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Market risk
Risk definition (audited)
Market risk is the risk posed to earnings, economic value or capital that arises from
changes in interest rates, market prices or foreign exchange rates.
Risk appetite statement
Our market risk appetite is determined by reference to a number of sub-risk appetites:
Earnings sensitivity
We have a low appetite for earnings risk, with the Board determining a limit calibrated to
ensure net interest income does not exceed an amount recommended and scrutinised by
the ALCO and approved by ROC. The limit is calibrated using a 2% instantaneous shock in
both directions.
Economic value sensitivity
We have a low appetite for economic value risk, with the Board determining a limit
calibrated to ensure that a change to the present value of our balance sheet does not
exceed an amount as recommended and scrutinised by ALCO and approved by ROC. The
limit is calibrated by calculating the impact of a 2% instantaneous shock in both directions.
Revaluation risk
We have a low appetite for revaluation risk, with the Board prescribing that we should avoid
situations where the potential losses caused by changes in market prices shall not exceed
capital held under standard risk weights, taking account of any offsets, determined by our
revaluation risk stress scenario.
Foreign exchange risk
We have no appetite for foreign exchange risk, with the Board determining that exposures
in foreign currencies should not represent a material portion of our capital resources.
Exposure and assessment (audited)
We do not have a trading book and we do not actively seek to create value through
taking interest rate positions. Whilst we support our customers to make payments or hold
accounts in foreign currency, we actively avoid exposing our own balance sheet to foreign
exchange risk.
The primary source of our market risk exposure arises from structural interest rate
risk in the banking book mismatch between the fixed rate assets and liabilities and any
differences in bases. Interest rate risk in the banking book crystallises in, and is measured
through, the sensitivity of our current and future net interest income and our economic
value to movements in market interest rates.
Interest rate risk
Table 25 sets out the interest rate risk repricing gaps of our balance sheet in the specified
time buckets, indicating how much of each type of asset and liability reprices in the
indicated periods, after applying expected pre-repayments in line with our policy.
A positive interest rate sensitivity gap exists when more assets than liabilities reprice during
a given period. A positive gap tends to benefit net interest income in an environment where
interest rates are rising; however, the actual effect will depend on multiple factors, including
actual repayment dates and interest rate sensitivities within the periods. The converse
is true for a negative interest rate sensitivity gap. The balances set out in the analysis do
not reconcile with the carrying amounts as disclosed in the consolidated balance sheet.
The difference arises primarily from a principal only basis, treatment of arrears, ECL, and
accrued interest for interest rate purposes.
Table 25: Behavioural repricing balance sheet
31 December 2025
Up to Non-interest
3 months 3 to 6 months 6 to 12 months 1 to 5 years Over 5 years bearing Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cash and balances at central banks
2,129
\u2013
\u2013
\u2013
\u2013
55
2,184
Loans and advances to customers
3,789
510
990
3,558
74
\u2013
8,921
Investment securities
1,811
201
946
778
544
\u2013
4,280
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
1,089
1,089
Total assets
7,729
711
1,936
4,335
619
1,144
16,475
Deposits from customers
(6,703)
(530)
(900)
(5,297)
\u2013
\u2013
(13,430)
Deposits from BoE and Repos
(473)
\u2013
\u2013
\u2013
\u2013
\u2013
(473)
Debt
\u2013
\u2013
\u2013
(925)
\u2013
\u2013
(925)
Other
\u2013
\u2013
\u2013
\u2013
\u2013
(412)
(412)
Shareholders\u2019 funds
(15)
(16)
(31)
(247)
\u2013
(925)
(1,234)
Total liabilities
(7,191)
(546)
(931)
(6,469)
\u2013
(1,337)
(16,474)
Interest rate derivatives
(1,323)
(85)
(202)
1,810
(200)
\u2013
\u2013
Interest rate sensitivity gap
(785)
80
803
(324)
419
(193)
\u2013
Cumulative gap
(785)
(705)
98
(226)
193
\u2013
\u2013
31 December 2024
Up to Non-interest
3 months 3 to 6 months 6 to 12 months 1 to 5 years Over 5 years bearing Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cash and balances at central banks
2,750
\u2013
\u2013
\u2013
\u2013
61
2,811
Loans and advances to customers
3,407
502
1,053
4,006
44
1
9,013
Investment securities (AC & FVOCI)
1,861
320
130
2,070
109
\u2013
4,490
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
1,268
1,268
Total assets
8,018
822
1,183
6,076
153
1,330
17,582
Deposits from customers
(7,449)
(1,017)
(807)
(5,185)
\u2013
\u2013
(14,458)
Deposits from BoE and Repos
(791)
\u2013
\u2013
\u2013
\u2013
\u2013
(791)
Debt
\u2013
\u2013
\u2013
(675)
\u2013
\u2013
(675)
Other liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
(475)
(475)
Shareholders\u2019 funds
(13)
(13)
(27)
(214)
\u2013
(916)
(1,183)
Total liabilities
(8,253)
(1,030)
(834)
(6,074)
\u2013
(1,391)
(17,582)
Interest rate derivatives
(123)
(150)
(50)
373
(50)
\u2013
\u2013
Interest rate sensitivity gap
(358)
(358)
299
375
103
(61)
\u2013
Cumulative gap
(358)
(716)
(417)
(42)
61
\u2013
\u2013
Table 26 shows the sensitivity arising from the regulatory scenario of a +200bps and -200bps parallel interest rate shock for a one-year forecasting period upon projected net interest income. Table 26: NII sensitivity (audited)
200bps increase
200bps decrease
1
\u00a3\u2019million \u00a3\u2019million
At 31 December 2025
(4.0)
3.1
At 31 December 2024
19.3
(19.9)
1. Sensitivities based on static balance sheet with rate changes passed in in full and assuming no specific product floors Foreign exchange exposure Foreign currency denominated assets and liabilities are matched off closely in each of the currencies we operate, and we eliminate our FX exposure as far as practical on a daily basis to an immaterial amount, well within the 2% threshold of our capital base. We offer business current accounts in foreign currency and foreign exchange facilities to facilitate customer requirements only. Response (audited) The Board is responsible for setting market risk appetite. Market risk is mitigated through a risk management framework that allows it to be monitored and managed by first line management and second line risk, with oversight from ALCO. Accordingly, ALCO ensures that steps taken to identify, measure, monitor and control the interest rate risk in the banking book are consistent with the approved strategies and policies. Management limits are set at ALCO for economic value and net interest income sensitivity to ensure prompt action and escalation. Limits and the relevant metrics are also reported to ROC and the Board. These limits are sufficient to allow efficient operational management of financial hedging. We benefit from natural offsetting between certain assets and liabilities, which may be based on both the contractual and behavioural characteristics of these positions. Where natural hedging is insufficient, we hedge net interest rate risk exposures appropriately, including, where necessary, with the use of derivatives. We enter into derivatives only for hedging purposes and not as part of customer transactions or for speculative purposes. Our Treasury and Prudential Risk teams work closely together to ensure that risks are identified and managed appropriately \u2013 and that we are well-positioned to avoid losses outside our appetite, in the event of unexpected market moves. Monitoring and reporting The Treasury function has responsibility for managing within our market risk policy and strategy. We have an independent second line Prudential Risk team that monitors our market risk exposures daily including ensuring compliance with the policies we have developed. The Prudential Risk team runs additional interest rate risk simulations monthly to assess other threats that may not be evident in the standard parallel shock metrics. We measure interest rate risk exposure using methods including the following: \u2022 interest rate gaps: calculating the net difference between total assets and total liabilities across a range of time buckets \u2022 economic value sensitivity: calculating repricing mismatches across our assets and liabilities over the horizon of our balance sheet and then evaluating the change in value arising from an instantaneous 2% change in the yield curve in both directions, taking into consideration any embedded customer optionality. Our economic value sensitivity risk appetite scenario is based on an instantaneous parallel rate movement of 2% at all repricing maturities, which is widely considered severe but plausible. Additionally, we evaluate the PRA\u2019s outlier test in line with regulatory requirements \u2022 net interest income sensitivity: calculating repricing mismatches across our assets and liabilities over a one-year horizon and then evaluating the change in net income arising from an instantaneous 2% change in the yield curve in both directions. Our net interest income risk appetite scenario is based on an instantaneous parallel rate movement of 2% at all repricing dates, which is widely considered severe but plausible. We also assess basis risk by considering divergences between the Bank of England Base Rate and the Sterling Overnight Index Average (SONIA). 30. Expected credit loss Accounting policy We assess on a forward-looking basis, the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date. Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly. Risk of default and ECL must incorporate forward-looking and macroeconomic information. Loans and advances Sophisticated impairment models have been developed for our retail and corporate and commercial loan portfolios, with three core models: revolving products; fixed term loans; and mortgages. Expected credit losses are calculated for drawn loans, and for committed lending. The same broad calculation approach is applied for each core model. ECL is calculated by multiplying three main components, being the PD, LGD and the EAD, discounted at the original effective interest rate. Key model inputs, judgements and estimates include: \u2022 consideration of when a SICR occurs \u2022 PD, LGD and EAD as well as their modelled impact \u2022 macroeconomic scenarios and weightings applied. Significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:
Stage
Description
ECL recognised
Stage 1
Financial assets that have had no significant increase in credit risk since initial
12-month ECL
recognition or that have low credit risk (high-quality investment securities only) at the Total losses expected on defaults which may occur within the next 12 months. Losses
reporting date. are adjusted for probability-weighted macroeconomic scenarios.
Stage 2
Financial assets that have had a significant increase in credit risk since initial recognition
Lifetime ECL
but that do not have objective evidence of impairment. Losses expected on defaults which may occur at any point in a loan\u2019s lifetime. Losses are
In addition, for corporate and commercial counterparties, the Early Warning List is used adjusted for probability-weighted macroeconomic scenarios.
to inform qualitative triggers for SICR.
SICR includes the rebuttable presumption that financial instruments falling 30 DPD
due on contractually defined payments are to be considered as having deteriorated
significantly since origination and should trigger Stage 2.
Stage 3
Financial assets that are credit impaired at the reporting date. A financial asset is
Lifetime ECL
credit impaired when it has met the definition of default. We define default to have Losses calculated based on default parameters. Losses are adjusted for probability-
occurred when a loan is greater than 90 days past due (non-performing loan) or where weighted macroeconomic scenarios.
the borrower is considered unlikely to pay. This includes customers in corporate and
commercial who are categorised as Early Warning List 3 (EWL3) or forbearance. Interest income is calculated on the carrying amount of the loan net of credit allowance.
Purchased or originated Financial assets that have been purchased and had objective evidence of being \u2018non- Lifetime ECL
credit-impaired performing\u2019 or \u2018credit impaired\u2019 at the point of purchase. At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
(POCI) assets are incorporated into the calculation of the asset\u2019s effective interest rate. Subsequent
changes to the estimate of lifetime ECL are recognised as a loss allowance.
