Annual Report
& Accounts 2025
Group performance highlights | |
A statement from our Chair | |
Your Chief Executive's review of the year | |
Welcoming The Co-operative Bank | |
Our strategy | |
Our stakeholders | |
Building a sustainable Group | |
Our external environment and top and emerging risks | |
Chief Financial Officer's review | |
Risk Management Report | |
Information about our capital, liquidity and funding position and how we manage key risks relating to our operations | |
Our approach to climate change | |
This section outlines how the Group is responding to climate change including its climate related financial disclosures | |
Governance | |
Our Board of directors and a review of our governance, including the Directors' Report and annual report on remuneration | |
Financial Statements | |
Our audited financial statements and related notes, including the Independent Auditors' Report | |
Other information | |
Annual Business Statement | |
Glossary |
The following terms are used in this report: | |
The Group | Coventry Building Society and all of its subsidiaries, including the Bank from 1 January 2025. |
Coventry Building Society the Society | Coventry Building Society, parent entity of the Group. |
The Society sub-group | Coventry Building Society and its subsidiaries, excluding the Bank sub-group. |
The Co-operative Bank Holdings p.l.c. the Bank the Bank sub-group | The entity acquired on 1 January 2025 by Coventry Building Society, including all of its subsidiaries. |
The Co-operative Bank | The trading entity which conducts the banking operations within the Bank sub-group. |
Underlying profit | Underlying profit excludes all of the accounting impacts of acquiring the Bank, including day one acquisition, accounting and related unwinds, reset of accounting policies on the acquired assets and liabilities and related acquisition and integration costs. Underlying performance is considered to be a better measure of core business performance. |
Group performance highlights | |
A statement from our Chair | |
Your Chief Executive's review of the year | |
Welcoming The Co-operative Bank | |
Our strategy | |
Our stakeholders | |
Building a sustainable Group | |
Our external environment and top and emerging risks | |
Chief Financial Officer's review | |
Other information |
Stakeholder group | Customers | Colleagues | Suppliers |
This group includes our members, other customers, and mortgage brokers. | This group includes all of the Group’s employees. | This group includes third-party organisations and contractors who provide goods and services to us. | |
Stakeholder needs – what do they expect from us? | • Great value products. • Excellent human service through whatever channel they use to interact with us. • A business model that is resilient, so we are safe and secure over the long term. • High availability of IT systems with data kept secure. • Simple and clear communications. | • An inclusive and inspiring workplace for everyone. • A great place to build and develop their careers. • An approach to reward that is fair and consistent. • Support for career development and training. • A culture that promotes wellbeing, supported by straightforward policies and processes. | • To do business with us on terms that are commercially beneficial. • To be paid promptly. • To work with consistent and understandable procurement processes (and proportionate for local SME suppliers). • Decisions that are made in a consistent, ethical and fair way. |
How do we engage with them? | • Our Member Panel, an online forum of 13,000 members. • Regular surveys and research conducted with customers, prospects and intermediaries. • Online Member Talkback sessions and research groups to hear first-hand member and customer thoughts on pre- defined subjects. • Complaints monitoring. • Our AGM, where members vote on key matters to the Society and interact with the Board. | • Employee forums and an all- colleague strategy unveiling event. • Annual Great Place to Work survey and quarterly pulse surveys. • Structured meetings with the Chief Executive and other executives. • Online internal communications tools and networks. • Through our recognised union, Unite. | • Regular governance meetings with key suppliers. Suppliers are provided with feedback on sourcing activities they are involved in, including debriefing unsuccessful suppliers. • Supplier awards, where all suppliers are invited to self- nominate. • Annual supplier surveys to gain an understanding of the views of our suppliers. • Supplier strategy events. |
What’s been important for them in 2025? | • Products that reward loyalty and offer good long-term value. • The ability to access our online services in an easier way whilst maintaining security standards. • Maintaining a consistent presence in the mortgage market. • Less paper and a mobile savings app. | • Our remuneration strategy and focus on financial wellbeing. • Creating an inclusive workplace and progress against published diversity and inclusion ambitions. • Maintaining positive wellbeing, including mental health support. • Improving opportunities for career development. • Bringing together the Society and Bank colleagues under one Group structure. | • Understanding more about our strategy. • Prompt payment. • Finding out about opportunities that might be available to local suppliers. • Simplifying relationships across the Group. |
Our response and key decisions taken by the Board | • Oversaw the launch of buy to let mortgages for limited companies. • Oversaw the introduction of same day payments. • Approved investment in mortgage broker capabilities. • Considered the Group's performance against the four Consumer Duty outcomes. | • The Board reviewed the results of the Great Place to Work survey and approved the annual People Strategy, including a review of diversity and inclusion initiatives and progress against key targets. • The Board received updates on the status of the integration programme following the acquisition of the Bank at the start of the year. | • The Board received updates throughout the year on how suppliers were being reviewed and managed as part of integration and strategic planning activity. |
Stakeholder group | Investors | Communities | Environment |
This group includes wholesale investors and ratings agencies. | This group includes those supporting the communities we serve. | The Group's direct and indirect impact on the world around us. | |
What do they expect from us? | • A stable and sustainable performance, with resilient capital and liquidity levels. • An organisation that is focused on the mortgage, savings, current account and business banking markets, that is well governed and manages risks effectively. • Clear disclosures to enable informed investment decisions to be made. • Focus on environmental, social and governance impacts. | • Support (financial and in kind) and to benefit from our skills and knowledge. • Help to raise awareness of key issues and signposting those in need. • A community strategy that makes clear what we support and how this can be accessed. • Funding commitment across the medium term. | • To contribute towards tackling climate change. • Measurement and reporting of our emissions. • The reduction of our own emissions and broader environmental impacts. • Helping customers make the transition to their homes being more energy efficient. |
How do we engage with them? | • A programme of investor and analyst meetings. • Public updates on our performance or other material matters for disclosure. • Information about our funding programmes and the Annual Report & Accounts published on our website. | • Engaging regularly with our strategic partnerships, charities, public sector and schools. • Key points of contact established and maintained in each of the organisations we work with. • Through a long-term partnership with Centrepoint. | • Working with a range of external bodies and suppliers to monitor, manage and reduce our environmental impacts. • Working with third parties for assurance to conform with ISO 14064 and ISO 20400 standards. • Engaging with customers to help make energy-saving improvements to their home. • Working with suppliers to understand actual emissions produced when providing goods or services to the Group. |
What’s been important for them in 2025? | • Updates on integration activity. • The Group's roadmap to achieving Net Zero ambitions. • Product propositions aimed at helping members improve the energy efficiency of their homes. • Our plans for a green or social bond. | • Building successful partnerships which bring value to community organisations. • Certainty of funding as well as responding to changing external events, by providing additional funding to support services. • Creating access to opportunities and raising aspirations. | • The Group's Net Zero Plan, outlining our progress towards improving our impact on the environment. • Aligning our environmental and social initiatives to further support our local communities. |
Our response and key decisions taken by the Board | • Feedback used to develop the Annual Report and Sustainability Report to ensure the emerging needs of investors are met. • The Board discussed the feedback from rating agencies and their assessment of our performance. | • £6 million in community investment across the Group. • The Board considered our ongoing investment in the Group's community strategy. • Received updates on a campaign of activities to support our corporate charity, Centrepoint. | • The Board considered the impact of climate change on both the Group, its customers and wider stakeholders in line with the Net Zero Plan. • The Board considered the Group's ESG performance against agreed ESG ambitions and approved the content for the annual Sustainability Report. |
Environmental | We believe that climate change is a critical issue for the UK and the wider world. We are committed to making a positive contribution to the challenge of climate change by reducing the environmental impact of our business activities. At the heart of this is progressing our decarbonisation strategy, which aims to deliver on ambitious Net Zero targets. |
Social | As a people and purpose-led organisation, we aim to meet the needs of multiple stakeholders. For members and customers, offering long-term value, good customer outcomes and superior customer service. For colleagues, providing work that supports, engages and enables them to unlock their full potential. And we support local communities and national causes, creating opportunities for the most disadvantaged in society. |
Governance | Maintaining the highest standards of governance is integral to the successful delivery of the Group's sustainability strategy. Our governance framework ensures that the Board is effective in making decisions and maintaining oversight, whilst keeping to our well- established purpose and values. |
Risk | Mitigation |
Economic and geopolitical environment | |
Global conflicts and trends towards protectionism and deglobalisation impact the UK economy and the sustainability of its national debt. This can inform UK policy decisions which impact operations, customers and suppliers and impact interest rates, housing prices and the unemployment outlook, all key drivers of Group performance. Particularly key are those policies that impact the flow and cost of retail deposits or wholesale funding or the size and performance of the UK financial services markets, in particular mortgages and personal current accounts. | Stress testing and sensitivity analysis of key assumptions in response to changes in the macroeconomic environment is regularly performed. The monthly Group Assets & Liabilities Committee (ALCO) is responsible for monitoring interest rate developments and managing the balance sheet accordingly. Regulatory horizon scanning feeds into executive risk committees and the quarterly forecasting and annual strategic planning process. The Group maintains options to moderate growth or deleverage in response to the economic outlook or policy changes. |
Customer expectations and market dynamics | |
Customers are increasingly seeking personalised and digitally enhanced experience, are less loyal and may be influenced by social media and/or Artificial Intelligence to behave differently. Still, a large section of society is less digitally literate and has more complex needs and may wish to be served in a more traditional way. New competitors are offering loss leading rates and switching incentives to attract market share. Whilst increasing choice, this may result in lower market stability and poorer consumer outcomes in the long-term. | The Group continues to focus on developing products and services that keep up with these expectations and we have increased our investment in digital servicing and distribution. Regular reviews of the evolving needs and expectations of customers through research inform future plans around product participation, customer proposition, servicing channels and the impact of competitor behaviour on future strategy. |
Technology and digital innovation | |
As new technology (including Artificial Intelligence) develops and is adopted, there is a risk that our offering does not keep pace with competitors, reducing the Group's relative attractiveness to customers. There is also a risk that technological change delivery itself could impact service levels, growth or other performance measures. | The Group continues to invest and focus on making sure the capabilities and resilience of technology keeps pace to meet the expectations of our regulators and other stakeholders, and to ensure the resilience of our platforms and the security of members' and customers' money and data. Over the plan horizon we expect to make progress on modernising our technology and include greater use of Artificial Intelligence, cloud and digital identification to keep pace with technology change in the market and help us reduce risk in some areas such as financial crime. |
Cyber | |
The cyber security threat landscape is continually evolving, presenting a risk to both the Group and its members and customers. As part of the integration, the Group is merging the digital estates of the Society and the Bank through an integration programme. Whilst this brings additional risk, cyber security has been at the forefront of integration activity and there is an opportunity to further enhance cyber defence capabilities. | The Group continues to develop its cyber defence posture, which is aligned to the NIST Cybersecurity Framework (CSF) and its six pillars, as well as the Bank of England's requirements. The integration and harmonisation programme will mature an existing intelligence led cyber capability, ensuring defence in depth across all corporate and customer digital environments. |
Risk | Mitigation |
Operational resilience | |
A severe disruptive event or crisis could impact the ability of the Group to maintain the delivery of its important business services and other support services. Such events could lead to member and customer harm, loss of funds, impact the safety and soundness of the Group, reputational damage or regulatory penalties. Severe disruptive events could include technology failure impacting key IT services, widespread data loss or corruption, a cyber security event, or the failure of a critical third party. | To reduce the likelihood and impact of severe disruption, the Group maintains operational resilience capabilities in place that spans across three centres of excellence (Business Continuity & Supplier Resilience, Incident Management & Change; and Important Business Service Oversight.) Each centre focuses on enhancing the Group's ability to prevent, adapt, respond, recover and learn from disruptive events. This activity is supported by multi layered approach to scenario stress testing and a suite of management information that spans across six resilience pillars (technology, data, cyber security, people, premises and third parties). |
Regulatory requirements | |
The Group is facing into a step up in regulatory requirements as a function of its size and systemic importance to the UK financial services sector. As a result of growth and the acquisition of The Co-operative Bank, the Group now undertakes a number of new regulated activities, increasing compliance activity and volume of regulatory change to implement. In addition, whilst the pace and sequencing of reform remain uncertain, the UK regulatory landscape is entering a period of major transition as the FCA, PRA, Bank of England and HM Treasury are all evolving towards a more connected, data and technology driven approach. | The Group is alert to this risk and continues to manage it appropriately, with a strong regulatory horizon scanning process, clear owners for regulatory change and ongoing monitoring of the Group's regulatory change implementations. The Group has no appetite for any breach and will at all times seek to achieve and maintain compliance with relevant regulatory requirements. It is acknowledged that unintentional breaches may occur, which will be remediated as and when they arise. The Group is planning for flexibility and remains vigilant to shifts in regulatory expectations. |
Climate change | |
The risks of climate change could create disruption to the Group's business as a result of transition risk as the UK economy transitions to lower carbon activities. This includes the potential impact of new regulations in our core markets or policy changes intended to support the transition to net zero. | The Group continues to focus on understanding and planning for the impacts of climate risk as presented in the Group's Sustainability Report and the Climate section of the Annual Report & Accounts. Regular horizon scanning is performed with periodic reporting to the Board Risk Committee, which includes monitoring of emerging risks. |
Strategic change | |
The risk that strategic outcomes are not successfully delivered within agreed investment targets and/ or strategic change deliverables adversely impact the business operations across the Group. This could affect the Group's growth and potentially cause reputational damage with members and customers or regulators. | The Group has a robust governance framework, with a dedicated change management office to ensure strategic change is appropriately managed, and portfolio risks are monitored and controlled. This includes deploying established programme risk and governance tools, utilising third party subject matter expertise as required. Strategic risk has been elevated to a principal risk category to support enhanced monitoring by the Board. |
Fraud and financial crime | |
The Group has greater exposure to fraud and financial crime as a result of the acquisition of The Co-operative Bank. This is due to it offering current account services to customers, which have a higher fraud and financial crime risk profile across the financial services industry. | The Group remains close to industry developments and external fraud threats, to manage fraud losses within defined internal tolerances, balanced with customer outcomes. The Group has no appetite for any breach in relevant regulatory requirements. The Group's financial crime policies, standards and supporting systems and controls help us to manage risks effectively and identify, detect and prevent fraud. The financial crime road map focuses on advancing our existing fraud prevention and detection capability. Financial crime risk has been elevated to a principal risk category to support enhanced monitoring by the Board. |
2025 | 2024 | |||||
Group underlying performance1 | Items related to acquisition & integration2 | Group statutory performance | Group underlying performance1 | Items related to acquisition & integration2 | Group statutory performance | |
£m | £m | £m | £m | £m | £m | |
Interest receivable3 | 3,952 | 41 | 3,993 | 3,294 | — | 3,294 |
Interest payable4 | (2,868) | 19 | (2,849) | (2,615) | — | (2,615) |
Net interest income | 1,084 | 60 | 1,144 | 679 | — | 679 |
Other income and charges | 43 | — | 43 | (4) | — | (4) |
Losses on derivative financial instruments5 | (3) | (99) | (102) | (11) | — | (11) |
Total income | 1,124 | (39) | 1,085 | 664 | — | 664 |
Administrative expenses6 | (673) | (67) | (740) | (307) | (26) | (333) |
Amortisation and depreciation7 | (62) | (42) | (104) | (26) | — | (26) |
Impairment (charge)/ release8 | (15) | (9) | (24) | 18 | — | 18 |
Gain on acquisition of a subsidiary9 | — | 584 | 584 | — | — | — |
Profit before tax | 374 | 427 | 801 | 349 | (26) | 323 |
Taxation | 11 | — | 11 | (76) | — | (76) |
Profit for the financial year | 385 | 427 | 812 | 273 | (26) | 247 |
2025 £m | 2024 £m | |
Assets | ||
Loans and advances to customers | 72,936 | 51,801 |
Liquidity | 13,896 | 10,724 |
Other | 1,407 | 1,506 |
Total assets | 88,239 | 64,031 |
Liabilities | ||
Retail and other deposits | 71,722 | 49,425 |
Wholesale funding | 11,316 | 10,475 |
Subordinated liabilities and subscribed capital | 290 | 57 |
Other | 622 | 446 |
Total liabilities | 83,950 | 60,403 |
Equity | ||
General reserve | 3,506 | 2,754 |
Other equity instruments | 665 | 665 |
Other | 118 | 209 |
Total equity | 4,289 | 3,628 |
Total liabilities and equity | 88,239 | 64,031 |
End-point 31 Dec 2025 £m | End-point 31 Dec 2024 £m | |
Capital resources: | ||
Common Equity Tier 1 (CET 1) | 2,907 | 2,616 |
Total Tier 1 capital | 3,572 | 3,281 |
Total capital | 3,847 | 3,321 |
Risk weighted assets | 14,760 | 9,340 |
Capital and leverage ratios: | % | % |
Common Equity Tier 1 (CET 1) ratio | 19.7 | 28.0 |
Leverage ratio including central bank reserves and full AT1 capital | 4.0 | 5.2 |
UK leverage ratio1 | 4.6 | 5.7 |
Reporting requirement | Page |
Business model | 15 |
Top & emerging risks | 24 |
Key risk management | 34 |
Key performance indicators | 5, 107 |
Colleagues | 17 |
Human rights | 22 |
Anti-bribery and corruption | 22 |
Communities | 18 |
Environmental matters1 | 21 |
Climate-related financial disclosures | 62 |
Principal risks | Mitigation |
Credit risk The risk of loss to the Group from members/customers or wholesale counterparties failing to meet their contractual payments in full and/or on time. This covers retail and commercial credit risk. | We operate robust underwriting and affordability assessments which, together with appropriate credit policies, results in the Group lending responsibly and within its risk appetite. We also build and operate statistical models to measure credit risk to ensure we understand our exposure to ongoing risk of losses in stressed scenarios. |
Market risk The risk of a reduction in Group earnings and/or value resulting from adverse movements in market factors. | We operate within Board approved limits and use interest and foreign exchange rate swap agreements to mitigate the impact of changes in interest rates and foreign exchange rate. |
Liquidity and funding risk The risk that the Group has insufficient funds or projected funds to meet obligations as they fall due or could only do so at excessive cost or risk. | We hold sufficient liquidity to withstand a severe but plausible stress, mitigate risks identified through the annual ILAAP process and operate within limits set by the Board. We maintain a diversified funding base to avoid any overreliance on any funding source, type or term. |
Capital risk The risk that the Group has insufficient capital resources to absorb losses in benign or stressed macro-economic conditions, fails to meet prudential regulations and expectations, or has insufficient financial resources to recapitalise in the event of resolution. | We hold sufficient capital to withstand a severe but plausible stress, and mitigate risks identified through the annual ICAAP process. Risk appetite limits are set to ensure that the Group always maintains compliance with regulatory minima, with early warning indicators in place to identify periods of severe stress as part of the recovery planning process. |
Model risk The potential for adverse consequences from errors or the inappropriate use of modelled outputs to inform business decisions. | We have implemented robust model risk management practices, set out in the policy on Model Risk and Model Risk Framework. These cover key governance requirements and processes applicable to material models. |
Operational risk The risk of loss arising from inadequate or failed internal processes, people, systems, or from external events that disrupt business operations. The operational risk principal risk category includes technology & cyber; data; third party; legal; people; statutory, regulatory and financial reporting; payments; and premises risk. | We actively identify, assess and manage operational risks across a number of categories to which the Group is exposed, consistent with Basel risk classifications, industry best practice and the Group's business model. We aim to continuously enhance our operational risk management framework to enable the Group to effectively manage its operational risk, thereby limiting incidents and associated losses to within appetite. |
Strategic change risk The risk that strategic outcomes are not successfully delivered and/or change deliverables adversely impact business operations. | The Group has implemented a robust governance framework, with a dedicated change management office to ensure strategic change is appropriately managed, and portfolio risks are monitored and controlled. This includes deploying established programme management techniques and governance tools utilising third party subject matter expertise as required. Strategic change risk has been elevated to a principal risk category to support enhanced oversight by the Board. |
Risk categories | Mitigation |
Financial crime risk The risk that Group products or services will be exploited for criminal purposes, including: a) fraud or dishonesty, including tax evasion and bribery or corruption; b) misconduct in, or misuse of information relating to a financial market; c) handling the proceeds of crime; or d) the financing of terrorism or evading or circumventing of sanctions. | The Group implements systems and controls in order to manage the economic crime risks posed by our customers, products, geographies and channels, in line with our legal and regulatory obligations. The Group monitors the effectiveness of these controls through ongoing oversight and assurance activity and through the Group's governance committees. |
