continuing operations at the balance sheet date and prior year
Return on average tangible
equity (“RoTE”)
Adjusted operating profit, less tax and AT1 coupons, divided by average total
shareholders’ equity, excluding intangible assets and AT1, for continuing operations
233
Strategic report Governance report Financial statements

Return on net loan book
(“RoNLB”)
Banking adjusted operating profit divided by average net loans and advances to
customers and operating lease assets excluding Vehicle Hire and Brewery Rentals
Return on opening equity
(“RoE”)
Adjusted operating profit less tax and AT1 coupons divided by opening equity for
continuing operations, excluding AT1
Risk weighted assets (“RWAs”) A measure of the amount of a bank’s exposures, adjusted for risk in line with the CRR. It
is used in determining the capital requirement for a financial institution
Scope 1, 2 and 3 emissions Categorisation of greenhouse gas emissions, as defined by the Greenhouse Gas (GHG)
Protocol, into direct emissions from owned or controlled sources (Scope 1), indirect
emissions from the generation of purchased electricity, heating and cooling consumed
by the reporting company (Scope 2), and all other indirect emissions that occur in a
company’s value chain (Scope 3)
Significant increase in credit
risk (“SICR”)
An assessment of whether credit risk has increased significantly since initial recognition
of a loan using a range of triggers. Accounts which have experienced a significant
increase in credit risk will be allocated to Stage 2
Standardised approach Generic term for regulator-defined approaches for calculating credit, operational and
market risk capital requirements as set out in the CRR
Subordinated debt Represents debt that ranks below, and is repaid after claims of, other secured or senior
debt owed by the issuer
Task Force on Climate-related
Financial Disclosures (“TCFD”)
Regulatory framework to improve and increase reporting of climate-related financial
information, including more effective and consistent disclosure of climate-related risks
and opportunities
Term funding Funding with a remaining maturity greater than 12 months
Term Funding Scheme for
Small and Medium-sized
Enterprises (“TFSME”)
The Bank of England’s Term Funding Scheme with additional incentives for SMEs
Tier 2 capital Additional regulatory capital that along with Tier 1 capital makes up a bank’s total
regulatory capital. Includes qualifying subordinated debt
Total funding as percentage of
loan book
Total funding divided by net loans and advances to customers and operating
lease assets
Total shareholder return
(“TSR”)
Measure of shareholder return including share price appreciation and dividends, which
are assumed to be re-invested in the company’s shares
Watch list Internal risk management process for heightened monitoring of exposures that are
showing increased credit risk
Glossary and definition of key terms continued
Close Brothers Group plc Annual Report 2025
234