A SICR may be identified in a number of ways: \u2022 Quantitative criteria \u2013 where the numerically calculated PD on a loan has increased significantly since initial recognition. This is assessed using detailed models which assess whether the lifetime PD at observation is greater than the lifetime PD at origination by a portfolio specific threshold. Given the different nature of the products and the dissimilar level of lifetime PDs at origination, we implement different thresholds by sub-products within each portfolio (term loans, revolving loan facilities and mortgages). \u2022 Qualitative criteria \u2013 instruments that are 30 days past due or more are allocated to Stage 2, regardless of the results of the quantitative analysis. In addition, instruments classified on the Early Warning List as higher risk are allocated to Stage 2, regardless of the results of the quantitative analysis. A loan will be considered to be \u2018non-performing\u2019 or \u2018credit impaired\u2019 when it meets our definition of default \u2013 that is to say, the loan is 90 days past due, or the borrower is considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed through the presence of triggers including the loan being in repossession, the customer having been declared bankrupt, or evidence of financial distress leading to forbearance. A loan may also be considered to be non-performing when it is subject to forbearance measures, consisting of concessions in relation to either: \u2022 a modification of the previous terms and conditions of the loan which the borrower is not considered able to comply with \u2022 a total or partial refinancing of a troubled debt contract that would not have been granted had the borrower not been in financial difficulties. It may not be possible to identify a single discrete event which defines an asset as \u2018non-performing\u2019 or \u2018credit impaired\u2019. Instead, the combined effect of several events may cause financial assets to become credit impaired. A probation period of at least three months is implemented before transferring a financial instrument to a lower stage (e.g. from Stage 3 to Stage 2). Specifically, in order to move an account from Stage 3, where an asset is showing improving trends and is no longer considered non-performing or credit impaired. Probability of default (PD) PD represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the loan (for Stage 2 and 3 accounts). A PD is calculated for all loans based on historical data and incorporates: \u2022 credit quality scores \u2022 life cycle trends depending on a loan\u2019s vintage \u2022 factors indicating the quality of the vintage \u2022 characteristics of the current and future economic environment. Loss given default (LGD) LGD represents our expectation of the extent of a loss on a defaulted exposure and is expressed as a percentage considering expected recoveries on defaulted accounts. We apply two LGD rates \u2013 one for unsecured lending and one for secured lending. LGD rates have been modelled considering a range of inputs, including: \u2022 value of collateral on secured portfolios \u2013 a key driver of the expected recovery in the event of default \u2022 expected haircut applied to the collateral value to reflect a forced sale discount \u2022 price index forecasts applied to project collateral values into the future \u2022 stress factors based on macroeconomic scenarios. Exposure at default (EAD) This is the amount that we expect to be owed at the point of default. This is subject to judgement since a balance will not necessarily remain static between the balance sheet date and the point of expected default. For example: \u2022 interest should be accrued \u2022 repayments may be received \u2022 for a revolving product, further drawings may be taken between the current point in time and the point of default \u2022 estimations of these factors will be incorporated into our estimate of EAD. PD, LGD and EAD are calculated and applied at an individual account level for secured lending. For unsecured lending, PD and EAD are calculated and applied at an individual account level, but LGD is assessed at a portfolio level and applied to accounts on an individual basis. Macroeconomic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios and including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL, and are designed to capture material \u2018non-linearities\u2019 (i.e. where the increase in credit losses if conditions deteriorate exceeds the decrease in credit losses if conditions improve). In the normal course of business, we use four scenarios. These represent a \u2018most likely outcome\u2019 (the \u2018Baseline\u2019 scenario) and three, less likely, \u2018Outer\u2019 scenarios, referred to as an \u2018Upside\u2019, a \u2018Downside\u2019 and a \u2018Severe downside\u2019 scenario respectively. The Baseline scenario captures the most likely economic future; the Downside and Severe Downside scenarios reflect adverse economic conditions; and the Upside scenario presents more favourable economic conditions. Key scenario assumptions are set using data sourced from independent external economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the use of independent information. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied as at 31 December 2025 and 31 December 2024: \u2022 UK interest rates (Bank of England Base Rate and five-year mortgage rate) \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics are considered to have a direct impact on PDs and were selected following a search and data calibration exercise of possible drivers. A list of around 15 potential drivers were initially considered, representing drivers which capture trends in the economy at large, and may indicate economic trends which will impact UK borrowers. The list included variables which impact economic output, interest rates, inflation, share prices, borrower income and the UK housing market. An algorithm was then used to choose the subset of drivers which had the greatest significance and predictive fit to our data. Each scenario was determined by flexing the Baseline scenario, taking into account a number of factors in the global and UK economy such as commodity prices, global interest rates, UK investment spend and exchange rates, as well as the possible impact of recessionary conditions or financial shocks. A simulation process was designed to determine the weighting to apply to each scenario based on its severity and the range of possible scenarios for which that scenario was representative. A summary of each scenario and weighting used at 31 December 2025 is as follows: \u2022 Baseline scenario: Reflects the projection of the median, or \u201850%\u2019 scenario, meaning that in the assessment there is an equal probability that the economy might perform better or worse than the baseline forecast \u2022 Upside scenario: This above-baseline scenario is designed so there is a 10% probability the economy will perform better than in this scenario, broadly speaking, and a 90% probability it will perform worse \u2022 Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 90% probability the economy will perform better, broadly speaking, and a 10% probability it will perform worse \u2022 Severe downside scenario: In this recession scenario, in which a deep downturn develops, there is a 96% probability the economy will perform better, broadly speaking, and a 4% probability it will perform worse. These assumptions are considered sufficient to capture any material non-linearities. The weightings applied to each scenario at 31 December 2025 were Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5% (31 December 2024: Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5%). Economic variable assumptions The period-end assumptions used for the ECL estimate as at 31 December 2025 are as follows:
31 December 2025
31 December 2024
Macroeconomic variable
Scenario
2026
2027
2028
2029
2030
2025
2026
2027
2028
2029
Five-year mortgage rate (%)
Baseline
4.16%
4.14%
4.11%
4.07%
4.05%
4.51%
4.24%
3.95%
3.96%
4.00%
Upside
4.37%
4.23%
4.10%
4.07%
4.05%
4.74%
4.25%
3.95%
3.95%
4.00%
Downside
2.61%
2.13%
2.63%
3.30%
3.84%
3.51%
2.41%
2.44%
3.09%
3.71%
Severe downside
2.19%
1.67%
2.03%
2.54%
3.31%
2.81%
2.08%
1.96%
2.43%
3.29%
BoE interest rate (%)
Baseline
3.25%
2.75%
2.75%
2.50%
2.50%
4.10%
2.75%
2.50%
2.50%
2.50%
Upside
3.46%
3.16%
2.87%
2.50%
2.50%
4.28%
2.97%
2.56%
2.50%
2.50%
Downside
1.94%
1.04%
1.25%
1.60%
1.95%
2.71%
1.11%
1.38%
1.72%
1.95%
Severe downside
1.36%
0.70%
0.70%
0.83%
1.04%
2.13%
0.76%
0.75%
0.94%
1.04%
Unemployment (%)
Baseline
5.11%
5.00%
4.93%
4.89%
4.89%
4.41%
4.50%
4.59%
4.67%
4.76%
Upside
4.47%
4.14%
4.12%
4.28%
4.49%
3.78%
3.64%
3.78%
4.07%
4.36%
Downside
7.01%
7.72%
7.60%
7.10%
6.40%
6.32%
7.22%
7.25%
6.89%
6.27%
Severe downside
8.24%
8.82%
8.54%
8.20%
7.46%
7.55%
8.32%
8.19%
7.99%
7.33%
House price index (YoY%)
Baseline
2.13%
2.32%
1.57%
1.93%
2.45%
2.24%
3.89%
2.62%
1.47%
2.07%
Upside
16.49%
5.41%
(0.97% )
(2.13% )
0.11%
16.62%
7.03%
0.06%
(2.57% )
(0.26% )
Downside
(9.11% )
(7.05% )
0.83%
4.69%
5.76%
(9.01% )
(5.62% )
1.88%
4.22%
5.37%
Severe downside
(15.29% )
(10.96% )
1.24%
3.37%
5.03%
(15.20% )
(9.60% )
2.29%
2.91%
4.64%
UK GDP (YoY%)
Baseline
1.35%
1.52%
1.65%
1.73%
1.73%
2.08%
1.18%
2.07%
1.43%
1.87%
Upside
4.89%
1.77%
1.60%
1.76%
1.94%
5.65%
1.42%
2.02%
1.46%
2.08%
Downside
(3.95% )
1.82%
2.80%
1.79%
1.65%
(3.50% )
1.49%
3.28%
1.43%
1.79%
Severe downside
(4.85% )
0.56%
3.96%
2.45%
1.61%
(4.61% )
0.15%
4.56%
2.26%
1.85%
Commercial real estate (YoY%)
Baseline
(1.12% )
(0.22% )
(0.35% )
(0.25% )
(0.16% )
(0.86% )
0.45%
(0.31% )
(1.34% )
(1.04% )
Upside
13.82%
1.57%
(3.16% )
(4.11% )
(2.20% )
14.42%
2.33%
(3.27% )
(5.24% )
(3.08% )
Downside
(15.91% )
(6.47% )
0.64%
3.17%
3.66%
(16.02% )
(5.62% )
0.83%
1.97%
2.75%
Severe downside
(25.20% )
(8.51% )
2.48%
2.37%
3.97%
(25.06% )
(8.49% )
2.57%
1.24%
3.06%
Following the initial four-year projection period, the Upside, Downside and Severe downside scenarios converge to the Baseline scenario. The rate of convergence varies based on the macroeconomic factor, but at a minimum convergence takes place three years from the initial four-year projection period. We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL in all economic environments. The scenarios applied comprise our best estimate of economic impacts on the ECL, and the actual outcome may be significantly different.
Critical accounting judgement
Measurement of the expected credit loss allowance
The measurement of ECL is complex and involves the use of significant judgements.
We consider that the following represent key judgements in respect of the measurement
of the ECL.
Measurement of the expected credit loss allowance \u2013 significant increase in credit risk
IFRS 9 requires a higher level of ECL to be recognised for underperforming loans as a
lifetime ECL is recognised compared to a 12-month ECL for performing loans. This is
considered based on a staging approach. Financial assets that have had no SICR since
initial recognition, or that have low credit risk at the reporting date, are considered to
be performing loans and are classified as \u2018Stage 1\u2019. Losses are calculated based on our
expectation of defaults which may occur within the next 12 months. Assets which are
considered to have experienced a SICR since initial recognition, but that do not have
objective evidence of impairment, are classified as \u2018Stage 2\u2019. Losses are calculated based
on defaults which may occur at any point in the asset\u2019s lifetime.
Judgement is required to determine when a SICR has occurred. An assessment of whether
credit risk has increased significantly since initial recognition, resulting in transfer to Stage 2,
is performed at each reporting period by considering the change in the PD expected over
the remaining life of the financial instrument. The assessment explicitly or implicitly compares
the PD occurring at the reporting date compared to that at initial recognition, taking into
account reasonable and supportable information, including information about past events,
current conditions and future economic conditions.
Measurement of the expected credit loss allowance \u2013 use of post model
adjustments and Management Overlays
We have applied expert judgement to the measurement of the ECL in the form of post
model adjustments and Management Overlays.
Post model adjustments refer to increases/decreases in ECL to address known model
limitations, either in model methodology or model inputs. These rely on analysis of model
inputs and parameters to determine the change required to improve model accuracy. These
may be applied at an aggregated level, however they will usually be applied at account level.
Management Overlays reflect management judgement. These rely more heavily on
expert judgement and will usually be applied at an aggregated level. For example, where
recent changes in market and economic conditions have not yet been captured in the
macroeconomic factor inputs to models (e.g., industry-specific stress event).
PMAs have been reassessed during the period to ensure an appropriate level of ECL that
continues to account for the macroeconomic uncertainty. The level of PMAs increased
during 2025 with the total percentage of ECL stock standing at 14% as at 31 December
2025 (31 December 2024: 10%). The increase in the PMA percentage relates to the
removal of negative PMAs following model enhancements and the reduction in the
overall ECL stock due to portfolio sales. There are no Management Overlays being used
as at 31 December 2025.
PMAs make up \u00a324.3 million of the ECL stock as at 31 December 2025 (31 December 2024:
\u00a318.7 million) and comprise the following:
\u2022 Macro correlation uncertainty \u2013 applied to address the risk that the Commercial PD
model may under-reflect macroeconomic sensitivity. (31 December 2025: \u00a312.3 million;
31 December 2024: \u00a311.5 million). The adjustment is informed by PD \u2013 Observed
Default Rate monitoring, the limited maturity of the expanded 2025 portfolio, and
expert judgement on how macro-relationships may normalise. The adjustment is
reviewed quarterly, with reduction considered once sufficient post-origination
performance evidence becomes available
\u2022 Commercial model enhancements \u2013 held in anticipation of model updates for the
corporate and commercial portfolio (31 December 2025: \u00a36.01 million; 31 December
2024: \u00a34.6 million). The increase in the overlay over the period is to reflect the impact
from the Enhanced Business Overdrafts portfolio growth which utilises the IFRS 9
commercial models as a proxy for ECL assessment
\u2022 Mortgage model and data enhancements \u2013 will be removed once the model and data
enhancements are implemented into production (31 December 2025: \u00a32.9 million;
31 December 2024: \u00a32.9 million)
\u2022 Climate change impact \u2013 reflects the impact of climate change on property values
for the mortgage and corporate and commercial portfolios (31 December 2025:
\u00a32.8 million; 31 December 2024: \u00a32.8 million)
\u2022 Commercial real estate adjustment \u2013 reflects potential downside risk in property
price indices beyond the latest scenarios for the corporate and commercial property
portfolios (31 December 2025: \u00a30.3 million; 31 December 2024: \u00a30.7 million).
Critical accounting estimate
Measurement of the expected credit loss allowance
We consider that the key source of estimation uncertainty relates to the formulation
and incorporation of multiple forward-looking economic scenarios into the ECL
estimates to meet the measurement objective of IFRS 9.
Multiple forward-looking economic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios, including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied: \u2022 UK interest rates \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. The weightings applied to each scenario at 31 December 2025 and 31 December 2024 are:
Full year Full year
31 December 31 December
2025 2024
Scenarios % %
Baseline
50%
50%
Upside
20%
20%
Downside
25%
25%
Severe downside
5%
5%
The weightings used are reviewed each reporting period to ensure these remain appropriate and as such are considered to represent significant accounting estimates. We have performed an assessment of the impact on the ECL if each of the Baseline, Upside, Downside and Severe downside scenarios were applied to the ECL calculation using a 100% weighting (that is, ignoring all other scenarios in each case):
31 December 2025
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
32
18
120
170
Baseline
29
15
118
162
Upside
25
13
116
154
Downside
40
24
126
190
Severe downside
45
32
129
206
31 December 2024
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
39
29
123
191
Baseline
36
26
121
183
Upside
33
23
120
176
Downside
44
37
129
210
Severe downside
48
50
132
230
The sensitivities disclosed above represent example scenarios and may not represent
actual scenarios which occur in the future. If one of these scenarios did arise then at that
time the ECL would not equal the amount disclosed above, as the amounts disclosed do
not take account of the alternative possible scenarios which would also be considered
at that time. Individually assessed Stage 3 cases have not been sensitised.
Write-off policy
We write off financial assets (either partially or fully) when there is no realistic expectation
of receiving further payment from the customer. Indicators that there is no reasonable
expectation of recovery include debt sale to a third party and ceasing enforcement activity.
We may write off financial assets that are still subject to enforcement activity.
Expected credit loss expense
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Retail mortgages
1
(4)
Consumer lending
1
(9)
\u2013
Commercial lending
19
(4)
Write-offs and other movements
3
15
Tota l
14
7
1. Adjusted for the \u00a3584 million sale of unsecured personal loans.
Write-offs and other movements are predominantly driven by loan and debt sales within the year.
Investment securities
All investment securities held at FVOCI are deemed to be in Stage 1. Any credit loss
allowance is, however, included as part of the revaluation amount in the FVOCI reserve.
At 31 December 2025, the loss allowance included within the FVOCI reserve is \u00a30.1 million
(31 December 2024: \u00a30.1 million).
All investment securities held at amortised cost are deemed to be in Stage 1. The total ECL expense
recognised for these assets at 31 December 2025 is \u00a30.8 million (31 December 2024: \u00a30.6 million).
The following tables explain the changes in both the gross carrying amount and loss allowances of our loans and advances during the year.
Total
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Transfers to/(from) Stage 1
1
301
(288)
(13)
\u2013
\u2013
(8)
7
1
\u2013
\u2013
293
(281)
(12)
\u2013
\u2013
Transfers to/(from) Stage 2
(281)
285
(3)
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(279)
283
(3)
\u2013
1
Transfers to/(from) Stage 3
(111)
(37)
148
\u2013
\u2013
\u2013
3
(4)
\u2013
(1)
(111)
(34)
144
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
7
(8)
(23)
\u2013
(24)
7
(8)
(23)
\u2013
(24)
New lending
3
2,228
94
2
\u2013
2,324
(14)
(1)
(1)
\u2013
(16)
2,214
93
1
\u2013
2,308
Repayments, additional drawdowns
and interest accrued
(384)
(36)
(20)
\u2013
(440)
\u2013
\u2013
\u2013
\u2013
\u2013
(384)
(36)
(20)
\u2013
(440)
Derecognitions
4
(1,657)
(283)
(156)
\u2013
(2,096)
15
10
33
\u2013
58
(1,642)
(273)
(123)
\u2013
(2,038)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
5
2
(3)
\u2013
4
5
2
(3)
\u2013
4
31 December 2025
7,819
713
462
(1)
8,993
(32)
(18)
(121)
1
(170)
7,787
695
341
\u2013
8,823
Off-balance sheet items
Commitments and guarantees
6
1,041
\u2013
1,041
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
10,596
1,511
389
\u2013
12,496
(63)
(43)
(93)
\u2013
(199)
10,533
1,468
296
\u2013
12,297
Transfers to/(from) Stage 1
1
385
(368)
(17)
\u2013
\u2013
(11)
10
1
\u2013
\u2013
374
(358)
(16)
\u2013
\u2013
Transfers to/(from) Stage 2
(409)
416
(7)
\u2013
\u2013
2
(2)
\u2013
\u2013
\u2013
(407)
414
(7)
\u2013
\u2013
Transfers to/(from) Stage 3
(192)
(100)
292
\u2013
\u2013
4
7
(11)
\u2013
\u2013
(188)
(93)
281
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
9
(14)
(40)
\u2013
(45)
9
(14)
(40)
\u2013
(45)
New lending
3
1,716
147
1
\u2013
1,864
(11)
(3)
(1)
\u2013
(15)
1,704
144
\u2013
\u2013
1,849
Repayments, additional drawdowns
and interest accrued
(618)
(121)
(33)
(1)
(773)
\u2013
\u2013
\u2013
\u2013
\u2013
(618)
(121)
(33)
(1)
(773)
Derecognitions
4
(3,755)
(507)
(121)
\u2013
(4,383)
11
11
20
\u2013
42
(3,744)
(496)
(101)
\u2013
(4,341)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
20
5
(1)
1
25
20
5
(1)
1
25
31 December 2024
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Off-balance sheet items
Commitments and guarantees
6
718
\u2013
718
1. Represents stage transfers prior to any ECL remeasurements.
2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer. In addition it includes any ECL change resulting from model assumptions and forward-looking information on these loans.
3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed as well as any ECL that has been recognised in relation to these loans during the year.
4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, sold or written off.