Conduct & compliance risk The risk that the Group's behaviour, decision making, or products and services result in poor outcomes for customers, undermine market integrity or breach regulatory standards and cause harm to customers, the Group or the financial system. | We place good customer outcomes, aligned to the FCA Consumer Duty, at the heart of our decision making. In line with putting members and customers first, this reduces conduct risk. This ethos is embedded in product design, services, and people and communication strategies. The Board plays an active role in oversight of these strategies and the delivery by the Group of good customer outcomes. |
Risk categories | Mitigation |
Climate risk The risk that climate-related events or the transition to a low-carbon economy will lead to financial losses, operational disruption, regulatory censure and/or reputational damage for the Group. | The Group continues to focus on understanding and planning for the impacts of risk associated with climate risk as presented in the Sustainability Report and the Climate section of the Annual Report & Accounts. Regular horizon scanning is performed with periodic reporting to the Group Board Risk Committee, which includes monitoring of emerging risks. |
Operational resilience The risk of the Group experiencing operational disruptions due to shortcomings in preventing, adapting to, responding to, recovering from, and learning from disruptive events. | To reduce the likelihood and impact of severe disruption, the Group maintains a comprehensive operational resilience capability that spans across three centres of excellence: Business Continuity & Supplier Resilience, Incident Management & Change, and Important Business Service Oversight. Each centre focuses on enhancing the Group's ability to prevent, adapt, respond, recover and learn from disruptive events. This activity is supported by a multilayered approach to scenario stress testing and a suite of management information that spans across six resilience pillars: Technology, Data, Cyber Security, People, Premises and Third Parties. |
(Audited) | On-balance sheet carrying value 2025 £m | Off-balance sheet exposures¹ 2025 £m | Maximum credit risk exposure 2025 £m | On-balance sheet carrying value 2024 £m | Off-balance sheet exposures¹ 2024 £m | Maximum credit risk exposure 2024 £m |
Cash and balances with the Bank of England | 11,948 | — | 11,948 | 9,893 | — | 9,893 |
Loans and advances to credit institutions | 383 | — | 383 | 329 | — | 329 |
Debt securities | 1,565 | — | 1,565 | 502 | — | 502 |
Loans and advances to customers | 72,936 | 3,946 | 76,882 | 51,801 | 1,915 | 53,716 |
Derivative financial instruments | 533 | — | 533 | 1,084 | — | 1,084 |
Total | 87,365 | 3,946 | 91,311 | 63,609 | 1,915 | 65,524 |
Region (Audited) | 2025 % | 2024 % |
London | 23.4 | 26.4 |
South East England | 18.1 | 18.2 |
Central England | 14.5 | 14.3 |
Northern England | 16.5 | 14.1 |
East of England | 11.9 | 12.0 |
South West England | 8.4 | 8.6 |
Scotland | 4.4 | 3.7 |
Wales and Northern Ireland | 2.8 | 2.7 |
Total | 100.0 | 100.0 |
Total mortgage book profile by number of accounts (Audited) | 2025 % | 2024 % |
Indexed loan to value: | ||
< 50% | 52.7 | 53.2 |
50% to 65% | 24.8 | 26.5 |
65% to 75% | 12.3 | 11.8 |
75% to 85% | 6.7 | 5.5 |
85% to 95% | 3.4 | 2.9 |
>95% | 0.1 | 0.1 |
Total | 100.0 | 100.0 |
Average indexed loan to value of stock (simple average) | 46.3 | 46.0 |
Average indexed loan to value of stock (balance weighted) | 54.9 | 53.5 |
Gross lending by balance - new business profile | 2025 % | 2024 % |
Owner-occupier purchase | 42.8 | 43.2 |
Owner-occupier remortgages | 30.4 | 30.9 |
Owner-occupier further advances | 2.2 | 2.2 |
Buy to let purchase | 5.1 | 5.7 |
Buy to let remortgages | 18.5 | 17.2 |
Buy to let further advance | 1.0 | 0.8 |
Total | 100.0 | 100.0 |
Average loan to value (simple average) | 63.4 | 62.7 |
Average loan to value (balance weighted) | 67.0 | 66.7 |
2025 | 2024 | |||
(Audited) | Gross balance £m | Arrears balance £m | Gross balance £m | Arrears balance £m |
Greater than three months | 269 | 15 | 174 | 9 |
Greater than six months | 159 | 12 | 99 | 7 |
Greater than one year | 61 | 7 | 40 | 4 |
In possession | 15 | 1 | 8 | — |
2025 | 2024 | |||
(Audited - Group only) | Group % | UK Finance1 % | Group % | UK Finance1 % |
Greater than three months | 0.38 | 0.78 | 0.33 | 0.91 |
Greater than six months | 0.22 | 0.49 | 0.19 | 0.60 |
Greater than one year | 0.08 | 0.29 | 0.08 | 0.31 |
In possession | 0.02 | 0.06 | 0.01 | 0.02 |
2025 | 2024 | ||||
No. of accounts | Carrying value £m | No. of accounts | Carrying value £m | ||
Forbearance: Accounts past due | |||||
Concessions | 343 | 60 | 217 | 36 | |
Payment holidays | 72 | 9 | 43 | 5 | |
Product transfers | 3 | — | 2 | — | |
Temporary transfer to interest only | 20 | 3 | 7 | 1 | |
Term extensions | 6 | — | 1 | — | |
Other | 40 | 3 | — | — | |
Forbearance Indicators: Accounts not past due | |||||
Concessions | 281 | 42 | 150 | 23 | |
Payment holidays | 567 | 82 | 158 | 21 | |
Product transfers | 1 | — | 1 | — | |
Temporary transfer to interest only | 125 | 22 | 18 | 3 | |
Term extensions | 2 | — | 2 | — | |
Other | 65 | 9 | — | — | |
Total Forbearance | 1,525 | 230 | 599 | 89 | |
Of which stage 2 | 348 | 37 | 177 | 22 | |
Of which stage 3 | 712 | 108 | 311 | 53 | |
ECL on forborne accounts | 2 | 1 | |||
2025 | ||||
(Audited) | Gross customer balances £m | Undrawn exposures £m | Allowance for losses £m | Coverage % |
Credit cards | 211 | 766 | 3 | 1.42 |
Overdrafts | 12 | 162 | 2 | 16.67 |
Total | 223 | 928 | 5 | 2.24 |
2025 | ||
No. of accounts | Carrying value £m | |
Forbearance: Accounts past due | ||
Arrangements | 203 | — |
Hardships | 461 | — |
Temporary reducing overdraft | 218 | — |
Forbearance: Accounts not past due | ||
Arrangements | 473 | — |
Hardships | 430 | — |
Temporary reducing overdraft | 2,797 | 1 |
Total Forbearance | 4,582 | 1 |
Of which stage 2 | 89 | — |
Of which stage 3 | 3,200 | 1 |
ECL on forborne accounts | — | |
2025 | ||||
Balance £m | Undrawn exposures £m | ECL £m | Coverage % | |
Split by industry | ||||
PFI | 300 | 21 | 1 | 0.25 |
Housing association | 271 | 163 | — | 0.03 |
Commercial real estate | 253 | 2 | 1 | 0.35 |
Other | 190 | 110 | 5 | 5.03 |
Total | 1,014 | 296 | 7 | 0.72 |
2025 | ||||
Collateral type | Total balances £m | Property collateral | Government guarantee | Loss allowance £m |
Stage 1 | 637 | 574 | 49 | 1 |
Stage 2 | 26 | 21 | 2 | — |
Stage 3 & POCI | 20 | 11 | 4 | 4 |
Total secured | 683 | 606 | 55 | 5 |
Unsecured | 331 | — | — | 2 |
Total | 1,014 | 606 | 55 | 7 |
Exposure value by Moody's rating | |||||
2025 (Audited) | Aaa-Aa3 £m | A1-A3 £m | Baa1-Baa3 £m | Unrated £m | Total £m |
Central banks and sovereigns1 | 12,757 | — | — | — | 12,757 |
Multilateral development banks (supranational bonds) | 473 | — | — | — | 473 |
Financial institutions2 | 276 | 310 | 38 | 13 | 637 |
Mortgage backed securities | 24 | — | 2 | 3 | 29 |
Total | 13,530 | 310 | 40 | 16 | 13,896 |
Exposure value by Moody's rating | |||||
2024 (Audited) | Aaa-Aa3 £m | A1-A3 £m | Baa1-Baa3 £m | Unrated £m | Total £m |
Central banks and sovereigns | 10,270 | — | — | — | 10,270 |
Multilateral development banks (supranational bonds) | 19 | — | — | — | 19 |
Financial institutions | 9 | 123 | — | 303 | 435 |
Mortgage backed securities | — | — | — | — | — |
Total | 10,298 | 123 | — | 303 | 10,724 |
Treasury assets | Of which, debt securities | ||||||||
2025 (Audited) | Sovereign £m | Supranationals £m | Financial institutions £m | Mortgage backed securities £m | Total liquid assets £m | Book value £m | Market value movement £m | Fair value £m | |
United Kingdom | 12,696 | — | 460 | 29 | 13,185 | 962 | (72) | 890 | |
Supranationals1 | — | 473 | — | — | 473 | 454 | 19 | 473 | |
Europe | 61 | — | 5 | — | 66 | 60 | 1 | 61 | |
Rest of the World | — | — | 172 | — | 172 | 140 | 1 | 141 | |
Total | 12,757 | 473 | 637 | 29 | 13,896 | 1,616 | (51) | 1,565 | |
Treasury assets | Of which, debt securities | ||||||||
2024 (Audited) | Sovereign £m | Supranationals £m | Financial institutions £m | Mortgage backed securities £m | Total liquid assets £m | Book value £m | Market value movement £m | Fair value £m | |
United Kingdom | 10,270 | — | 290 | — | 10,560 | 530 | (47) | 483 | |
Supranationals1 | — | 19 | — | — | 19 | 19 | — | 19 | |
Europe | — | — | 135 | — | 135 | — | — | — | |
Rest of the World | — | — | 10 | — | 10 | — | — | — | |
Total | 10,270 | 19 | 435 | — | 10,724 | 549 | (47) | 502 | |
Shock applied | 2025 £m | 2024 £m |
Impact on present value of assets and liabilities at year end from a parallel change in yield curve: | ||
+100 basis points shift (EV 100) | 2 | 3 |
-100 basis points shift (EV 100) | (2) | (3) |
+200 basis points shift (EV 200) | 35 | 28 |
-200 basis points shift (EV 200) | (39) | (31) |
Impact on net interest income for the year from a parallel change in yield curve: | ||
+100 basis points shift | 6 | 11 |
-100 basis points shift | (9) | (11) |
2025 | 2024 | |||||
(Audited) | Notes to the accounts | £m | % | £m | % | |
Deposits from banks, including repo agreements | 24 | 2,745 | 24.3 | 1,867 | 17.8 | |
Amounts drawn under the Term Funding Scheme | 24 | 264 | 2.3 | 2,065 | 19.7 | |
Debt securities in issue | ||||||
Medium term notes | 25 | 2,412 | 21.3 | 2,067 | 19.7 | |
Covered bonds | 25 | 4,168 | 36.8 | 2,866 | 27.4 | |
Residential Mortgage Backed Securities | 25 | 1,727 | 15.3 | 1,610 | 15.4 | |
Total | 11,316 | 100.0 | 10,475 | 100.0 | ||
(Audited) | GBP £m | EUR £m | Total £m |
Deposits from banks, including repo agreements | 2,745 | — | 2,745 |
Amounts drawn under the Term Funding Scheme | 264 | — | 264 |
Debt securities in issue | |||
Medium term notes | 1,975 | 437 | 2,412 |
Covered bonds | 2,203 | 1,965 | 4,168 |
Residential Mortgage Backed Securities | 1,727 | — | 1,727 |
Total as at 31 December 2025 | 8,914 | 2,402 | 11,316 |
Total as at 31 December 2024 | 8,201 | 2,274 | 10,475 |
2025 | 2024 | |||
(Audited) | £m | % | £m | % |
Less than one year | 4,053 | 35.8 | 4,487 | 42.8 |
One to two years | 2,172 | 19.2 | 1,559 | 14.9 |
Two to five years | 4,947 | 43.7 | 3,550 | 33.9 |
More than five years | 144 | 1.3 | 879 | 8.4 |
Total | 11,316 | 100.0 | 10,475 | 100.0 |
Group At 31 December 2025 (Audited) | Repayable on demand £m | Up to 3 months £m | 3-12 months £m | 1-5 years £m | More than 5 years £m | Total £m |
Assets | ||||||
Cash and balances with the Bank of England | 11,948 | — | — | — | — | 11,948 |
Loans and advances to credit institutions | 358 | — | — | — | 25 | 383 |
Debt securities | — | 118 | 335 | 811 | 301 | 1,565 |
Loans and advances to customers | 84 | 1,474 | 3,235 | 16,017 | 52,126 | 72,936 |
Hedge accounting adjustment | 1 | 4 | 51 | 121 | (8) | 169 |
Derivative financial instruments | 10 | 8 | 115 | 329 | 71 | 533 |
Investment in equity shares | — | — | — | — | 5 | 5 |
Total financial assets | 12,401 | 1,604 | 3,736 | 17,278 | 52,520 | 87,539 |
Liabilities | ||||||
Shares | 30,674 | 1,207 | 13,384 | 5,104 | 461 | 50,830 |
Customer accounts | 18,112 | 586 | 1,780 | 414 | — | 20,892 |
Sale and repurchase agreements1 | 61 | 993 | 964 | 500 | — | 2,518 |
Amounts drawn under TFSME1 | 3 | — | — | 261 | — | 264 |
Deposits from banks - other | 225 | 2 | — | — | — | 227 |
Secured debt securities in issue - RMBS and covered bonds | — | 8 | 1,147 | 4,737 | — | 5,892 |
Senior unsecured debt funding | 5 | 14 | 665 | 1,589 | 142 | 2,415 |
Hedge accounting adjustment | — | — | 16 | 13 | — | 29 |
Derivative financial instruments | 2 | 4 | 50 | 244 | 20 | 320 |
Subordinated liabilities | — | 2 | 10 | 220 | 16 | 248 |
Subscribed capital | — | 2 | — | — | 40 | 42 |
Total financial liabilities | 49,082 | 2,818 | 18,016 | 13,082 | 679 | 83,677 |
Net liquidity gap (contractual) | (36,681) | (1,214) | (14,280) | 4,196 | 51,841 | 3,862 |
Group At 31 December 2024 (Audited) | Repayable on demand £m | Up to 3 months £m | 3-12 months £m | 1-5 years £m | More than 5 years £m | Total £m |
Assets | ||||||
Cash and balances with the Bank of England | 9,893 | — | — | — | — | 9,893 |
Loans and advances to credit institutions | 329 | — | — | — | — | 329 |
Debt securities | — | 57 | 25 | 295 | 125 | 502 |
Loans and advances to customers | 64 | 917 | 2,652 | 12,787 | 35,382 | 51,802 |
Hedge accounting adjustment | — | (2) | (51) | (370) | (25) | (448) |
Derivative financial instruments | 7 | 12 | 194 | 775 | 96 | 1,084 |
Investment in equity shares | — | — | — | — | 9 | 9 |
Total financial assets | 10,293 | 984 | 2,820 | 13,487 | 35,587 | 63,171 |
Liabilities | ||||||
Shares | 27,982 | 1,930 | 13,481 | 5,515 | 435 | 49,343 |
Customer accounts | — | 76 | 6 | — | — | 82 |
Sale and repurchase agreements1 | — | 301 | 203 | 500 | — | 1,004 |
Amounts drawn under TFSME1 | — | 25 | 2,040 | — | — | 2,065 |
Deposits from banks - other | 860 | 2 | — | — | — | 862 |
Secured debt securities in issue - RMBS and covered bonds | — | 508 | 203 | 3,278 | 487 | 4,476 |
Senior unsecured debt funding | — | 10 | 359 | 1,309 | 390 | 2,068 |
Hedge accounting adjustment | — | — | 121 | (149) | (40) | (68) |
Derivative financial instruments | — | — | 68 | 190 | 47 | 305 |
Subordinated liabilities | — | — | — | 15 | — | 15 |
Subscribed capital | — | 2 | — | — | 40 | 42 |
Total financial liabilities | 28,842 | 2,854 | 16,481 | 10,658 | 1,359 | 60,194 |
Net liquidity gap (contractual) | (18,549) | (1,870) | (13,661) | 2,829 | 34,228 | 2,977 |
Group At 31 December 2025 (Audited) | Up to 3 months £m | 3-12 months £m | 1-5 years £m | More than 5 years £m | Total £m |
Liabilities | |||||
Shares | 31,891 | 13,580 | 5,147 | 461 | 51,079 |
Customer accounts | 18,724 | 1,824 | 422 | — | 20,970 |
Deposits | 1,293 | 996 | 780 | — | 3,069 |
Debt securities in issue | 144 | 2,441 | 8,071 | 181 | 10,837 |
Other liabilities and adjustments | 105 | 541 | 912 | 14 | 1,572 |
Subordinated liabilities | 1 | 24 | 263 | — | 288 |
Subscribed capital | 2 | 2 | 19 | 41 | 64 |
Total liabilities | 52,160 | 19,408 | 15,614 | 697 | 87,879 |
Society At 31 December 2025 (Audited) | Up to 3 months £m | 3-12 months £m | 1-5 years £m | More than 5 years £m | Total £m |
Liabilities | |||||
Shares | 31,891 | 13,580 | 5,147 | 461 | 51,079 |
Customer accounts | 36 | 10 | — | — | 46 |
Deposits | 1,055 | 524 | 516 | — | 2,095 |
Debt securities in issue | 137 | 2,147 | 7,354 | 181 | 9,819 |
Other liabilities and adjustments | 54 | 230 | 163 | — | 447 |
Subordinated liabilities | 1 | 24 | 263 | — | 288 |
Subscribed capital | 2 | 2 | 19 | 41 | 64 |
Total liabilities | 33,176 | 16,517 | 13,462 | 683 | 63,838 |
Group At 31 December 2024 (Audited) | Up to 3 months £m | 3-12 months £m | 1-5 years £m | More than 5 years £m | Total £m |
Liabilities | |||||
Shares | 29,908 | 13,687 | 5,582 | 435 | 49,612 |
Customer accounts | 62 | 6 | 446 | 323 | 837 |
Deposits | 1,238 | 1,392 | 535 | — | 3,165 |
Debt securities in issue | 606 | 826 | 4,552 | 467 | 6,451 |
Other liabilities and adjustments | 41 | 282 | 162 | 11 | 496 |
Subordinated liabilities | 1 | 1 | 17 | — | 19 |
Subscribed capital | 3 | 2 | 19 | 40 | 64 |
Total liabilities | 31,859 | 16,196 | 11,313 | 1,276 | 60,644 |
Encumbered | Unencumbered | |||||
Pledged as collateral1 £m | Other2 £m | Available as collateral 3 £m | Other4 £m | Total £m | ||
Cash and balances with the Bank of England | — | 342 | 11,606 | — | 11,948 | |
Loans and advances to credit institutions | 327 | — | — | 56 | 383 | |
Debt securities | 609 | — | 926 | 30 | 1,565 | |
Loans and advances to customers | 14,153 | — | 11,598 | 47,185 | 72,936 | |
Hedge accounting adjustments | — | — | — | 169 | 169 | |
Derivative financial instruments | — | — | — | 533 | 533 | |
Other assets | — | — | — | 705 | 705 | |
Total as at 31 December 2025 | 15,089 | 342 | 24,130 | 48,678 | 88,239 | |
Total as at 31 December 2024 | 14,342 | 71 | 16,323 | 33,296 | 64,031 | |
(Audited) | Long-term | Short-term | Outlook | Date of last credit opinion |
Moody’s | A3 | P–2 | Stable | December 2025 |
Fitch | A– | F1 | Stable | October 2025 |
Capital position | End-point 31 Dec 2025 £m | End-point 31 Dec 2024 £m |
Common Equity Tier 1 | ||
General reserve | 3,506 | 2,754 |
Fair value through other comprehensive income reserve | — | (1) |
Cash flow hedge reserve | 118 | 210 |
Common Equity Tier 1 prior to regulatory adjustments | 3,624 | 2,963 |
Common Equity Tier 1 regulatory adjustments | ||
Prudent additional valuation adjustment 1 | (2) | (1) |
Intangible assets2 | (232) | (49) |
Deferred tax assets | (243) | — |
Cash flow hedge reserve2 | (118) | (210) |
Pension fund surplus adjustment2 | (20) | — |
Excess of expected loss over impairment 3 | (100) | (66) |
Foreseeable distributions4 | (2) | (21) |
Common Equity Tier 1 (CET 1) | 2,907 | 2,616 |
Additional Tier 1 (AT 1) capital | ||
Additional Tier 1 - Perpetual Capital Securities | 665 | 665 |
Total Additional Tier 1 capital | 665 | 665 |
Total Tier 1 capital | 3,572 | 3,281 |
Tier 2 | ||
Subordinated debt | 232 | — |
Permanent Interest Bearing Shares (PIBS) | 42 | 40 |
Excess of provisions over expected loss | 1 | — |
Total Tier 2 capital | 275 | 40 |
Total Capital | 3,847 | 3,321 |
Risk weighted assets | ||
IRB approach | ||
Credit risk – retail exposures | 11,181 | 7,832 |
Credit risk - corporate exposures | 823 | — |
Standardised Approach | ||
Credit risk – retail exposures | 356 | 82 |
Credit risk – liquidity book | 203 | 245 |
Credit risk – other | 305 | 80 |
Credit valuation adjustment risk | 59 | 55 |
Operational risk | 1,833 | 1,046 |
Total risk weighted assets | 14,760 | 9,340 |
Common Equity Tier 1 ratio | 19.7% | 28.0% |
Leverage ratio | End-point 31 Dec 2025 £m | End-point 31 Dec 2024 £m |
Total Tier 1 capital - used in CRR calculation | 3,572 | 3,281 |
Adjustment for AT 1 restriction | (44) | (229) |
Total Tier 1 capital - used in UK calculation | 3,528 | 3,052 |
Leverage ratio exposures | ||
Total balance sheet assets | 88,239 | 64,031 |
Retail: lending pipeline and other committed facilities1 | 637 | 383 |
Corporate: undrawn facilities1 | 228 | — |
Repurchase agreements2 | 109 | 80 |
Netted derivative adjustments3 | (226) | (905) |
Other adjustments4 | (12) | (137) |
Items included in the capital calculation | (590) | — |
Total leverage ratio exposures | 88,385 | 63,452 |
Adjustment to exclude central bank reserves | (11,978) | (9,787) |
Total leverage ratio exposure - used in UK calculation | 76,407 | 53,665 |
CRR leverage ratio | 4.0% | 5.2% |
UK leverage ratio | 4.6% | 5.7% |
% of total volume | % of total losses | |||
Operational risk by Basel category1 | 2025 | 2024 | 2025 | 2024 |
Execution, delivery and process management | 21 | 33 | 16 | 16 |
Business disruption and system failure | — | 10 | — | 5 |
External fraud | 79 | 57 | 84 | 79 |
Total | 100 | 100 | 100 | 100 |
Value of losses (£m) | 17.1 | 0.4 | ||
Emissions | |
Scope 1 | Direct greenhouse gas (GHG) emissions that occur from our own operations (e.g. our company vehicles, gas usage and fugitive emissions). |
Scope 2 | Indirect GHG emissions associated with the purchase of our electricity. |
Scope 3 | The result of activities from assets not owned or controlled by the Group, but that the Group indirectly impacts in its value chain. Include all sources not within an organisation's Scope 1 and 2 boundary and can be separated into the following two categories: |
- Scope 3 upstream | Business travel by means not owned or controlled by the Group, waste disposal, employee commuting, and purchased goods and services. |
- Scope 3 downstream | The emissions from our financed activities through the Group’s operations. |
Risk Type | |
Physical | The physical risks arising from the direct impacts of climate change related to specific weather events (such as heatwaves, floods and storms) and longer-term shifts in the climate (such as changes in precipitation, extreme weather variability, sea level rise and rising mean temperatures). This may lead to damage to assets, business disruption and changes in individuals' health and incomes, driving financial losses and impaired asset/collateral values. |
Transition | The risks arising from the process of adjustments as we transition to a Net Zero economy. Transition risk could arise from technological innovations, policy decisions and/or market changes. These may drive changes in the value of assets and liabilities, increase the cost of business for the Group and/or its customers, and result in changes to consumer spending habits. |
Achievements | Future activity | |
Governance | • The Society has maintained B Corp Status, demonstrating continued high standards in our ESG approach. • Continued oversight of climate change through the Board committee governance structures, with periodic Board and Senior Management updates on Climate Risk developments. • Designated Senior Management Function (SMF) with accountability for the financial risks arising from climate change. • A Non-Executive Director who is dedicated to championing ESG at the Board. • Continued oversight of external developments and trends across ESG. • Implemented Group governance structures, risk frameworks and policies that support effective oversight and monitoring of climate risk management across the Group entities. • Embedded consideration of climate risk within the Group's product approval process. | • Ensure our Board and senior management continue to receive at least annual climate risk training and education. • Continue to evolve climate governance in line with updates to PRA guidance in SS5/25 and drive positive outcomes. |
Strategy | • Enhanced our assessment of the risks and opportunities of climate change to our business model. • Identified strategic partners who can help us to rise to the climate challenge. • Continued to offer our green mortgage product to eligible members and customers. • Delivered Sustainability Reports in accordance with GRI standards. • Developed our Group environmental and Net Zero approach. • Continued supplier engagements, collecting actual supplier-specific emissions data, to support our move from spend-based emissions estimation to a hybrid approach. | • Develop further our green product propositions. • Engage with our members and customers to support a green transition as understanding of government support and regulations develop. |
Risk Management | • Maintained climate risk as a category within our Enterprise Risk Management Framework, with an elevated profile as a thematic risk. • Continued to review our data with respect to physical and transition risks to continue to grow our understanding of our potential exposure to climate risks across the Group. • Incorporated climate risk modelling and analysis within our ICAAP process. • Incorporated group-wide climate risk measures and KRIs within our risk appetite statement. • Developed a group-wide Climate Risk Policy. | • Continue to review lending policy to ensure it remains robust to potential climate risks. • Develop our data capabilities to further embed physical and transitional risk considerations in our modelling and decision making. • Enhance our data, risk management and scenario analysis capability in line with the updates to PRA guidance in SS5/25. |
Metrics and targets | • Remained carbon neutral for our own operations. • Continued to publish calculations for all of the Group's emissions (Scope 1, 2 and 3). • Developed the Group's Net Zero approach of how we intend to decarbonise. | • Continue to evolve our Net Zero Transition Plan, to reflect the increased scale and scope of the Group following acquisition of the Bank. • Continuing to evolve and make progress against our plan, monitoring internal and external scenarios to drive the required action. • Further define metrics and targets to capture physical and transition risks. |
TCFD areas of opportunity | Climate opportunities | Description |
Products and Services | Green finance | An opportunity for the Group to offer innovative financial products, which help borrowers to reduce their carbon emissions and improve energy efficiency. |
Resilience | Educating and communicating with our members and customers | Supporting our members and customers with the transition to Net Zero and leveraging partnerships and our B Corp network to attract more ESG conscious customers and funding. |
Markets | Access to green funding | By supporting a fair transition to Net Zero, the Group can utilise opportunities to obtain green retail or wholesale funding. |
Risk category | Risk description | |
Retail Credit Risk | Transitional | • Impacts on valuations of properties due to potential future governmental requirements for minimum efficiency standards (EPC). Metrics linked to this risk can be found under the heading 'Transition Risk' of the risk management climate section. • Borrower affordability declines leading to higher arrears and defaults, due to higher energy costs, structural changes in the economy, tax changes or, for buy to let specifically, other transitional impacts on borrowers' ability to repay. • Deterioration in book quality and mix if we are not selected by more climate conscious customers, or we do not compete with competitors pricing to attract or incentivise higher rated EPC (or equivalent) properties. |
Physical | • Houses are damaged or become uninhabitable due to physical impacts such as flooding. • Properties become uninsurable or premiums increase dramatically, impacting affordability and property valuations. | |
Operational Risk | Transitional | • Reputational and financial impacts because of third-party providers not delivering climate commitments. • Potential for litigation from future impacts of climate change. • New area for potential mortgage fraud through transitional climate processes e.g. energy ratings for properties. |
Physical | • Adverse impact on business continuity because of damages to the Group's premises and infrastructure, or failure of suppliers to provide critical services as a result of physical risks. • Risk to employee health and safety in extreme weather events. | |
Conduct and Compliance Risk | Transitional | • Borrowers in lower EPC rated properties are subject to increasing energy bills and unable to afford retrofit costs, possibly resulting in 'mortgage prisoners' as lenders judge they do not meet affordability requirements. • Inadequate or misleading information about climate risks may lead to reputational damage and erode customer trust. • Increased regulatory compliance and costs associated with climate change, including enhanced emissions or other climate-related reporting obligations. |
Market & Treasury Credit Risk | Physical & Transitional | • Impacts to markets arising from physical or transitional events. This could impact foreign exchange markets or interest rate movements and in turn impact the Group's value, or net income from its assets and liabilities. • Investor sentiment and preferences, as they increasingly consider ESG factors when making decisions. • ESG rating downgrades, and credit ratings downgrades because of climate risk, could impact the value of securities held and who we can operate with. |