Return on net loan book
(“RoNLB”)
Banking adjusted operating profit divided by average net loans and advances to
customers and operating lease assets excluding Vehicle Hire and Brewery Rentals
Return on opening equity
(“RoE”)
Adjusted operating profit less tax and AT1 coupons divided by opening equity for
continuing operations, excluding AT1
Risk weighted assets (“RWAs”) A measure of the amount of a bank’s exposures, adjusted for risk in line with the CRR. It
is used in determining the capital requirement for a financial institution
Scope 1, 2 and 3 emissions Categorisation of greenhouse gas emissions, as defined by the Greenhouse Gas (GHG)
Protocol, into direct emissions from owned or controlled sources (Scope 1), indirect
emissions from the generation of purchased electricity, heating and cooling consumed
by the reporting company (Scope 2), and all other indirect emissions that occur in a
company’s value chain (Scope 3)
Significant increase in credit
risk (“SICR”)
An assessment of whether credit risk has increased significantly since initial recognition
of a loan using a range of triggers. Accounts which have experienced a significant
increase in credit risk will be allocated to Stage 2
Standardised approach Generic term for regulator-defined approaches for calculating credit, operational and
market risk capital requirements as set out in the CRR
Subordinated debt Represents debt that ranks below, and is repaid after claims of, other secured or senior
debt owed by the issuer
Task Force on Climate-related
Financial Disclosures (“TCFD”)
Regulatory framework to improve and increase reporting of climate-related financial
information, including more effective and consistent disclosure of climate-related risks
and opportunities
Term funding Funding with a remaining maturity greater than 12 months
Term Funding Scheme for
Small and Medium-sized
Enterprises (“TFSME”)
The Bank of England’s Term Funding Scheme with additional incentives for SMEs
Tier 2 capital Additional regulatory capital that along with Tier 1 capital makes up a bank’s total
regulatory capital. Includes qualifying subordinated debt
Total funding as percentage of
loan book
Total funding divided by net loans and advances to customers and operating
lease assets
Total shareholder return
(“TSR”)
Measure of shareholder return including share price appreciation and dividends, which
are assumed to be re-invested in the company’s shares
Watch list Internal risk management process for heightened monitoring of exposures that are
showing increased credit risk
Glossary and definition of key terms continued
Close Brothers Group plc Annual Report 2025
234
Investor relations
Financial calendar (provisional)
Event
Date
First quarter trading update
20 November 2025
Annual General Meeting
20 November 2025
Half year end
31 January 2026
Interim results
March 2026
Third quarter trading update
May 2026
Financial year end
31 July 2026
Preliminary results
September 2026
The financial calendar is updated on a regular basis throughout the year. Please refer to our website www.closebrothers.com
for up-to-date details.
Cautionary statement
Certain statements included or incorporated by reference
within this report may constitute “forward-looking
statements” in respect of the group’s operations,
performance, prospects, financial condition and/or
environmental, social and governance ambitions, targets and
commitments. All statements other than statements of
historical fact are, or may be deemed to be, forward-looking
statements. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or
such words as “anticipates”, “aims”, “due”, “could”, “may”,
“will”, “should”, “expects”, “believes”, “intends”, “plans”,
“potential”, “targets”, “goal” or “estimates”. By their nature,
forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events
may differ materially from those expressed or implied by
those statements. There are also a number of factors that
could cause actual future operations, performance, financial
conditions, results or developments to differ materially from
the plans, goals and expectations expressed or implied by
these forward-looking statements and forecasts. These
factors include, but are not limited to, those contained in this
report. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or
activities should not be taken as a representation that such
trends or activities will continue in the future.
Except as may be required by law or regulation, no
responsibility or obligation is accepted to update or revise
any forward-looking statement resulting from new
information, future events or otherwise. Nothing in this
document should be construed as a profit forecast. Past
performance cannot be relied upon as a guide to future
performance and persons needing advice should consult an
independent financial adviser.
This report does not constitute or form part of any offer or
invitation to sell, or any solicitation of any offer to subscribe
for or purchase any shares or other securities in the
company or any of its group members, nor shall it or any part
of it or the fact of its distribution form the basis of, or be
relied on in connection with, any contract or commitment or
investment decisions relating thereto, nor does it constitute a
recommendation regarding the shares or other securities of
the company or any of its group members. Statements in this
report reflect the knowledge and information available at the
time of its preparation. Liability arising from anything in this
report shall be governed by English law. Nothing in this
report shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
235
Strategic report Governance report Financial statements