5. Represents the change in ECL to those loans that remain within the same stage through the year.
6. Represents undrawn lending facilities. Further details can be found in note 31.
Consumer lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
Transfers to/(from) Stage 1
1
7
(6)
(1)
\u2013
\u2013
(2)
1
1
\u2013
\u2013
5
(5)
\u2013
\u2013
\u2013
Transfers to/(from) Stage 2
(1)
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(1)
(4)
5
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(1)
(3)
4
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
\u2013
(3)
\u2013
(1)
2
\u2013
(3)
\u2013
(1)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(12)
\u2013
(5)
\u2013
(17)
\u2013
\u2013
\u2013
\u2013
\u2013
(12)
\u2013
(5)
\u2013
(17)
Derecognitions
4
(456)
(140)
(22)
\u2013
(618)
11
6
20
\u2013
37
(445)
(134)
(2)
\u2013
(581)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
4
\u2013
5
1
\u2013
4
\u2013
5
31 December 2025
37
4
74
(1)
114
\u2013
(1)
(67)
1
(67)
37
3
7
\u2013
47
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
906
314
77
\u2013
1,297
(26)
(16)
(66)
\u2013
(108)
880
298
11
\u2013
1,189
Transfers to/(from) Stage 1
1
80
(79)
(1)
\u2013
\u2013
(3)
3
\u2013
\u2013
\u2013
77
(76)
(1)
\u2013
\u2013
Transfers to/(from) Stage 2
(74)
74
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(73)
73
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(27)
(14)
41
\u2013
\u2013
1
4
(5)
\u2013
\u2013
(26)
(10)
36
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
(4)
(25)
\u2013
(27)
2
(4)
(25)
\u2013
(27)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(226)
(83)
(10)
(1)
(320)
\u2013
\u2013
\u2013
\u2013
\u2013
(226)
(83)
(10)
(1)
(320)
Derecognitions
4
(167)
(59)
(10)
\u2013
(236)
4
2
9
\u2013
15
(163)
(57)
(1)
\u2013
(221)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
9
3
(1)
1
12
9
3
(1)
1
12
31 December 2024
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
1. Represents stage transfers prior to any ECL remeasurements.
2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information.
3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed.
4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off.
5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile.
Corporate and commercial lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
Transfers to/(from) Stage 1
1
82
(80)
(2)
\u2013
\u2013
(5)
5
\u2013
\u2013
\u2013
77
(75)
(2)
\u2013
\u2013
Transfers to/(from) Stage 2
(138)
139
\u2013
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(136)
137
\u2013
\u2013
1
Transfers to/(from) Stage 3
(62)
(9)
71
\u2013
\u2013
\u2013
1
(2)
\u2013
(1)
(62)
(8)
69
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
4
(7)
(18)
\u2013
(21)
4
(7)
(18)
\u2013
(21)
New lending
3
1,619
28
1
\u2013
1,648
(13)
(1)
(1)
\u2013
(15)
1,606
27
\u2013
\u2013
1,633
Repayments, additional drawdowns and interest
accrued
(265)
(27)
(16)
\u2013
(308)
\u2013
\u2013
\u2013
\u2013
\u2013
(265)
(27)
(16)
\u2013
(308)
Derecognitions
4
(547)
(79)
(90)
\u2013
(716)
4
4
11
\u2013
19
(543)
(75)
(79)
\u2013
(697)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
4
2
(7)
\u2013
(1)
4
2
(7)
\u2013
(1)
31 December 2025
3,558
213
168
\u2013
3,939
(27)
(14)
(46)
\u2013
(87)
3,531
199
122
\u2013
3,852
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,803
413
166
\u2013
3,382
(30)
(21)
(21)
\u2013
(72)
2,773
392
145
\u2013
3,310
Transfers to/(from) Stage 1
1
159
(151)
(8)
\u2013
\u2013
(7)
6
1
\u2013
\u2013
152
(145)
(7)
\u2013
\u2013
Transfers to/(from) Stage 2
(164)
169
(5)
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(163)
168
(5)
\u2013
\u2013
Transfers to/(from) Stage 3
(112)
(40)
152
\u2013
\u2013
3
2
(5)
\u2013
\u2013
(109)
(38)
147
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
6
(9)
(13)
\u2013
(16)
6
(9)
(13)
\u2013
(16)
New lending
3
985
21
1
\u2013
1,007
(10)
(1)
(1)
\u2013
(12)
975
20
\u2013
\u2013
994
Repayments, additional drawdowns and interest
accrued
(279)
(26)
(24)
\u2013
(329)
\u2013
\u2013
\u2013
\u2013
\u2013
(279)
(26)
(24)
\u2013
(329)
Derecognitions
4
(522)
(145)
(78)
\u2013
(745)
4
7
9
\u2013
20
(518)
(138)
(69)
\u2013
(725)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
10
1
1
\u2013
12
10
1
1
\u2013
12
31 December 2024
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
1. Represents stage transfers prior to any ECL remeasurements.
2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information.
3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed.
4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off.
5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile.
Retail mortgages
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
Transfers to/(from) Stage 1
1
212
(202)
(10)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
211
(201)
(10)
\u2013
\u2013
Transfers to/(from) Stage 2
(142)
145
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(142)
145
(3)
\u2013
\u2013
Transfers to/(from) Stage 3
(48)
(24)
72
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(48)
(23)
71
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
605
66
1
\u2013
672
(1)
\u2013
\u2013
\u2013
(1)
604
66
1
\u2013
671
Repayments, additional drawdowns and interest
accrued
(107)
(9)
1
\u2013
(115)
\u2013
\u2013
\u2013
\u2013
\u2013
(107)
(9)
1
\u2013
(115)
Derecognitions
4
(654)
(64)
(44)
\u2013
(762)
\u2013
\u2013
2
\u2013
2
(654)
(64)
(42)
\u2013
(760)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
31 December 2025
4,224
496
220
\u2013
4,940
(5)
(3)
(8)
\u2013
(16)
4,219
493
212
\u2013
4,924
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
6,887
784
146
\u2013
7,817
(7)
(6)
(6)
\u2013
(19)
6,880
778
140
\u2013
7,798
Transfers to/(from) Stage 1
1
146
(138)
(8)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
145
(137)
(8)
\u2013
\u2013
Transfers to/(from) Stage 2
(171)
173
(2)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(171)
173
(2)
\u2013
\u2013
Transfers to/(from) Stage 3
(53)
(46)
99
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(53)
(45)
98
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
728
126
\u2013
\u2013
854
(1)
(2)
\u2013
\u2013
(3)
726
124
\u2013
\u2013
851
Repayments, additional drawdowns and interest
accrued
(113)
(13)
1
\u2013
(124)
\u2013
\u2013
\u2013
\u2013
\u2013
(113)
(12)
1
\u2013
(124)
Derecognitions
4
(3,066)
(303)
(33)
\u2013
(3,402)
3
2
2
\u2013
7
(3,063)
(301)
(31)
\u2013
(3,395)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
\u2013
\u2013
2
1
1
\u2013
\u2013
2
31 December 2024
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile .
Credit risk exposures
Retail mortgages
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
4,221
450
59
\u2013
4,356
504
57
\u2013
1 to 29 days past due
3
17
9
\u2013
2
21
11
\u2013
30 to 89 days past due
\u2013
29
31
\u2013
\u2013
59
21
\u2013
90+ days past due
\u2013
\u2013
121
\u2013
\u2013
\u2013
114
\u2013
Gross carrying amount
4,224
496
220
\u2013
4,358
584
203
\u2013
Consumer lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
36
2
4
\u2013
496
141
2
(1)
1 to 29 days past due
\u2013
1
\u2013
\u2013
\u2013
2
1
\u2013
30 to 89 days past due
1
1
1
\u2013
\u2013
10
5
\u2013
90+ days past due
\u2013
\u2013
69
(1)
\u2013
\u2013
89
\u2013
Gross carrying amount
37
4
74
(1)
496
153
97
(1)
Corporate and commercial lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
3,544
176
78
\u2013
2,842
203
86
\u2013
1 to 29 days past due
14
28
5
\u2013
27
16
2
\u2013
30 to 89 days past due
\u2013
9
5
\u2013
\u2013
21
60
\u2013
90+ days past due
\u2013
\u2013
80
\u2013
\u2013
\u2013
56
\u2013
Gross carrying amount
3,558
213
168
\u2013
2,869
241
204
\u2013
Tota l
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
7,801
628
141
\u2013
7,693
848
145
(1)
1 to 29 days past due
17
46
14
\u2013
29
40
13
\u2013
30 to 89 days past due
1
39
37
\u2013
\u2013
90
87
\u2013
90+ days past due
\u2013
\u2013
270
(1)
\u2013
\u2013
260
\u2013
Gross carrying amount
7,819
713
462
(1)
7,722
978
505
(1)
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-384": { "value": "Market risk Risk definition (audited) Market risk is the risk posed to earnings, economic value or capital that arises from changes in interest rates, market prices or foreign exchange rates. Risk appetite statement Our market risk appetite is determined by reference to a number of sub-risk appetites: Earnings sensitivity We have a low appetite for earnings risk, with the Board determining a limit calibrated to ensure net interest income does not exceed an amount recommended and scrutinised by the ALCO and approved by ROC. The limit is calibrated using a 2% instantaneous shock in both directions. Economic value sensitivity We have a low appetite for economic value risk, with the Board determining a limit calibrated to ensure that a change to the present value of our balance sheet does not exceed an amount as recommended and scrutinised by ALCO and approved by ROC. The limit is calibrated by calculating the impact of a 2% instantaneous shock in both directions. Revaluation risk We have a low appetite for revaluation risk, with the Board prescribing that we should avoid situations where the potential losses caused by changes in market prices shall not exceed capital held under standard risk weights, taking account of any offsets, determined by our revaluation risk stress scenario. Foreign exchange risk We have no appetite for foreign exchange risk, with the Board determining that exposures in foreign currencies should not represent a material portion of our capital resources. Exposure and assessment (audited) We do not have a trading book and we do not actively seek to create value through taking interest rate positions. Whilst we support our customers to make payments or hold accounts in foreign currency, we actively avoid exposing our own balance sheet to foreign exchange risk. The primary source of our market risk exposure arises from structural interest rate risk in the banking book mismatch between the fixed rate assets and liabilities and any differences in bases. Interest rate risk in the banking book crystallises in, and is measured through, the sensitivity of our current and future net interest income and our economic value to movements in market interest rates. Interest rate risk Table 25 sets out the interest rate risk repricing gaps of our balance sheet in the specified time buckets, indicating how much of each type of asset and liability reprices in the indicated periods, after applying expected pre-repayments in line with our policy. A positive interest rate sensitivity gap exists when more assets than liabilities reprice during a given period. A positive gap tends to benefit net interest income in an environment where interest rates are rising; however, the actual effect will depend on multiple factors, including actual repayment dates and interest rate sensitivities within the periods. The converse is true for a negative interest rate sensitivity gap. The balances set out in the analysis do not reconcile with the carrying amounts as disclosed in the consolidated balance sheet. The difference arises primarily from a principal only basis, treatment of arrears, ECL, and accrued interest for interest rate purposes. Table 25: Behavioural repricing balance sheet
31 December 2025
Up to Non-interest
3 months 3 to 6 months 6 to 12 months 1 to 5 years Over 5 years bearing Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cash and balances at central banks
2,129
\u2013
\u2013
\u2013
\u2013
55
2,184
Loans and advances to customers
3,789
510
990
3,558
74
\u2013
8,921
Investment securities
1,811
201
946
778
544
\u2013
4,280
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
1,089
1,089
Total assets
7,729
711
1,936
4,335
619
1,144
16,475
Deposits from customers
(6,703)
(530)
(900)
(5,297)
\u2013
\u2013
(13,430)
Deposits from BoE and Repos
(473)
\u2013
\u2013
\u2013
\u2013
\u2013
(473)
Debt
\u2013
\u2013
\u2013
(925)
\u2013
\u2013
(925)
Other
\u2013
\u2013
\u2013
\u2013
\u2013
(412)
(412)
Shareholders\u2019 funds
(15)
(16)
(31)
(247)
\u2013
(925)
(1,234)
Total liabilities
(7,191)
(546)
(931)
(6,469)
\u2013
(1,337)
(16,474)
Interest rate derivatives
(1,323)
(85)
(202)
1,810
(200)
\u2013
\u2013
Interest rate sensitivity gap
(785)
80
803
(324)
419
(193)
\u2013
Cumulative gap
(785)
(705)
98
(226)
193
\u2013
\u2013
31 December 2024
Up to Non-interest
3 months 3 to 6 months 6 to 12 months 1 to 5 years Over 5 years bearing Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cash and balances at central banks
2,750
\u2013
\u2013
\u2013
\u2013
61
2,811
Loans and advances to customers
3,407
502
1,053
4,006
44
1
9,013
Investment securities (AC & FVOCI)
1,861
320
130
2,070
109
\u2013
4,490
Other assets
\u2013
\u2013
\u2013
\u2013
\u2013
1,268
1,268
Total assets
8,018
822
1,183
6,076
153
1,330
17,582
Deposits from customers
(7,449)
(1,017)
(807)
(5,185)
\u2013
\u2013
(14,458)
Deposits from BoE and Repos
(791)
\u2013
\u2013
\u2013
\u2013
\u2013
(791)
Debt
\u2013
\u2013
\u2013
(675)
\u2013
\u2013
(675)
Other liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
(475)
(475)
Shareholders\u2019 funds
(13)
(13)
(27)
(214)
\u2013
(916)
(1,183)
Total liabilities
(8,253)
(1,030)
(834)
(6,074)
\u2013
(1,391)
(17,582)
Interest rate derivatives
(123)
(150)
(50)
373
(50)
\u2013
\u2013
Interest rate sensitivity gap
(358)
(358)
299
375
103
(61)
\u2013
Cumulative gap
(358)
(716)
(417)
(42)
61
\u2013
\u2013
Table 26 shows the sensitivity arising from the regulatory scenario of a +200bps and
-200bps parallel interest rate shock for a one-year forecasting period upon projected net
interest income.
Table 26: NII sensitivity (audited)
200bps increase
200bps decrease
1
\u00a3\u2019million \u00a3\u2019million
At 31 December 2025
(4.0)
3.1
At 31 December 2024
19.3
(19.9)
1. Sensitivities based on static balance sheet with rate changes passed in in full and assuming no specific product
floors
Foreign exchange exposure
Foreign currency denominated assets and liabilities are matched off closely in each of
the currencies we operate, and we eliminate our FX exposure as far as practical on a daily
basis to an immaterial amount, well within the 2% threshold of our capital base. We offer
business current accounts in foreign currency and foreign exchange facilities to facilitate
customer requirements only.
Response (audited)
The Board is responsible for setting market risk appetite. Market risk is mitigated through
a risk management framework that allows it to be monitored and managed by first line
management and second line risk, with oversight from ALCO. Accordingly, ALCO ensures
that steps taken to identify, measure, monitor and control the interest rate risk in the
banking book are consistent with the approved strategies and policies.
Management limits are set at ALCO for economic value and net interest income
sensitivity to ensure prompt action and escalation. Limits and the relevant metrics are also
reported to ROC and the Board. These limits are sufficient to allow efficient operational
management of financial hedging.
We benefit from natural offsetting between certain assets and liabilities, which may be
based on both the contractual and behavioural characteristics of these positions. Where
natural hedging is insufficient, we hedge net interest rate risk exposures appropriately,
including, where necessary, with the use of derivatives. We enter into derivatives only for
hedging purposes and not as part of customer transactions or for speculative purposes.
Our Treasury and Prudential Risk teams work closely together to ensure that risks are
identified and managed appropriately \u2013 and that we are well-positioned to avoid losses
outside our appetite, in the event of unexpected market moves.