Liquidity & Funding Risk | Physical & Transitional | • Inability to access wholesale markets due to lack of ability to operate in green markets. • Retail funding is impacted as members and customers suffer economic challenges of climate change. |
Capital Risk | Physical & Transitional | • Assets depreciate due to physical or transitional impacts of climate change, especially in regions prone to extreme weather events. • Imposed regulatory capital allocation could lead to opportunity cost, as the capital may be utilised in other areas. |
Technology & Data Risk | Transitional | • Failure to adapt systems and technology to the requirements of the Group Net Zero Plan, ingesting climate data into systems, emerging sustainability reporting and regulatory changes. |
Business & commercial Credit Risk | Physical & Transitional | • Business and commercial borrowers may experience financial stress or asset devaluation due to physical damage or transition pressures in carbon-intensive sectors, affecting their ability to repay or refinance. |
Model Risk | Transitional | • Data used for climate models is inaccurate and/or unreliable, increasing regulations and external scrutiny of climate data mean that inaccurate or inconsistent data and disclosures can lead to regulatory breaches, loss of investor confidence and reputational harm. |
Owner-occupier mortgages | |||||||
As at 31 December 2025 | As at 31 December 2024 | ||||||
Current EPC data | Number | Exposure £m | % of book2 | Number | Exposure £m | % of book2 | |
A | 1,020 | 256 | 0.5 | 518 | 132 | 0.4 | |
B | 24,623 | 5,091 | 10.0 | 13,367 | 2,805 | 8.7 | |
C | 69,074 | 12,175 | 24.0 | 39,398 | 7,150 | 22.1 | |
D | 107,086 | 18,919 | 37.3 | 65,049 | 11,898 | 36.7 | |
E | 35,699 | 6,506 | 12.8 | 23,627 | 4,548 | 14.0 | |
F | 7,375 | 1,373 | 2.7 | 5,199 | 1,020 | 3.1 | |
G | 1,503 | 264 | 0.5 | 1,107 | 204 | 0.6 | |
No EPC1 | 55,909 | 6,174 | 12.2 | 37,379 | 4,655 | 14.4 | |
Buy to let mortgages | |||||||
As at 31 December 2025 | As at 31 December 2024 | ||||||
Current EPC data | Number | Exposure £m | % of book2 | Number | Exposure £m | % of book2 | |
A | 89 | 18 | 0.1 | 79 | 16 | 0.1 | |
B | 6,348 | 1,078 | 5.1 | 6,062 | 1,028 | 5.3 | |
C | 49,843 | 7,310 | 34.9 | 43,438 | 6,386 | 33.0 | |
D | 57,771 | 8,681 | 41.5 | 53,946 | 8,106 | 41.8 | |
E | 14,180 | 2,041 | 9.8 | 14,518 | 2,094 | 10.8 | |
F | 643 | 86 | 0.4 | 709 | 101 | 0.5 | |
G | 170 | 21 | 0.1 | 198 | 25 | 0.1 | |
No EPC1 | 10,922 | 1,698 | 8.1 | 10,437 | 1,619 | 8.4 | |
Energy consumption | 2025 Society sub-group | 2025 Bank sub-group | 2025 Total Group | 2024 | |
Scope 1: Combustion of fuel and operation of facilities | Natural gas (kWh) | 1,462,320 | 1,406,124 | 2,868,444 | 1,223,360 |
Direct transport (kWh) | 193,351 | — | 193,351 | 301,626 | |
White diesel (kWh) | — | 9,083 | 9,083 | 25,314 | |
Refrigerants (kg) | 1 | — | — | 21 | |
Total Scope 1 energy (kWh) excl refrigerants | 1,655,671 | 1,415,207 | 3,070,878 | 1,550,300 | |
Scope 2: Electricity purchased | Total electricity (kWh) | 4,462,293 | 4,013,251 | 8,475,544 | 4,067,441 |
Scope 3: Indirect transport | Indirect transport (incl only employee owned vehicles (kWh) | 316,135 | 305,530 | 621,665 | 371,227 |
Total Scope 1, 2 and 3 energy consumption (kWh) excl refrigerants | 6,434,099 | 5,733,988 | 12,168,087 | 5,988,968 | |
Emissions assessment | 2025 Society sub-group | 2025 Bank sub-group | 2025 Total Group | 2024 | |
Scope 1: Combustion of fuel and operation of facilities | Natural gas (tCO2e) | 268 | 257 | 525 | 224 |
Direct transport (tCO2e) | 48 | — | 48 | 73 | |
White diesel (tCO2e) | — | 3 | 3 | 7 | |
Refrigerants (tCO2e) | 3 | — | 3 | 34 | |
Total Scope 1 energy (tCO2e) | 319 | 260 | 579 | 338 | |
Scope 2: Electricity purchased, heat and steam generated | Location based (LB) (tCO2e) | 790 | 710 | 1,500 | 842 |
Total Scope 1 and 2 energy (tCO2e) | 1,109 | 970 | 2,079 | 1,180 | |
Scope 3: Indirect emissions | Indirect emissions excluding mortgage (tCO2e) | 19,509 | 31,039 | 50,548 | 22,630 |
Mortgages (tCO2e) | 663,542 | 305,060 | 968,602 | 677,302 | |
Total Scope 1, 2 (LB) and 3 (indirect) emissions (tCO2 e) | 684,160 | 337,069 | 1,021,229 | 701,112 | |
Intensity metric assessment | 2025 Society sub-group | 2025 Bank sub-group | 2025 Total Group | 2024 | |
Intensity ratio (total gross Scope 1 and 2) | tCO2e/ net interest income £m | 1.81 | 2.25 | 1.99 | 1.74 |
Intensity ratio (total gross Scope 1, 2 and partial 3) | tCO2e/ net interest income £m | 2.21 | 2.77 | 2.44 | 2.03 |
31 October 2025 | 30 September 2024 | ||||
Society sub-group Mortgage book | Bank sub-group Mortgage book | Bank sub-group Corporate loans | Total Group | Total Group | |
Total properties | 312,309 | 130,431 | N/A | 442,740 | 310,121 |
Absolute finance emissions (FE) (MTCO2e) 1 | 0.66 | 0.27 | 0.04 | 0.97 | 0.68 |
Average FE per property (tCO2e) | 2.12 | 2.05 | N/A | 2.10 | 2.18 |
FE intensity (KGCO2e/m2)2 | 42.6 | 42.8 | N/A | 42.6 | 43.5 |
% EPC match | 85% | 81% | N/A | 83% | 82% |
PCAF data score | 3.12 | 2.81 | 5.00 | 3.15 | |
C | ||||||||||||||||||||||
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Re | A | C | Re | C | N&G | |||||||||||||||||
R | Re | N&G | R | N&G | A | R | C | Re | ||||||||||||||
A | Re | B | A | R | B | A | R | A | ||||||||||||||
B | A | B | B | A | B | B | NDR | B | B | |||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
Name | Board | Board Risk Committee | Board Audit Committee | Board Nominations & Governance Committee | Board Remuneration Committee | Non-Executive Directors’ Remuneration Committee | Board Change Committee |
David Thorburn1 | 9/9 | 4/4 | 5/5 | 1/1 | |||
Jo Kenrick2 | 9/9 | 4/4 | 5/5 | ||||
Iraj Amiri3 | 9/9 | 6/6 | 8/8 | ||||
Martin Stewart4 | 9/9 | 6/6 | 8/8 | 4/4 | |||
Shamira Mohammed | 9/9 | 8/8 | 5/5 | ||||
Brendan O'Connor | 9/9 | ||||||
Iain Plunkett5 | 9/9 | 5/6 | 4/4 | 4/4 | |||
Caroline Marsh 6 | 9/9 | 6/6 | 4/4 | 5/5 | |||
Mark Parker7 | 9/9 | 5/5 | 4/4 | ||||
Jane Leach8 | 2/2 | 1/1 | 1/1 | ||||
Stephen Hughes9 | 8/9 | 1/1 | |||||
Lee Raybould | 8/9 | 1/1 |
Role | Responsibilities |
Chair David Thorburn | • Provide leadership to the Board and to safeguard and promote the long-term success and sustainability of the Group in the interests of past and future members and customers. • Establish a programme of work for the Board, ensuring they are appropriately focused on strategy, performance, culture and risk management matters. • Empower Board members to challenge issues openly, and encourage and manage vigorous debate in order to reach effective decisions. • Demonstrate ethical leadership and uphold the highest standards of integrity and probity, setting clear expectations concerning the Group’s culture, values and behaviour, including emphasising putting members and customers first principles. • Build an effective and diverse Board reflecting an appropriate balance of skills and experience given the Group’s current and future activities, including leading on policies for Board member training and development. • Ensure effective communication with all stakeholder groups and that the Group’s obligations to and interests of its stakeholders are known and understood by the Board. • Facilitating the Group Chief Executive’s relationship with the Board and providing support to the Group Chief Executive. |
Deputy Chair and Senior Independent Director Jo Kenrick | • Deputise for the Chair where necessary. • Work closely with the Chair, act as a sounding board and provide support in the delivery of the directors' objectives. • Serve as a trusted intermediary for the directors when necessary, including addressing any issues they feel have not been dealt with adequately. • Lead an annual process to review the Chair's performance and lead succession planning for the Chair of the Board’s role, chairing the Board Nominations & Governance Committee when it considers Chair succession. |
Independent non– executive directors Iraj Amiri Jane Leach Caroline Marsh Shamira Mohammed Brendan O’Connor Mark Parker Iain Plunkett Martin Stewart | • Safeguard and promote the long-term success and sustainability of the Group in the interests of past and future members and customers. • Constructively challenge and help develop proposals on strategy and oversee the executive directors’ implementation of the agreed strategy. • Scrutinise the performance of management in meeting agreed goals and objectives, and monitor ongoing performance against such goals. • Satisfy themselves that the integrity of financial information, financial controls and systems of risk management are robust and defensible. • Complement the skills and experience of the executive directors, in particular by providing to the Board a range of knowledge, experience and insight. |
Role | Responsibilities |
Chief Executive (CEO) Stephen Hughes | • Responsible for the day-to-day running of the Group and accountable to the Board for the Group’s financial and operational performance. • Responsible for providing leadership and direction to and developing the vision and strategy of the Group, having regard to the duty to promote the success of the Group in the interests of members, colleagues, customers and key stakeholders. • Communicate the vision, strategy and performance of the Society to members, employees, regulators and other stakeholders. • Build and lead an effective Executive team to manage the Group in the longer-term interests of its members and customers. • Ensure that effective succession and development plans are in place and implemented for all key executive roles. • Lead the Executive team to successfully deliver agreed plans, objectives and targets. • Monitor the effective implementation of policies and procedures for the induction, training and professional development of all persons performing designated senior management functions on behalf of the Society. |
Chief Financial Officer (CFO) Lee Raybould | • With the Chief Executive and Executive team, ensure the development and implementation of the Group’s corporate plans, strategies and policies. • Ensure that the Group is appropriately resourced to meet its strategic aims and objectives, with regular reviews of performance against objectives. • Ensure the Group remains well funded and has sufficient liquidity to meet internal and regulatory limits. • Ensure that plans are in place to meet the financial performance targets agreed with the Chief Executive and the Board. • Ensure effective financial control, management and information are in place to support other business areas. • Manage the Group’s capital effectively, ensuring capital is managed within agreed risk appetites. • Provide leadership of the Group, and the Finance function in particular, with a framework of prudent and effective controls which enable risk to be assessed and managed. |
Role | Expected time commitment |
Chair | Approximately 120 days per year. |
Deputy Chair & Senior Independent Director | As is required to fulfil the role. |
Non-Executive Director | Average time commitment of 35 days per year. |
Committee Chair | Board Risk Committee Chair: |
Approximately 12 days per year in addition to the time spent on normal non-executive director responsibilities. | |
Board Audit Committee Chair: | |
Approximately 10–12 days per year in addition to the time spent on normal non-executive director responsibilities. | |
Board Remuneration Committee Chair: | |
Approximately 10 days per year in addition to the time spent on normal non-executive director responsibilities. | |
Board Nominations & Governance Committee Chair: | |
Approximately 6 days per year in addition to the overall time commitment required of the Chair. | |
Board Change Committee Chair: | |
Approximately 10 days per year in addition to the time spent on normal non-executive director responsibilities. |
Name | Role | Change |
Caroline Marsh | Non-Executive Director | Appointed January 2025 |
Mark Parker | Non-Executive Director | Appointed January 2025 |
Jane Leach | Non-Executive Director | Appointed October 2025 |
Membership | Member since |
David Thorburn1 | 2022 |
Jo Kenrick | 2018 |
Caroline Marsh2 | 2025 |
Iain Plunkett 3 | 2025 |
Membership | Member since |
Martin Stewart | 2018 |
Iraj Amiri | 2018 |
Iain Plunkett | 2024 |
Caroline Marsh1 | 2025 |
Jane Leach2 | 2025 |
Membership | Member since |
Jane Leach1 | 2025 |
Iraj Amiri2 | 2018 |
Shamira Mohammed | 2019 |
Mark Parker3 | 2025 |
Martin Stewart | 2018 |
Membership | Member since |
Mark Parker1 | 2025 |
Iain Plunkett2 | 2024 |
Martin Stewart | 2023 |
Membership | Member since |
Caroline Marsh1 | 2025 |
Jo Kenrick2 | 2017 |
Shamira Mohammed | 2023 |
David Thorburn | 2022 |
(Audited) | Fixed remuneration | Variable remuneration | Total remuneration £000 | |||||
Base salary £000 | Taxable benefit £000 | Pension allowance1 £000 | Total fixed £000 | Annual Incentive Plan £000 | Integration & Retention Award £000 | Total variable £000 | ||
2025 | ||||||||
Stephen Hughes | 800 | 10 | 80 | 890 | 592 | 700 | 1,292 | 2,182 |
Lee Raybould | 575 | 13 | 58 | 646 | 425 | 475 | 900 | 1,546 |
Total | 1,375 | 23 | 138 | 1,536 | 1,017 | 1,175 | 2,192 | 3,728 |
(Audited) | Fixed remuneration | Variable remuneration | Total remuneration £000 | |||||
Base salary £000 | Taxable benefit £000 | Pension allowance1 £000 | Total fixed £000 | Success Share £000 | ExVPP £000 | Total variable £000 | ||
2024 | ||||||||
Stephen Hughes | 671 | 10 | 67 | 748 | 107 | 361 | 468 | 1,216 |
Lee Raybould | 464 | 12 | 46 | 522 | 74 | 245 | 319 | 841 |
Total | 1,135 | 22 | 113 | 1,270 | 181 | 606 | 787 | 2,057 |
Executive director | Effective 1 January 2025 £ | Effective 1 April 2024 £ | % increase |
Stephen Hughes | 800,000 | 700,000 | 14.3% |
Lee Raybould | 575,000 | 475,000 | 21.1% |
Balanced Scorecard - 2025 Plan | Performance target range | Performance result | Performance relative to target range | |
People and societal impact | ||||
Employee Engagement1 | 67% - 73% Trust (Recognised) | 76% | Exceed Target | |
Environmental, Social and Governance measures | Qualitative and quantitative assessment 2 | Assessment against these outcome measures rated overall as Achieved Target | ||
Best at mortgages and savings | ||||
Mortgage balance growth3 | -1% - +1% | 1.0% | Achieved Target | |
Net Promoter Score4 | +71 - +77 | +75 | Achieved Target | |
Savings Rate Premium | 0.70% - 0.80% | 0.86% | Exceeded Target | |
Key transformation and capability | ||||
Key capability delivery including: digitisation, mortgages and integration5 | Qualitative and quantitative assessment | Assessment against these outcome measures rated overall as Exceeded Target | ||
Financial plan delivery | ||||
Group cost/ investment budget | £800m - £840m | £814m | Achieved Target | |
Group underlying profit before tax6 | £248m - £304m | £374m | Exceeded Target | |
Group UK leverage ratio within appetite | 4.25% - 4.75% | 4.6% | Achieved Target | |
Individual objectives: | ||||
3 main individual objectives | Chair of Board/Chief Executive assessment | |||
Stephen Hughes individual goals | ||
Delivery of year one integration and detailed planning of future transition states. | All 2025 key integration milestones delivered. Integration costs for 2025 below budget and synergies exceeded targets. Strong colleague engagement sustained. | Exceeded target performance |
Development of Group strategy including long-term ambitions and performance measures for short-, mid- and long-term time horizons. | Group strategy developed and approved by Board. Plan signed off, setting out capability road map over three time horizons: 2026-7 perform, 2028-30 transform and 2030+ scale. Purpose, customer missions and values launched to all colleagues. | |
Development of approach to customer ecosystem replacement. | Path in place to deliver requirements definition, architecture review, capability assessment, vendor selection and infrastructure. |
Lee Raybould individual goals | ||
Lead development of the Group financial strategy. Deliver the 2025 financial plan, including capital build. | Financial strategy shaped to support Group strategy. Strong financial plan delivery in 2025, exceeding plan profit, controlling costs and delivering capital plan. Significant contribution to strategy development. | Exceeded target performance |
Integrate the Finance functions safely, embedding best practice, delivering efficiency and enhancing diversity. | Teams brought together, processes working effectively and policies harmonised. Strong colleague engagement and diversity is building. | |
Sponsor the delivery of technology integration to time, scope and cost including regulatory reporting and Group general ledger alignment. | Five projects incepted, all running in line with approved value cases. |
Performance condition | Weighting |
Franchise build based on the growth in active account volumes. | 30% |
Integration and transformation measured through delivery of financial and non-financial milestones. | 40% |
Financial plan delivery measured through our leverage ratio and our cost/income ratio. | 30% |
2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | |||||||||||||||
Annual Incentive Plan | 100% cash | Performance period | 100% cash | ||||||||||||||||||
Integration and Retention Award | 33.3% cash | Performance period | 33.3% cash | ||||||||||||||||||
33.3% deferred for one year | 33.3% SEI | ||||||||||||||||||||
33.3% deferred for two years | 33.3% SEI | ||||||||||||||||||||
Long-term Incentive Plan | 100% Share equivalent instruments | Pre-grant performance period | Performance period | 50% SEI | 50% released | ||||||||||||||||
50% SEI | 50% released | ||||||||||||||||||||
2025 £m | 2024 £m | Change % | |
Total assets | 88,239 | 64,031 | 37.8 |
Total employee remuneration | 344 | 169 | 103.6 |
Profit after tax | 812 | 247 | 228.7 |
20251 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
% | % | % | % | % | % | % | % | % | % | |
Annual Incentive Plan bonus as a percentage of maximum | 74 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
LTIP as a percentage of maximum | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | 63 | 63 |
Annual Success Share as a percentage of maximum | n/a | 80 | 95 | 90 | 75 | 40 | 50 | 55 | 60 | 70 |
ExVPP as a percentage of maximum | n/a | 96.5 | 96.5 | 85.5 | 75 | 40 | 45 | 50 | 60 | 65 |
25th percentile £ | Median £ | 75th percentile £ | |
Total pay and benefits | 33,179 | 45,072 | 66,089 |
Salary | 28,249 | 37,088 | 50,938 |
Year | Method | 25th percentile £ | Median £ | 75th percentile £ |
2025 | Option A | 66:1 | 48:1 | 33:1 |
2024 | Option A | 38:1 | 28:1 | 19:1 |
2023 | Option A | 35:1 | 26:1 | 17:1 |
2022 | Option A | 32:1 | 25:1 | 16:1 |
2021 | Option A | 32:1 | 24:1 | 16:1 |
Base salary | |
Purpose and link to strategy | Salaries are set with reference to market rates of pay to enable the Group to recruit, retain and motivate high calibre leaders. |
Operation | Executive director salaries are normally reviewed annually, with any increases usually taking effect from 1 April, taking into account a number of factors, including but not limited to: • The scope and size of role. • The skills, experience and responsibility of the role holder. • The position of the role holder’s salary against wider market rates of pay and their individual performance. • Equal pay principles, the Group’s financial performance and the economic environment. • Increases awarded to the Group’s colleagues. Where an executive director is to be promoted or where their role is to be expanded, the Group will review the salary and decide whether an adjustment is appropriate. |
Maximum potential | Any increases will generally be no higher than the average increases applied to the Group’s colleagues (in percentage terms). Increases may be made either above or below that level in exceptional circumstances, taking into account the factors outlined above. |
Performance metrics | Individual performance is considered when setting salaries. |
Consistency with other colleagues | The Group uses the same approach when setting salaries for all its colleagues and executive directors. |
Benefits (excluding pension) | |
Purpose and link to strategy | The Group provides a competitive benefits package to all its colleagues to support their physical, mental and financial wellbeing. |
Operation | Each executive director receives benefits that are in line with the external market. These may include a company car or cash alternative, private medical insurance, health screening, permanent health insurance and life insurance. |
Consistency with other colleagues | All colleagues receive permanent health insurance and life insurance, and many also receive private medical insurance. Executive directors do not receive any benefits that are unavailable to other colleagues within the Group. |
Pension | |
Purpose and link to strategy | The Group provides post-retirement financial security for all its colleagues at a cost that is sustainable for the Group over the long term and in line with market practice. |
Operation | Executive directors are eligible to participate in the defined contribution pension plan or they may be permitted to take a cash alternative in place of contributions. |
Maximum potential | Executive directors receive a pension contribution or cash alternative. This is 10% of base salary in line with the maximum potential for all colleagues. |
Consistency with other colleagues | All colleagues are eligible to join the Group’s defined contribution pension schemes, receiving contributions of up to 10%. |
Annual Incentive Plan (AIP) | |
Purpose and link to strategy | The AIP is a discretionary variable pay scheme that enables executive directors to share in the Group’s success in delivering against its strategy. It helps the Group to be competitive in attracting and retaining high calibre executives and ensures alignment with strategic priorities. |
Operation | Awards are determined by the Committee following the end of a one year performance period. Awards to executive directors are made in cash (as opposed to shares) and are subject to deferral and retention in line with regulatory requirements. Alongside awards made under the LTIP (and for 2025 the Integration and Retention Award), the payment, deferral and retention of all variable pay awards are determined at the time of award in compliance with regulatory requirements. To the extent that the minimum level of deferral is not met via the LTIP award (or for 2025 the Integration and Retention Award), a proportion of the AIP may be deferred in line with regulatory requirements. Any non-deferred portion is normally paid upfront following the end of the performance year. Where deferral applies, awards may be made in the form of a share equivalent instrument where necessary to meet the requirements of the Remuneration Code. The Group’s share equivalent instrument is currently based on leverage ratio and provides for both uplift and reduction of awards. In line with the new Remuneration Code, the Committee retains the discretion to pay interest on any deferred awards. The AIP is reviewed each year to ensure alignment to the strategic priorities and changes in regulation. In line with the new Remuneration Code, a 12 month retention period will no longer apply to deferred awards. |
Maximum potential | If the Group performs in line with its plans, the AIP scheme provides for an award of up to 50% of salary for executive directors. The maximum award of up to 100% of base salary at the date of grant can only be achieved by exceeding stretching upper targets for all measures. |
Performance metrics | The Group measures annual performance of the AIP against a mix of collective performance targets in the balanced scorecard that normally account for 70% of the total award, and up to three individual objectives that account for 30% of the total award. These goals are agreed with the Committee at the outset of the scheme year. |
Consistency with other colleagues | The plan is only available to executive directors and executive managers. To ensure alignment across the Group, the balanced scorecard which determines the all-colleague Success Share bonus will continue to determine the outcome of the AIP. |
Long Term Incentive Plan (LTIP) | |
Purpose and link to strategy | The LTIP helps to recruit and retain high calibre executives. Its design brings a long-term focus to reward sustained performance in delivering the Group’s strategy. Awards are made annually and only pay-out where appropriately stretching performance measures are met, normally measured over a three year period. |
Operation | LTIP awards are normally granted subject to the achievement of satisfactory performance over the year prior to grant and are then normally subject to a forward-looking three year performance period from the start of the financial year in which the grant is made. For each forward-looking performance measure, the Committee determines targets by reference to the Group’s long-term goals and sets a ‘threshold’, ‘target’ and ‘maximum’ level of award. Subject to the satisfaction of the performance conditions, vesting of LTIP awards will start following the end of the three year performance period. LTIP awards are made in cash (as opposed to shares) and are subject to deferral and retention in line with regulatory requirements. To comply with the UK Corporate Governance Code, LTIP awards made to executive directors will normally be released no earlier than five years from the date of grant. The Remuneration Code requires that 50% of variable pay is made in shares or, in the case of a non-listed business like the Group, a share equivalent instrument. The Group's share equivalent instrument is currently based on leverage ratio and provides for both uplift and reduction of awards. The plan is reviewed each year to ensure alignment to the strategic priorities and changes in regulation. |
Maximum potential | The LTIP scheme provides for an award of up to 50% of salary for executive directors for on target performance and 25% at the threshold level of performance. The maximum award (up to 100% of base salary at the date of grant for executive directors) can only be achieved by exceeding stretching upper targets for all measures. |
Performance metrics | The LTIP incentivises sustainable long-term performance and alignment with member interests. The Committee will usually consider both Group and individual performance over the pre-grant performance period when determining the level of LTIP awards that may be granted. This ensures that the granting of awards is sustainable based on the Group’s performance and justified on the basis of individual performance, conduct and behaviours. Forward-looking performance will be measured normally over a three year period against a long- term scorecard set to align with the long-term objectives of the Group. The performance metrics will normally reflect a balance of financial and non-financial measures linked to the Group’s long- term goals and be subject to the satisfaction of risk and individual performance and regulatory obligations. The measures are agreed with the Committee at the outset of the scheme year and will be disclosed in the Remuneration Report for the relevant year. |