Company information
Registered office
Close Brothers Group plc
10 Crown Place
London EC2A 4FT
Telephone: +44 (0)333 321 6100
Email: enquiries@closebrothers.com
Website: www.closebrothers.com
Company No. 00520241
Independent auditor
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Solicitor
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Corporate brokers
Keefe, Bruyette & Woods (A Stifel Company)
UBS AG London Branch
Registrar
MUFG Corporate Markets
FREEPOST SAS
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
Customer support centre: 0371 664 0300 (calls are charged
at the standard geographic rate and will vary by provider)
From overseas: +44 (0)371 664 0300 (calls will be charged at
the applicable international rate)
Lines are open from 9.00 am to 5.30 pm Monday to Friday,
excluding public holidays in England and Wales
Email:
shareholderenquiries@cm.mpms.mufg.com
Website: www.linkgroup.eu
Online proxy voting:
https://uk.investorcentre.mpms.mufg.com/
Shareholder warning
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell shares that prove to be
worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment. While high profits are
promised, if you buy or sell shares in this way you will probably lose your money.
How to avoid share fraud
• Keep in mind that firms authorised by the FCA are unlikely to contact you out of the blue with an offer to buy or sell shares.
• Do not get into a conversation, but note the name of the person and firm contacting you and then end the call.
• Check the Financial Services Register at https://register.fca.org.uk/s/ to see if the person and firm contacting you are
authorised by the FCA.
• Beware of fraudsters claiming to be from an authorised firm, copying its website, or giving you false contact details.
• If you want to phone the caller back, use the firm’s contact details listed on the Financial Services Register at
https://register.fca.org.uk/s/
• If the firm does not have contact details on the Register or they tell you the details are out of date, call the FCA on
0800 111 6768.
• Search the list of unauthorised firms to avoid at https://www.fca.org.uk/consumers/unauthorised-firms-individuals
• Remember that if you buy or sell shares from an unauthorised firm, you cannot access the Financial Ombudsman Service or
Financial Services Compensation Scheme.
• Get independent financial and professional advice before handing over any money.
• If it sounds too good to be true, it probably is.
Report a scam
If fraudsters approach you, tell the FCA using the share fraud reporting form at https://www.fca.org.uk/consumers/report-
scam-us. You can also find out more about investment scams at https://www.fca.org.uk/scamsmart/how-avoid-investment-
scams. You can call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters, call
Action Fraud on 0300 123 2040.
Close Brothers Group plc Annual Report 2025
236

Company information
Registered office
Close Brothers Group plc
10 Crown Place
London EC2A 4FT
Telephone: +44 (0)333 321 6100
Email: enquiries@closebrothers.com
Website: www.closebrothers.com
Company No. 00520241
Independent auditor
PricewaterhouseCoopers LLP
1 Embankment Place
London WC2N 6RH
Solicitor
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Corporate brokers
Keefe, Bruyette & Woods (A Stifel Company)
UBS AG London Branch
Registrar
MUFG Corporate Markets
FREEPOST SAS
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds
LS1 4DL
Customer support centre: 0371 664 0300 (calls are charged
at the standard geographic rate and will vary by provider)
From overseas: +44 (0)371 664 0300 (calls will be charged at
the applicable international rate)
Lines are open from 9.00 am to 5.30 pm Monday to Friday,
excluding public holidays in England and Wales
Email:
shareholderenquiries@cm.mpms.mufg.com
Website: www.linkgroup.eu
Online proxy voting:
https://uk.investorcentre.mpms.mufg.com/
Shareholder warning
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell shares that prove to be
worthless or non-existent, or to buy shares at an inflated price in return for an upfront payment. While high profits are
promised, if you buy or sell shares in this way you will probably lose your money.
How to avoid share fraud
• Keep in mind that firms authorised by the FCA are unlikely to contact you out of the blue with an offer to buy or sell shares.
• Do not get into a conversation, but note the name of the person and firm contacting you and then end the call.
• Check the Financial Services Register at https://register.fca.org.uk/s/ to see if the person and firm contacting you are
authorised by the FCA.
• Beware of fraudsters claiming to be from an authorised firm, copying its website, or giving you false contact details.
• If you want to phone the caller back, use the firm’s contact details listed on the Financial Services Register at
https://register.fca.org.uk/s/
• If the firm does not have contact details on the Register or they tell you the details are out of date, call the FCA on
0800 111 6768.
• Search the list of unauthorised firms to avoid at https://www.fca.org.uk/consumers/unauthorised-firms-individuals
• Remember that if you buy or sell shares from an unauthorised firm, you cannot access the Financial Ombudsman Service or
Financial Services Compensation Scheme.
• Get independent financial and professional advice before handing over any money.
• If it sounds too good to be true, it probably is.
Report a scam
If fraudsters approach you, tell the FCA using the share fraud reporting form at https://www.fca.org.uk/consumers/report-
scam-us. You can also find out more about investment scams at https://www.fca.org.uk/scamsmart/how-avoid-investment-
scams. You can call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters, call
Action Fraud on 0300 123 2040.
Close Brothers Group plc Annual Report 2025
236
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Design by Black Sun Global.
Board of Directors and Executive Committee photography by Richard Davies
.
237

Close Brothers Group plc
10 Crown Place
London EC2A 4FT
Tel: +44 (0)333 321 6100
www.closebrothers.com