Monitoring and reporting
The Treasury function has responsibility for managing within our market risk policy and
strategy. We have an independent second line Prudential Risk team that monitors our
market risk exposures daily including ensuring compliance with the policies we have
developed. The Prudential Risk team runs additional interest rate risk simulations monthly
to assess other threats that may not be evident in the standard parallel shock metrics.
We measure interest rate risk exposure using methods including the following:
\u2022 interest rate gaps: calculating the net difference between total assets and total liabilities
across a range of time buckets
\u2022 economic value sensitivity: calculating repricing mismatches across our assets and
liabilities over the horizon of our balance sheet and then evaluating the change in value
arising from an instantaneous 2% change in the yield curve in both directions, taking
into consideration any embedded customer optionality. Our economic value sensitivity
risk appetite scenario is based on an instantaneous parallel rate movement of 2% at all
repricing maturities, which is widely considered severe but plausible. Additionally, we
evaluate the PRA\u2019s outlier test in line with regulatory requirements
\u2022 net interest income sensitivity: calculating repricing mismatches across our assets and
liabilities over a one-year horizon and then evaluating the change in net income arising
from an instantaneous 2% change in the yield curve in both directions. Our net interest
income risk appetite scenario is based on an instantaneous parallel rate movement of
2% at all repricing dates, which is widely considered severe but plausible. We also assess
basis risk by considering divergences between the Bank of England Base Rate and the
Sterling Overnight Index Average (SONIA).
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-7": { "value": "725400000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-8": { "value": "935400000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:RevenueFromInterest", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-9": { "value": "265100000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:InterestExpense", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-10": { "value": "557500000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:InterestExpense", 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"2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-15": { "value": "5600000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:FeeAndCommissionExpense", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-16": { "value": "4800000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:FeeAndCommissionExpense", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-17": { "value": "91100000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:FeeAndCommissionIncomeExpense", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-18": { "value": "93200000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:FeeAndCommissionIncomeExpense", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-19": { "value": "5200000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:GainsLossesOnDisposalsOfNoncurrentAssets", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-20": { "value": "-101400000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:GainsLossesOnDisposalsOfNoncurrentAssets", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-21": { "value": "36700000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:OtherIncome", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-22": { "value": "35600000.0", "decimals": -5, "dimensions": { "concept": "ifrs-full:OtherIncome", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00", "unit": "iso4217:GBP" } }, "fact-23": { 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1. Basis of preparation and material accounting policies
This section sets out the Group\u2019s (\u2018our\u2019 or \u2018we\u2019) accounting policies which relate to the
financial statements as a whole. Where an accounting policy relates specifically to a
note then the related accounting policy is set out within that note. All policies have been
consistently applied to all the years presented unless stated otherwise.
1.1 General information
Metro Bank Holdings PLC (the \u2018Company\u2019) is the holding company of Metro Bank PLC,
which provides retail and commercial banking services in the UK. Metro Bank Holdings PLC
is a public limited liability company incorporated and domiciled in England and Wales under
the Companies Act 2006 (Company number 14387040) and is listed on the London Stock
Exchange (LON:MTRO). The address of its registered office is One Southampton Row,
London, WC1B 5HA .
1.2 Basis of preparation
The consolidated financial statements of the Company together with its subsidiaries
(the \u2018Group\u2019) have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the UK, interpretations issued by the IFRS Interpretations
Committee and the Companies Act 2006 applicable to companies reporting under IFRSs.
The consolidated financial statements of the Group and Company were authorised by the
Board for issue on 15 April 2026.
The financial information has been prepared under the historical cost convention, as
modified by the revaluation of certain financial assets and liabilities at fair value through
profit or loss and other comprehensive income. Fair value is defined as the price that
would be received or paid in an orderly transaction between market participants at the
measurement date.
Certain disclosures required under IFRS 7 \u2018Financial instruments: disclosures\u2019 and IAS 1
\u2018Presentation of financial statements\u2019 have been included within the Risk report on pages
104 to 138. Where information is marked as audited, it is incorporated into these financial
statements and it is covered by the Independent auditor\u2019s report.
The Directors consider that it is appropriate to continue to adopt the going concern basis
of accounting in preparing the financial statements. In reaching this assessment, the
Directors have considered projections for the Group\u2019s capital and funding position as well
as other principal risks.
As part of this process the Directors have considered and approved the Group\u2019s most
recent Long Term Plan including severe but plausible downside scenarios. The Directors
also considered the key assumptions and uncertainties that feed into these plans alongside
management actions and mitigants that would be available if required. Under all scenarios
considered, the Directors believe the Group to remain a going concern on the basis that
it maintains sufficient resources (including liquidity and capital) to be able to continue to
operate for the foreseeable future (considered to be at least 15 months from the date of
authorisation of these financial statements). The Directors do not consider there to be any
material uncertainties with regards to the assessment on going concern. Further details on
the assessment undertaken by the Directors is set out in the Viability statement on pages
45 to 46.
Basis of consolidation
Our consolidated financial statements include the results for all entities which we control
(details of our subsidiaries can be found in note 3 to the Company financial statements on
pages 197 to 198). Controlled entities are all entities to which we are exposed, or have rights,
to variable returns from our involvement with the entity and have the ability to affect those
returns through our power over it. An assessment of control is performed on an ongoing basis.
Our controlled entities are consolidated from the date on which we establish control until
the date that control ceases. The acquisition method of accounting is used to account for
business combinations other than those under common control.
Post-acquisition, income and expenses are included in the consolidated income statement on
a line-by-line basis in accordance with the accounting policies set out herein, adjusting for any
intra-group transactions which are eliminated in full upon consolidation.
In publishing the Company financial statements here together with the Group financial
statements, we have adopted the exemption in section 408(3) of the Companies Act 2006.
This means we have chosen not to present a Company statement of comprehensive income
and related notes as part of these financial statements.
1.3 Functional and presentation currency
These financial statements are presented in pounds sterling (\u00a3), which is our functional
currency. All amounts have been rounded to the nearest \u00a31 million and \u00a30.1 million for balance
sheet and income statement line items respectively, except where otherwise indicated.
1.4 Cash flow statement
The cash flow statement shows the changes in cash and cash equivalents arising during
the year from operating activities, investing activities and financing activities.
The cash flows from operating activities are determined by using the indirect method.
Under that method, profit/(loss) before tax is adjusted for non-cash items and changes
in other assets and liabilities to determine net cash inflows or outflows from operating
activities. Cash flows from investing and financing activities are determined using the
direct method which directly reports the cash effects of the transactions.
1.5 Changes in accounting policies and presentational amendments
During the period there have not been any changes in any accounting policies or
disclosures that have had a material impact on our financial statements.
1.6 Future accounting developments
Amendments to IFRS 9 and IFRS 7; Amendments to the Classification and Measurement of
Financial Instruments
The amendments to IFRS 9 and IFRS 7 will be effective for annual reporting periods
beginning on or after 1 January 2026, with early application permitted. These amendments
will primarily impact the level of detail at which the Group discloses information about
strategic equity investments whose changes in fair value the Group has elected to present
in other comprehensive income. The Group has not yet decided whether \u2013 and, if so,
to what extent \u2013 it will elect to derecognise financial liabilities before the settlement
date where they are settled in cash using an electronic cash transfer system eligible
for this election. The Group does not expect the change to have a material impact on
its financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual
reporting periods beginning on or after 1 January 2027. While early application of
the standard is permitted, the Group has not early adopted them in preparing these
consolidated financial statements. The Group is still in the process of assessing the
potential impact of this standard on presentation and disclosures.
1.7 Segmental reporting
IFRS 8 \u2018Operating Segments\u2019 requires operating segments to be identified on the basis
of internal reports and components of the Group which are regularly reviewed by the
Chief Operating Decision Maker to allocate resources to segments and to assess their
performance. For this purpose, the Chief Operating Decision Maker of the Group is our
Board of Directors.
The Board considers the results of the Group as a whole when assessing the performance
of the Group and allocating resources, owing to our simple structure. Accordingly, the
Group has a single operating segment. We operate solely within the UK and, as such,
no geographical analysis is required. We are not reliant on any single customer.
1.8 Foreign currency translation
Transactions in a foreign currency are translated into the functional currency using the
exchange rates prevailing at the date of the transaction.
Monetary items denominated in a foreign currency are translated using the closing rate as
at the reporting date. Non-monetary items measured at historical cost denominated in a
foreign currency are translated with the exchange rate as at the date of initial recognition;
non-monetary items in a foreign currency that are measured at fair value are translated
using the exchange rates at the date when the fair value was determined.
Foreign currency differences arising on translation are recognised in other income.
Gains and losses arising from foreign currency transactions offered to customers are
also recognised in other income.
1.9 Critical accounting judgements and estimates
The preparation of financial statements in conformity with IFRS requires us to make
material judgements as well as estimates which, although based on our best assessment,
by definition will seldom equal the actual results. Management believes that the underlying
assumptions applied at 31 December 2025 are appropriate and that these consolidated
financial statements therefore present our financial position and results fairly. The area
involving a higher degree of complexity, judgement or where estimates have a significant
risk of resulting in a material adjustment is:
Area
Estimates
Judgements
Further details
Measurement of ECL
Multiple forward-
Significant increase in credit risk Note 30
looking scenarios
Use of MOs and PMAs
Management has considered areas previously disclosed and concluded they no longer
meet the criteria of a critical accounting judgement.
Accounting policy
We recognise interest income and expense for all interest-bearing financial instruments
within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the
effective interest rate method. The effective interest rate method is a method of
calculating the amortised cost of a financial asset or a financial liability and of allocating
the interest income or interest expense over the relevant period. The effective interest
rate is the rate that exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument to the net carrying amount of
the financial asset or financial liability. When calculating the effective interest rate,
we estimate cash flows considering all contractual terms of the financial instrument
(for example, prepayment options) but do not consider future credit losses except for
purchased or originated credit impaired assets. The calculation includes all fees paid
or received between parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or discounts.
For loans that are credit impaired, interest income is calculated on the carrying amount
of the loan net of credit impairment.
Accounting policy
Fee and commission income is earned from a wide range of services we provide to
our customers. We account for fees and commissions as follows:
Product and service
Nature, timing and satisfaction of performance obligations and payment terms
Service charges and other We levy a range of standard charges and fees for account
fee income maintenance or specific account services. Where the fee is earned
upon the execution of a significant act at a point in time, for example
CHAPS payment charges, these are recognised as revenue when the
act is completed for the customer. Where the income is earned from
the provision of services, for example an account maintenance fee,
this is recognised as revenue when the service is delivered.
Safe deposit box Revenue is recognised over the period the customer has access to
the box from the date income possession is taken. Safe deposit box
fees are billed on either a monthly or annual basis with a standard
set price payable dependent on the size of box.
ATM and interchange fees Where we earn fees from our ATMs or from interchange this is
recognised at the point the service is delivered.
Expenses that are directly related and incremental to the generation of fee and
commission income are presented within fee and commission expense.
As disclosed in note 1, we provide services solely within the UK and therefore revenues
are not presented on a geographic basis. Revenue is grouped solely by contract-type
as we believe this best depicts how the nature, amount, timing and uncertainty of our
revenue and cash flows are affected by economic factors.
Accounting policy
Other income is accounted for as follows:
Product or service
Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency Gains on foreign currency transactions is the spread earned on
transactions foreign currency transactions performed for our customers along
with any associated fees. It is recognised at the point in time that
the exchange is executed.
Rental income
Rental income is primarily earned from the letting out of surplus
space in some of our properties. The revenue is recognised on
a straight-line basis over the life of the lease.
Deferred grant income
Deferred grant income relates to amounts recognised in relation
to the amounts drawn down against the Capability and Innovation
Fund award (further details of which can be found in note 23).
Income is recognised in line with the delivery of the commitments
we agreed to as part of the bid.
Gains on lease modification
A gain on lease modification occurs under IFRS 16 when a lease
is modified, resulting in a decrease in the lease liability that
exceeds the reduction in the right-of-use (ROU) asset. This gain
is recognised immediately in the profit or loss statement.
Other income
Other income primarily consists of hedge ineffectiveness, foreign
currency differences arising on translation of movements in
financial assets held at fair value through profit and loss.
Accounting policy
Current tax
Our current tax comprises the expected tax payable or receivable on the taxable profit for
the year and any adjustment to the tax payable or receivable in respect of previous years.
It is measured using tax rates enacted or substantively enacted at the reporting date.
Where we have tax losses that can be relieved only by carry-forward against taxable
profits of future periods, a deductible temporary difference arises. Those losses
carried forward are set off against deferred tax liabilities carried in the balance sheet.
Deferred tax
Deferred tax is recognised in respect of temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the date of the balance sheet and are expected to apply
when the related deferred tax asset is realised or the deferred tax liability is settled.
The principal differences arise from trading losses, depreciation of property, plant and
equipment and relief on research and development expenditure.
We recognise a deferred tax asset to the extent that it is probable that future taxable
profits will be available against which they can be used and deferred tax liabilities
are provided on taxable temporary differences. Deferred tax assets and liabilities are
reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised or the deferred tax liability settled.
Deferred tax assets and liabilities are offset where there is a legally enforceable right
to offset current tax assets against current tax liabilities and where the deferred tax
assets and liabilities relate to taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities where there is an intention to settle on
a net basis.
Accounting policy
Repurchase agreements
Where we sell financial assets subject to sale and repurchase agreements, the
financial assets are retained in their respective balance sheet categories, however
become encumbered and are not available for transfer or sale. The associated
liabilities are included in the repurchase agreements line. The difference between
the sale and repurchase price of repurchase agreements is treated as interest and
accrued over the life of the agreements using the effective interest method as set
out in note 2.
Derivative financial instruments
Derivative instruments are contracts whose value is derived from one or more
underlying financial instruments or indices defined in the contract. Notional amounts
of the contracts are not recorded on the balance sheet. All derivative instruments are
held at fair value through profit or loss. Derivatives are classified as assets when their
fair value is positive or as liabilities when their fair value is negative.
Other financial instruments
Our accounting policies in respect of our other financial instruments can be found
in their respective notes, where applicable.
Accounting policy
Cash and balances with other banks consists of both cash on hand and demand
deposits, both at other banks as well as the Bank of England. In addition it includes
highly liquid investments that are readily convertible to known amounts of cash and
which are subject to insignificant risk of changes in value. Investment securities are
only classified as cash if they have a short maturity of three months or less from the
date of acquisition and are in substance cash equivalents, e.g. debt investments with
fixed redemption dates that are acquired within a short period of their maturity.
Where cash is pledged as collateral and as such is not available on demand this is
included within other assets in note 17.
Accounting policy Loans and advances to customers are classified as held at amortised cost. All customer lending is held to collect cash flows, with no sales expected in the normal course of business. We aim to offer products with simple terms to customers, and as a result, all loans comprise solely payments of principal and interest. Loans are initially recognised when cash is advanced to the borrower at fair value \u2013 which is the cash consideration to originate the loan including any transaction costs \u2013 and measured subsequently at amortised cost using the effective interest rate method, which is detailed further in note 2. Interest on loans is included in the income statement and is reported as \u2018Interest income\u2019. Expected credit losses (ECL) are reported as a deduction from the carrying value of the loan. Changes to the ECL during the year are recognised in the income statement as \u2018Expected credit loss expense\u2019 .