Consistency with other colleagues | The LTIP is only available to executive directors and executive managers. |
Integration and Retention Award - 2025 only | |
Purpose and link to strategy | The Integration and Retention Award helps to retain high calibre executives during a period of substantial change following the acquisition of The Co-operative Bank and in delivering the Group’s strategy. |
Operation | Awards are determined by the Committee based on performance to 31 December 2025. Awards are made in cash (as opposed to shares) and are subject to deferral to satisfy regulatory requirements. One third of the Integration and Retention Award will be paid upfront following the end of the performance year and two thirds will be deferred and paid in equal instalments over the following two years. This exceeds the minimum level of deferral required under the Remuneration Code. The Remuneration Code requires that 50% of variable pay is made in shares or, in the case of a non-listed business like the Group, a share equivalent instrument. In line with the new Remuneration Code, we will primarily use the LTIP and deferred pay to meet this instrument's requirement. The 12 month retention period will no longer apply to deferred pay. The share equivalent instrument is currently based on leverage ratio and provides for both uplift and reduction of awards. In line with the new Remuneration Code, the Committee may decide to pay interest on deferred pay. |
Maximum potential | If the Group performs in line with its integration plans, the Integration and Retention Award provides for an award of up to 100% of salary for participants. |
Performance metrics | The Group will measure the performance of the Integration and Retention Award against the delivery of financial and non-financial integration targets for each participant during 2025. No further grants of this award will be made. |
Consistency with other colleagues | The plan is only available to executives. |
Malus | Clawback | |
What is it? | The Committee can decide to reduce or cancel any variable pay award before the payment has been made. | The Committee may decide that an individual must repay part or all of a variable pay award after the payment has been made. |
Which awards does it apply to? | Malus applies to any payments under all our variable pay plans. | Clawback applies to payments under all our variable pay plans, for up to seven years even if an individual leaves the Group’s employment. |
When would this be used? | Can be applied in circumstances including, but not limited to: • Reasonable evidence of misbehaviour or material error. • The Group suffering a material downturn in its financial performance. • The Group suffering a material failure of risk management. | Can be applied in circumstances including, but not limited to: • Reasonable evidence of misbehaviour or material error. • The Group or function suffering a material failure of risk management. • A material misstatement of the Group’s financial results, such that the payment made under the variable pay arrangement was greater than it would have been. |
Current membership | Member since |
Stephen Hughes1 | 2020 |
Lucy Becque2 | 2025 |
Lee Raybould | 2021 |
David Thorburn | 2022 |
Non-executive directors fees | |
Purpose and link to strategy | Non-executive director fees are set at a level that reflects market conditions and is sufficient to attract individuals with appropriate knowledge and experience. |
Operation | Fees are usually reviewed annually and amended to reflect market positioning and any change in responsibilities, with any increases usually taking effect from 1 April. Non-executive director fees are made up of a base fee, plus an additional supplement paid for additional roles or responsibilities or time commitments including chairing a Committee, Senior Independent Director and Deputy Chair. The Chair of the Board does not receive additional fees for roles carried out other than that of Chair. Non-executive directors may be eligible to receive reimbursement of expenses for travel and accommodation costs and tax thereof. |
Risk mitigation | Benchmarking non-executive director salaries against comparable financial services organisations ensures they are not excessive. Fees paid to non-executive directors are recommended by the NEDR Committee and approved by the Board as a whole. Non-executive directors do not participate in any variable pay plans. |
Maximum potential | Fees are based on the level of fees paid to non-executive directors serving on boards of similar- sized UK companies and the time commitment and contribution expected for the role. Non-executive directors receive a basic fee and an additional fee for further duties (for example, Chair of a Committee or Senior Independent Director responsibilities). |
Performance metrics | Not applicable. |
Audited information | Group & Society fees | Bank fees | Expense payments | Total fees and expense payments | Group & Society fees | Bank fees | Expense payments | Total fees and expense payments |
2025 | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 | 2024 | |
£000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
Non-executive directors: | ||||||||
David Thorburn 1 | 420 | — | 8 | 428 | 242 | — | 16 | 258 |
Iraj Amiri2 | 111 | 72 | 3 | 186 | 85 | — | 5 | 90 |
Jo Kenrick3 | 111 | 180 | 3 | 294 | 104 | — | 2 | 106 |
Ewa Kerin4 | — | — | — | — | 25 | — | 1 | 26 |
Jane Leach5 | 25 | — | — | 25 | — | — | — | — |
Caroline Marsh6 | 115 | 69 | 3 | 187 | — | — | — | — |
Shamira Mohammed7 | 90 | — | 1 | 91 | 66 | — | 1 | 67 |
Vanessa Murden8 | — | — | — | — | 11 | — | — | 11 |
Brendan O'Connor9 | 90 | 72 | 3 | 165 | 74 | — | 5 | 79 |
Mark Parker10 | 90 | 56 | 7 | 153 | — | — | — | — |
Iain Plunkett11 | 115 | — | 7 | 122 | 45 | — | 1 | 46 |
Martin Stewart 12 | 115 | 66 | 6 | 187 | 85 | — | 6 | 91 |
Total | 1,282 | 515 | 41 | 1,838 | 737 | — | 37 | 774 |
Group & Society fees 2025 £000 | Bank fees 2025 £000 | |
Chair of the Board | 420 | 180 |
Base fee | 90 | 56 |
Deputy Chair of the Board1 | 21 | 10 |
Senior Independent Director1 | 21 | 10 |
Chair of Remuneration Committee | 25 | 16 |
Chair of Board Audit Committee | 25 | 16 |
Chair of Board Risk Committee | 25 | 16 |
Chair of Board Change Committee | 25 | 0 |
Number of votes | % votes cast | |
Annual Remuneration Report | ||
Votes cast for | 64,369 | 92.4 |
Votes cast against | 5,059 | 7.6 |
Number of votes | % votes cast | |
Remuneration Policy | ||
Votes cast for | 64,100 | 92.7 |
Votes cast against | 5,306 | 7.3 |
Audit scope | • On 1 January 2025, the Society acquired The Co-operative Bank Holdings p.l.c. ("the Bank"). Therefore, this is the first year in which the results of The Co-operative Bank Holdings p.l.c. and its subsidiaries have been incorporated into the Group. We performed audit procedures over all material account balances and financial information of the Coventry Building Society, The Co-operative Bank Holdings p.l.c., The Co- operative Bank p.l.c. ("The Co-operative Bank") and Godiva Mortgages Limited due to their size and significance to the Group; and • For four further reporting entities, namely ITL Mortgages Limited, Coventry Building Society Covered Bonds LLP, Coventry Godiva Covered Bonds LLP and Economic Master Issuer plc we performed audit procedures over one or more financial statement line items. |
Key audit matters | • The application of key judgements and assumptions in relation to applying expected credit loss provisioning on loans and advances to customers (Group and Society); • Completeness and accuracy of hedge accounting consolidation adjustments (Group); • Recognition and measurement of the deferred tax asset relating to the Bank's brought forward trading losses (Group); and • Measurement of the gain on acquisition of The Co-operative Bank Holdings p.l.c. (Group). |
Materiality | • Overall Group materiality: £18.0 million (2024: £16.2 million), based on 5% of underlying profit before tax (2024: 5% of profit before tax). • Overall Society materiality: £13.0 million (2024: £9.3 million), based on 0.5% of total equity (2024: 5% of profit before tax). • Group performance materiality: £13.5 million (2024: £12.1 million). • Society performance materiality: £9.75 million (2024: £7.0 million). |
Key audit matter | How our audit addressed the key audit matter | |
The application of key judgements and assumptions in relation to applying expected credit loss provisioning on loans and advances to customers (Group and Society) | ||
The Group holds £44 million (2024: £24 million) of expected credit loss (‘ECL’) provisions against loans and advances to customers in accordance with IFRS 9 against total outstanding balances of £72,928 million (2024: £51,825 million). Of this balance, the Group holds £7 million of ECL provisions for its commercial lending portfolio, with £5 million of this in relation to its individually assessed provisions. The Society holds £13 million (2024: £11 million) of ECL provisions against loans and advances to customers with total outstanding balances of £33,921 million (2024: £33,433 million). The determination of ECL provisions is inherently judgemental and involves setting assumptions using forward looking information reflecting wider macro- economic trends, individual customer behaviours as well as individual recovery strategies for commercial loans, which can give rise to increased estimation uncertainty. For the audit of the Group, we focused our work on the areas of the methodology that we identified as most judgemental and where the risk to the financial statements is greatest, which is the valuation of collateral for stage 2 and stage 3 commercial customers within the Group. For the audit of the Group and the Society, we focused our work on the appropriateness of provision models and their ability to capture risk in the loan portfolio, due to the low level of provision coverage recorded. Detailed disclosures can be found in note 16. Associated accounting policies are detailed in note 1 and significant accounting judgements and estimates in note 2. The Audit Committee’s consideration of the matter is set out in the Board Audit Committee Report. | We have assessed the design and implementation of controls over the estimation of ECL. With the assistance of our credit risk modelling specialists, we understood and critically assessed the ECL methodology and assumptions applied by reference to the accounting standards and industry practice. We understood and assessed the methodology applied by management in calculating the valuation of collateral for its commercial customers. Our testing over the Group and Society's mortgage ECL included a combination of controls and substantive testing, including using our credit risk modelling specialists to perform the following: • Reviewed and challenged key model monitoring outputs and independently replicated the ECL model logic. • Assess the appropriateness of significant assumptions and methodologies used for ECL models, in particular, those underpinning probability of default and loss given default for the mortgage book. Our testing over the Group's commercial ECL included: • With the assistance of our real estate valuations experts, we tested a sample of higher risk customer collateral valuations to assess they are valued appropriately and reflect the current economic environment. • We have reviewed the work performed by management's experts and critically evaluated the assumptions they have applied. • We ran sensitivities on the commercial portfolio to systematic declines in collateral values by modelling wholesale valuation reductions across the book, to identify any risk that could result in the ECL recorded by the Group in the year to be materially misstated. • We performed a full replication of the commercial modelled ECL to confirm that it was mathematically accurate. We have reviewed the disclosures to ensure compliance with accounting standards and agreed the disclosures to supporting evidence. | |
Key audit matter | How our audit addressed the key audit matter | |
Completeness and accuracy of hedge accounting consolidation adjustments (Group) | ||
As part of the acquisition of The Co-operative Bank Holdings p.l.c., the Group acquired a portfolio of derivative assets and designated them in hedge accounting relationships to minimise accounting volatility. The acquisition value of these derivatives requires adjustments to be made to reflect hedge accounting principles under accounting standards. These adjustments are designed to ensure appropriate hedge accounting adjustments are recognised over time. We focused on this matter because of the judgement and complexity involved in the application of accounting standards and in determining the impact of hedge accounting on the income statement. Detailed disclosures can be found in notes 9 and 26. Associated accounting policies are detailed in note 1. The Audit Committee's consideration of the matter is set out in the Board Audit Committee Report. | We have assessed the design and implementation of controls over the hedge accounting adjustments in respect of The Co-operative Bank's acquired derivatives at Group level. We assessed the reasonableness of the designation of a hedge relationship under accounting standards at a Group level. We challenged management on the completeness and appropriateness of adjustments made to calculate the amounts recognised in the income statement. We evaluated the reasonableness of the run-off profile of the hedge by comparing it to the run-off profile of the underlying hedged item. We tested the accuracy of input data used to calculate the adjustments and recalculated the amounts recognised in the income statement. We reconciled management's calculation to the accounting books and records. We have reviewed the disclosures to ensure compliance with accounting standards and agreed the disclosures to supporting evidence. | |
Recognition and measurement of the deferred tax asset relating to the The Co-operative Bank's brought forward trading losses (Group) | ||
As at 31 December 2025, the Group has recorded £243 million of deferred tax assets relating to brought forward trading losses (2024: Nil). Deferred tax assets are recognised on the The Co- operative Bank's brought forward losses to the extent it is probable that there will be future taxable profits generated on the same trade which gave rise to the losses. Management are required to make an estimate of the amount and timing of future taxable profits, and judgements relating to the continuity of The Co-operative Bank's trade in light of the Group's future strategic plans. Since this is inherently uncertain we focused on this as a key audit matter. We focused on the reasonableness of forecast future taxable profits in the strategic plan, as well as the estimation of taxable profits beyond the strategic planning period. Detailed disclosures can be found in note 23. Associated accounting policies are detailed in note 1 and significant accounting judgements and estimates in note 2. The Audit Committee's consideration of the matter is set out in the Board Audit Committee Report. | With the help of tax specialists, we evaluated management's methodology for assessing the recognition of and recoverability of deferred tax assets, including the ability to offset certain deferred tax liabilities and deferred tax assets. Where deferred tax assets are recognised our evaluation of these future profits considered both the business model and the applicable UK tax legislation. We critically assessed the future profit forecasts within the board approved strategic plan for the Group, along with the supporting assumptions, testing that the assumptions were reasonable. We assessed the consistency of the forecasts used to justify the recognition of deferred tax assets to those used elsewhere in the business, including those used in the going concern assessment. In doing this, we verified that the forecasts did not include taxable profit growth that could not be demonstrated as probable, including critically evaluating risks and contrary evidence around the projected future profits. We also performed sensitivity analysis to understand whether reasonably possible changes to these assumptions could lead to a material change in the recognised asset. We considered the length of the forecasts that it would be appropriate to use in measuring the deferred tax asset, with reference to The Co-operative Bank's historic performance and levels of forecasting accuracy, as well as the haircuts applied to the outer years of the forecast. We tested the mathematical accuracy of the calculations used in determination of deferred tax assets. We have reviewed the disclosures to ensure compliance with accounting standards and agreed the disclosures to supporting evidence. | |
Key audit matter | How our audit addressed the key audit matter | |
Measurement of the gain on acquisition of The Co-operative Bank Holdings p.l.c. (Group) | ||
On 1 January 2025, the Group acquired the entire share capital of The Co-operative Bank Holdings p.l.c.. Consideration of £745 million was paid for the acquisition in exchange for net assets with a fair value of £1,329 million, resulting in a gain on bargain purchase of £584 million being recognised in the Group’s income statement. The acquisition was accounted for as a business combination using the acquisition method in accordance with IFRS 3 ‘Business combinations’. The identifiable assets acquired, and liabilities assumed were recorded at their acquisition-date fair values. IFRS 3 also allows a period of not more than 12 months from the acquisition date in which an acquirer may adjust the provisional amounts recognised in a business combination. Purchase price allocation (‘PPA’) adjustments were recognised on a range of assets and liabilities including loans and advances to customers and the Bank’s deposit book in the form of a core deposit intangible (the intangible benefit arising in respect of the Bank having a stable source of funding from depositors). Management engaged an external expert to determine the fair value of certain assets, including intangible assets and liabilities on the acquisition date balance sheet. Deriving the Group’s fair value estimates involves significant judgement and there is a high degree of estimation uncertainty in the fair value adjustment of the acquired Loans and advances to customers and the valuation of the core deposit intangible. We focused on these as a Key Audit Matter. The transaction also gave rise to a gain on bargain purchase and, as such, we focused on the completeness of the purchase price allocation accounting based on the activities of the Bank. Detailed disclosures can be found in note 38. Associated accounting policies are detailed in note 1 and significant accounting judgements and estimates in note 2. The Audit Committee’s consideration of the matter is set out in the Board Audit Committee Report. | We reviewed the Sale Purchase Agreement, regulatory approvals and related documentation to understand the structure and terms of the acquisition. We obtained an understanding of management’acquisition accounting process and assessed whether the accounting treatment associated with the assets and liabilities acquired was in accordance with IFRS 3 'Business Combinations'. We assessed the competence and objectivity of managements expert, and we engaged our own valuations expert to challenge management's assumptions. We challenged the completeness of management’s identification of intangible assets by reviewing the Sale and Purchase Agreement and related documentation for indicators of separately identifiable intangibles. With the support of our valuation experts, we assessed the appropriateness of the valuation methodologies, the reasonableness of significant assumptions applied and re- performed the valuation of the core deposit intangible. Our procedures focused on the alternative cost of funds assumption and the internal consistency of assumptions applied between the valuation of loans and advances to customers and the core deposit intangible. We assessed the appropriateness of management's amortisation approach for the core deposit intangible by comparing the amortisation profile to the expected period of benefit of the acquired deposits. For loans and advances to customers, we focused on the assumptions with the most material impact on fair value, namely the cost of debt component of the discount rate and the assumed run-off of the acquired mortgage portfolio following the end of the fixed term. We assessed the reasonableness of these assumptions by corroborating recent retail and wholesale funding costs and benchmarking them against market rates and comparable institutions, and we re-performed fair value calculations for a sample of loans. We tested the completeness and accuracy of data used in the valuation models to underlying records. We challenged management on the overall recognition of a gain on bargain purchase by considering the commercial rationale for the transaction, market precedent for banks to trade below their book value, the specific factors that led to this transaction and evaluating the completeness of the identified acquisition accounting adjustments. We validated the consideration paid to bank statements and legal documents. We evaluated the fair value of purchase consideration at the acquisition date and considered subsequent evidence arising during 2025. We instructed the Bank component team to audit the acquisition date balance sheet. We inspected their working papers and summary conclusions reported to the Audit Committee of the Bank. We performed stand-back procedures during the measurement period to assess whether post-acquisition information indicated the provisional fair values required adjustment. We have reviewed the disclosures to ensure compliance with accounting standards and agreed the disclosures to supporting evidence. | |
Group financial statements | Society financial statements | |
Overall materiality | £18.0 million (2024: £16.2 million). | £13.0 million (2024: £9.3 million). |
How we determined it | 5% of underlying profit before tax. | 0.5% of total equity. |
Rationale for benchmark applied | We determined that underlying profit before tax, excluding accounting impacts of the Bank acquisition, is the appropriate benchmark. This focuses on recurring earnings and removes accounting balances arising as part of the acquisition, including the gain on a bargain purchase recognised, and deal and integration costs. Management monitors the business on underlying profit before tax. In 2024 we adopted a materiality based on statutory profit before tax. | We determined that total equity is the appropriate benchmark for the Society in 2025. This reflects that the users' focus is on capital strength and balance sheet resilience rather than Society standalone profitability, particularly given the Society holds the majority of the capital in the Group and capital adequacy remains a key consideration post-acquisition of the Bank. In 2024 we adopted a materiality based on statutory profit before tax. |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Interest receivable and similar income | 4 | 2,683 | 3,138 | ||
Interest payable and similar charges | 5 | ( | ( | (2,317) | (2,642) |
Net interest income | 366 | 496 | |||
Fees and commissions receivable | 6 | 2 | 3 | ||
Fees and commissions payable | 7 | ( | ( | (9) | (9) |
Other operating income | 8 | 4 | 2 | ||
Losses from derivative financial instruments | 9 | ( | ( | (18) | (11) |
Total income | 345 | 481 | |||
Administrative expenses | 10 | ( | ( | (246) | (254) |
Acquisition & integration related costs | 10 | ( | ( | (58) | (26) |
Amortisation of intangible assets | 19 | ( | ( | (18) | (14) |
Depreciation of property, plant and equipment | 20 | ( | ( | (12) | (12) |
Impairment (charge)/ release on loans and advances to customers | 16 | ( | (2) | 11 | |
Gain on acquisition of a subsidiary | — | — | |||
Profit before tax | 9 | 186 | |||
Taxation | 17 | ( | 26 | (43) | |
Profit for the financial year | 35 | 143 |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Profit for the financial year | 35 | 143 | |||
Other comprehensive (expense)/ income | |||||
Items that will not be transferred to the income statement: | |||||
Remeasurement of defined benefit pension plan | ( | ( | (3) | (9) | |
Taxation | 17 | 1 | 2 | ||
Items that may be transferred to the income statement | |||||
Fair value through other comprehensive income investments: | |||||
Fair value movements taken to reserves | ( | 17 | (6) | ||
Amount transferred to the income statement | ( | (17) | 3 | ||
Taxation | 17 | — | 1 | ||
Cash flow hedges: | |||||
Fair value movements taken to reserves | ( | 39 | 27 | ||
Amount transferred to the income statement | ( | ( | (129) | (122) | |
Taxation | 17 | 24 | 27 | ||
Other comprehensive expense for the year, net of tax | ( | ( | (68) | (77) | |
Total comprehensive income/(expense) for the year, net of tax | (33) | 66 |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Assets | |||||
Cash in hand and balances with the Bank of England | 13 | 8,912 | 9,818 | ||
Loans and advances to credit institutions | 13 | 261 | 329 | ||
Debt securities | 14 | 440 | 442 | ||
Loans and advances to customers | 15 | 33,941 | 33,458 | ||
Hedge accounting adjustment | ( | 118 | (448) | ||
Derivative financial instruments | 26 | 424 | 1,082 | ||
Investment in equity shares | — | 9 | |||
Current tax assets | 8 | — | |||
Deferred tax assets | 23 | — | — | ||
Investments in Group undertakings | 18 | 19,462 | 17,591 | ||
Intangible assets | 19 | 48 | 55 | ||
Property, plant and equipment | 20 | 50 | 47 | ||
Other assets | 21 | — | 725 | ||
Prepayments and accrued income | 45 | 34 | |||
Pension benefit surplus | 22 | — | — | ||
Total assets | 63,709 | 63,142 | |||
Liabilities | |||||
Shares | 50,830 | 49,343 | |||
Customer accounts | 187 | 234 | |||
Deposits from banks | 24 | 2,055 | 3,932 | ||
Debt securities in issue | 25 | 5,615 | 4,930 | ||
Hedge accounting adjustment | ( | 7 | (68) | ||
Derivative financial instruments | 26 | 252 | 254 | ||
Current tax liabilities | — | 28 | |||
Deferred tax liabilities | 23 | 44 | 74 | ||
Accruals and deferred income | 81 | 57 | |||
Other liabilities | 32 | 1,703 | 1,574 | ||
Pension benefit obligation | 22 | 8 | 5 | ||
Subordinated liabilities | 28 | 254 | 15 | ||
Subscribed capital | 29 | 42 | 42 | ||
Total liabilities | 61,078 | 60,420 | |||
Equity | |||||
General reserve | 1,854 | 1,879 | |||
Other equity instruments | 30 | 665 | 665 | ||
Fair value through other comprehensive income reserve | ( | (1) | (1) | ||
Cash flow hedge reserve | 113 | 179 | |||
Total equity | 2,631 | 2,722 | |||
Total liabilities and equity | 63,709 | 63,142 |
Group | General reserve £m | Other equity instruments £m | Fair value through other comprehensive income reserve £m | Cash flow hedge reserve £m | Total £m |
As at 1 January 2025 | ( | ||||
Profit for the financial year | |||||
Net remeasurement of defined benefit plan | ( | ( | |||
Net movement in fair value through other comprehensive income reserve | |||||
Net movement in cash flow hedge reserve | ( | ( | |||
Total comprehensive income/(expense) | ( | ||||
Distribution to Additional Tier 1 capital holders | ( | ( | |||
As at 31 December 2025 | |||||
As at 1 January 2024 | |||||
Profit for the financial year | |||||
Additional Tier 1 Capital repurchased | ( | ( | ( | ||
Additional Tier 1 Capital issued | ( | ||||
Net remeasurement of defined benefit plan | ( | ( | |||
Net movement in fair value through other comprehensive income reserve | ( | ( | |||
Net movement in cash flow hedge reserve | ( | ( | |||
Total comprehensive income/(expense) | ( | ( | |||
Distribution to Additional Tier 1 capital holders | ( | ( | |||
As at 31 December 2024 | ( |
Society | General reserve £m | Other equity instruments £m | Fair value through other comprehensive income reserve £m | Cash flow hedge reserve £m | Total £m |
As at 1 January 2025 | 1,879 | 665 | (1) | 179 | 2,722 |
Profit for the financial year | 35 | — | — | — | 35 |
Net remeasurement of defined benefit plan | (2) | — | — | — | (2) |
Net movement in fair value through other comprehensive income reserve | — | — | — | — | — |
Net movement in cash flow hedge reserve | — | — | — | (66) | (66) |
Total comprehensive income/(expense) | 33 | — | — | (66) | (33) |
Distribution to Additional Tier 1 capital holders | (58) | — | — | — | (58) |
As at 31 December 2025 | 1,854 | 665 | (1) | 113 | 2,631 |
As at 1 January 2024 | 1,802 | 415 | 1 | 247 | 2,465 |
Profit for the financial year | 143 | — | — | — | 143 |
Additional Tier 1 Capital repurchased | (2) | (415) | — | — | (417) |
Additional Tier 1 Capital issued | (7) | 665 | 658 | ||
Net remeasurement of defined benefit plan | (7) | — | — | — | (7) |
Net movement in fair value through other comprehensive income reserve | — | — | (2) | — | (2) |
Net movement in cash flow hedge reserve | — | — | — | (68) | (68) |
Total comprehensive income/(expense) | 127 | 250 | (2) | (68) | 307 |
Distribution to Additional Tier 1 capital holders | (50) | — | — | — | (50) |
As at 31 December 2024 | 1,879 | 665 | (1) | 179 | 2,722 |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Cash flows from operating activities: | |||||
Profit before tax | 9 | 186 | |||
Adjustments for: | |||||
Expected credit loss provisions | 16 | ( | 2 | (11) | |
Depreciation and amortisation | 30 | 26 | |||
Interest on subordinated liabilities and subscribed capital | 14 | 6 | |||
Changes to fair value adjustment of hedged risk | 59 | 28 | |||
Gain on acquisition | 38 | ( | — | — | |
Other non-cash movements | ( | 207 | (28) | ||
Non-cash items included in profit before tax | ( | 312 | 21 | ||
Loans and advances to credit institutions | 50 | 642 | |||
Loans and advances to customers | ( | ( | (485) | (1,444) | |
Prepayments, accrued income and other assets | ( | 710 | (729) | ||
Changes in operating assets | ( | 275 | (1,531) | ||
Shares | 1,524 | 1,703 | |||
Customer accounts, deposits and other borrowings | ( | ( | (1,907) | (1,396) | |
Accruals and deferred income and other liabilities | 30 | 14 | |||
Changes in operating liabilities | ( | (353) | 321 | ||
Interest paid on subordinated liabilities and subscribed capital | ( | ( | (18) | (6) | |
Interest paid on lease liabilities | ( | — | — | ||
Taxation | ( | ( | (15) | — | |
Net cash flows from operating activities | ( | ( | 210 | (1,009) | |
Cash flows from investing activities | |||||
Net cash on acquisition of subsidiary | 38 | — | — | ||
Purchase of investment securities | ( | ( | (16) | (717) | |
Sale and maturity of investment securities and equities | 47 | 1,785 | |||
Purchase of property, plant and equipment and intangible assets | ( | ( | (26) | (26) | |
Net cash flows from investing activities | 5 | 1,042 | |||
Cash flows from financing activities | |||||
Distributions paid to Additional Tier 1 capital holders | ( | ( | (58) | (50) | |
Loans with connected undertakings | (1,428) | 400 | |||
Issuance of AT 1 Capital1 | — | 658 | |||
Repurchase of AT 1 Capital1 | ( | — | (417) | ||
Repurchase and repayment of debt securities | ( | ( | (850) | (430) | |
Principal elements of lease payments | ( | ( | (4) | (5) | |
Issue of debt securities | 1,201 | 1,324 | |||
Net cash flows from financing activities | (1,139) | 1,480 | |||
Net increase in cash | (924) | 1,513 | |||
Cash and cash equivalents at start of year | 9,818 | 8,305 | |||
Cash and cash equivalents at end of year | 13 | 8,894 | 9,818 |
Freehold and long leasehold buildings | Over a period of 50 years |
Leasehold adaptations | Shorter of remaining term of the lease and useful life |
Equipment, fixtures and fittings | Three to eight years |
Significant accounting policy judgements | Notes |
Determining a significant increase in credit risk (SICR) under IFRS 9 | 1 |
Significant accounting assumptions and estimates | |
Measurement of deferred tax assets in respect of future taxable profits | 23 |
Society sub-group 2025 £m | Bank sub-group 2025 £m | Consolidation 2025 £m | Group 2025 £m | |
Net interest income1 | 611 | 431 | 102 | 1,144 |
Other non-interest (expense)/ income | (21) | 52 | (90) | (59) |
Total income | 590 | 483 | 12 | 1,085 |
Administrative expenses | (301) | (372) | — | (673) |
Acquisition & integration related costs | (58) | (9) | — | (67) |
Amortisation and depreciation | (29) | (45) | (30) | (104) |
Impairment charge | (2) | (4) | (18) | (24) |
Gain on acquisition of a subsidiary | — | — | 584 | 584 |
Profit before tax | 200 | 53 | 548 | 801 |
Total assets | 64,618 | 24,981 | (1,360) | 88,239 |
Total liabilities | 60,962 | 23,629 | (641) | 83,950 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
On financial assets measured at amortised cost: | ||||
Loans and advances to customers | 2,795 | 1,846 | 1,262 | 1,145 |
Connected undertakings | — | — | 546 | 555 |
Interest on other liquid assets1 | 562 | 496 | 420 | 490 |
Interest and other income on debt securities measured at FVOCI | 96 | 60 | 7 | 56 |
Net income on financial instruments in a qualifying hedge relationship | 539 | 892 | 448 | 892 |
Total interest receivable and similar income calculated using the EIR method | 3,992 | 3,294 | 2,683 | 3,138 |
Interest income on derivatives not in a designated hedging relationship | 1 | — | — | — |
Total interest receivable and similar income | 3,993 | 3,294 | 2,683 | 3,138 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
On shares held by individuals | 1,844 | 1,935 | 1,844 | 1,935 |
On customer accounts | 400 | — | — | — |
On subscribed capital | 5 | 5 | 5 | 5 |
On other deposits and borrowings | ||||
Subordinated liabilities | 16 | 1 | 9 | 1 |
Debt securities in issue | 317 | 229 | 182 | 150 |
Loans from connected undertakings | — | — | 119 | 128 |
Other1 | 192 | 241 | 114 | 241 |
Net expense from hedging instruments | 74 | 204 | 42 | 182 |
Foreign currency losses | 1 | — | 2 | — |
Total interest payable and similar charges | 2,849 | 2,615 | 2,317 | 2,642 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Mortgage related administration fees | 8 | 3 | 2 | 2 |
Current accounts | 58 | — | — | — |
Credit cards | 7 | — | — | — |
Other fees and commissions | 2 | 1 | — | 1 |
Total | 75 | 4 | 2 | 3 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Mortgage related administration fees | 6 | 4 | 3 | 3 |
Current accounts | 31 | — | — | — |
Credit cards | 4 | — | — | — |
Other fees and commissions | 6 | 6 | 6 | 6 |
Total | 47 | 10 | 9 | 9 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Investment in equity shares | 5 | 2 | 3 | 2 |
Foreign exchange gains | 8 | — | — | — |
Other | 2 | — | 1 | — |
Total | 15 | 2 | 4 | 2 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Derivatives designated as fair value hedges | ||||
Losses on derivatives designated as fair value hedges | (753) | (119) | (625) | (119) |
Movement in fair value of hedged items attributable to hedged risk | 549 | (16) | 508 | (16) |
Derivatives designated as fair value hedges | (204) | (135) | (117) | (135) |
Derivatives designated as cash flow hedges | ||||
Interest rate | 108 | 126 | 108 | 126 |
Derivatives designated as cash flow hedges | 108 | 126 | 108 | 126 |
Losses on other derivatives | (6) | (2) | (9) | (2) |
Total | (102) | (11) | (18) | (11) |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Employee costs | ||||
Wages and salaries | 252 | 137 | 119 | 137 |
Social security costs | 33 | 15 | 18 | 15 |
Pension costs | 17 | 9 | 9 | 9 |
302 | 161 | 146 | 161 | |
Other expenses | ||||
Information systems | 162 | 52 | 35 | 52 |
Training, recruitment and other employee costs | 12 | 13 | 8 | 13 |
Premises and facilities | 21 | 9 | 10 | 9 |
Legal, professional and consultancy | 67 | 36 | 26 | 36 |
Marketing and communications | 16 | 9 | 12 | 9 |
Other operating expenses (include project costs) | 93 | 27 | 62 | 26 |
Intercompany management charge | — | — | (53) | (52) |
Total | 673 | 307 | 246 | 254 |
Acquisition and integration related costs | 67 | 26 | 58 | 26 |
Total administrative expenses | 740 | 333 | 304 | 280 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Audit of the Group and Society annual accounts | 1.3 | 1.4 | 1.3 | 1.4 |
Audit of Group subsidiaries | 2.6 | 0.2 | — | — |
Audit related assurance services | 0.3 | 0.1 | 0.3 | 0.1 |
Other non-audit services | 0.3 | 0.3 | 0.2 | 0.3 |
Total | 4.5 | 2.0 | 1.8 | 1.8 |
Group 2025 | Group 2024 | Society 2025 | Society 2024 | |
Full time | 4,598 | 2,358 | 2,957 | 2,358 |
Part time | 1,354 | 722 | 781 | 722 |
Total | 5,952 | 3,080 | 3,738 | 3,080 |
Head office and administrative centres | 5,052 | 2,516 | 3,190 | 2,516 |
Branches | 900 | 564 | 548 | 564 |
Total | 5,952 | 3,080 | 3,738 | 3,080 |
2025 | 2024 | |||||||
Group | Amortised cost £m | Fair value through other comprehensive income £m | Fair value through profit and loss £m | Total £m | Amortised cost £m | Fair value through other comprehensive income £m | Fair value through profit and loss £m | Total £m |
Financial assets | ||||||||
Cash and balances with the Bank of England | 11,948 | — | — | 11,948 | 9,893 | — | — | 9,893 |
Loans and advances to credit institutions | 383 | — | — | 383 | 329 | — | — | 329 |
Debt securities | 26 | 1,536 | 3 | 1,565 | — | 502 | — | 502 |
Loans and advances to customers | 72,936 | — | — | 72,936 | 51,801 | — | — | 51,801 |
Hedge accounting adjustment | 169 | — | — | 169 | (448) | — | — | (448) |
Derivative financial instruments | — | — | 533 | 533 | — | — | 1,084 | 1,084 |
Investment in equity shares | — | — | 5 | 5 | — | — | 9 | 9 |
Total financial assets | 85,462 | 1,536 | 541 | 87,539 | 61,575 | 502 | 1,093 | 63,170 |
Other non-financial assets | 700 | — | — | 700 | 861 | — | — | 861 |
Total assets | 86,162 | 1,536 | 541 | 88,239 | 62,436 | 502 | 1,093 | 64,031 |
Financial liabilities | ||||||||
Shares | 50,830 | — | — | 50,830 | 49,343 | — | — | 49,343 |
Customer accounts | 20,892 | — | — | 20,892 | 82 | — | — | 82 |
Deposits from banks | 3,009 | — | — | 3,009 | 3,932 | — | — | 3,932 |
Debt securities in issue | 8,307 | — | — | 8,307 | 6,543 | — | — | 6,543 |
Hedge accounting adjustment | 29 | — | — | 29 | (68) | — | — | (68) |
Derivative financial instruments | — | — | 320 | 320 | — | — | 305 | 305 |
Subordinated liabilities | 248 | — | — | 248 | 15 | — | — | 15 |
Subscribed capital | 42 | — | — | 42 | 42 | — | — | 42 |
Total financial liabilities | 83,357 | — | 320 | 83,677 | 59,889 | — | 305 | 60,194 |
Other non-financial liabilities | 273 | — | — | 273 | 209 | — | — | 209 |
Total liabilities | 83,630 | — | 320 | 83,950 | 60,098 | — | 305 | 60,403 |
2025 | 2024 | |||||||
Society | Amortised cost £m | Fair value through other comprehensive income £m | Fair value through profit and loss £m | Total £m | Amortised cost £m | Fair value through other comprehensive income £m | Fair value through profit and loss £m | Total £m |
Financial assets | ||||||||
Cash and balances with the Bank of England | 8,912 | — | — | 8,912 | 9,818 | — | — | 9,818 |
Loans and advances to credit institutions | 261 | — | — | 261 | 329 | — | — | 329 |
Debt securities | — | 440 | — | 440 | — | 442 | — | 442 |
Loans and advances to customers | 33,941 | — | — | 33,941 | 33,458 | — | — | 33,458 |
Hedge accounting adjustment | 118 | — | — | 118 | (448) | — | — | (448) |
Derivative financial instruments | — | — | 424 | 424 | — | — | 1,082 | 1,082 |
Loans with Group undertakings | 18,263 | — | 446 | 18,709 | 17,583 | — | — | 17,583 |
Investment in equity shares | — | — | — | — | — | — | 9 | 9 |
Total financial assets | 61,495 | 440 | 870 | 62,805 | 60,740 | 442 | 1,091 | 62,273 |
Other non-financial assets | 904 | — | — | 904 | 869 | — | — | 869 |
Total assets | 62,399 | 440 | 870 | 63,709 | 61,609 | 442 | 1,091 | 63,142 |
Financial liabilities | ||||||||
Shares | 50,830 | — | — | 50,830 | 49,343 | — | — | 49,343 |
Customer accounts | 187 | — | — | 187 | 234 | — | — | 234 |
Deposits from banks | 2,055 | — | — | 2,055 | 3,932 | — | — | 3,932 |
Debt securities in issue | 5,408 | — | 207 | 5,615 | 4,930 | — | — | 4,930 |
Hedge accounting adjustment | 7 | — | — | 7 | (68) | — | — | (68) |
Derivative financial instruments | — | — | 252 | 252 | — | — | 254 | 254 |
Subordinated liabilities | 15 | — | 239 | 254 | 15 | — | — | 15 |
Subscribed capital | 42 | — | — | 42 | 42 | — | — | 42 |
Total financial liabilities | 58,544 | — | 698 | 59,242 | 58,428 | — | 254 | 58,682 |
Other non-financial liabilities | 1,836 | — | — | 1,836 | 1,738 | — | — | 1,738 |
Total liabilities | 60,380 | — | 698 | 61,078 | 60,166 | — | 254 | 60,420 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Cash and balances at central banks | 11,948 | 9,893 | 8,912 | 9,818 |
Loans and advances to credit institutions repayable in 3 months or less | 56 | — | (18) | — |
Total cash and cash equivalents | 12,004 | 9,893 | 8,894 | 9,818 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Amortised cost: | ||||
Mortgage backed securities | 26 | — | — | — |
Total amortised cost | 26 | — | — | — |
Fair value through other comprehensive income: | ||||
UK Government investment securities | 789 | 483 | 440 | 423 |
Other listed transferable debt securities | 747 | 19 | — | 19 |
Total fair value through other comprehensive income | 1,536 | 502 | 440 | 442 |
Fair value through profit and loss: | ||||
Mortgage backed securities | 3 | — | — | — |
Total fair value through profit and loss | 3 | — | — | — |
Total debt securities | 1,565 | 502 | 440 | 442 |
2025 | 2024 | |||||||
Group | Amortised cost £m | FVOCI £m | FVTPL £m | Total £m | Amortised cost £m | FVOCI £m | FVTPL £m | Total £m |
As at 1 January 2025 | — | 502 | — | 502 | — | 1,564 | — | 1,564 |
Recognised on acquisition | 47 | 1,587 | 3 | 1,637 | — | — | — | — |
Additions | — | 182 | — | 182 | — | 844 | — | 844 |
Maturities and disposals | (21) | (765) | — | (786) | — | (1,902) | — | (1,902) |
Change in fair value | — | 30 | — | 30 | — | (4) | — | (4) |
As at 31 December 2025 | 26 | 1,536 | 3 | 1,565 | — | 502 | — | 502 |
2025 | 2024 | |||||||
Society | Amortised cost £m | FVOCI £m | FVTPL £m | Total £m | Amortised cost £m | FVOCI £m | FVTPL £m | Total £m |
As at 1 January 2025 | — | 442 | — | 442 | — | 1,515 | — | 1,515 |
Additions | — | 16 | — | 16 | — | 718 | — | 718 |
Maturities and disposals | — | (35) | — | (35) | — | (1,787) | — | (1,787) |
Change in fair value | — | 17 | — | 17 | — | (4) | — | (4) |
As at 31 December 2025 | — | 440 | — | 440 | — | 442 | — | 442 |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Retail | |||||
Secured: owner-occupier | 50,758 | 32,422 | 32,663 | 32,114 | |
Secured: buy to let | 20,933 | 19,374 | 1,258 | 1,319 | |
Unsecured1 | 223 | — | — | — | |
Business and commercial | 1,014 | — | — | — | |
Total Gross loans and advances to customers (contractual amounts) | 72,928 | 51,796 | 33,921 | 33,433 | |
Impairment | 16 | (44) | (24) | (13) | (11) |
Total Net loans and advances to customers (contractual amounts) | 72,884 | 51,772 | 33,908 | 33,422 | |
EIR, fair value and other adjustments | 52 | 29 | 33 | 36 | |
Total | 72,936 | 51,801 | 33,941 | 33,458 |
Notes | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Repayable in less than one year | 4,796 | 3,636 | 2,109 | 2,071 | |
Repayable in more than one year | 68,184 | 48,189 | 31,845 | 31,398 | |
72,980 | 51,825 | 33,954 | 33,469 | ||
Impairment provision | 16 | (44) | (24) | (13) | (11) |
Total | 72,936 | 51,801 | 33,941 | 33,458 |
Notes in issue 1 | |||||
2025 Group | Mortgages pledged £m | Held by third parties £m | Held by the Group pledged £m | Held by the Group unpledged £m | Total £m |
Loans and advances to customers | |||||
Covered bond programme – Coventry Building Society Covered Bonds LLP | 7,703 | 3,674 | 1,132 | 218 | 5,024 |
Covered bond programme – Coventry Godiva Covered Bonds LLP | 4,294 | — | — | 3,000 | 3,000 |
Covered bond programme – Moorland Covered Bonds LLP | 2,519 | 500 | 455 | 545 | 1,500 |
Securitisation programme – Economic Master Issuer plc | 2,332 | 1,730 | — | — | 1,730 |
Whole mortgage loan pools2 | 3,857 | — | 1,776 | 2,081 | 3,857 |
Total | 20,705 | 5,904 | 3,363 | 5,844 | 15,111 |
Notes in issue 1 | |||||
2024 Group | Mortgages pledged £m | Held by third parties £m | Held by the Group pledged £m | Held by the Group unpledged £m | Total £m |
Loans and advances to customers | |||||
Covered bond programme – Coventry Building Society Covered Bonds LLP | 6,912 | 2,873 | 1,346 | 4 | 4,223 |
Covered bond programme – Coventry Godiva Covered Bonds LLP | 5,393 | — | 1,000 | 3,000 | 4,000 |
Securitisation programme – Economic Master Issuer plc | 2,496 | 1,611 | 232 | — | 1,843 |
Whole mortgage loan pools2 | 4,495 | — | 2,075 | 2,420 | 4,495 |
Total | 19,296 | 4,484 | 4,653 | 5,424 | 14,561 |
Fair value assets pledged 2025 £m | Fair value liabilities 2025 £m | Fair value net position 2025 £m | Fair value assets pledged 2024 £m | Fair value liabilities 2024 £m | Fair value net position 2024 £m | |
Securitisation programme – Economic Master Issuer plc | 2,336 | 1,730 | 606 | 2,474 | 1,610 | 864 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Income statement | ||||
(Charge) / release for the year1 | (20) | 18 | (2) | 11 |
Net (write offs)/recoveries of amounts previously written off | (4) | — | — | — |
Total (charge)/ release to the Income Statement | (24) | 18 | (2) | 11 |
Group | Stage 1 'Performing' | Stage 2 'Deteriorating' | Stage 3 'Default' and POCI 'Acquired defaulted' | ||||
As at 31 December 2025 | £m | Not past due £m | Past due £m | Not past due £m | Past due £m | Total £m | |
Gross balances | |||||||
Retail secured | 65,908 | 4,991 | 269 | 155 | 368 | 71,691 | |
Retail unsecured | 212 | 5 | 2 | 1 | 3 | 223 | |
Business and commercial | 959 | 33 | — | 22 | — | 1,014 | |
Total | 67,079 | 5,029 | 271 | 178 | 371 | 72,928 | |
ECL | |||||||
Retail secured | 6 | 10 | 2 | 4 | 10 | 32 | |
Retail unsecured | 2 | 1 | — | — | 2 | 5 | |
Business and commercial | 2 | — | — | 5 | — | 7 | |
Total | 10 | 11 | 2 | 9 | 12 | 44 | |
ECL coverage as a % of total balance | |||||||
Retail secured | 0.01 | 0.20 | 0.74 | 2.58 | 2.72 | 0.04 | |
Retail unsecured | 0.94 | 20.00 | — | — | 66.67 | 2.24 | |
Business and commercial | 0.21 | — | — | 22.73 | — | 0.69 | |
Total coverage | 0.01 | 0.22 | 0.74 | 5.06 | 3.23 | 0.06 | |
Society | Stage 1 ‘Performing’ | Stage 2 ‘Deteriorating’ | Stage 3 'Default' and POCI 'Acquired defaulted' | ||||
As at 31 December 2025 | £m | Not past due £m | Past due £m | Not past due £m | Past due £m | Total £m | |
Gross balances | |||||||
Retail secured | 30,911 | 2,609 | 144 | 64 | 193 | 33,921 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 30,911 | 2,609 | 144 | 64 | 193 | 33,921 | |
ECL | |||||||
Retail secured | 1 | 3 | 1 | 3 | 5 | 13 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 1 | 3 | 1 | 3 | 5 | 13 | |
ECL coverage as a % of total balance | |||||||
Retail secured | 0.01 | 0.11 | 0.69 | 4.69 | 2.59 | 0.04 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total coverage | — | 0.11 | 0.69 | 4.69 | 2.59 | 0.04 | |
Group | Stage 1 'Performing' | Stage 2 'Deteriorating' | Stage 3 'Default' and POCI 'Acquired defaulted' | ||||
As at 31 December 2024 | £m | Not past due £m | Past due £m | Not past due £m | Past due £m | Total £m | |
Gross balances | |||||||
Retail secured | 46,203 | 5,038 | 205 | 91 | 259 | 51,796 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 46,203 | 5,038 | 205 | 91 | 259 | 51,796 | |
ECL | |||||||
Retail secured | 2 | 10 | 1 | 5 | 6 | 24 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 2 | 10 | 1 | 5 | 6 | 24 | |
ECL coverage as a % of total balance | |||||||
Retail secured | — | 0.20 | 0.49 | 5.49 | 2.32 | 0.05 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total coverage | — | 0.20 | 0.49 | 5.49 | 2.32 | 0.05 | |
Society | Stage 1 ‘Performing’ | Stage 2 ‘Deteriorating’ | Stage 3 'Default' and POCI 'Acquired defaulted' | ||||
As at 31 December 2024 | £m | Not past due £m | Past due £m | Not past due £m | Past due £m | Total £m | |
Gross balances | |||||||
Retail secured | 30,236 | 2,861 | 121 | 52 | 163 | 33,433 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 30,236 | 2,861 | 121 | 52 | 163 | 33,433 | |
ECL | |||||||
Retail secured | 2 | 3 | — | 3 | 3 | 11 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total | 2 | 3 | — | 3 | 3 | 11 | |
ECL coverage as a % of total balance | |||||||
Retail secured | 0.01 | 0.10 | — | 5.77 | 1.84 | 0.03 | |
Retail unsecured | — | — | — | — | — | — | |
Business and commercial | — | — | — | — | — | — | |
Total coverage | 0.01 | 0.10 | — | 5.77 | 1.84 | 0.03 | |
Group | 2025 | 2024 | |||||||
Basis of stage 2 classification | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | |
Gross balances | |||||||||
Quantitative criteria | 1,346 | 3 | 18 | 1,367 | 1,182 | — | — | 1,182 | |
Qualitative criteria | 3,646 | 2 | 15 | 3,663 | 3,829 | — | — | 3,829 | |
30 days past due backstop | 268 | 2 | — | 270 | 232 | — | — | 232 | |
Total | 5,260 | 7 | 33 | 5,300 | 5,243 | — | — | 5,243 | |
ECL | |||||||||
Quantitative criteria | 3 | 1 | — | 4 | 2 | — | — | 2 | |
Qualitative criteria | 9 | — | — | 9 | 9 | — | — | 9 | |
30 days past due backstop | — | — | — | — | — | — | — | — | |
Total | 12 | 1 | — | 13 | 11 | — | — | 11 | |
Group | 2025 | 2024 | |||||||
Basis of stage 3 and POCI classification | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | |
Acquired impaired (POCI) | 74 | 2 | 5 | 81 | — | — | — | — | |
Qualitative criteria | 117 | — | — | 117 | 93 | — | — | 93 | |
90 days past due backstop | 90 | — | 17 | 107 | 69 | — | — | 69 | |
In cure period | 242 | 2 | — | 244 | 188 | — | — | 188 | |
Total | 523 | 4 | 22 | 549 | 350 | — | — | 350 | |
ECL | |||||||||
Acquired impaired (POCI) | — | — | — | — | — | — | — | — | |
Qualitative criteria | 2 | — | — | 2 | 1 | — | — | 1 | |
90 days past due backstop | 7 | 1 | 5 | 13 | 7 | — | — | 7 | |
In cure period | 5 | 1 | — | 6 | 3 | — | — | 3 | |
Total | 14 | 2 | 5 | 21 | 11 | — | — | 11 | |
2025 | 2024 | |||||||||
Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | |||
Core modelled ECL | 26 | 5 | 6 | 37 | 18 | — | — | 18 | ||
Judgemental adjustments | 6 | — | 1 | 7 | 6 | — | — | 6 | ||
Total reported ECL | 32 | 5 | 7 | 44 | 24 | — | — | 24 | ||
Stage 1 | Stage 2 | Stage 3 | Total | ||||||||
Group | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2025 | 46,203 | 2 | 5,243 | 11 | 350 | 11 | 51,796 | 24 | |||
Loans recognised on acquisition | 20,347 | 9 | — | — | 120 | — | 20,467 | 9 | |||
Movements with Income Statement impact | |||||||||||
Transfers from Stage 1 to Stage 2 | (2,438) | (1) | 2,438 | 4 | — | — | — | 3 | |||
Transfers from Stage 1 to Stage 3 | (133) | — | — | — | 133 | 11 | — | 11 | |||
Transfers from Stage 2 to Stage 3 | — | — | (134) | — | 134 | — | — | — | |||
Transfers from Stage 3 to Stage 2 | — | — | 46 | 1 | (46) | (1) | — | — | |||
Transfers from Stage 3 to Stage 1 | 12 | — | — | — | (12) | — | — | — | |||
Transfers from Stage 2 to Stage 1 | 1,753 | — | (1,753) | (1) | — | — | — | (1) | |||
Net movement arising from transfer of stages | (806) | (1) | 597 | 4 | 209 | 10 | — | 13 | |||
New loans originated | 10,529 | 5 | 24 | — | — | — | 10,553 | 5 | |||
Remeasurement of ECL due to changes in risk parameters | — | 1 | — | (1) | — | 5 | — | 5 | |||
Increase/(decrease) in post model adjustments | — | — | — | — | — | — | — | — | |||
Loans derecognised in the period | (6,823) | (3) | (463) | (1) | (118) | (2) | (7,404) | (6) | |||
Net write offs | (2) | (3) | — | — | (3) | (3) | (5) | (6) | |||
Income Statement charge for the period | 8 | 2 | 10 | 20 | |||||||
Repayment and charges | (2,369) | — | (101) | — | (9) | — | (2,479) | — | |||
At 31 December 2025 | 67,079 | 10 | 5,300 | 13 | 549 | 21 | 72,928 | 44 | |||
Stage 1 | Stage 2 | Stage 3 & POCI | Total | ||||||||
Society | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2025 | 30,236 | 2 | 2,982 | 3 | 215 | 6 | 33,433 | 11 | |||
Movements with Income Statement impact | |||||||||||
Transfers from Stage 1 to Stage 2 | (1,210) | — | 1,210 | 1 | — | — | — | 1 | |||
Transfers from Stage 1 to Stage 3 | (47) | — | — | — | 47 | 1 | — | 1 | |||
Transfers from Stage 2 to Stage 3 | — | — | (81) | — | 81 | — | — | — | |||
Transfers from Stage 3 to Stage 2 | — | — | 27 | — | (27) | — | — | — | |||
Transfers from Stage 3 to Stage 1 | 8 | — | — | — | (8) | — | — | — | |||
Transfers from Stage 2 to Stage 1 | 1,025 | — | (1,025) | — | — | — | — | — | |||
Net movement arising from transfer of stages | (224) | — | 131 | 1 | 93 | 1 | — | 2 | |||
New loans originated | 5,103 | 1 | 16 | — | — | — | 5,119 | 1 | |||
Remeasurement of ECL due to changes in risk parameters | — | (1) | — | — | — | 2 | — | 1 | |||
Increase/(decrease) in post model adjustments | — | — | — | — | — | — | — | — | |||
Loans derecognised in the period | (2,649) | (1) | (286) | — | (45) | (1) | (2,980) | (2) | |||
Net write offs | — | — | — | — | — | — | — | — | |||
Income Statement charge for the period | (1) | 1 | 2 | — | 2 | ||||||
Repayment and charges | (1,555) | — | (90) | — | (6) | — | (1,651) | — | |||
At 31 December 2025 | 30,911 | 1 | 2,753 | 4 | 257 | 8 | 33,921 | 13 | |||
Stage 1 | Stage 2 | Stage 3 & POCI | Total | ||||||||
Group | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2024 | 42,720 | 2 | 7,319 | 29 | 268 | 11 | 50,307 | 42 | |||