Accounting policy
Our investment securities may be categorised as amortised cost, fair value through
other comprehensive income (FVOCI) or fair value through profit and loss. Currently all
investment securities are non-complex, with cash flows comprising solely payments of
principal and interest. We hold some securities to collect cash flows; other securities
are held to collect cash flows, and to sell if the need arises (e.g. to manage and meet
day-to-day liquidity needs). Therefore, we have a mixed business model and securities
are classified as either amortised cost or FVOCI as appropriate. We do not categorise
any investment securities as fair value through profit and loss.
Settlement date accounting is used when recording financial asset transactions where
a trade is settled through the regular settlement cycle for that particular investment.
Investment securities held at amortised cost
Investment securities held at amortised cost consist entirely of debt instruments.
They are accounted for using the effective interest method, less any impairment losses.
Investment securities held at FVOCI
Investment securities held at FVOCI consist entirely of debt instruments. Investment
securities held at FVOCI are initially recognised at fair value, which is the cash
consideration including any transaction costs, and measured subsequently at fair
value with gains and losses being recognised in other comprehensive income, except
for impairment losses and foreign exchange gains and losses, until the investment
security is derecognised. Interest is calculated using the effective interest method.
Accounting policy
Property, plant and equipment
Our property, plant and equipment primarily consists of investments and
improvements in our store network and is stated at cost less accumulated
depreciation and any recognised impairment.
We depreciate property, plant and equipment on a straight-line basis to its residual
value using the following useful economic lives:
Leasehold improvements
Lower of the remaining life of the lease or the useful life of the asset
Freehold land
Not depreciated
Buildings
Up to 50 years
Fixtures, fittings and
equipment
5 years
IT hardware
3 to 5 years
We keep depreciation rates, methods and the residual values underlying the
calculation of depreciation of items of property, plant and equipment under review
to take account of any change in circumstances.
All items of property, plant and equipment are reviewed at the end of each reporting
period for indicators of impairment.
Right-of-use assets (RoU)
Our leases within the scope of IFRS 16 primarily relate to our stores and head
office properties.
Upon the recognition of a lease liability (see note 22 for further details) a
corresponding right-of-use asset is recognised. This is adjusted for any initial direct
costs incurred, lease incentives paid or received and any restoration costs at the end
of the lease (where applicable).
The right-of-use asset is depreciated on a straight-line basis over the life of the lease.
All right-of-use assets are reviewed at the end of each reporting period for indicators
of impairment.
Investment property
Investment property is also stated at cost less accumulated depreciation and any
recognised impairment. Depreciation is calculated on a consistent basis with that
applied to land and buildings as disclosed.
Accounting policy
Goodwill
Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration
transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent
liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment assessment, goodwill acquired in a business combination is
allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to
benefit from the synergies of the combination. Each unit or group of units to which the goodwill is
allocated represents the lowest level within the entity at which the goodwill is monitored for internal
management purposes.
Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period.
The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present
value of its expected future cash flows.
If the recoverable amount is less than the carrying value, an impairment loss is charged to the
income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment
is recognised immediately as an expense and is not subsequently reversed.
Other intangible assets
Software includes both purchased items and internally developed systems, which consists
principally of identifiable and directly associated internal colleague, contractor and other costs.
Purchased intangible assets and costs directly associated with the development of systems are
capitalised as intangible assets where there is an identifiable asset which we control and which will
generate future economic benefits in accordance with IAS 38.
Costs to establish feasibility or to maintain existing performance are recognised as an expense.
Intangible assets are amortised on a straight-line basis within the income statement using the
following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was
assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was
upgraded during 2019 with the upgrade assessed as having a 15-year life.
All intangible assets are reviewed at the end of each reporting period for indicators
of impairment.
Accounting policy
Debt securities in issue are recognised initially at fair value, being proceeds less
transaction costs. Subsequently debt securities are measured at amortised cost using
the effective interest method.
Accounting policy
In accordance with our risk management strategy, to the extent not naturally hedged,
we use interest rate swaps to manage our exposure to interest rate risk. On adoption
of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39
as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting
of interest rate risk across fixed rate financial assets and fixed rate financial liabilities.
Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate
to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages.
Where we are using interest rate swaps to hedge the changes in fair value attributable
to the interest rate risk of a recognised asset or liability that could affect profit or
loss, we apply fair value hedge accounting. If there is an effective hedge relationship,
the hedged item (such as fixed rate mortgages or non-interest bearing customer
deposits) is adjusted for fair value changes in respect of the hedged risk. These fair
value changes are recognised in the income statement together with the fair value
movements on the hedging instrument (the interest rate swaps).
Where we are using interest rate swaps to hedge the exposure to variability in cash
flows attributable to interest rate risk on a recognised asset or liability or a highly
probable forecast transaction that could affect profit or loss, we apply cash flow
hedge accounting. If there is an effective hedge relationship, the effective portion
of the movement in fair value of the hedging instrument (the interest rate swap) is
recognised in other comprehensive income (OCI) and taken to the cash flow hedge
reserve. The financial hedged item (such as floating rate loans and advances to
customers) is accounted for as normal in line with IFRS 9 accounting requirements.
Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative
expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new
underlying hedged item or hedging instrument is added to the hedge relationship. Where
a fair value hedge is de-designated (either due to becoming ineffective or as part of our
dynamic approach to hedge accounting) any hedge adjustments accrued to that point
are amortised over the remaining life of the hedged item. When a cash flow hedge is
de-designated any accumulated amounts in the cash flow hedge reserve are recycled to
profit or loss as and when the hedged forecast cash flows impact the income statement
so long as the hedged forecast cash flows are still expected.
At the inception of every hedge, we produce hedge documentation which identifies
the hedged risk, hedged item and hedging instrument. This documentation sets out
the methodology used for testing hedge effectiveness.
Accounting policy
At the inception of a contract we assess whether the contract contains a lease.
At the commencement of a lease we recognise a lease liability and right-of-use
asset (see note 14 for further details). The lease liability is initially measured as the
present value for the future lease payments discounted at the rate implicit in the lease
(where available) or our incremental cost of borrowing. Generally we use our deemed
incremental cost of borrowing as the discount rate. Following initial recognition, the
lease liability is measured using the effective interest method.
Where we are reasonably certain to exercise a break in the lease, only the lease
payments up until the date of the break are included.
We subsequently remeasure the lease liability when there is a change to an index or
rate used or when there is a change in expectation that we will exercise a purchase
option or break clause or if we extend the lease. When such an adjustment is made
to the lease liability a corresponding adjustment is made to the right-of-use asset.
Irrecoverable VAT on lease payments is excluded from the lease liability and is taken
to the income statement over the period which is due. This is included within note 6,
General operating expenses, under \u2018occupancy costs\u2019.
We have elected not to recognise a lease liability and right-of-use assets for any leases
that have a term of less than 12 months, or are for an asset which is deemed to be of
low value (item is worth less than \u00a35,000). For these leases, the lease payments are
recognised as an expense in the income statement on a straight-line basis over the life
of the lease.
All of our leases within the scope of IFRS 16 relate to our stores and head office properties.
Accounting policy
Government grants are recognised where there is reasonable assurance that we
will both receive the grant and will be able to comply with all the attached conditions.
When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate,
are expensed. When the grant relates to the purchase of an asset, it is recognised
directly against the cost of the asset.
Accounting policy
We recognise provisions when it is probable that an outflow of economic benefits
will be required to settle a present legal or constructive obligation that has arisen as
a result of past events and for which a reliable estimate can be made. The provision
is measured at its current present value.
Provision
Description
Restructuring
Restructuring provisions are recognised at the point we have developed a
detailed formal plan and we have raised a valid expectation that it will be
implemented. This is typically at the point the plan is announced to affected
colleagues.
Customer We are committed to doing the right thing but occasionally we identify issues
remediation that have caused detriment as a result of our actions.
Where we have to refund costs to customers we provide for this at the
point the obligation arises. The amounts recognised include any associated
interest due.
Dilapidations
Dilapidations provisions are recognised in regard to certain properties
we lease.
The majority of our stores and offices have an automatic right to renewal at
the end of the lease under the provisions of the Landlord and Tenant Act 1954
(\u2018the act\u2019). Where this is the case we do not provide for restorations on these site
since we have no intention of vacating at the end of the lease term. For sites that
that are outside the act or sites within the act where we think there is a chance
we will vacate a site at the end of its lease a provision is made for dilapidations.
The provision is made in line with the underlying obligations contained within
the lease.
Onerous Onerous contract provisions are recognised when the unavoidable costs of
contracts meeting the obligations under the contract exceed the economic benefits we
expect to be received under it. The provision is recognised as the net cost of
exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Legal and Provisions are made relating to the outcome of legal cases and regulatory
regulatory investigations based on our best estimate of settlement following
consultation with our lawyers and advisors. The inclusion of a provision
does not constitute any admission of wrongdoing or legal liability. Details
of individual cases are provided where these are material to our financial
statements and disclosure would not be prejudicial to the outcome of
the case.
Other provisions
Other provisions consist of other immaterial amounts that are provided for in
the ordinary course of our business.
No provision has been recognised in relation to any of the legal and regulatory matters
set out in note 32.
Accounting policy On issue of new shares, incremental directly attributable costs are shown in equity as a deduction from the proceeds.
Accounting policy
The grant date fair value of options awarded to colleagues is recognised as an expense
over the period in which colleagues become unconditionally entitled to the options.
The expense (representing the value of the services received by us) is measured by
reference to the fair value of the awards granted on the date of the grant. The cost of
the colleague services received in respect of the awards granted is recognised in the
consolidated income statement over the period that the services are received, which
is the vesting period. Graded vesting is applied where relevant.
Vesting conditions are limited to service conditions and performance conditions.
For performance-based schemes, the relevant performance measures are projected to
the end of the performance period in order to determine the number of options expected
to vest. This estimate of the performance measures is used to determine the option fair
value, discounted to present value. The Group revises the number of options that are
expected to vest, including an estimate of forfeitures at each reporting date based on
forecast performance measures. The impact of the revision to original estimates, if any,
is recognised in the income statement, with a corresponding adjustment to equity.
The fair value of colleague awards plans is calculated at the grant date using a
Black-Scholes and Monte Carlo model. The resulting cost is charged to the income
statement over the vesting period. The value of the charge is adjusted to reflect
expected and actual levels of vesting.
Accounting policy
We assess on a forward-looking basis, the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date.
Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has
increased significantly. Risk of default and ECL must incorporate forward-looking and macroeconomic information.
Loans and advances
Sophisticated impairment models have been developed for our retail and corporate and commercial loan portfolios, with three core models: revolving products; fixed term loans; and
mortgages. Expected credit losses are calculated for drawn loans, and for committed lending. The same broad calculation approach is applied for each core model. ECL is calculated
by multiplying three main components, being the PD, LGD and the EAD, discounted at the original effective interest rate. Key model inputs, judgements and estimates include:
\u2022 consideration of when a SICR occurs
\u2022 PD, LGD and EAD as well as their modelled impact
\u2022 macroeconomic scenarios and weightings applied.
Significant increase in credit risk
IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:
Stage
Description
ECL recognised
Stage 1
Financial assets that have had no significant increase in credit risk since initial
12-month ECL
recognition or that have low credit risk (high-quality investment securities only) at the Total losses expected on defaults which may occur within the next 12 months. Losses
reporting date. are adjusted for probability-weighted macroeconomic scenarios.
Stage 2
Financial assets that have had a significant increase in credit risk since initial recognition
Lifetime ECL
but that do not have objective evidence of impairment. Losses expected on defaults which may occur at any point in a loan\u2019s lifetime. Losses are
In addition, for corporate and commercial counterparties, the Early Warning List is used adjusted for probability-weighted macroeconomic scenarios.
to inform qualitative triggers for SICR.
SICR includes the rebuttable presumption that financial instruments falling 30 DPD
due on contractually defined payments are to be considered as having deteriorated
significantly since origination and should trigger Stage 2.
Stage 3
Financial assets that are credit impaired at the reporting date. A financial asset is
Lifetime ECL
credit impaired when it has met the definition of default. We define default to have Losses calculated based on default parameters. Losses are adjusted for probability-
occurred when a loan is greater than 90 days past due (non-performing loan) or where weighted macroeconomic scenarios.
the borrower is considered unlikely to pay. This includes customers in corporate and
commercial who are categorised as Early Warning List 3 (EWL3) or forbearance. Interest income is calculated on the carrying amount of the loan net of credit allowance.
Purchased or originated Financial assets that have been purchased and had objective evidence of being \u2018non- Lifetime ECL
credit-impaired performing\u2019 or \u2018credit impaired\u2019 at the point of purchase. At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
(POCI) assets are incorporated into the calculation of the asset\u2019s effective interest rate. Subsequent
changes to the estimate of lifetime ECL are recognised as a loss allowance.
A SICR may be identified in a number of ways:
\u2022 Quantitative criteria \u2013 where the numerically calculated PD on a loan has increased
significantly since initial recognition. This is assessed using detailed models which assess
whether the lifetime PD at observation is greater than the lifetime PD at origination by a
portfolio specific threshold. Given the different nature of the products and the dissimilar
level of lifetime PDs at origination, we implement different thresholds by sub-products
within each portfolio (term loans, revolving loan facilities and mortgages).
\u2022 Qualitative criteria \u2013 instruments that are 30 days past due or more are allocated to
Stage 2, regardless of the results of the quantitative analysis. In addition, instruments
classified on the Early Warning List as higher risk are allocated to Stage 2, regardless
of the results of the quantitative analysis.
A loan will be considered to be \u2018non-performing\u2019 or \u2018credit impaired\u2019 when it meets our
definition of default \u2013 that is to say, the loan is 90 days past due, or the borrower is
considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed
through the presence of triggers including the loan being in repossession, the customer
having been declared bankrupt, or evidence of financial distress leading to forbearance.
A loan may also be considered to be non-performing when it is subject to forbearance
measures, consisting of concessions in relation to either:
\u2022 a modification of the previous terms and conditions of the loan which the borrower
is not considered able to comply with
\u2022 a total or partial refinancing of a troubled debt contract that would not have been
granted had the borrower not been in financial difficulties.
It may not be possible to identify a single discrete event which defines an asset as
\u2018non-performing\u2019 or \u2018credit impaired\u2019. Instead, the combined effect of several events
may cause financial assets to become credit impaired.
A probation period of at least three months is implemented before transferring
a financial instrument to a lower stage (e.g. from Stage 3 to Stage 2). Specifically,
in order to move an account from Stage 3, where an asset is showing improving
trends and is no longer considered non-performing or credit impaired.
Probability of default (PD)
PD represents the likelihood of a borrower defaulting on its financial obligation either
over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the
loan (for Stage 2 and 3 accounts). A PD is calculated for all loans based on historical data
and incorporates:
\u2022 credit quality scores
\u2022 life cycle trends depending on a loan\u2019s vintage
\u2022 factors indicating the quality of the vintage
\u2022 characteristics of the current and future economic environment.
Loss given default (LGD)
LGD represents our expectation of the extent of a loss on a defaulted exposure and
is expressed as a percentage considering expected recoveries on defaulted accounts.
We apply two LGD rates \u2013 one for unsecured lending and one for secured lending.
LGD rates have been modelled considering a range of inputs, including:
\u2022 value of collateral on secured portfolios \u2013 a key driver of the expected recovery in the
event of default
\u2022 expected haircut applied to the collateral value to reflect a forced sale discount
\u2022 price index forecasts applied to project collateral values into the future
\u2022 stress factors based on macroeconomic scenarios.