Movements with Income Statement impact | — | — | — | — | — | — | — | — | |||
Transfers from Stage 1 to Stage 2 | (2,193) | — | 2,193 | 2 | — | — | — | 2 | |||
Transfers from Stage 1 to Stage 3 | (71) | — | — | — | 71 | 1 | — | 1 | |||
Transfers from Stage 2 to Stage 3 | — | — | (134) | (1) | 134 | 1 | — | — | |||
Transfers from Stage 3 to Stage 2 | — | — | 29 | — | (29) | — | — | — | |||
Transfers from Stage 3 to Stage 1 | 9 | — | — | — | (9) | — | — | — | |||
Transfers from Stage 2 to Stage 1 | 3,592 | — | (3,592) | (1) | — | — | — | (1) | |||
Net movement arising from transfer of stages | 1,337 | — | (1,504) | — | 167 | 2 | — | 2 | |||
New loans originated | 7,057 | 2 | 17 | — | — | — | 7,074 | 2 | |||
Remeasurement of ECL due to changes in risk parameters | — | (1) | — | (1) | — | 2 | — | — | |||
Increase/(decrease) in post model adjustments | — | — | — | (16) | — | (2) | — | (18) | |||
Loans derecognised in the period | (3,084) | (1) | (481) | (1) | (77) | (1) | (3,642) | (3) | |||
Net write offs | — | — | — | — | (1) | (1) | (1) | (1) | |||
Income Statement charge for the period | — | (18) | — | (18) | |||||||
Repayment and charges | (1,827) | — | (108) | — | (7) | — | (1,942) | — | |||
At 31 December 2024 | 46,203 | 2 | 5,243 | 11 | 350 | 11 | 51,796 | 24 | |||
Stage 1 | Stage 2 | Stage 3 | Total | ||||||||
Society | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2024 | 27,383 | 1 | 4,456 | 15 | 161 | 6 | 32,000 | 22 | |||
Movements with Income Statement impact | |||||||||||
Transfers from Stage 1 to Stage 2 | (1,297) | — | 1,297 | 1 | — | — | — | 1 | |||
Transfers from Stage 1 to Stage 3 | (41) | — | — | — | 41 | 1 | — | 1 | |||
Transfers from Stage 2 to Stage 3 | — | — | (82) | — | 82 | — | — | — | |||
Transfers from Stage 3 to Stage 2 | — | — | 19 | — | (19) | — | — | — | |||
Transfers from Stage 3 to Stage 1 | 6 | — | — | — | (6) | — | — | — | |||
Transfers from Stage 2 to Stage 1 | 2,288 | — | (2,288) | (1) | — | — | — | (1) | |||
Net movement arising from transfer of stages | 956 | — | (1,054) | — | 98 | 1 | — | 1 | |||
New loans originated | 5,510 | 2 | 12 | — | — | — | 5,522 | 2 | |||
Remeasurement of ECL due to changes in risk parameters | — | — | — | — | — | 1 | — | — | |||
Increase/(decrease) in post model adjustments | — | — | — | (11) | — | (1) | — | (12) | |||
Loans derecognised in the period | (2,045) | (1) | (336) | — | (39) | — | (2,420) | (1) | |||
Net write offs | — | — | — | — | (1) | (1) | (1) | (1) | |||
Income Statement charge for the period | 1 | (12) | — | (11) | |||||||
Repayment and charges | (1,568) | — | (96) | — | (4) | — | (1,668) | — | |||
At 31 December 2024 | 30,236 | 2 | 2,982 | 3 | 215 | 6 | 33,433 | 11 | |||
Scenario | Weighting | |
2025 | 2024 | |
Base | ||
The central scenario used to support the business planning of the Group. Unemployment remains elevated for a while following restrictive monetary policy, with GDP growth remaining steady. Whilst domestic inflationary pressures take longer to unwind than they did to emerge, CPI is expected to return close to the 2% target in the near term, allowing bank rate to decrease. This easing of conditions supports house prices which return to modest growth. | 50% | 55% |
Downside | ||
Inflation rebounds following renewed geopolitical tensions, and the Bank of England increases interest rates again to contain it. There is an economic contraction resulting from further cost of living deterioration which drives up unemployment, and house prices weaken considerably. Inflation returns to target within the first 5 years and monetary policy begins to ease. | 25% | 25% |
Severe downside | ||
Following the Bank of England’s Bank Capital Stress Test, in which deep simultaneous recessions in the UK and global economies sees large falls in asset prices and higher global interest rates. GDP contracts 5% as unemployment reaches 8.5%. Bank rate rises to 8% to tackle inflation of 10% and house prices consequently fall 28%. | 10% | 10% |
Upside | ||
Inflation dissipates and unemployment reduces, underpinning robust economic growth and rising house prices. The Bank of England lowers bank rate further in response to the easing inflation environment. | 15% | 10% |
Scenario/ weighting | 2026 % | 2027 % | 2028 % | 2029 % | 2030 % | Peak to trough % | Range % | Average to 31 Dec 2030 % | |
Unemployment | 5.2 | 5.3 | 5.1 | 4.9 | 4.9 | 0.6 | 4.7 - 5.3 | 4.9 | |
Base | HPI | 2.5 | 3.0 | 3.0 | 3.0 | 3.0 | 15.2 | 0.2 - 15.4 | 2.9 |
50% | GDP | 1.4 | 1.5 | 1.5 | 1.5 | 1.5 | 7.5 | 0.1 - 7.6 | 1.5 |
Base Rate | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 | 0.50 | 3.25 - 3.75 | 3.3 | |
Unemployment | 5.5 | 6.0 | 5.7 | 5.5 | 5.5 | 1.0 | 5.0 - 6.0 | 5.5 | |
Downside | HPI | (1.1) | (8.0) | (5.0) | 4.0 | 4.5 | 13.5 | (13.6) - (0.1) | (1.2) |
25% | GDP | 0.0 | (0.9) | 1.4 | 1.4 | 1.5 | 4.3 | (0.9) - 3.4 | 0.7 |
Base Rate | 5.00 | 5.25 | 4.50 | 4.00 | 4.00 | 1.50 | 3.75 - 5.25 | 4.5 | |
Severe downside 10% | Unemployment | 6.3 | 8.2 | 8.1 | 7.3 | 6.5 | 3.6 | 4.9 - 8.5 | 7.1 |
HPI | (9.4) | (12.1) | (9.5) | 7.4 | 6.9 | 27.9 | (28.0) - (0.1) | (3.8) | |
GDP | (4.3) | 0.0 | 1.4 | 1.4 | 1.4 | 4.9 | (5.0) - (0.1) | (0.1) | |
Base Rate | 8.00 | 6.75 | 5.25 | 4.00 | 3.00 | 5.00 | 3.00 - 8.00 | 5.6 | |
Unemployment | 4.4 | 4.0 | 4.0 | 4.0 | 4.0 | 1.0 | 4.0 - 5.0 | 4.2 | |
Upside | HPI | 3.8 | 5.0 | 5.0 | 5.0 | 5.0 | 25.9 | 0.3 - 26.2 | 4.8 |
15% | GDP | 2.0 | 2.5 | 2.5 | 2.5 | 2.5 | 12.4 | 0.2 - 12.6 | 2.4 |
Base Rate | 3.25 | 2.75 | 2.75 | 2.75 | 2.75 | 1.00 | 2.75 - 3.75 | 2.9 |
Group | 31 December 2025 | 31 December 2024 | ||
Scenario | IFRS 9 provision £m | (Decrease)/ increase % | IFRS 9 provision £m | (Decrease)/ increase % |
IFRS 9 weighted average | 44 | — | 24 | — |
Base scenario | 33 | (25) | 18 | (25) |
Downside scenario | 53 | 21 | 32 | 33 |
Severe downside scenario | 95 | 116 | 46 | 92 |
Upside scenario | 30 | (32) | 16 | (33) |
Group | 2025 | 2024 | ||||||
Sensitivity impacts on ECL | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m | Retail secured £m | Retail unsecured £m | Business and commercial £m | Total £m |
Underlying ECL | 32 | 5 | 7 | 44 | 24 | — | — | 24 |
Sensitised ECL | 47 | 5 | 7 | 59 | 43 | — | — | 43 |
Difference | 15 | — | — | 15 | 19 | — | — | 19 |
Stage 1 | Stage 2 | Stage 3 & POCI | Total | ||||||||
Group | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2025 | 46,203 | 2 | 5,243 | 11 | 350 | 11 | 51,796 | 24 | |||
Loans recognised on acquisition | 19,135 | 5 | — | — | 101 | — | 19,236 | 5 | |||
Movements with Income Statement impact | — | — | — | — | — | — | — | — | |||
Transfers from Stage 1 to Stage 2 | (2,398) | (1) | 2,398 | 3 | — | — | — | 2 | |||
Transfers from Stage 1 to Stage 3 | (114) | — | — | — | 114 | 3 | — | 3 | |||
Transfers from Stage 2 to Stage 3 | — | — | (134) | — | 134 | — | — | — | |||
Transfers from Stage 3 to Stage 2 | — | — | 46 | 1 | (46) | (1) | — | — | |||
Transfers from Stage 3 to Stage 1 | 12 | — | — | — | (12) | — | — | — | |||
Transfers from Stage 2 to Stage 1 | 1,753 | — | (1,753) | (1) | — | — | — | (1) | |||
Net movement arising from transfer of stages | (747) | (1) | 557 | 3 | 190 | 2 | — | 4 | |||
New loans originated | 10,315 | 3 | 24 | — | — | — | 10,339 | 3 | |||
Remeasurement of ECL due to changes in risk parameters | — | — | — | (1) | — | 3 | — | 2 | |||
Loans derecognised in the period | (6,715) | (2) | (463) | (1) | (110) | (2) | (7,288) | (5) | |||
Net write offs | — | (1) | — | — | — | — | — | (1) | |||
Income Statement charge for the period | 4 | 1 | 3 | 8 | |||||||
Repayment and charges | (2,283) | — | (101) | — | (8) | — | (2,392) | — | |||
At 31 December 2025 | 65,908 | 6 | 5,260 | 12 | 523 | 14 | 71,691 | 32 | |||
As at 31 December 2025 Indexed loan to value | Stage 1 £m | Stage 2 £m | Stage 3 & POCI £m | Total £m | ECL £m |
<50% | 26,208 | 836 | 211 | 27,255 | 5 |
50% to 65% | 19,734 | 1,882 | 158 | 21,774 | 6 |
65% to 75% | 10,099 | 1,734 | 84 | 11,917 | 6 |
75% to 85% | 6,478 | 614 | 42 | 7,134 | 6 |
85% to 95% | 3,313 | 189 | 21 | 3,523 | 6 |
95% to 100% | 61 | 1 | — | 62 | — |
> 100% | 15 | 4 | 7 | 26 | 3 |
Total | 65,908 | 5,260 | 523 | 71,691 | 32 |
As at 31 December 2024 Indexed loan to value | Stage 1 £m | Stage 2 £m | Stage 3 & POCI £m | Total £m | ECL £m |
<50% | 20,028 | 723 | 140 | 20,891 | 2 |
50% to 65% | 14,474 | 1,930 | 115 | 16,519 | 8 |
65% to 75% | 6,175 | 1,761 | 57 | 7,993 | 5 |
75% to 85% | 3,614 | 665 | 24 | 4,303 | 4 |
85% to 95% | 1,887 | 161 | 9 | 2,057 | 3 |
95% to 100% | 25 | 2 | 1 | 28 | — |
> 100% | — | 1 | 4 | 5 | 2 |
Total | 46,203 | 5,243 | 350 | 51,796 | 24 |
2025 | 2024 | |||||||||
Society Indexed loan to value | Stage 1 £m | Stage 2 £m | Stage 3 £m | Total £m | ECL £m | Stage 1 £m | Stage 2 £m | Stage 3 £m | Total £m | ECL £m |
<50% | 13,422 | 495 | 102 | 14,019 | 1 | 13,618 | 471 | 87 | 14,176 | 1 |
50% to 65% | 8,108 | 810 | 71 | 8,989 | 2 | 7,623 | 877 | 64 | 8,564 | 2 |
65% to 75% | 4,065 | 836 | 35 | 4,936 | 2 | 3,876 | 887 | 33 | 4,796 | 2 |
75% to 85% | 3,283 | 477 | 27 | 3,787 | 4 | 3,208 | 585 | 21 | 3,814 | 4 |
85% to 95% | 2,006 | 134 | 19 | 2,159 | 2 | 1,886 | 160 | 8 | 2,054 | 2 |
95% to 100% | 27 | 1 | — | 28 | — | 25 | 2 | 1 | 28 | — |
> 100% | — | — | 3 | 3 | 2 | — | — | 1 | 1 | — |
Total | 30,911 | 2,753 | 257 | 33,921 | 13 | 30,236 | 2,982 | 215 | 33,433 | 11 |
Group As at 31 December 2025 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI 2 £m | Total £m | ECL £m |
0.0 to <0.25% | 34,282 | 621 | 4 | 34,907 | 1 |
0.25 to <0.75% | 27,096 | 2,106 | 7 | 29,209 | 4 |
0.75 to <2.50% | 3,483 | 969 | 6 | 4,458 | 4 |
2.50 to <10.00% | 830 | 887 | 3 | 1,720 | 1 |
10.00 to <100% | 88 | 646 | 22 | 756 | 3 |
100% (default) | — | — | 477 | 477 | 14 |
Other1 | 129 | 31 | 4 | 164 | 5 |
Total | 65,908 | 5,260 | 523 | 71,691 | 32 |
Society As at 31 December 2025 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI 2 £m | Total £m | ECL £m |
0.0 to <0.25% | 17,944 | 379 | — | 18,323 | — |
0.25 to <0.75% | 11,564 | 1,163 | — | 12,727 | 2 |
0.75 to <2.50% | 1,062 | 475 | — | 1,537 | 1 |
2.50 to <10.00% | 311 | 436 | — | 747 | 1 |
10.00 to <100% | 11 | 298 | — | 309 | 1 |
100% (default) | — | — | 257 | 257 | 7 |
Other1 | 19 | 2 | — | 21 | 1 |
Total | 30,911 | 2,753 | 257 | 33,921 | 13 |
Group As at 31 December 2024 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI2 £m | Total £m | ECL £m |
0.0 to <0.25% | 26,378 | 745 | — | 27,123 | 1 |
0.25 to <0.75% | 17,196 | 2,278 | — | 19,474 | 3 |
0.75 to <2.50% | 1,846 | 843 | — | 2,689 | 1 |
2.50 to <10.00% | 617 | 842 | — | 1,459 | 1 |
10.00 to <100% | 22 | 503 | — | 525 | 1 |
100% (default) | — | — | 345 | 345 | 10 |
Other1 | 144 | 32 | 5 | 181 | 7 |
Total | 46,203 | 5,243 | 350 | 51,796 | 24 |
Society As at 31 December 2024 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI2 £m | Total £m | ECL £m |
0.0 to <0.25% | 18,122 | 476 | — | 18,598 | — |
0.25 to <0.75% | 10,874 | 1,349 | — | 12,223 | 2 |
0.75 to <2.50% | 943 | 479 | — | 1,422 | 1 |
2.50 to <10.00% | 271 | 430 | — | 701 | 1 |
10.00 to <100% | 5 | 245 | — | 250 | 1 |
100% (default) | — | — | 215 | 215 | 5 |
Other1 | 21 | 3 | — | 24 | 1 |
Total | 30,236 | 2,982 | 215 | 33,433 | 11 |
Stage 1 | Stage 2 | Stage 3 & POCI | Total | ||||||||
Group | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2025 | — | — | — | — | — | — | — | — | |||
Loans recognised on acquisition | 226 | 2 | — | — | 4 | — | 230 | 2 | |||
Movements with Income Statement impact | |||||||||||
Transfers from Stage 1 to Stage 2 | (7) | — | 7 | 1 | — | — | — | 1 | |||
Transfers from Stage 1 to Stage 3 | (3) | — | — | — | 3 | 2 | — | 2 | |||
Net movement arising from transfer of stages | (10) | — | 7 | 1 | 3 | 2 | — | 3 | |||
New loans originated | 9 | 1 | — | — | — | — | 9 | 1 | |||
Remeasurement of ECL due to changes in risk parameters | — | 1 | — | — | — | 2 | — | 3 | |||
Loans derecognised in the period | (8) | — | — | — | — | — | (8) | — | |||
Net write offs | (2) | (2) | — | — | (2) | (2) | (4) | (4) | |||
Income Statement charge for the period | 2 | 1 | 2 | 5 | |||||||
Repayment and charges | (3) | — | — | — | (1) | — | (4) | — | |||
At 31 December 2025 | 212 | 2 | 7 | 1 | 4 | 2 | 223 | 5 | |||
Group As at 31 December 2025 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI £m | Total £m | ECL £m |
0.0 to <0.15% | 25 | — | — | 25 | — |
0.15 to <0.25% | 44 | — | — | 44 | — |
0.25 to <0.50% | 38 | — | — | 38 | — |
0.50 to <0.75% | 1 | — | — | 1 | — |
0.75 to <2.50% | 26 | — | — | 26 | — |
2.50 to <10.00% | 38 | 1 | — | 39 | 1 |
10.00 to <100% | 40 | 6 | — | 46 | 2 |
100% (default) | — | — | 4 | 4 | 2 |
Total | 212 | 7 | 4 | 223 | 5 |
Stage 1 | Stage 2 | Stage 3 & POCI | Total | ||||||||
Group | Gross balance £m | Provision 12 month ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision lifetime ECL £m | Gross balance £m | Provision £m | |||
At 1 January 2025 | — | — | — | — | — | — | — | — | |||
Loans recognised on acquisition | 986 | 2 | — | — | 15 | — | 1,001 | 2 | |||
Movements with Income Statement impact | |||||||||||
Transfers from Stage 1 to Stage 2 | (33) | — | 33 | — | — | — | — | — | |||
Transfers from Stage 1 to Stage 3 | (16) | — | — | — | 16 | 6 | — | 6 | |||
Net movement arising from transfer of stages | (49) | — | 33 | — | 16 | 6 | — | 6 | |||
New loans originated | 205 | 1 | — | — | — | — | 205 | 1 | |||
Remeasurement of ECL due to changes in risk parameters | — | — | — | — | — | — | — | — | |||
Loans derecognised in the period | (100) | (1) | — | — | (8) | — | (108) | (1) | |||
Net write offs | — | — | — | — | (1) | (1) | (1) | (1) | |||
Income Statement charge for the period | 2 | — | 5 | 7 | |||||||
Repayment and charges | (83) | — | — | — | — | — | (83) | — | |||
At 31 December 2025 | 959 | 2 | 33 | — | 22 | 5 | 1,014 | 7 | |||
Group As at 31 December 2025 Risk grades | Gross balance Stage 1 £m | Gross balance Stage 2 £m | Gross balance Stage 3 & POCI £m | Total £m | ECL £m |
Strong | 275 | — | — | 275 | — |
Good | 231 | 3 | — | 234 | 1 |
Satisfactory | 13 | 15 | — | 28 | — |
Weak | 2 | 1 | 1 | 4 | — |
Default | 2 | — | 19 | 21 | 5 |
Other | 436 | 14 | 2 | 452 | 1 |
Total | 959 | 33 | 22 | 1,014 | 7 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | ||
Current tax | |||||
UK corporation tax | 26 | 72 | (21) | 37 | |
UK corporation tax – adjustment in respect of prior years | (1) | 32 | (1) | 32 | |
Total current tax charge / (credit) | 25 | 104 | (22) | 69 | |
Deferred tax | |||||
Current year | (34) | 4 | (2) | 4 | |
Adjustment in respect of prior years | (2) | (32) | (2) | (30) | |
Total deferred tax credit | (36) | (28) | (4) | (26) | |
Total (credit) / charge | (11) | 76 | (26) | 43 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | ||
Profit before tax (PBT) | 801 | 323 | 9 | 186 | |
Tax at UK standard rate of corporation tax on PBT of 25% | 200 | 81 | 2 | 46 | |
Surcharge on banking profits1 | — | 1 | — | 1 | |
Tax credit on Additional Tier 1 capital distribution 2 | (15) | (12) | (15) | (12) | |
Expenses/income not deductible for tax purposes 3 | 4 | 6 | (10) | 6 | |
Gain on acquisition | (146) | — | — | — | |
Recognition of deferred tax asset in relation to tax losses | (46) | — | — | — | |
Utilisation of unrecognised deferred tax assets | (2) | — | — | — | |
Deferred tax arising from surcharge rate | (3) | — | — | — | |
Adjustments in respect of prior years | (3) | — | (3) | 2 | |
Total (credit)/ charge | (11) | 76 | (26) | 43 |
Statements of Comprehensive Income | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Tax credit on remeasurement of defined benefit pension plan | (1) | (2) | (1) | (2) | |
Tax credit on fair value through other comprehensive income | — | (1) | — | (1) | |
Tax credit on cash flow hedges | (36) | (16) | (24) | (27) | |
Total | (37) | (19) | (25) | (30) |
Society | Shares £m | Loans £m | Total £m |
At 1 January 2025 | 8 | 17,583 | 17,591 |
Movements | 745 | 1,126 | 1,871 |
At 31 December 2025 | 753 | 18,709 | 19,462 |
Active subsidiary undertakings | Address reference | Principal activity | Group shareholding |
Godiva Mortgages Limited | 1 | Mortgage lending | 100% |
ITL Mortgages Limited | 1 | Mortgage lending | 100% |
The Co-operative Bank Holdings p.l.c. | 2 | Intermediary holding company | 100% |
The Co-operative Bank Finance p.l.c. | 2 | Intermediary holding company | 100% |
The Co-operative Bank p.l.c. | 2 | Provider of banking operations | 100% |
Mortgage Agency Services Number One Ltd | 2 | Former mortgage and syndicated lending | 100% |
Mortgage Agency Services Number Two Ltd | 2 | Former mortgage lending | 100% |
Mortgage Agency Services Number Four Ltd | 2 | Former mortgage lending | 100% |
Mortgage Agency Services Number Five Ltd | 2 | Former mortgage lending | 100% |
Mortgage Agency Services Number Six Ltd | 2 | Former mortgage lending | 100% |
Platform Funding Ltd | 2 | Former mortgage lending | 100% |
Second Roodhill Leasing Ltd | 2 | Inactive | 100% |
Third Roodhill Leasing Ltd | 2 | Inactive | 100% |
Fourth Roodhill Leasing Ltd | 2 | Inactive | 100% |
Co-operative Bank Financial Advisers Ltd | 2 | Inactive | 100% |
Britannia Pension Trustees Ltd | 2 | Dormant | 100% |
BPS Principal Employer Ltd | 2 | Dormant | 100% |
The Co-operative Bank Pension Trust Ltd | 2 | Dormant | 100% |
Britannia New Homes (Scotland) Ltd | 5 | Dormant | 50% |
Consolidated structured entities | Address reference | Principal activity |
Coventry Building Society Covered Bonds LLP | 3 | Mortgage acquisition and guarantor of covered bonds |
Coventry Godiva Covered Bonds LLP | 3 | Mortgage acquisition and guarantor of covered bonds |
Economic Master Issuer plc | 4 | Funding vehicle |
Moorland Covered Bonds LLP | 2 | Mortgage acquisition and guarantor of covered bonds |
Address reference | Address |
1 | Coventry House, Harry Weston Road, Binley, Coventry CV3 2TQ |
2 | 1 Balloon Street, Manchester, M4 4BE |
3 | Oakfield House, Harry Weston Road, Coventry CV3 2TQ |
4 | 10th Floor, 5 Churchill Place, London E14 5HU |
5 | Blairton House, Old Aberdeen Road, Balmedie, Aberdeenshire, AB23 8SH |
Group | Externally acquired 2025 £m | Internally developed 2025 £m | Core deposit intangible 2025 £m | Total 2025 £m | Externally acquired 2024 £m | Internally developed 2024 £m | Core deposit intangible 2025 £m | Total 2024 £m |
Cost | ||||||||
At 1 January | 5 | 99 | — | 104 | 5 | 87 | — | 92 |
Recognised on acquisition | 17 | 93 | 143 | 253 | — | — | — | — |
Additions | 13 | 27 | — | 40 | — | 20 | — | 20 |
Disposals | (4) | (14) | — | (18) | — | (8) | — | (8) |
At 31 December | 31 | 205 | 143 | 379 | 5 | 99 | — | 104 |
Amortisation | ||||||||
At 1 January | 4 | 45 | — | 49 | 4 | 39 | — | 43 |
Charge for the year | 4 | 46 | 29 | 79 | — | 14 | — | 14 |
Disposals | (4) | (14) | — | (18) | — | (8) | — | (8) |
At 31 December | 4 | 77 | 29 | 110 | 4 | 45 | — | 49 |
Net book value at 31 December | 27 | 128 | 114 | 269 | 1 | 54 | — | 55 |
Society | Externally acquired 2025 £m | Internally developed 2025 £m | Total 2025 £m | Externally acquired 2024 £m | Internally developed 2024 £m | Total 2024 £m |
Cost | ||||||
At 1 January | 5 | 99 | 104 | 5 | 87 | 92 |
Additions | — | 11 | 11 | — | 20 | 20 |
Disposals | — | (5) | (5) | — | (8) | (8) |
At 31 December | 5 | 105 | 110 | 5 | 99 | 104 |
Amortisation | ||||||
At 1 January | 4 | 45 | 49 | 4 | 39 | 43 |
Charge for the year | — | 18 | 18 | — | 14 | 14 |
Disposals | — | (5) | (5) | — | (8) | (8) |
At 31 December | 4 | 58 | 62 | 4 | 45 | 49 |
Net book value at 31 December | 1 | 47 | 48 | 1 | 54 | 55 |
Group | Land and buildings 2025 £m | Equipment, fixtures and fittings 2025 £m | Right-of- use assets 2025 £m | Total 2025 £m | Land and buildings 2024 £m | Equipment, fixtures and fittings 2024 £m | Right-of- use assets 2024 £m | Total 2024 £m |
Cost | ||||||||
At 1 January | 15 | 69 | 23 | 107 | 15 | 63 | 27 | 105 |
Recognised on acquisition | 10 | 15 | 31 | 56 | — | — | — | — |
Additions1 | — | 10 | 23 | 33 | — | 7 | 1 | 8 |
Disposals1 | (15) | (8) | (5) | (28) | — | (1) | (5) | (6) |
At 31 December | 10 | 86 | 72 | 168 | 15 | 69 | 23 | 107 |
Depreciation | ||||||||
At 1 January | 4 | 42 | 14 | 60 | 4 | 34 | 15 | 53 |
Charge for the year | 4 | 13 | 8 | 25 | — | 9 | 3 | 12 |
Depreciation on disposals | (8) | (8) | (2) | (18) | — | (1) | (4) | (5) |
At 31 December | — | 47 | 20 | 67 | 4 | 42 | 14 | 60 |
Net book value at 31 December | 10 | 39 | 52 | 101 | 11 | 27 | 9 | 47 |
Society | Land and buildings 2025 £m | Equipment, fixtures and fittings 2025 £m | Right-of- use assets 2025 £m | Total 2025 £m | Land and buildings 2024 £m | Equipment, fixtures and fittings 2024 £m | Right-of- use assets 2024 £m | Total 2024 £m |
Cost | ||||||||
At 1 January | 15 | 69 | 23 | 107 | 15 | 63 | 27 | 105 |
Additions1 | — | 6 | 16 | 22 | — | 7 | 1 | 8 |
Disposals1 | (8) | (3) | (2) | (13) | — | (1) | (5) | (6) |
At 31 December | 7 | 72 | 37 | 116 | 15 | 69 | 23 | 107 |
Depreciation | ||||||||
At 1 January | 4 | 42 | 14 | 60 | 4 | 34 | 15 | 53 |
Charge for the year | — | 9 | 3 | 12 | — | 9 | 3 | 12 |
Depreciation on disposals | (1) | (3) | (2) | (6) | — | (1) | (4) | (5) |
At 31 December | 3 | 48 | 15 | 66 | 4 | 42 | 14 | 60 |
Net book value at 31 December | 4 | 24 | 22 | 50 | 11 | 27 | 9 | 47 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Net book value | 8 | 11 | 4 | 11 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Property | 50 | 7 | 20 | 7 |
Enhanced data infrastructure | 2 | 2 | 2 | 2 |
Total | 52 | 9 | 22 | 9 |
2025 | 2024 | |||||
Asset | Obligation | Net | Asset | Obligation | Net | |
Scheme | £m | £m | £m | £m | £m | £m |
CBS Scheme | 127 | (135) | (8) | 132 | (137) | (5) |
Society total | 127 | (135) | (8) | 132 | (137) | (5) |
Pace DB | 794 | (781) | 13 | — | — | — |
BPS | 403 | (388) | 15 | — | — | — |
Total funded surplus/(obligation) | 1,324 | (1,304) | 20 | 132 | (137) | (5) |
Unfunded Obligation | — | (5) | (5) | — | — | — |
Net surplus/(obligation) | 1,324 | (1,309) | 15 | 132 | (137) | (5) |
Shown as | ||||||
Pension benefit surplus | 28 | — | ||||
Pension benefit obligation | (13) | (5) | ||||
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Present value of obligation | ||||
As at 1 January | (137) | (149) | (137) | (149) |
Recognised on acquisition | (1,209) | — | — | — |
Interest expense | (73) | (7) | (8) | (7) |
Benefit payments from plan assets | 81 | 7 | 8 | 7 |
Remeasurements: | — | — | — | — |
Effects of changes in demographic assumptions | 6 | — | (1) | — |
Effects of changes in financial assumptions | 34 | 12 | 3 | 12 |
Effects of experience adjustments | (6) | — | — | — |
As at 31 December | (1,304) | (137) | (135) | (137) |
Fair value of plan assets | ||||
As at 1 January | 132 | 153 | 132 | 153 |
Recognised on acquisition | 1,241 | — | — | — |
Interest income | 75 | 7 | 8 | 7 |
Benefit payments from plan assets | (81) | (7) | (8) | (7) |
Return on assets | (37) | (21) | (5) | (21) |
Administrative Expenses | (6) | — | 0 | — |
As at 31 December | 1,324 | 132 | 127 | 132 |
Funded pension benefit (obligation)/surplus | 20 | (5) | (8) | (5) |
The movement is analysed below: | ||||
Pension benefit (obligation)/surplus as at 1 January | (5) | 4 | (5) | 4 |
Recognised on acquisition | 32 | — | — | — |
Amount recognised in the income statement | (4) | — | — | — |
Remeasurement losses | (3) | (9) | (3) | (9) |
Funded pension benefit (obligation)/surplus as at 31 December | 20 | (5) | (8) | (5) |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Amount recognised in Other Comprehensive Income: | ||||
Return on plan assets | (37) | (21) | (5) | (21) |
Effect of changes in demographic assumptions | 6 | — | (1) | — |
Effect of changes in financial assumptions | 34 | 12 | 3 | 12 |
Effect of experience adjustments | (6) | — | — | — |
Remeasurement loss of pension benefit surplus | (3) | (9) | (3) | (9) |
Amount recognised in the income statement: | ||||
Administrative Expenses | (6) | — | — | — |
Net Interest expense on defined benefit obligation | 2 | — | — | — |
Net expense | (4) | — | — | — |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Quoted | ||||
Corporate bonds and liability matching | 43 | 14 | 43 | 14 |
Equities | — | 1 | — | 1 |
Unit trusts | 5 | — | 5 | — |
Unquoted | ||||
Annuities | 1,162 | — | — | — |
Cash | 19 | 3 | — | 3 |
Corporate bonds and liability matching | 6 | 36 | 6 | 36 |
Direct lending | 19 | 4 | 3 | 4 |
Diversified growth funds | 8 | 11 | 8 | 11 |
Property | — | 9 | — | 9 |
Unit trusts | 62 | 55 | 62 | 55 |
Total | 1,324 | 133 | 127 | 133 |
Financial assumptions | 2025 % | 2024 % |
Discount rate | 5.60 | 5.55 |
Rate of pensionable salary increase | — | — |
Rates of inflation (Retail Prices Index) | 2.80 - 2.90 | 3.10 |
Rates of inflation (Consumer Prices Index) | 2.30 - 2.45 | 2.55 |
2025 | 2024 | ||||
Life expectancy for mortality tables used to determine benefit obligation | Male | Female | Male | Female | |
Member age 60 (current life expectancy) | 24.7 - 26.2 | 27.6 - 28.8 | 25.9 | 28.7 | |
Member age 40 (life expectancy at age 60) | 25.9 - 27.7 | 28.8 - 30.3 | 27.4 | 30.2 | |
CBS Scheme Impact on present value of obligation: | Change in assumption | Increase in assumption % | Increase in assumption £m | Decrease in assumption % | Decrease in assumption £m |
Discount rate | 0.50% | (0.06) | (7.5) | 0.06 | 8.4 |
Rates of inflation (Retail Prices Index and Consumer Prices Index) | 0.25% | 0.02 | 2.8 | (0.02) | (2.7) |
Life expectancy | 1 year | 0.03 | 3.5 | (0.03) | (3.4) |
Pace DB and BPS Impact on present value of obligation: | Change in assumption | Increase in assumption % | Increase in assumption £m | Decrease in assumption % | Decrease in assumption £m |
Discount rate | 0.50% | (0.06) | (68.4) | 0.06 | 75.4 |
Rates of inflation (Retail Prices Index and Consumer Prices Index) | 0.50% | 0.05 | 54.3 | (0.04) | (51.4) |
Life expectancy | 1 year | 0.03 | 33.9 | (0.03) | (34.4) |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | ||
Deferred tax assets | |||||
Other derivatives | — | (1) | (1) | (1) | |
Defined benefit pension plan obligation | — | (1) | (2) | (1) | |
Excess of capital allowances over depreciation | (46) | (2) | (2) | (2) | |
Provisions and other temporary differences | — | (1) | (1) | (1) | |
Tax losses | (243) | — | — | — | |
Total deferred tax assets | (289) | (5) | (6) | (5) | |
Deferred tax liabilities | |||||
Cash flow hedges | 45 | 81 | 44 | 69 | |
Defined benefit pension plan surplus | 6 | — | — | — | |
Investment in equity shares | 1 | 4 | — | 4 | |
Research and development intangible assets | 6 | 6 | 6 | 6 | |
Transfer of engagements – fair value adjustments | 26 | — | — | — | |
Total deferred tax liabilities | 84 | 91 | 50 | 79 | |
Net deferred tax (asset)/liability | (205) | 86 | 44 | 74 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Bank of England - TFSME | 264 | 2,065 | — | 2,065 |
Sale and repurchase agreements (repos) in relation to: | ||||