Exposure at default (EAD)
This is the amount that we expect to be owed at the point of default. This is subject to
judgement since a balance will not necessarily remain static between the balance sheet
date and the point of expected default. For example:
\u2022 interest should be accrued
\u2022 repayments may be received
\u2022 for a revolving product, further drawings may be taken between the current point in
time and the point of default
\u2022 estimations of these factors will be incorporated into our estimate of EAD.
PD, LGD and EAD are calculated and applied at an individual account level for secured
lending. For unsecured lending, PD and EAD are calculated and applied at an individual
account level, but LGD is assessed at a portfolio level and applied to accounts on an
individual basis.
Macroeconomic scenarios
The ECL recognised in the financial statements reflects the effect on ECL of a range
of possible outcomes, calculated on a probability-weighted basis, based on a number
of economic scenarios and including Management Overlays where required. These
scenarios are representative of our view of forecast economic conditions, sufficient to
calculate unbiased ECL, and are designed to capture material \u2018non-linearities\u2019 (i.e. where
the increase in credit losses if conditions deteriorate exceeds the decrease in credit
losses if conditions improve).
In the normal course of business, we use four scenarios. These represent a \u2018most likely
outcome\u2019 (the \u2018Baseline\u2019 scenario) and three, less likely, \u2018Outer\u2019 scenarios, referred to as an
\u2018Upside\u2019, a \u2018Downside\u2019 and a \u2018Severe downside\u2019 scenario respectively. The Baseline scenario
captures the most likely economic future; the Downside and Severe Downside scenarios
reflect adverse economic conditions; and the Upside scenario presents more favourable
economic conditions.
Key scenario assumptions are set using data sourced from independent external
economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the
use of independent information.
The following assumptions, considered to be the key drivers of ECL, have been used for
the scenarios applied as at 31 December 2025 and 31 December 2024:
\u2022 UK interest rates (Bank of England Base Rate and five-year mortgage rate)
\u2022 UK unemployment rates
\u2022 UK HPI changes, year-on-year
\u2022 UK GDP changes, year-on-year
\u2022 UK commercial real estate index, year-on-year.
Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We
use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics
are considered to have a direct impact on PDs and were selected following a search and
data calibration exercise of possible drivers. A list of around 15 potential drivers were
initially considered, representing drivers which capture trends in the economy at large,
and may indicate economic trends which will impact UK borrowers. The list included
variables which impact economic output, interest rates, inflation, share prices, borrower
income and the UK housing market. An algorithm was then used to choose the subset of
drivers which had the greatest significance and predictive fit to our data.
Each scenario was determined by flexing the Baseline scenario, taking into account
a number of factors in the global and UK economy such as commodity prices, global
interest rates, UK investment spend and exchange rates, as well as the possible impact
of recessionary conditions or financial shocks. A simulation process was designed to
determine the weighting to apply to each scenario based on its severity and the range
of possible scenarios for which that scenario was representative. A summary of each
scenario and weighting used at 31 December 2025 is as follows:
\u2022 Baseline scenario: Reflects the projection of the median, or \u201850%\u2019 scenario, meaning
that in the assessment there is an equal probability that the economy might perform
better or worse than the baseline forecast
\u2022 Upside scenario: This above-baseline scenario is designed so there is a 10% probability
the economy will perform better than in this scenario, broadly speaking, and a 90%
probability it will perform worse
\u2022 Downside scenario: In this recession scenario, in which a deep downturn develops,
there is a 90% probability the economy will perform better, broadly speaking, and a
10% probability it will perform worse
\u2022 Severe downside scenario: In this recession scenario, in which a deep downturn
develops, there is a 96% probability the economy will perform better, broadly speaking,
and a 4% probability it will perform worse.
These assumptions are considered sufficient to capture any material non-linearities.
The weightings applied to each scenario at 31 December 2025 were Baseline \u2013 50%,
Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5% (31 December 2024:
Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5%).
Economic variable assumptions
The period-end assumptions used for the ECL estimate as at 31 December 2025 are as follows:
31 December 2025
31 December 2024
Macroeconomic variable
Scenario
2026
2027
2028
2029
2030
2025
2026
2027
2028
2029
Five-year mortgage rate (%)
Baseline
4.16%
4.14%
4.11%
4.07%
4.05%
4.51%
4.24%
3.95%
3.96%
4.00%
Upside
4.37%
4.23%
4.10%
4.07%
4.05%
4.74%
4.25%
3.95%
3.95%
4.00%
Downside
2.61%
2.13%
2.63%
3.30%
3.84%
3.51%
2.41%
2.44%
3.09%
3.71%
Severe downside
2.19%
1.67%
2.03%
2.54%
3.31%
2.81%
2.08%
1.96%
2.43%
3.29%
BoE interest rate (%)
Baseline
3.25%
2.75%
2.75%
2.50%
2.50%
4.10%
2.75%
2.50%
2.50%
2.50%
Upside
3.46%
3.16%
2.87%
2.50%
2.50%
4.28%
2.97%
2.56%
2.50%
2.50%
Downside
1.94%
1.04%
1.25%
1.60%
1.95%
2.71%
1.11%
1.38%
1.72%
1.95%
Severe downside
1.36%
0.70%
0.70%
0.83%
1.04%
2.13%
0.76%
0.75%
0.94%
1.04%
Unemployment (%)
Baseline
5.11%
5.00%
4.93%
4.89%
4.89%
4.41%
4.50%
4.59%
4.67%
4.76%
Upside
4.47%
4.14%
4.12%
4.28%
4.49%
3.78%
3.64%
3.78%
4.07%
4.36%
Downside
7.01%
7.72%
7.60%
7.10%
6.40%
6.32%
7.22%
7.25%
6.89%
6.27%
Severe downside
8.24%
8.82%
8.54%
8.20%
7.46%
7.55%
8.32%
8.19%
7.99%
7.33%
House price index (YoY%)
Baseline
2.13%
2.32%
1.57%
1.93%
2.45%
2.24%
3.89%
2.62%
1.47%
2.07%
Upside
16.49%
5.41%
(0.97% )
(2.13% )
0.11%
16.62%
7.03%
0.06%
(2.57% )
(0.26% )
Downside
(9.11% )
(7.05% )
0.83%
4.69%
5.76%
(9.01% )
(5.62% )
1.88%
4.22%
5.37%
Severe downside
(15.29% )
(10.96% )
1.24%
3.37%
5.03%
(15.20% )
(9.60% )
2.29%
2.91%
4.64%
UK GDP (YoY%)
Baseline
1.35%
1.52%
1.65%
1.73%
1.73%
2.08%
1.18%
2.07%
1.43%
1.87%
Upside
4.89%
1.77%
1.60%
1.76%
1.94%
5.65%
1.42%
2.02%
1.46%
2.08%
Downside
(3.95% )
1.82%
2.80%
1.79%
1.65%
(3.50% )
1.49%
3.28%
1.43%
1.79%
Severe downside
(4.85% )
0.56%
3.96%
2.45%
1.61%
(4.61% )
0.15%
4.56%
2.26%
1.85%
Commercial real estate (YoY%)
Baseline
(1.12% )
(0.22% )
(0.35% )
(0.25% )
(0.16% )
(0.86% )
0.45%
(0.31% )
(1.34% )
(1.04% )
Upside
13.82%
1.57%
(3.16% )
(4.11% )
(2.20% )
14.42%
2.33%
(3.27% )
(5.24% )
(3.08% )
Downside
(15.91% )
(6.47% )
0.64%
3.17%
3.66%
(16.02% )
(5.62% )
0.83%
1.97%
2.75%
Severe downside
(25.20% )
(8.51% )
2.48%
2.37%
3.97%
(25.06% )
(8.49% )
2.57%
1.24%
3.06%
Following the initial four-year projection period, the Upside, Downside and Severe downside scenarios converge to the Baseline scenario. The rate of convergence varies based on
the macroeconomic factor, but at a minimum convergence takes place three years from the initial four-year projection period.
We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL in all economic environments. The scenarios applied comprise our best
estimate of economic impacts on the ECL, and the actual outcome may be significantly different.
Accounting policy
To meet the financial needs of our customers, we enter into various irrevocable
commitments. These generally consist of financial guarantees, letters of credit and
other undrawn commitments to lend.
Even though these obligations are not recognised on the balance sheet, they do
contain credit risk and an ECL is calculated and recognised for them (see note 30).
When these commitments are drawn down or called upon, and meet the recognition
criteria as detailed in note 30, these are recognised within our loans and advances
to customers.
Accounting policy
Financial assets and liabilities are offset and the net amount reported in the statement
of financial position when there is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis or realise the asset and settle
the liability simultaneously.
Accounting policy
Determination of fair value
\u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the
principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair
values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below:
\u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to
at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and
when there are binding and exercisable price quotes available on the balance sheet date
\u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the
entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets
and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the
condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable
inputs which are significant to the entire measurement, we will classify the instruments as Level 3
\u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole.
Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not
included in the table below as the carrying value of those assets are a close approximation of their fair value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-303": { "value": "1.1 General information Metro Bank Holdings PLC (the \u2018Company\u2019) is the holding company of Metro Bank PLC, which provides retail and commercial banking services in the UK. Metro Bank Holdings PLC is a public limited liability company incorporated and domiciled in England and Wales under the Companies Act 2006 (Company number 14387040) and is listed on the London Stock Exchange (LON:MTRO). The address of its registered office is One Southampton Row, London, WC1B 5HA . ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-2": { "value": "Metro Bank Holdings PLC", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-297": { "value": "Metro Bank Holdings PLC", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-3": { "value": "provides retail and commercial banking services in the UK", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-298": { "value": "UK", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-4": { "value": "public limited liability company", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-5": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-299": { "value": "England and Wales", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-6": { "value": "One Southampton Row, London, WC1B 5HA ", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-304": { "value": "1.2 Basis of preparation The consolidated financial statements of the Company together with its subsidiaries (the \u2018Group\u2019) have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the UK, interpretations issued by the IFRS Interpretations Committee and the Companies Act 2006 applicable to companies reporting under IFRSs. The consolidated financial statements of the Group and Company were authorised by the Board for issue on 15 April 2026. The financial information has been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities at fair value through profit or loss and other comprehensive income. Fair value is defined as the price that would be received or paid in an orderly transaction between market participants at the measurement date. Certain disclosures required under IFRS 7 \u2018Financial instruments: disclosures\u2019 and IAS 1 \u2018Presentation of financial statements\u2019 have been included within the Risk report on pages 104 to 138. Where information is marked as audited, it is incorporated into these financial statements and it is covered by the Independent auditor\u2019s report. The Directors consider that it is appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements. In reaching this assessment, the Directors have considered projections for the Group\u2019s capital and funding position as well as other principal risks. As part of this process the Directors have considered and approved the Group\u2019s most recent Long Term Plan including severe but plausible downside scenarios. The Directors also considered the key assumptions and uncertainties that feed into these plans alongside management actions and mitigants that would be available if required. Under all scenarios considered, the Directors believe the Group to remain a going concern on the basis that it maintains sufficient resources (including liquidity and capital) to be able to continue to operate for the foreseeable future (considered to be at least 15 months from the date of authorisation of these financial statements). The Directors do not consider there to be any material uncertainties with regards to the assessment on going concern. Further details on the assessment undertaken by the Directors is set out in the Viability statement on pages 45 to 46. Basis of consolidation Our consolidated financial statements include the results for all entities which we control (details of our subsidiaries can be found in note 3 to the Company financial statements on pages 197 to 198). Controlled entities are all entities to which we are exposed, or have rights, to variable returns from our involvement with the entity and have the ability to affect those returns through our power over it. An assessment of control is performed on an ongoing basis. Our controlled entities are consolidated from the date on which we establish control until the date that control ceases. The acquisition method of accounting is used to account for business combinations other than those under common control. Post-acquisition, income and expenses are included in the consolidated income statement on a line-by-line basis in accordance with the accounting policies set out herein, adjusting for any intra-group transactions which are eliminated in full upon consolidation. In publishing the Company financial statements here together with the Group financial statements, we have adopted the exemption in section 408(3) of the Companies Act 2006. This means we have chosen not to present a Company statement of comprehensive income and related notes as part of these financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-339": { "value": "The consolidated financial statements of the Company together with its subsidiaries (the \u2018Group\u2019) have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the UK, interpretations issued by the IFRS Interpretations Committee and the Companies Act 2006 applicable to companies reporting under IFRSs. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-340": { "value": "The Directors consider that it is appropriate to continue to adopt the going concern basis of accounting in preparing the financial statements. In reaching this assessment, the Directors have considered projections for the Group\u2019s capital and funding position as well as other principal risks. As part of this process the Directors have considered and approved the Group\u2019s most recent Long Term Plan including severe but plausible downside scenarios. The Directors also considered the key assumptions and uncertainties that feed into these plans alongside management actions and mitigants that would be available if required. Under all scenarios considered, the Directors believe the Group to remain a going concern on the basis that it maintains sufficient resources (including liquidity and capital) to be able to continue to operate for the foreseeable future (considered to be at least 15 months from the date of authorisation of these financial statements). The Directors do not consider there to be any material uncertainties with regards to the assessment on going concern. Further details on the assessment undertaken by the Directors is set out in the Viability statement on pages 45 to 46. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-341": { "value": "Basis of consolidation Our consolidated financial statements include the results for all entities which we control (details of our subsidiaries can be found in note 3 to the Company financial statements on pages 197 to 198). Controlled entities are all entities to which we are exposed, or have rights, to variable returns from our involvement with the entity and have the ability to affect those returns through our power over it. An assessment of control is performed on an ongoing basis. Our controlled entities are consolidated from the date on which we establish control until the date that control ceases. The acquisition method of accounting is used to account for business combinations other than those under common control. Post-acquisition, income and expenses are included in the consolidated income statement on a line-by-line basis in accordance with the accounting policies set out herein, adjusting for any intra-group transactions which are eliminated in full upon consolidation. In publishing the Company financial statements here together with the Group financial statements, we have adopted the exemption in section 408(3) of the Companies Act 2006. This means we have chosen not to present a Company statement of comprehensive income and related notes as part of these financial statements. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-305": { "value": "1.3 Functional and presentation currency These financial statements are presented in pounds sterling (\u00a3), which is our functional currency. All amounts have been rounded to the nearest \u00a31 million and \u00a30.1 million for balance sheet and income statement line items respectively, except where otherwise indicated. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-306": { "value": "1.4 Cash flow statement The cash flow statement shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities. The cash flows from operating activities are determined by using the indirect method. Under that method, profit/(loss) before tax is adjusted for non-cash items and changes in other assets and liabilities to determine net cash inflows or outflows from operating activities. Cash flows from investing and financing activities are determined using the direct method which directly reports the cash effects of the transactions. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-307": { "value": "1.5 Changes in accounting policies and presentational amendments During the period there have not been any changes in any accounting policies or disclosures that have had a material impact on our financial statements. 1.6 Future accounting developments Amendments to IFRS 9 and IFRS 7; Amendments to the Classification and Measurement of Financial Instruments The amendments to IFRS 9 and IFRS 7 will be effective for annual reporting periods beginning on or after 1 January 2026, with early application permitted. These amendments will primarily impact the level of detail at which the Group discloses information about strategic equity investments whose changes in fair value the Group has elected to present in other comprehensive income. The Group has not yet decided whether \u2013 and, if so, to what extent \u2013 it will elect to derecognise financial liabilities before the settlement date where they are settled in cash using an electronic cash transfer system eligible for this election. The Group does not expect the change to have a material impact on its financial statements. IFRS 18 Presentation and Disclosure in Financial Statements IFRS 18 will replace IAS 1 Presentation of Financial Statements and applies for annual reporting periods beginning on or after 1 January 2027. While early application of the standard is permitted, the Group has not early adopted them in preparing these consolidated financial statements. The Group is still in the process of assessing the potential impact of this standard on presentation and disclosures. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-308": { "value": "1.7 Segmental reporting IFRS 8 \u2018Operating Segments\u2019 requires operating segments to be identified on the basis of internal reports and components of the Group which are regularly reviewed by the Chief Operating Decision Maker to allocate resources to segments and to assess their performance. For this purpose, the Chief Operating Decision Maker of the Group is our Board of Directors. The Board considers the results of the Group as a whole when assessing the performance of the Group and allocating resources, owing to our simple structure. Accordingly, the Group has a single operating segment. We operate solely within the UK and, as such, no geographical analysis is required. We are not reliant on any single customer. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-310": { "value": "1.8 Foreign currency translation Transactions in a foreign currency are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Monetary items denominated in a foreign currency are translated using the closing rate as at the reporting date. Non-monetary items measured at historical cost denominated in a foreign currency are translated with the exchange rate as at the date of initial recognition; non-monetary items in a foreign currency that are measured at fair value are translated using the exchange rates at the date when the fair value was determined. Foreign currency differences arising on translation are recognised in other income. Gains and losses arising from foreign currency transactions offered to customers are also recognised in other income. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-393": { "value": "1.9 Critical accounting judgements and estimates The preparation of financial statements in conformity with IFRS requires us to make material judgements as well as estimates which, although based on our best assessment, by definition will seldom equal the actual results. Management believes that the underlying assumptions applied at 31 December 2025 are appropriate and that these consolidated financial statements therefore present our financial position and results fairly. The area involving a higher degree of complexity, judgement or where estimates have a significant risk of resulting in a material adjustment is:
Area
Estimates
Judgements
Further details
Measurement of ECL
Multiple forward-
Significant increase in credit risk Note 30
looking scenarios
Use of MOs and PMAs
Management has considered areas previously disclosed and concluded they no longer meet the criteria of a critical accounting judgement. Critical accounting judgement Measurement of the expected credit loss allowance The measurement of ECL is complex and involves the use of significant judgements. We consider that the following represent key judgements in respect of the measurement of the ECL. Measurement of the expected credit loss allowance \u2013 significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans as a lifetime ECL is recognised compared to a 12-month ECL for performing loans. This is considered based on a staging approach. Financial assets that have had no SICR since initial recognition, or that have low credit risk at the reporting date, are considered to be performing loans and are classified as \u2018Stage 1\u2019. Losses are calculated based on our expectation of defaults which may occur within the next 12 months. Assets which are considered to have experienced a SICR since initial recognition, but that do not have objective evidence of impairment, are classified as \u2018Stage 2\u2019. Losses are calculated based on defaults which may occur at any point in the asset\u2019s lifetime. Judgement is required to determine when a SICR has occurred. An assessment of whether credit risk has increased significantly since initial recognition, resulting in transfer to Stage 2, is performed at each reporting period by considering the change in the PD expected over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the PD occurring at the reporting date compared to that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions. Measurement of the expected credit loss allowance \u2013 use of post model adjustments and Management Overlays We have applied expert judgement to the measurement of the ECL in the form of post model adjustments and Management Overlays. Post model adjustments refer to increases/decreases in ECL to address known model limitations, either in model methodology or model inputs. These rely on analysis of model inputs and parameters to determine the change required to improve model accuracy. These may be applied at an aggregated level, however they will usually be applied at account level. Management Overlays reflect management judgement. These rely more heavily on expert judgement and will usually be applied at an aggregated level. For example, where recent changes in market and economic conditions have not yet been captured in the macroeconomic factor inputs to models (e.g., industry-specific stress event). PMAs have been reassessed during the period to ensure an appropriate level of ECL that continues to account for the macroeconomic uncertainty. The level of PMAs increased during 2025 with the total percentage of ECL stock standing at 14% as at 31 December 2025 (31 December 2024: 10%). The increase in the PMA percentage relates to the removal of negative PMAs following model enhancements and the reduction in the overall ECL stock due to portfolio sales. There are no Management Overlays being used as at 31 December 2025. PMAs make up \u00a324.3 million of the ECL stock as at 31 December 2025 (31 December 2024: \u00a318.7 million) and comprise the following: \u2022 Macro correlation uncertainty \u2013 applied to address the risk that the Commercial PD model may under-reflect macroeconomic sensitivity. (31 December 2025: \u00a312.3 million; 31 December 2024: \u00a311.5 million). The adjustment is informed by PD \u2013 Observed Default Rate monitoring, the limited maturity of the expanded 2025 portfolio, and expert judgement on how macro-relationships may normalise. The adjustment is reviewed quarterly, with reduction considered once sufficient post-origination performance evidence becomes available \u2022 Commercial model enhancements \u2013 held in anticipation of model updates for the corporate and commercial portfolio (31 December 2025: \u00a36.01 million; 31 December 2024: \u00a34.6 million). The increase in the overlay over the period is to reflect the impact from the Enhanced Business Overdrafts portfolio growth which utilises the IFRS 9 commercial models as a proxy for ECL assessment \u2022 Mortgage model and data enhancements \u2013 will be removed once the model and data enhancements are implemented into production (31 December 2025: \u00a32.9 million; 31 December 2024: \u00a32.9 million) \u2022 Climate change impact \u2013 reflects the impact of climate change on property values for the mortgage and corporate and commercial portfolios (31 December 2025: \u00a32.8 million; 31 December 2024: \u00a32.8 million) \u2022 Commercial real estate adjustment \u2013 reflects potential downside risk in property price indices beyond the latest scenarios for the corporate and commercial property portfolios (31 December 2025: \u00a30.3 million; 31 December 2024: \u00a30.7 million). Critical accounting estimate Measurement of the expected credit loss allowance We consider that the key source of estimation uncertainty relates to the formulation and incorporation of multiple forward-looking economic scenarios into the ECL estimates to meet the measurement objective of IFRS 9.
Multiple forward-looking economic scenarios
The ECL recognised in the financial statements reflects the effect on ECL of a range of
possible outcomes, calculated on a probability-weighted basis, based on a number of
economic scenarios, including Management Overlays where required. These scenarios
are representative of our view of forecast economic conditions, sufficient to calculate
unbiased ECL.
The following assumptions, considered to be the key drivers of ECL, have been used
for the scenarios applied:
\u2022 UK interest rates
\u2022 UK unemployment rates
\u2022 UK HPI changes, year-on-year
\u2022 UK GDP changes, year-on-year
\u2022 UK commercial real estate index, year-on-year.
The weightings applied to each scenario at 31 December 2025 and 31 December 2024 are:
Full year Full year
31 December 31 December
2025 2024
Scenarios % %
Baseline
50%
50%
Upside
20%
20%
Downside
25%
25%
Severe downside
5%
5%
The weightings used are reviewed each reporting period to ensure these remain
appropriate and as such are considered to represent significant accounting estimates.
We have performed an assessment of the impact on the ECL if each of the Baseline,
Upside, Downside and Severe downside scenarios were applied to the ECL calculation
using a 100% weighting (that is, ignoring all other scenarios in each case):
31 December 2025
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
32
18
120
170
Baseline
29
15
118
162
Upside
25
13
116
154
Downside
40
24
126
190
Severe downside
45
32
129
206
31 December 2024
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
39
29
123
191
Baseline
36
26
121
183
Upside
33
23
120
176
Downside
44
37
129
210
Severe downside
48
50
132
230
The sensitivities disclosed above represent example scenarios and may not represent actual scenarios which occur in the future. If one of these scenarios did arise then at that time the ECL would not equal the amount disclosed above, as the amounts disclosed do not take account of the alternative possible scenarios which would also be considered at that time. Individually assessed Stage 3 cases have not been sensitised. Write-off policy We write off financial assets (either partially or fully) when there is no realistic expectation of receiving further payment from the customer. Indicators that there is no reasonable expectation of recovery include debt sale to a third party and ceasing enforcement activity. We may write off financial assets that are still subject to enforcement activity. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-360": { "value": "2. Net interest income Accounting policy We recognise interest income and expense for all interest-bearing financial instruments within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, we estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but do not consider future credit losses except for purchased or originated credit impaired assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. For loans that are credit impaired, interest income is calculated on the carrying amount of the loan net of credit impairment. Interest income
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash and balances held with other banks
93.8
193.1
Loans and advances to customers
507.9
586.2
Investment securities held at amortised cost
113.4
126.1
Investment securities held at FVOCI
3.9
18.3
Interest expense calculated using the effective interest rate method
719.0
923.7
Derivatives in a hedging relationship
6.4
11.7
Total interest income
725.4
935.4
Interest expense
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits from customers
143.2
303.6
Deposits from central banks
17.0
124.2
Debt securities
85.0
84.8
Lease liabilities
10.5
12.4
Repurchase agreements
7.6
26.5
Interest expense calculated using the effective interest rate method
263.3
551.5
Derivatives in a hedging relationship
1.8
6.0
Total interest expense
265.1
557.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-309": { "value": "2. Net interest income Accounting policy We recognise interest income and expense for all interest-bearing financial instruments within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, we estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but do not consider future credit losses except for purchased or originated credit impaired assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. For loans that are credit impaired, interest income is calculated on the carrying amount of the loan net of credit impairment.
Interest income
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash and balances held with other banks
93.8
193.1
Loans and advances to customers
507.9
586.2
Investment securities held at amortised cost
113.4
126.1
Investment securities held at FVOCI
3.9
18.3
Interest expense calculated using the effective interest rate method
719.0
923.7
Derivatives in a hedging relationship
6.4
11.7
Total interest income
725.4
935.4
Interest expense
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits from customers
143.2
303.6
Deposits from central banks
17.0
124.2
Debt securities
85.0
84.8
Lease liabilities
10.5
12.4
Repurchase agreements
7.6
26.5
Interest expense calculated using the effective interest rate method
263.3
551.5
Derivatives in a hedging relationship
1.8
6.0
Total interest expense
265.1
557.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-422": { "value": "Accounting policy We recognise interest income and expense for all interest-bearing financial instruments within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, we estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but do not consider future credit losses except for purchased or originated credit impaired assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. For loans that are credit impaired, interest income is calculated on the carrying amount of the loan net of credit impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-412": { "value": "Accounting policy We recognise interest income and expense for all interest-bearing financial instruments within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, we estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but do not consider future credit losses except for purchased or originated credit impaired assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. For loans that are credit impaired, interest income is calculated on the carrying amount of the loan net of credit impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-395": { "value": "Accounting policy We recognise interest income and expense for all interest-bearing financial instruments within \u2018interest income\u2019 and \u2018interest expense\u2019 in the income statement using the effective interest rate method. The effective interest rate method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, we estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but do not consider future credit losses except for purchased or originated credit impaired assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. For loans that are credit impaired, interest income is calculated on the carrying amount of the loan net of credit impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-375": { "value": "Interest income
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash and balances held with other banks
93.8
193.1
Loans and advances to customers
507.9
586.2
Investment securities held at amortised cost
113.4
126.1
Investment securities held at FVOCI
3.9
18.3
Interest expense calculated using the effective interest rate method
719.0
923.7
Derivatives in a hedging relationship
6.4
11.7
Total interest income
725.4
935.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-342": { "value": "Interest income
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash and balances held with other banks
93.8
193.1
Loans and advances to customers
507.9
586.2
Investment securities held at amortised cost
113.4
126.1
Investment securities held at FVOCI
3.9
18.3
Interest expense calculated using the effective interest rate method
719.0
923.7
Derivatives in a hedging relationship
6.4
11.7
Total interest income
725.4
935.4
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-376": { "value": "Interest expense
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits from customers
143.2
303.6
Deposits from central banks
17.0
124.2
Debt securities
85.0
84.8
Lease liabilities
10.5
12.4
Repurchase agreements
7.6
26.5
Interest expense calculated using the effective interest rate method
263.3
551.5
Derivatives in a hedging relationship
1.8
6.0
Total interest expense
265.1
557.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-343": { "value": "Interest expense
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits from customers
143.2
303.6
Deposits from central banks
17.0
124.2
Debt securities
85.0
84.8
Lease liabilities
10.5
12.4
Repurchase agreements
7.6
26.5
Interest expense calculated using the effective interest rate method
263.3
551.5
Derivatives in a hedging relationship
1.8
6.0
Total interest expense
265.1
557.5
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-311": { "value": "3. Net fee and commission income Accounting policy Fee and commission income is earned from a wide range of services we provide to our customers. We account for fees and commissions as follows:
Product and service
Nature, timing and satisfaction of performance obligations and payment terms
Service charges and other We levy a range of standard charges and fees for account
fee income maintenance or specific account services. Where the fee is earned
upon the execution of a significant act at a point in time, for example
CHAPS payment charges, these are recognised as revenue when the
act is completed for the customer. Where the income is earned from
the provision of services, for example an account maintenance fee,
this is recognised as revenue when the service is delivered.
Safe deposit box Revenue is recognised over the period the customer has access to
the box from the date income possession is taken. Safe deposit box
fees are billed on either a monthly or annual basis with a standard
set price payable dependent on the size of box.
ATM and interchange fees Where we earn fees from our ATMs or from interchange this is
recognised at the point the service is delivered.
Expenses that are directly related and incremental to the generation of fee and commission income are presented within fee and commission expense. As disclosed in note 1, we provide services solely within the UK and therefore revenues are not presented on a geographic basis. Revenue is grouped solely by contract-type as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Service charges and other fee income
38.3
38.6
Safe deposit box income
20.1
19.0
ATM and interchange fees
38.3
40.4
Fee and commission income
96.7
98.0
Fee and commission expense
(5.6)
(4.8)
Total net fee and commission income
91.1
93.2
", "dimensions": { "concept": "ifrs-full:DisclosureOfFeeAndCommissionIncomeExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-396": { "value": "Accounting policy Fee and commission income is earned from a wide range of services we provide to our customers. We account for fees and commissions as follows:
Product and service
Nature, timing and satisfaction of performance obligations and payment terms
Service charges and other We levy a range of standard charges and fees for account
fee income maintenance or specific account services. Where the fee is earned
upon the execution of a significant act at a point in time, for example
CHAPS payment charges, these are recognised as revenue when the
act is completed for the customer. Where the income is earned from
the provision of services, for example an account maintenance fee,
this is recognised as revenue when the service is delivered.
Safe deposit box Revenue is recognised over the period the customer has access to
the box from the date income possession is taken. Safe deposit box
fees are billed on either a monthly or annual basis with a standard
set price payable dependent on the size of box.
ATM and interchange fees Where we earn fees from our ATMs or from interchange this is
recognised at the point the service is delivered.
Expenses that are directly related and incremental to the generation of fee and commission income are presented within fee and commission expense. As disclosed in note 1, we provide services solely within the UK and therefore revenues are not presented on a geographic basis. Revenue is grouped solely by contract-type as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-312": { "value": "
4. Net gain/(loss) on sale of assets
2025 2024
\u00a3\u2019million \u00a3\u2019million
Loan portfolios
5.2
(101.4)
Total gain/(loss) on sale of assets
5.2
(101.4)
Loan portfolio sales
The gain on sale relates to the sale of the \u00a3584 million unsecured personal loan portfolio. Metro
Bank completed the sale on 31 March 2025. We will continue to the service the loans under the
existing contractual obligation.