Covered bond programme | 1,358 | 504 | 1,358 | 504 |
Debt securities | 1,160 | 500 | 503 | 500 |
Other1 | 227 | 863 | 194 | 863 |
Total deposits from banks | 3,009 | 3,932 | 2,055 | 3,932 |
2025 | 2024 | |||||||
Group | Medium term notes £m | Covered bonds £m | Residential Mortgage Backed Securities £m | Total £m | Medium term notes £m | Covered bonds £m | Residential Mortgage Backed Securities £m | Total £m |
As at 1 January | 2,067 | 2,866 | 1,610 | 6,543 | 1,145 | 2,955 | 1,278 | 5,378 |
Recognised on acquisition | 678 | 499 | — | 1,177 | — | — | — | — |
Cash flows | (345) | 697 | 117 | 469 | 910 | (15) | 331 | 1,226 |
Non-cash flows | ||||||||
Foreign exchange movements | 24 | 104 | — | 128 | (2) | (76) | — | (78) |
Change in accrued interest | (6) | (1) | (1) | (8) | 12 | — | — | 12 |
Amortisation | 4 | 3 | 1 | 8 | 2 | 2 | 1 | 5 |
Unwind of fair value on acquisition | (10) | — | — | (10) | — | — | — | — |
As at 31 December | 2,412 | 4,168 | 1,727 | 8,307 | 2,067 | 2,866 | 1,610 | 6,543 |
2025 | 2024 | |||||||
Society | Medium term notes £m | Covered bonds £m | Residential Mortgage Backed Securities £m | Total £m | Medium term notes £m | Covered bonds £m | Residential Mortgage Backed Securities £m | Total £m |
As at 1 January | 2,067 | 2,866 | (3) | 4,930 | 1,145 | 2,955 | (3) | 4,097 |
Cash flows | (145) | 697 | — | 552 | 910 | (15) | — | 895 |
Non-cash flows | ||||||||
Foreign exchange movements | 24 | 104 | — | 128 | (2) | (76) | — | (78) |
Change in accrued interest | (3) | (1) | — | (4) | 12 | — | — | 12 |
Amortisation | 2 | 3 | — | 5 | 2 | 2 | — | 4 |
Change in fair value through profit and loss | 4 | — | — | 4 | — | — | — | — |
As at 31 December | 1,949 | 3,669 | (3) | 5,615 | 2,067 | 2,866 | (3) | 4,930 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Accrued interest | 39 | 31 | 32 | 30 |
Other debt securities | ||||
In not more than one year | 1,795 | 1,052 | 1,272 | 849 |
In more than one year | 6,473 | 5,460 | 4,311 | 4,051 |
Total | 8,307 | 6,543 | 5,615 | 4,930 |
2025 | 2024 | ||||||
Group | Notional amount £m | Fair value assets £m | Fair value liabilities £m | Notional amount £m | Fair value assets £m | Fair value liabilities £m | |
Derivatives designated as fair value hedges: | |||||||
Interest rate risk | 69,401 | 457 | 291 | 55,893 | 1,057 | 201 | |
Derivatives designated as cash flow hedges: | |||||||
Interest rate risk | 9,238 | 18 | 12 | 9,916 | 23 | 43 | |
Foreign exchange risk1 | 1,940 | 30 | 11 | 1,941 | 2 | 51 | |
Foreign exchange and interest rate risk 1 | 417 | 16 | — | 417 | — | 8 | |
Other derivatives | |||||||
Interest rate risk | 1,257 | 12 | 6 | 972 | 2 | 2 | |
Foreign exchange risk | 14 | — | — | — | — | — | |
Total derivatives | 82,267 | 533 | 320 | 69,139 | 1,084 | 305 | |
2025 | 2024 | ||||||
Society | Notional amount £m | Fair value assets £m | Fair value liabilities £m | Notional amount £m | Fair value assets £m | Fair value liabilities £m | |
Derivatives designated as fair value hedges: | |||||||
Interest rate risk | 56,784 | 389 | 240 | 55,893 | 1,057 | 201 | |
Derivatives designated as cash flow hedges: | |||||||
Interest rate risk | 9,238 | 18 | 12 | 9,916 | 23 | 43 | |
Foreign exchange and interest rate risk | 417 | 16 | — | 417 | — | 8 | |
Other derivatives | |||||||
Interest rate risk | 482 | 1 | — | 972 | 2 | 2 | |
Total derivatives | 66,921 | 424 | 252 | 67,198 | 1,082 | 254 | |
Maturity | |||||
2025 Group | Up to one month £m | One to three months £m | Three months to one year £m | One to five years £m | More than five years £m |
Interest rate risk: | |||||
Contract/ notional amount | 1,278 | 1,795 | 25,710 | 47,266 | 3,847 |
Average fixed interest rate | 1.9% | 3.4% | 3.7% | 3.4% | 3.6% |
Foreign exchange risk: | |||||
Contract/ notional amount | 2 | — | 891 | 1,061 | — |
Average fixed interest rate | —% | —% | 2.9% | 2.3% | —% |
Average £/€ exchange rate | 1.2 | — | 0.9 | 0.9 | — |
Foreign exchange and interest rate risk: | |||||
Contract/ notional amount | — | — | — | 417 | — |
Average fixed interest rate | —% | —% | —% | 3.1% | —% |
Average £/€ exchange rate | — | — | — | 0.8 | — |
Maturity | |||||
2025 Society | Up to one month £m | One to three months £m | Three months to one year £m | One to five years £m | More than five years £m |
Interest rate risk: | |||||
Contract/ notional amount | 232 | 961 | 22,822 | 39,697 | 2,792 |
Average fixed interest rate | 1.3% | 3.4% | 3.7% | 3.4% | 3.6% |
Foreign exchange and interest rate risk: | |||||
Contract/ notional amount | — | — | — | 417 | — |
Average fixed interest rate | —% | —% | —% | 3.1% | —% |
Average £/€ exchange rate | — | — | — | 0.8 | — |
Maturity | |||||
2024 Group | Up to one month £m | One to three months £m | Three months to one year £m | One to five years £m | More than five years £m |
Interest rate risk: | |||||
Contract/ notional amount | 184 | 792 | 23,453 | 38,961 | 3,392 |
Average fixed interest rate | 0.4% | 2.3% | 4.0% | 3.4% | 3.4% |
Foreign exchange risk: | |||||
Contract/ notional amount | — | — | — | 1,940 | — |
Average fixed interest rate | — | — | — | 2.6% | — |
Average £/€ exchange rate | — | — | — | 1.0 | — |
Foreign exchange and interest rate risk: | |||||
Contract/ notional amount | — | — | — | 417 | — |
Average fixed interest rate | — | — | — | 3.1% | — |
Average £/€ exchange rate | — | — | — | 0.8 | — |
Maturity | |||||
2024 Society | Up to one month £m | One to three months £m | Three months to one year £m | One to five years £m | More than five years £m |
Interest rate risk: | |||||
Contract/ notional amount | 184 | 792 | 23,453 | 38,961 | 3,392 |
Average fixed interest rate | 0.4% | 2.3% | 4.0% | 3.4% | 3.4% |
Foreign exchange and interest rate risk: | |||||
Contract/ notional amount | — | — | — | 417 | — |
Average fixed interest rate | — | — | — | 3.1% | — |
Average £/€ exchange rate | — | — | — | 0.8 | — |
2025 | 2024 | ||||||||
Carrying amount of hedged item | Accumulated amount of fair value adjustments on the hedged item | Carrying amount of hedged item | Accumulated amount of fair value adjustments on the hedged item | ||||||
Group | Assets £m | Liabilities £m | Assets £m | Liabilities £m | Assets £m | Liabilities £m | Assets £m | Liabilities £m | |
Fair value hedges: | |||||||||
Interest rate 1,2 | 67,047 | (22,739) | 107 | (29) | 46,473 | (23,042) | (494) | 68 | |
2025 | 2024 | ||||||||
Carrying amount of hedged item | Accumulated amount of fair value adjustments on the hedged item | Carrying amount of hedged item | Accumulated amount of fair value adjustments on the hedged item | ||||||
Society | Assets £m | Liabilities £m | Assets £m | Liabilities £m | Assets £m | Liabilities £m | Assets £m | Liabilities £m | |
Fair value hedges: | |||||||||
Interest rate 1,2 | 48,489 | (19,394) | 88 | (7) | 46,473 | (23,042) | (494) | 68 | |
Changes in Fair Value | Amounts reclassified from reserves to Income Statement | |||||
2025 Group | Hedging derivative £m | Hedged item for ineffectiveness assessment £m | Gains/(losses) recognised in OCI £m | Hedged cash flows will no longer occur £m | Hedged item for affected Income Statement £m | Recognised in Income Statement1 £m |
Derivatives designated as cash flow hedges: | ||||||
Foreign exchange | 68 | 68 | 68 | — | 106 | — |
Foreign exchange and interest rate | 22 | 23 | 22 | — | 22 | — |
Interest rate | 17 | 17 | 17 | 107 | — | 108 |
Changes in Fair Value | Amounts reclassified from reserves to Income Statement | |||||
2025 Society | Hedging derivative £m | Hedged item for ineffectiveness assessment £m | Gains/(losses) recognised in OCI £m | Hedged cash flows will no longer occur £m | Hedged item for affected Income Statement £m | Recognised in Income Statement1 £m |
Derivatives designated as cash flow hedges: | ||||||
Foreign exchange | — | — | — | — | — | — |
Foreign exchange and interest rate | 22 | 23 | 22 | — | 22 | — |
Interest rate | 17 | 17 | 17 | 107 | — | 108 |
Changes in Fair Value | Amounts reclassified from reserves to Income Statement | |||||
2024 Group | Hedging derivative £m | Hedged item for ineffectiveness assessment £m | Gains/(losses) recognised in OCI £m | Hedged cash flows will no longer occur £m | Hedged item for affected Income Statement £m | Recognised in Income Statement1 £m |
Derivatives designated as cash flow hedges: | ||||||
Foreign exchange | (38) | (38) | (38) | — | (77) | — |
Foreign exchange and interest rate | (4) | (4) | (4) | — | (4) | — |
Interest rate | 31 | 31 | 31 | 126 | — | 126 |
Changes in Fair Value | Amounts reclassified from reserves to Income Statement | |||||
2024 Society | Hedging derivative £m | Hedged item for ineffectiveness assessment £m | Gains/(losses) recognised in OCI £m | Hedged cash flows will no longer occur £m | Hedged item for affected Income Statement £m | Recognised in Income Statement1 £m |
Derivatives designated as cash flow hedges: | ||||||
Foreign exchange | — | — | — | — | — | — |
Foreign exchange and interest rate | (4) | (4) | (4) | — | (4) | — |
Interest rate | 31 | 31 | 31 | 126 | — | 126 |
Issue date | Call date | Maturity date | Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Subordinated liabilities owed to note holders are as follows: | |||||||
Fixed rate subordinated notes 2032 - 7.54% | Aug 2009 | Aug 2027 | Aug 2032 | 15 | 15 | 15 | 15 |
Fixed rate subordinated notes 2034 - 11.75% | Nov 2023 | May 2029 | May 2034 | 233 | — | 239 | — |
Total | 248 | 15 | 254 | 15 |
Group and Society | 2025 £m | 2024 £m | |
Subscribed capital owed to permanent interest holding members is as follows: | |||
Permanent Interest Bearing Shares - 1992 - 12 1/8% | 42 | 42 | |
Total | 42 | 42 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Advances in respect of loans and advances to customers for mortgages approved but not yet completed | 2,722 | 1,915 | 1,196 | 1,429 |
Loan facilities for business and commercial customers | 296 | — | — | — |
Unused credit card and overdraft limits | 928 | — | — | — |
Total commitments arising from customer transactions | 3,946 | 1,915 | 1,196 | 1,429 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Other taxation and social security | 13 | 7 | 4 | 7 |
Amounts due to beneficiary banks | 23 | — | — | |
Lease liabilities | 44 | 12 | 13 | 12 |
Amounts due to connected undertakings | — | — | 1,671 | 1,546 |
Other | 28 | 9 | 15 | 9 |
Total | 108 | 28 | 1,703 | 1,574 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
Amounts falling due: | ||||
Less than three months | 2 | 1 | 1 | 1 |
Greater than three months and less than one year | 7 | 3 | 3 | 3 |
Between one and five years | 24 | 7 | 9 | 7 |
After five years | 15 | 1 | 1 | 1 |
Total | 48 | 12 | 14 | 12 |
2025 Group | Carrying amount £m | Fair value Level 1 £m | Fair value Level 2 £m | Fair value Level 3 £m | Fair value Total £m |
Financial assets | |||||
Loans and advances to credit institutions | 383 | — | 383 | — | 383 |
Loans and advances to customers | 72,936 | — | — | 73,266 | 73,266 |
Debt securities | 26 | — | — | 27 | 27 |
Financial liabilities | |||||
Shares | 50,830 | — | — | 50,480 | 50,480 |
Customer accounts | 20,892 | — | 42 | 20,841 | 20,883 |
Deposits from banks | 3,009 | — | 2,993 | 16 | 3,009 |
Debt securities in issue | 8,307 | — | 8,301 | — | 8,301 |
Subordinated liabilities | 248 | — | 258 | — | 258 |
Subscribed capital | 42 | 79 | — | — | 79 |
2025 Society | Carrying amount £m | Fair value Level 1 £m | Fair value Level 2 £m | Fair value Level 3 £m | Fair value Total £m |
Financial assets | |||||
Loans and advances to credit institutions | 261 | — | 261 | — | 261 |
Loans and advances to customers | 33,941 | — | — | 34,167 | 34,167 |
Debt securities | — | — | — | — | — |
Loans with Group undertakings | 18,263 | — | 3,873 | 14,298 | 18,171 |
Financial liabilities | |||||
Shares | 50,830 | — | — | 50,480 | 50,480 |
Customer accounts | 187 | — | 187 | — | 187 |
Deposits from banks | 2,055 | — | 2,055 | — | 2,055 |
Debt securities in issue | 5,408 | — | 5,393 | — | 5,393 |
Subordinated liabilities | 15 | — | 19 | — | 19 |
Subscribed capital | 42 | 79 | — | — | 79 |
2024 Group | Carrying amount £m | Fair value Level 1 £m | Fair value Level 2 £m | Fair value Level 3 £m | Fair value Total £m |
Financial assets | |||||
Loans and advances to credit institutions | 329 | — | 329 | — | 329 |
Loans and advances to customers | 51,801 | — | — | 51,593 | 51,593 |
Debt securities | — | — | — | — | — |
Financial liabilities | |||||
Shares | 49,343 | — | — | 49,268 | 49,268 |
Customer accounts | 82 | — | 82 | — | 82 |
Deposits from banks | 3,932 | — | 3,932 | — | 3,932 |
Debt securities in issue | 6,543 | — | 6,441 | — | 6,441 |
Subordinated liabilities | 15 | — | 19 | — | 19 |
Subscribed capital | 42 | 67 | — | — | 67 |
2024 Society | Carrying amount £m | Fair value Level 1 £m | Fair value Level 2 £m | Fair value Level 3 £m | Fair value Total £m |
Financial assets | |||||
Loans and advances to credit institutions | 329 | — | 329 | — | 329 |
Loans and advances to customers | 33,458 | — | — | 33,416 | 33,416 |
Debt securities | — | — | — | — | — |
Loans with Group undertakings | 17,583 | — | 4,634 | 12,810 | 17,444 |
Financial liabilities | |||||
Shares | 49,343 | — | — | 49,268 | 49,268 |
Customer accounts | 234 | — | 234 | — | 234 |
Deposits from banks | 3,932 | — | 3,932 | — | 3,932 |
Debt securities in issue | 4,930 | — | 4,831 | — | 4,831 |
Subordinated liabilities | 15 | — | 19 | — | 19 |
Subscribed capital | 42 | 67 | — | — | 67 |
2025 Group | Level 1 £m | Level 2 £m | Level 3 £m | Total £m |
Financial assets | ||||
Derivative financial instruments - assets: | ||||
Interest rate swaps | — | 488 | — | 488 |
Cross currency swaps | — | 45 | — | 45 |
Total | — | 533 | — | 533 |
Debt securities: | ||||
UK Government investment securities | 789 | — | — | 789 |
Other listed transferable debt securities | 747 | — | 3 | 750 |
Total | 1,536 | — | 3 | 1,539 |
Investment in equity shares: | ||||
Investment in equity shares | — | — | 5 | 5 |
Total | — | — | 5 | 5 |
Financial liabilities | ||||
Derivative financial instruments - liabilities: | ||||
Interest rate swaps | — | 308 | 1 | 309 |
Cross currency swaps | — | 11 | — | 11 |
Total | — | 319 | 1 | 320 |
2025 Society | Level 1 £m | Level 2 £m | Level 3 £m | Total £m |
Financial assets | ||||
Derivative financial instruments - assets: | ||||
Interest rate swaps | — | 409 | — | 409 |
Cross currency swaps | — | 15 | — | 15 |
Total | — | 424 | — | 424 |
Debt securities: | ||||
UK Government investment securities | 440 | — | — | 440 |
Other listed transferable debt securities | — | — | — | — |
Total | 440 | — | — | 440 |
Loans with Group undertakings: | ||||
Loans with Group undertakings | — | 446 | — | 446 |
Total | — | 446 | — | 446 |
Financial liabilities | ||||
Derivative financial instruments - liabilities: | ||||
Interest rate swaps | — | 251 | 1 | 252 |
Cross currency swaps | — | — | — | — |
Total | — | 251 | 1 | 252 |
Debt securities in issue: | ||||
Medium term notes | — | 207 | — | 207 |
Total | — | 207 | — | 207 |
Subordinated liabilities: | ||||
Subordinated liabilities | — | 239 | — | 239 |
Total | — | 239 | — | 239 |
2024 Group | Level 1 £m | Level 2 £m | Level 3 £m | Total £m |
Financial assets | ||||
Derivative financial instruments - assets: | ||||
Interest rate swaps | — | 1,082 | — | 1,082 |
Cross currency swaps | — | 2 | — | 2 |
Total | — | 1,084 | — | 1,084 |
Debt securities: | ||||
UK Government investment securities | 483 | — | — | 483 |
Other listed transferable debt securities | 19 | — | — | 19 |
Total | 502 | — | — | 502 |
Investment in equity shares: | ||||
Investment in equity shares | 1 | — | 8 | 9 |
Total | 1 | — | 8 | 9 |
Financial liabilities | ||||
Derivative financial instruments - liabilities: | ||||
Interest rate swaps | — | 245 | 1 | 246 |
Cross currency swaps | — | 59 | — | 59 |
Total | — | 304 | 1 | 305 |
2024 Society | Level 1 £m | Level 2 £m | Level 3 £m | Total £m |
Financial assets | ||||
Derivative financial instruments - assets: | ||||
Interest rate swaps | — | 1,082 | — | 1,082 |
Cross currency swaps | — | — | — | — |
Total | — | 1,082 | — | 1,082 |
Debt securities: | ||||
UK Government investment securities | 423 | — | — | 423 |
Other listed transferable debt securities | 19 | — | — | 19 |
Total | 442 | — | — | 442 |
Investment in equity shares: | ||||
Investment in equity shares | 1 | — | 8 | 9 |
Total | 1 | — | 8 | 9 |
Financial liabilities | ||||
Derivative financial instruments - liabilities: | ||||
Interest rate swaps | — | 245 | 1 | 246 |
Cross currency swaps | — | 8 | — | 8 |
Total | — | 253 | 1 | 254 |
2025 | 2024 | ||||||
Group | Investment in equity shares £m | Derivative financial instruments £m | Debt securities £m | Investment in equity shares £m | Derivative financial instruments £m | Debt securities £m | |
As at 1 January | 8 | (1) | — | 6 | (2) | — | |
Recognised on acquisition | 6 | — | 14 | ||||
Gains/(losses) recognised in the Income Statement | |||||||
Net unrealised gains/ (losses) | (1) | — | — | 2 | 1 | — | |
Settlements | (8) | — | (11) | — | — | — | |
As at 31 December | 5 | (1) | 3 | 8 | (1) | — | |
2025 | 2024 | ||||||
Society | Investment in equity shares £m | Derivative financial instruments £m | Debt securities £m | Investment in equity shares £m | Derivative financial instruments £m | Debt securities £m | |
As at 1 January | 8 | (1) | — | 6 | (2) | — | |
Gains/(losses) recognised in the Income Statement | |||||||
Net unrealised gains/ (losses) | 3 | — | — | 2 | 1 | — | |
Settlements | (11) | — | — | — | — | — | |
As at 31 December | — | (1) | — | 8 | (1) | — | |
2025 Group | Gross amounts £m | Master netting arrangements £m | Financial collateral1 £m | Net amount £m |
Financial assets | ||||
Derivative financial instruments | 533 | (309) | (189) | 35 |
Reverse Repurchase Agreements | — | — | — | — |
Total financial assets | 533 | (309) | (189) | 35 |
Financial liabilities | ||||
Derivative financial instruments | 320 | (309) | (1) | 10 |
Repurchase agreements | 2,015 | — | (2,015) | — |
Total financial liabilities | 2,335 | (309) | (2,016) | 10 |
2025 Society | Gross amounts £m | Master netting arrangements £m | Financial collateral1 £m | Net amount £m |
Financial assets | ||||
Derivative financial instruments | 424 | (251) | (172) | 1 |
Reverse Repurchase Agreements | 250 | — | (250) | — |
Total financial assets | 674 | (251) | (422) | 1 |
Financial liabilities | ||||
Derivative financial instruments | 252 | (251) | (1) | — |
Repurchase agreements | 1,358 | — | (1,358) | — |
Total financial liabilities | 1,610 | (251) | (1,359) | — |
2024 Group | Gross amounts £m | Master netting arrangements £m | Financial collateral1 £m | Net amount £m |
Financial assets | ||||
Derivative financial instruments | 1,084 | (245) | (837) | 2 |
Reverse Repurchase Agreements | — | — | — | — |
Total financial assets | 1,084 | (245) | (837) | 2 |
Financial liabilities | ||||
Derivative financial instruments | 305 | (245) | (7) | 53 |
Repurchase agreements | 602 | — | (602) | — |
Total financial liabilities | 907 | (245) | (609) | 53 |
2024 Society | Gross amounts £m | Master netting arrangements £m | Financial collateral1 £m | Net amount £m |
Financial assets | ||||
Derivative financial instruments | 1,083 | (246) | (837) | — |
Reverse Repurchase Agreements | — | — | — | — |
Total financial assets | 1,083 | (246) | (837) | — |
Financial liabilities | ||||
Derivative financial instruments | 254 | (246) | (7) | 1 |
Repurchase agreements | 602 | — | (602) | — |
Total financial liabilities | 856 | (246) | (609) | 1 |
2025 £m | 2024 £m | |
Loans payable to the Society | ||
Loans outstanding as at 1 January | 17,583 | 17,668 |
Movement during the year | 1,879 | (85) |
Loans outstanding as at 31 December | 19,462 | 17,583 |
Loans and deposits payable by the Society | ||
Deposits outstanding at 1 January | 1,546 | 1,231 |
Movement during the year1 | 125 | 315 |
Deposits outstanding at 31 December | 1,671 | 1,546 |
Net interest income | ||
Interest receivable | 546 | 555 |
Interest payable | (119) | (128) |
Total | 427 | 427 |
Other income and expenses | ||
Fees and expenses paid to the Society | 53 | 52 |
No. of directors and persons connected to them | Amount in relation to directors and persons connected to them | No. of directors and persons connected to them | Amount in relation to directors and persons connected to them | |
2025 Number | 2025 £m | 2024 Number | 2024 £m | |
Loans and advances | ||||
Net movement | — | — | — | (0.1) |
Balance outstanding | 2 | 0.3 | 2 | 0.3 |
Share and deposit accounts | ||||
Net movement | 3 | 0.1 | 1 | — |
Balance outstanding | 16 | 0.5 | 13 | 0.4 |
Group 2025 £m | Group 2024 £m | Society 2025 £m | Society 2024 £m | |
At 1 January | 6,600 | 5,435 | 4,986 | 4,153 |
Recognised on acquisition | 1,404 | — | — | — |
Cash flows: | ||||
Net proceeds form issue of debt securities | 1,701 | 1,824 | 1,201 | 1,324 |
Repayment of debt securities in issue | (1,232) | (598) | (850) | (430) |
Interest paid on subordinated liabilities | (24) | — | (13) | — |
Non-cash flows: | ||||
Amortisation of premium/ discount on issue | 6 | 5 | 6 | 5 |
Intercompany transfer | — | — | 443 | — |
Accrued interest movements | 12 | 12 | 5 | 12 |
Change in FVTPL | 4 | — | 4 | — |
Foreign exchange movements | 126 | (78) | 129 | (78) |
At 31 December | 8,597 | 6,600 | 5,911 | 4,986 |
Book value as at 1 January 2025 £m | Fair value adjustments £m | Fair value as at 1 January 2025 £m | |
Assets | |||
Cash in hand and balances with the Bank of England | 2,586 | — | 2,586 |
Loans and advances to credit institutions | 173 | — | 173 |
Debt securities | 1,637 | — | 1,637 |
Loans and advances to customers | 20,373 | 31 | 20,404 |
Derivative financial instruments | 216 | — | 216 |
Investments in equity shares | 6 | — | 6 |
Current tax assets | 7 | — | 7 |
Deferred tax assets | 243 | (26) | 217 |
Intangible assets | 110 | 143 | 253 |
Property, plant & equipment | 52 | 4 | 56 |
Other assets | 9 | — | 9 |
Prepayments and accrued income | 36 | — | 36 |
Pension benefit asset | 32 | — | 32 |
Total assets | 25,480 | 152 | 25,632 |
Liabilities | |||
Deposits from banks | 2,717 | — | 2,717 |
Customer accounts | 19,971 | 5 | 19,976 |
Debt securities in issue | 1,156 | 21 | 1,177 |
Hedge accounting adjustment | (21) | 21 | — |
Derivative financial instruments | 48 | — | 48 |
Accruals and deferred income | 47 | — | 47 |
Other liabilities | 82 | — | 82 |
Provisions for liabilities and charges | 10 | — | 10 |
Pension benefit obligation | 5 | — | 5 |
Subordinated liabilities | 200 | 41 | 241 |
Total liabilities | 24,215 | 88 | 24,303 |
Net assets acquired | 1,265 | 64 | 1,329 |
Cash consideration paid | 745 | ||
Gain on acquisition | 584 |
2025 | 2024 | Statutory limits | |
% | % | % | |
Lending limit | 3.1 | 2.7 | 25.0 |
Funding limit | 38.8 | 16.7 | 50.0 |
2025 % | 2024 % | |
As a percentage of shares and borrowings: | ||
Gross capital | 5.51 | 6.16 |
Free capital | 5.07 | 5.99 |
Liquid assets | 16.7 | 17.9 |
As a percentage of mean total assets: | ||
Profit for the financial year | 0.91 | 0.39 |
Management expenses | 0.95 | 0.57 |
Net profit as a percentage of total Balance Sheet | 0.92 | 0.39 |
Name (Date of birth) | Occupation | Date of appointment as a director of the Society | Other directorships and appointments |
Iraj Amiri | Non-Executive Director | 28.06.2018 | AON UK Limited |
(February 1954) | Eurocell plc | ||
The Co-operative Bank p.l.c. | |||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
Stephen Hughes | Chief Executive | 20.04.2020 | Godiva Mortgages Limited |
(May 1972) | ITL Mortgages Limited | ||
BSA Council | |||
The Money and Pension Service (Member) | |||
The Pennies Foundation (Member) | |||
Financial Conduct Authority Practitioner Panel (Member) | |||
The Co-operative Bank p.l.c. | |||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
Joanne Kenrick | Non-Executive Director | 06.11.2017 | Dwr Cymru Cyfyngedig |
(September 1966) | Glas Cymru Holdings Cyfyngedig | ||
Rhapsody Court Freehold Limited | |||
Sirius Real Estate Ltd | |||
Vitality Health Limited | |||
Vitality Life Limited | |||
Vitality Corporate Services Limited | |||
Discovery Holdings Europe Limited | |||
The Co-operative Bank p.l.c. | |||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
Jane Leach | Non-Executive Director | 03.10.2025 | PayPal UK Limited |
(May 1966) | Jupiter Unit Trust Managers Limited | ||
American International Group UK Limited | |||
Lucy Faithfull Foundation | |||
Caroline Marsh | Non-Executive Director | 03.01.2025 | Another Lens LLP |
(December 1963) | The Co-operative Bank p.l.c. | ||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
Shamira Mohammed | Non-Executive Director | 01.05.2019 | Pezula Limited |
(November 1968) | |||
Brendan O’Connor | Non-Executive Director | 18.01.2021 | Ford Credit Europe Bank plc |
(June 1965) | The Co-operative Bank p.l.c. | ||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. |
Name (Date of birth) | Occupation | Date of appointment as a director of the Society | Other directorships and appointments |
Mark Parker | Non-Executive Director | 01.01.2025 | Parkers Consulting Group Limited |
(March 1965) | Talkbiznow Limited | ||
Elixirr Consulting Limited (advisory role) | |||
The Co-operative Bank p.l.c. | |||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
Iain Plunkett | Non-Executive Director | 01.07.2024 | Citi Group Global Markets Limited |
(May 1971) | Two Viewbank Limited | ||
Lee Raybould | Chief Financial Officer | 06.04.2021 | Godiva Mortgages Limited |
(March 1973) | ITL Mortgages Limited | ||
Mortgage Agency Services Number One Limited | |||
Mortgage Agency Services Number Two Limited | |||
Mortgage Agency Services Number Four Limited | |||
Mortgage Agency Services Number Five Limited | |||
Mortgage Agency Services Number Six Limited | |||
Platform Funding Limited | |||
Martin Stewart | Non-Executive Director | 01.09.2018 | Clayton Stewart Properties Limited |
(September 1966) | Clayton Stewart Limited | ||
Northern Bank Limited | |||
Independent Football Regulator Expert Panel (Member) | |||
The Co-operative Bank p.l.c. | |||
The Co-operative Bank Finance p.l.c | |||
The Co-operative Bank Holdings p.l.c. | |||
David Thorburn | Non-Executive Director | 28.04.2022 | None |
(January 1958) |
Measure | Definition | Calculation |
Underlying profit | Underlying profit excludes all of the accounting impacts of acquiring the Bank, including day one acquisition, accounting and related unwinds, reset of accounting policies on the acquired assets and liabilities and related acquisition and integration costs. Underlying performance is considered to be a better measure of core business performance. | n/a |
Cost to income ratio | A measure of costs relative to income more generally used by banks. This ratio will be impacted by significant changes in interest rates or widening margins. | Administrative expenses, depreciation and amortisation as a percentage of total income. |
Member value | This measure is widely used across the building society sector. | The Society’s average month end savings rate compared to the CACI savings database for market average rate for savings accounts, excluding current accounts and offset savings. |
Net interest margin | A measure of profitability which is used throughout the building society sector. | Net interest income as a percentage of average total assets. Net interest income is the difference between interest receivable on assets and interest payable on liabilities. |
Additional Tier 1 (AT 1) capital | Capital that meets certain criteria set out in CRD V. In particular, the criteria require that upon the occurrence of a trigger event, the AT 1 capital instrument converts to a form of Common Equity Tier 1 capital or the principal is written down on a permanent basis; or grandfathered instruments such as Permanent Interest Bearing Shares (PIBS). |
Arrears | The financial value of unpaid obligations, which arise when contractual payments are not paid as they fall due. |
Bank | The group of companies of which the ultimate parent company is The Co- operative Bank Holdings p.l.c. and the main trading entity is The Co-operative Bank p.l.c.. |
Basel 3.1 | The Basel Committee's final implementation of its Basel III Banking Supervision reforms, published in December 2017, addressing credit risk and operational risk. The proposal will update the risk weighted asset calculation and improve comparability across firms and is now effective from January 2027. |
Basis point | One hundredth of a percent (0.01 percent). Used when quoting movements in interest rates and yields on securities. |
Board | Represents the Group and Society Board. |
Bounce Bank Loan Scheme (BBLS) | Scheme brought in during the pandemic to help small and medium size entities borrow between £2,000 and £50,000 at low interest rates, guaranteed by the Government. |
Buy to let mortgage | A mortgage secured on a residential property that is rented out to tenants. |
Capital Conservation Buffer (CCoB) | A CRD V risk adjusted capital requirement for all banks that can be used to absorb losses whilst avoiding breaching minimum capital requirements. |
Capital requirements | Amount of capital required to be held by the Group to cover the risk of losses and to protect against excessive leverage. The level is set by regulators and the firm’s own assessment of its risk profile. |
Capital Requirements Regulation and Capital Requirements Directive V (CRD V) | CRD V is the European Union legislation (part regulation and part directive), which came into force to implement Basel III, revising the capital requirements framework and introducing liquidity requirements, which regulators use when supervising firms. |
Capital resources | Capital comprising the general reserve, fair value through other comprehensive income reserve, eligible Additional Tier 1 capital less all required regulatory adjustments. |
Collateral | Security pledged by the borrower to the lender in case of default. |
Common Equity Tier 1 (CET 1) | Common Equity Tier 1 capital comprises general reserve and the fair value through other comprehensive income reserve, less regulatory deductions. Common Equity Tier 1 must absorb losses on a going concern basis. The CET 1 ratio is calculated as CET 1 capital as a percentage of risk weighted assets. |
Conduct risk | The risk that the Group’s behaviour and decision making fails to deliver good customer outcomes. |
Consumer Price Index (CPI) | An index that measures the average change in price over time of a UK-based market basket of consumer goods and services. |
Contractual maturity | The date in the terms of a financial instrument on which the last payment or receipt under the contract is due for settlement. |
Core Capital Deferred Shares (CCDS) | A form of Common Equity Tier 1 (CET 1) capital. The Society’s Perpetual Capital Securities (PCS) convert into CCDS. |
Coronavirus Business Interruption Loan Scheme (CBILS) | Scheme brought in to help small and medium size entities access loans and other finance up to £5 million, 80% guaranteed by the Government. |
Countercyclical Buffer (CCyB) | A CRD V risk adjusted capital requirement for all banks that is varied over the financial cycle to match the resilience of the banking system to the scale of risks faced. |
Countercyclical Leverage Buffer (CCLB) | A leverage capital requirement under the UK leverage regime that is set at 35% of the corresponding risk adjusted Countercyclical Buffer (CCyB). |
Covered bonds | Debt securities that are backed by both the resources of the issuer and a portfolio of mortgages that are segregated from the issuer’s other assets solely for the benefit of the holders of the covered bonds. The Group issues covered bonds as part of its funding activities. |
Credit risk | The risk of loss to the Group from members and customers or wholesale counterparties failing to meet their contractual payments in full and/or on time. This covers retail, commercial and treasury credit risk and is a principal risk of the Group. |
Credit valuation adjustment | An adjustment to the valuation of financial instruments held at fair value to reflect the creditworthiness of the counterparty. |
Debt securities | Transferable instruments creating or acknowledging indebtedness of credit institutions, public bodies or other undertakings. |
Debt securities in issue | Liabilities of the Group that are transferable by external investors that operate within the global financial markets. |
Defined benefit obligation/surplus | The present value of expected future payments required to settle the obligations of a defined benefit pension scheme resulting from past employee service. |
Derivative financial instrument (swap) | A contract or agreement that derives its value or cash flows from changes in an underlying index such as an interest rate, foreign exchange rate or market index. The most common type of derivative instruments are interest rate swaps. |
Effective Interest Rate (EIR) | The rate of interest earned over the life of an instrument that is equivalent to the discounted rate of projected cash flows of the instrument, adjusted for compounding. |
Encumbered assets | Assets used to secure liabilities or otherwise pledged. This excludes loans and advances to customers that, although technically encumbered, are held in respect of undrawn self-issued notes under the Group’s covered bond and securitisation programmes. |
Enterprise Risk Management Framework (ERMF) | A Board approved framework that provides the context, guidance and principles needed for cohesive risk management activity across the Society and its subsidiaries. |
Economic Value | Measure of the change in the net present value of interest rate sensitive instruments over their remaining life resulting from a 100 basis points (1%) (EV100), or 200 basis points (2%) (EV200) parallel shock to the yield curve. |
Expected credit loss (ECL) | The present value of all cash shortfalls over the expected life of a financial instrument. The term is used for the accounting for impairment provisions under the IFRS 9 standard. ECLs may arise over a 12 month or lifetime basis. |
Expected loss | A calculation under the IRB approach to estimate the potential losses on current exposures due to expected defaults over a 12 month time period. |
Exposure | The quantified potential for loss that might occur as a result of a risk occurring. |
Exposure at default (EAD) | A calculation of the amount expected to be outstanding at the time of default. |
Fair value | The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. |
Fair value through other comprehensive income (FVOCI) | Financial assets held at fair value on the Balance Sheet with changes in fair value recognised through other comprehensive income. |
Fair value through profit and loss (FVTPL) | Financial assets held at fair value on the Balance Sheet with changes in fair value recognised through the Income Statement. |
Financial Conduct Authority (FCA) | A statutory body responsible for the conduct of business regulation and supervision of UK financial institutions in the UK. |
Financial Ombudsman Service | The Financial Ombudsman Service provides an independent and impartial service to resolve individual complaints that consumers and financial institutions have been unable to settle themselves. |
Forbearance | Forbearance takes place when a concession, which can be temporary or permanent, is made on the contractual terms of a loan in response to the borrower’s financial difficulties. |
Free capital | The aggregate of gross capital and collective impairment less intangible assets and property, plant and equipment. |
General reserve | The general reserve is the accumulation of historical and current year profits and includes remeasurements of the defined benefit pension scheme and distributions to holders of Perpetual Capital Securities (net of tax). |
Gross capital | The aggregate of reserves, other equity instruments, subscribed capital and subordinated liabilities. |
Gross Domestic Product (GDP) | A measure that includes the value created through the production of goods and service in a national economy. |
House Price Index (HPI) | An index that captures changes in house prices monthly or annually, using data from UK-based residential housing transactions. |
Impaired loans | Impaired loans are defined as those which are defaulted loans in IFRS 9 stage 3. |
Interest rate risk | Interest rate risk arises from the different interest rate characteristics of the Group’s lending and deposit products and from other financial instruments. The Group is subject to the risk that changes in interest rates will cause material variations in earnings because of differences between interest rates received and paid on mortgages, deposits and financial instruments. |
Internal Capital Adequacy Assessment Process (ICAAP) | The Group’s own assessment of the amount of capital that it needs to hold to support all relevant current and future risks. This assessment includes determination of a number of capital buffers to be held in case of potential future economic stress, and provides confirmation that the Group has appropriate processes in place to ensure compliance with regulatory requirements. |
Internal Liquidity Adequacy Assessment Process (ILAAP) | The Group’s own assessment of the liquidity resources that are required to remain within the risk tolerances it has set. This will include an evaluation of potential stresses based on regulatory benchmarks and on Group-specific tests. |
Internal Ratings Based (IRB) approach | An advanced approach to measuring capital requirements in respect of credit risk under Pillar 1. The IRB approach may only be used with permission from the PRA. |
ISDA | International Swaps and Derivatives Association is the global trade association for over-the-counter derivatives and providers of the industry-standard documentation for derivative transactions. |
Leverage ratio | A calculation as part of CRD V, which measures the relationship between eligible Tier 1 capital and exposures to on and off-balance sheet items. UK institutions are subject to the PRA's interpretation of the leverage ratio - see UK leverage ratio. |
Liquid assets | This comprises cash in hand, balances with the Bank of England, debt securities (including Government investment securities (gilts)), loans to credit institutions and other liquid assets. |
Liquidity and funding risk | Liquidity risk is the risk that the Group has insufficient funds to meet its obligations as and when they fall due. Funding risk is the inability to access funding markets or to only do so at excessive cost and/or liquidity risk. Liquidity and funding risk is a principal risk of the Group. |
Loan to value (LTV) | The amount of mortgage loan as a percentage of the value of the property. Average loan to value is either a simple average, or balance weighted. Indexed loan to value is calculated on the basis of the latest property valuation being adjusted by the relevant house price index movement since that date. |
Loss given default (LGD) | A parameter used to estimate the difference between exposure at default (EAD) and the net amount of the expected recovery expressed as a percentage of EAD. |
Management expenses | The aggregate of administrative expenses, depreciation and amortisation. |
Market risk | Market risk is defined as the risk of a reduction in Group earnings and/or value resulting from adverse movements in financial markets. |
Medium term notes | Securities offered by a company to investors, through a dealer, across a range of maturity periods. |
Member | A person or individual who holds a share in the Society or has a mortgage loan with the Society. Deposit or lending customers of subsidiary entities are not members. |
Minimum Requirement for own funds and Eligible Liabilities (MREL) | A requirement under the Bank Recovery and Resolution Directive which requires deposit takers to hold minimum levels of capital plus debt eligible for bail-in. |
Model risk | The risk that an ineffective model or incorrectly interpreted model output leads to a loss, reputational damage or regulatory censure. |
Mortgage backed securities (RMBS) | Asset backed securities that represent interests in a group of mortgages which give the investor the right to cash received from future mortgage payments of both principal and interest. These can also be known as Residential mortgage backed securities (RMBS) where the underlying security is a residential mortgage. |
Net interest income | The difference between interest receivable on assets and similar income and interest paid on liabilities and similar charges. |
Net interest margin | Net interest income as a percentage of average total assets. |
Net Stable Funding Ratio (NSFR) | A ratio which assesses the amount of stable funding in place as a proportion of the on and off-balance sheet funding requirements of an institution. |
Operational risk | The risk of loss arising from inadequate internal processes, systems or people, or from external events. |
Other Systemically Important Institutions (O-SII) Buffer | Buffer set for ring-fenced banks and large building societies to reduce their probability of failure or distress, reducing the risk of disruption to the supply of credit in the UK economy. |
Owner-occupier mortgage | A mortgage on residential property that is to be occupied by the borrower. |
Past due | A financial asset such as a loan is past due when the counterparty has failed to make a payment when contractually due. |
Permanent Interest Bearing Shares (PIBS) | Unsecured, perpetual deferred shares of the Society offering a fixed coupon. Also defined as subscribed capital. |
Perpetual Capital Securities (PCS) | Securities that pay a non-cumulative coupon at the discretion of the Society and qualify as Additional Tier 1 capital. |
Pillar 1/2/2A/3 | Components of the Basel capital framework. Pillar 1 covers the minimum requirement, Pillar 2/2A covers capital requirement of risks not covered in Pillar 1 and Pillar 3 covers disclosures. |
PRA buffer | A buffer to ensure that financial institutions that are more at risk of loss than the system in aggregate have additional capital buffers to reflect that risk. |
Post Model Adjustment (PMA) | A PMA is applied when the Group considers that a modelled output is not sufficiently accurate or complete due to there being potential for additional risks that have not been identified or that cannot be adequately modelled. |
Probability of default (PD) | An estimate of the probability that a borrower will default on their credit obligations over a fixed time period. With respect to impairment provisions under IFRS 9, 12 month ECLs use 12 month PDs, whilst a lifetime ECL uses the estimated PD over the remaining contractual life of the loan. |
Principal risk | Principal risks are those risks to which the Group's business model is inherently exposed and those that the Group believes could materially compromise its ability to meet its strategic objectives. |
Prudential Regulation Authority (PRA) | The statutory body responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. The PRA is a subsidiary of the Bank of England. |
Purchased or originated credit impaired (POCI) | Purchased or originated financial assets that are credit-impaired on initial recognition. |
Retail deposits | Includes Shares and other customer deposits made by individuals. |
Reverse stress test | A regulatory stress test that requires a firm to assess scenarios and circumstances that would render its business model unviable, thereby identifying potential business vulnerabilities. |
Risk appetite | An articulation of the level of risk that the Group is willing to accept in order to safeguard the interests of the Group’s members and customers, whilst also achieving its business objectives. |
Risk weighted assets (RWAs) | The value of assets, after adjustment to reflect the degree of risk they represent in accordance with the relevant capital rules. |
Sale and repurchase agreement (repo) | An agreement to sell a financial security together with a commitment by the seller to repurchase the asset at a specified price on a given date. In substance, this forms a secured loan, with the difference between the purchase price and repurchase price being the interest rate. |
Securitisation | A pool of loans used to back the issuance of new securities. The loans are transferred to a structured entity which then issues securities (RMBS) backed by the assets. The Group has used residential mortgages as the loan pool for securitisation purposes. |
Shares | Funds deposited by a person in a retail savings account with the Society. Such funds are recorded as liabilities of the Society. These are also referred to as retail deposits. |
Shares and borrowings | The total of shares, customer accounts, deposits from banks and debt securities in issue. |
Significant increase in credit risk (SICR) | A significant increase in credit risk on a financial asset is judged to have occurred when an assessment, using quantitative and qualitative factors, identifies at a reporting date that the credit risk has increased significantly since the asset was originally recognised. |
SONIA (Sterling Overnight Interbank Average) | A rate reflecting actual overnight funding rates, at a weighted average overnight deposit rate for each day. |
Stage 1 | Assets that under IFRS 9 have not experienced a significant increase in credit risk since the asset was originally recognised on the Balance Sheet are classed as stage 1. |
Stage 2 | Assets that have experienced a significant increase in credit risk since initial recognition under IFRS 9 are classed as stage 2. |
Stage 3 | Assets identified as in default and considered credit impaired under IFRS 9 are classed as stage 3. |
Standardised approach | The basic method used to calculate capital requirements for credit and operational risk. In this approach, the risk weighting used in the capital calculation is determined by specified percentages. |
Strategic risk | Strategic risk is the risk that changes to business model or macroeconomic, geopolitical, regulatory or other factors may lead to the business model, strategy or Strategic Plan becoming inappropriate. This includes the risk of an overly ambitious Strategic Plan as well as unforeseen market, consumer, competitor or regulatory changes. |
Stress testing | Testing undertaken to provide an understanding of the Group’s resilience to internal and external shocks. |
Structured entity | An entity in which voting or similar rights are not the dominant factor in deciding control. Structured entities are consolidated when the substance of the relationship indicates control. |
Subordinated liabilities | A form of Tier 2 capital that is unsecured. Subordinated notes rank equally with each other and behind all other creditors of the Society and the claims of Shareholding Members (other than holders of Permanent Interest Bearing Shares and Perpetual Capital Securities) as to principal and interest. |
Subscribed capital | See Permanent Interest Bearing Shares. |
Term Funding Scheme with additional incentives for SMEs (TFSME) | A scheme (now closed to new drawings) launched by the Bank of England designed to boost lending to households and businesses by providing term funding to banks and building societies participating in the scheme at rates close to Bank Rate. |
Tier 1 capital | A component of regulatory capital comprising Common Equity Tier 1 and Additional Tier 1 capital. |
Tier 2 capital | A component of regulatory capital comprising qualifying subordinated debt and eligible collective impairment allowances. |
Total Capital Requirement (TCR) | The minimum amount of capital the Group should hold as set by the PRA under Pillar 1 and Pillar 2A and informed by the Internal Capital Adequacy Assessment Process (ICAAP). |
UK leverage ratio | A ratio prescribed by the PRA based on the CRR leverage ratio but modified to restrict the amount of AT 1 capital that can be included in Tier 1 capital and to exclude eligible central bank holdings from leverage ratio exposures. |
Unencumbered assets | Assets readily available as collateral to secure funding. This includes loans and advances to customers that, although technically encumbered, are held in respect of undrawn self-issued notes under the Group’s covered bond and securitisation programmes and are therefore readily available as collateral to secure funding or to pledge as collateral against margin calls. |
Watchlist | A list of counterparties drawn up by the Group once it has elected to closely monitor the performance of loans subject to significant credit risk. |
Wholesale funding | Funding received from external counterparties that operate within the global financial markets (for example, insurance companies, pension funds, large businesses, financial institutions and sovereign entities). |
Write off | To write off a financial asset when it has exhausted all practical recovery efforts and it is concluded that there is no reasonable expectation of recovery. |
Climate Biennial Exploratory Scenario exercise (CBES) | Bank of England initiative to explore the financial risks posed by climate change. The exercise will test the resilience of the current business models of the largest banks, insurers and the financial system to climate-related risks and therefore the scale of adjustment that will need to be undertaken in coming decades for the system to remain resilient. |
Climate-related risks - physical | The physical risks arising from the direct physical impacts of climate change. Physical risks from climate change arise from a number of factors, and relate to specific weather events (such as heatwaves, floods and storms) and longer-term shifts in the climate (such as changes in precipitation, extreme weather variability, sea level rise and rising mean temperatures). |
Climate-related risks - transition | The transition risks arising from the transition to a low-carbon economy. Transition risks arise from the process of adjustment towards a Net-Zero Carbon economy. The UK Government has set a target of achieving Net Zero greenhouse gas emissions by 2050 to respond to the challenge climate change poses. A range of factors influence this risk, including: climate-related developments in policy and regulation, the emergence of disruptive technology or business models, shifting sentiment and societal preferences and the potential for 'stranded assets' to be created. |
Climate-related opportunities | Refers to the potential positive impacts that climate change may have on the Group’s business model and the opportunities this may present, for example, by growing our lending by supporting borrowers who make energy efficiency improvements on their homes. |
Energy Performance Certificate (EPC) | A report that assesses the energy efficiency of a property and recommends specific ways in which the efficiency of a property could be improved. Certification is graded from A (most efficient) to G (least efficient). |
Greenhouse gas (GHG) emissions | GHGs are atmospheric gases that absorb and emit radiation within the thermal infrared range and that contribute to the greenhouse effect and global climate change. Many different GHGs are produced as a result of human activities. The seven gases mandated under the Kyoto Protocol and to be included in national inventories under the United Nations Framework Convention on Climate Change (UNFCCC) - carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulphur hexafluoride (SF) and nitrogen trifluoride (NF3). |
ISO 14064-1 certification | An international standard that quantifies the reporting of greenhouse gas (GHG) emissions and the verification. |
Partnership for Carbon Accounting Financial (PCAF) | Global partnership of financial institutions that work together to develop and implement a harmonised approach to assess and disclose the greenhouse gas emissions associated with their loans and investments. |
Representative Concentration Pathway (RCP) | A method for capturing assumptions about climate change and global mean temperature increases over the 21st century. Each pathway results in a different range of global mean temperature, which helps the Group to understand how its assets will perform under a range of scenarios. |
Scope 1 emissions | Scope 1 emissions are direct greenhouse gas (GHG) emissions that occur from our own operations (e.g. our company vehicles, gas usage & fugitive emissions). |
Scope 2 emissions | Scope 2 emissions are indirect GHG emissions associated with the purchase of our electricity. |
Scope 3 emissions | Scope 3 emissions are the result of activities from assets not owned or controlled by the Society, but that the Society indirectly impacts in its value chain. Scope 3 emissions include all sources not within an organisation's Scope 1 and 2 boundary and can be separated into the following two categories: • Upstream Scope 3 emissions: business travel by means not owned or controlled by the Society, waste disposal and purchased goods & services; • Downstream Scope 3 emissions: the emissions from the properties financed through the Society’s operations – i.e. our mortgage customers. |
Streamlined Energy and Carbon Reporting (SECR) | SECR regulation is a crucial element of the UK's climate strategy. It aims to improve energy efficiency and reduce carbon emissions across large businesses. |
Task Force for Climate Related Financial Disclosures (TCFD) | The Financial Stability Board created the TCFD to improve the quality and quantity of reporting of climate related financial information, including the concentration of carbon related assets within the financial sector and the financial system's exposure to climate related risks. |