", "dimensions": { "concept": "metrobankholdingsplc:DisclosureOfNetGainsOnSaleOfAssets", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-385": { "value": "5. Other income Accounting policy Other income is accounted for as follows:
Product or service
Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency Gains on foreign currency transactions is the spread earned on
transactions foreign currency transactions performed for our customers along
with any associated fees. It is recognised at the point in time that
the exchange is executed.
Rental income
Rental income is primarily earned from the letting out of surplus
space in some of our properties. The revenue is recognised on
a straight-line basis over the life of the lease.
Deferred grant income
Deferred grant income relates to amounts recognised in relation
to the amounts drawn down against the Capability and Innovation
Fund award (further details of which can be found in note 23).
Income is recognised in line with the delivery of the commitments
we agreed to as part of the bid.
Gains on lease modification
A gain on lease modification occurs under IFRS 16 when a lease
is modified, resulting in a decrease in the lease liability that
exceeds the reduction in the right-of-use (ROU) asset. This gain
is recognised immediately in the profit or loss statement.
Other income
Other income primarily consists of hedge ineffectiveness, foreign
currency differences arising on translation of movements in
financial assets held at fair value through profit and loss.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Foreign currency transactions
27.0
29.7
Rental income
0.8
1.3
Deferred grant income
2.8
3.4
Gain on lease modification
5.0
\u2013
Other income
1.1
1.2
Total other income
36.7
35.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-344": { "value": "5. Other income Accounting policy Other income is accounted for as follows:
Product or service
Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency Gains on foreign currency transactions is the spread earned on
transactions foreign currency transactions performed for our customers along
with any associated fees. It is recognised at the point in time that
the exchange is executed.
Rental income
Rental income is primarily earned from the letting out of surplus
space in some of our properties. The revenue is recognised on
a straight-line basis over the life of the lease.
Deferred grant income
Deferred grant income relates to amounts recognised in relation
to the amounts drawn down against the Capability and Innovation
Fund award (further details of which can be found in note 23).
Income is recognised in line with the delivery of the commitments
we agreed to as part of the bid.
Gains on lease modification
A gain on lease modification occurs under IFRS 16 when a lease
is modified, resulting in a decrease in the lease liability that
exceeds the reduction in the right-of-use (ROU) asset. This gain
is recognised immediately in the profit or loss statement.
Other income
Other income primarily consists of hedge ineffectiveness, foreign
currency differences arising on translation of movements in
financial assets held at fair value through profit and loss.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Foreign currency transactions
27.0
29.7
Rental income
0.8
1.3
Deferred grant income
2.8
3.4
Gain on lease modification
5.0
\u2013
Other income
1.1
1.2
Total other income
36.7
35.6
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-313": { "value": "5. Other income Accounting policy Other income is accounted for as follows:
Product or service
Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency Gains on foreign currency transactions is the spread earned on
transactions foreign currency transactions performed for our customers along
with any associated fees. It is recognised at the point in time that
the exchange is executed.
Rental income
Rental income is primarily earned from the letting out of surplus
space in some of our properties. The revenue is recognised on
a straight-line basis over the life of the lease.
Deferred grant income
Deferred grant income relates to amounts recognised in relation
to the amounts drawn down against the Capability and Innovation
Fund award (further details of which can be found in note 23).
Income is recognised in line with the delivery of the commitments
we agreed to as part of the bid.
Gains on lease modification
A gain on lease modification occurs under IFRS 16 when a lease
is modified, resulting in a decrease in the lease liability that
exceeds the reduction in the right-of-use (ROU) asset. This gain
is recognised immediately in the profit or loss statement.
Other income
Other income primarily consists of hedge ineffectiveness, foreign
currency differences arising on translation of movements in
financial assets held at fair value through profit and loss.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Foreign currency transactions
27.0
29.7
Rental income
0.8
1.3
Deferred grant income
2.8
3.4
Gain on lease modification
5.0
\u2013
Other income
1.1
1.2
Total other income
36.7
35.6
6. General operating expenses
2025 2024
\u00a3\u2019million \u00a3\u2019million
People costs (note 7)
197.8
209.6
Information technology costs
56.4
60.1
Occupancy costs
30.2
30.9
Money transmission and other banking-related costs
43.2
49.3
Transformation costs
14.4
31.1
Remediation costs
1.2
21.3
Capability and Innovation Fund (C&I) costs
1
2.7
3.4
Legal and regulatory fees
9.2
9.0
Professional fees
2
35.4
27.7
Printing, postage and stationery costs
5.5
7.5
Travel costs
1.5
1.4
Marketing costs
6.7
9.4
Other
25.2
28.3
Total general operating expenses
429.4
489.0
1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes \u00a31.5 million
(2024: \u00a32.4 million) of people costs. These are included within C&I costs rather than people costs to better reflect
their nature. In addition to these costs the grant income recognised in note 5 is also used to offset property costs
relating to the store commitments delivered.
2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation
costs, remediation costs and C&I costs lines.
Information technology costs
Information technology costs include costs expensed in relation to software licenses,
support from third-party providers, back-up costs and cloud computing costs.
Occupancy costs
Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and
offices, including rates, utilities and property maintenance costs as well as irrecoverable
VAT on lease payments.
Money transmission and other banking-related costs
Money transmission and other banking-related costs are made up of the overheads
relating to servicing our deposits and lending that do not constitute either part of the
effective interest rate, or fee and commission expense.
Professional fees
Professional costs includes \u00a35.9 million (2024: \u00a312.3 million) of R&D costs not capitalised.
This does not include any costs of colleagues working on these projects that are included
in the people costs line. Including these costs we spent \u00a38.7 million (2024: \u00a325.1 million)
on R&D costs not capitalised.
Included within legal and regulatory fees is \u00a32.5 million (2024: \u00a32.5 million) in respect of the
Bank of England (BoE) levy.
Transformation and remediation costs, and Capability and Innovation Fund
Further details on transformation and remediation costs, and Capability and Innovation
Fund can be found on page 207.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-397": { "value": "Accounting policy Other income is accounted for as follows:
Product or service
Nature, timing and satisfaction of performance obligations and payment terms
Foreign currency Gains on foreign currency transactions is the spread earned on
transactions foreign currency transactions performed for our customers along
with any associated fees. It is recognised at the point in time that
the exchange is executed.
Rental income
Rental income is primarily earned from the letting out of surplus
space in some of our properties. The revenue is recognised on
a straight-line basis over the life of the lease.
Deferred grant income
Deferred grant income relates to amounts recognised in relation
to the amounts drawn down against the Capability and Innovation
Fund award (further details of which can be found in note 23).
Income is recognised in line with the delivery of the commitments
we agreed to as part of the bid.
Gains on lease modification
A gain on lease modification occurs under IFRS 16 when a lease
is modified, resulting in a decrease in the lease liability that
exceeds the reduction in the right-of-use (ROU) asset. This gain
is recognised immediately in the profit or loss statement.
Other income
Other income primarily consists of hedge ineffectiveness, foreign
currency differences arising on translation of movements in
financial assets held at fair value through profit and loss.
", "dimensions": { "concept": "metrobankholdingsplc:DescriptionOfAccountingPolicyForOtherIncome", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-386": { "value": "6. General operating expenses
2025 2024
\u00a3\u2019million \u00a3\u2019million
People costs (note 7)
197.8
209.6
Information technology costs
56.4
60.1
Occupancy costs
30.2
30.9
Money transmission and other banking-related costs
43.2
49.3
Transformation costs
14.4
31.1
Remediation costs
1.2
21.3
Capability and Innovation Fund (C&I) costs
1
2.7
3.4
Legal and regulatory fees
9.2
9.0
Professional fees
2
35.4
27.7
Printing, postage and stationery costs
5.5
7.5
Travel costs
1.5
1.4
Marketing costs
6.7
9.4
Other
25.2
28.3
Total general operating expenses
429.4
489.0
1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes \u00a31.5 million (2024: \u00a32.4 million) of people costs. These are included within C&I costs rather than people costs to better reflect their nature. In addition to these costs the grant income recognised in note 5 is also used to offset property costs relating to the store commitments delivered. 2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation costs, remediation costs and C&I costs lines. Information technology costs Information technology costs include costs expensed in relation to software licenses, support from third-party providers, back-up costs and cloud computing costs. Occupancy costs Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and offices, including rates, utilities and property maintenance costs as well as irrecoverable VAT on lease payments. Money transmission and other banking-related costs Money transmission and other banking-related costs are made up of the overheads relating to servicing our deposits and lending that do not constitute either part of the effective interest rate, or fee and commission expense. Professional fees Professional costs includes \u00a35.9 million (2024: \u00a312.3 million) of R&D costs not capitalised. This does not include any costs of colleagues working on these projects that are included in the people costs line. Including these costs we spent \u00a38.7 million (2024: \u00a325.1 million) on R&D costs not capitalised. Included within legal and regulatory fees is \u00a32.5 million (2024: \u00a32.5 million) in respect of the Bank of England (BoE) levy. Transformation and remediation costs, and Capability and Innovation Fund Further details on transformation and remediation costs, and Capability and Innovation Fund can be found on page 207. 8. Fees payable to the Group\u2019s auditor During the year, the Group (including its subsidiaries) obtained the following services from our auditors, PricewaterhouseCoopers LLP:
2025 2024
Group \u00a3\u2019thousand \u00a3\u2019thousand
Audit of the Consolidated and Company financial statements
108
105
Audit of the financial statements of the Company\u2019s subsidiaries
2,451
2,783
Audit-related assurance services
151
162
Other assurance services
160
\u2013
Total fees payable to the Group\u2019s auditors
2,870
3,050
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesByNatureExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-377": { "value": "6. General operating expenses
2025 2024
\u00a3\u2019million \u00a3\u2019million
People costs (note 7)
197.8
209.6
Information technology costs
56.4
60.1
Occupancy costs
30.2
30.9
Money transmission and other banking-related costs
43.2
49.3
Transformation costs
14.4
31.1
Remediation costs
1.2
21.3
Capability and Innovation Fund (C&I) costs
1
2.7
3.4
Legal and regulatory fees
9.2
9.0
Professional fees
2
35.4
27.7
Printing, postage and stationery costs
5.5
7.5
Travel costs
1.5
1.4
Marketing costs
6.7
9.4
Other
25.2
28.3
Total general operating expenses
429.4
489.0
1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes \u00a31.5 million (2024: \u00a32.4 million) of people costs. These are included within C&I costs rather than people costs to better reflect their nature. In addition to these costs the grant income recognised in note 5 is also used to offset property costs relating to the store commitments delivered. 2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation costs, remediation costs and C&I costs lines. Information technology costs Information technology costs include costs expensed in relation to software licenses, support from third-party providers, back-up costs and cloud computing costs. Occupancy costs Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and offices, including rates, utilities and property maintenance costs as well as irrecoverable VAT on lease payments. Money transmission and other banking-related costs Money transmission and other banking-related costs are made up of the overheads relating to servicing our deposits and lending that do not constitute either part of the effective interest rate, or fee and commission expense. Professional fees Professional costs includes \u00a35.9 million (2024: \u00a312.3 million) of R&D costs not capitalised. This does not include any costs of colleagues working on these projects that are included in the people costs line. Including these costs we spent \u00a38.7 million (2024: \u00a325.1 million) on R&D costs not capitalised. Included within legal and regulatory fees is \u00a32.5 million (2024: \u00a32.5 million) in respect of the Bank of England (BoE) levy. Transformation and remediation costs, and Capability and Innovation Fund Further details on transformation and remediation costs, and Capability and Innovation Fund can be found on page 207. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-361": { "value": "6. General operating expenses
2025 2024
\u00a3\u2019million \u00a3\u2019million
People costs (note 7)
197.8
209.6
Information technology costs
56.4
60.1
Occupancy costs
30.2
30.9
Money transmission and other banking-related costs
43.2
49.3
Transformation costs
14.4
31.1
Remediation costs
1.2
21.3
Capability and Innovation Fund (C&I) costs
1
2.7
3.4
Legal and regulatory fees
9.2
9.0
Professional fees
2
35.4
27.7
Printing, postage and stationery costs
5.5
7.5
Travel costs
1.5
1.4
Marketing costs
6.7
9.4
Other
25.2
28.3
Total general operating expenses
429.4
489.0
1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes \u00a31.5 million (2024: \u00a32.4 million) of people costs. These are included within C&I costs rather than people costs to better reflect their nature. In addition to these costs the grant income recognised in note 5 is also used to offset property costs relating to the store commitments delivered. 2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation costs, remediation costs and C&I costs lines. Information technology costs Information technology costs include costs expensed in relation to software licenses, support from third-party providers, back-up costs and cloud computing costs. Occupancy costs Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and offices, including rates, utilities and property maintenance costs as well as irrecoverable VAT on lease payments. Money transmission and other banking-related costs Money transmission and other banking-related costs are made up of the overheads relating to servicing our deposits and lending that do not constitute either part of the effective interest rate, or fee and commission expense. Professional fees Professional costs includes \u00a35.9 million (2024: \u00a312.3 million) of R&D costs not capitalised. This does not include any costs of colleagues working on these projects that are included in the people costs line. Including these costs we spent \u00a38.7 million (2024: \u00a325.1 million) on R&D costs not capitalised. Included within legal and regulatory fees is \u00a32.5 million (2024: \u00a32.5 million) in respect of the Bank of England (BoE) levy. Transformation and remediation costs, and Capability and Innovation Fund Further details on transformation and remediation costs, and Capability and Innovation Fund can be found on page 207. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-345": { "value": "6. General operating expenses
2025 2024
\u00a3\u2019million \u00a3\u2019million
People costs (note 7)
197.8
209.6
Information technology costs
56.4
60.1
Occupancy costs
30.2
30.9
Money transmission and other banking-related costs
43.2
49.3
Transformation costs
14.4
31.1
Remediation costs
1.2
21.3
Capability and Innovation Fund (C&I) costs
1
2.7
3.4
Legal and regulatory fees
9.2
9.0
Professional fees
2
35.4
27.7
Printing, postage and stationery costs
5.5
7.5
Travel costs
1.5
1.4
Marketing costs
6.7
9.4
Other
25.2
28.3
Total general operating expenses
429.4
489.0
1. C&I costs represent the non-capitalisable costs of delivering the C&I digital commitments. It includes \u00a31.5 million (2024: \u00a32.4 million) of people costs. These are included within C&I costs rather than people costs to better reflect their nature. In addition to these costs the grant income recognised in note 5 is also used to offset property costs relating to the store commitments delivered. 2. Professional fees are shown net of both amounts capitalised and amounts included within the transformation costs, remediation costs and C&I costs lines. Information technology costs Information technology costs include costs expensed in relation to software licenses, support from third-party providers, back-up costs and cloud computing costs. Occupancy costs Occupancy costs consist of the non-IFRS 16 property costs of occupying our stores and offices, including rates, utilities and property maintenance costs as well as irrecoverable VAT on lease payments. Money transmission and other banking-related costs Money transmission and other banking-related costs are made up of the overheads relating to servicing our deposits and lending that do not constitute either part of the effective interest rate, or fee and commission expense. Professional fees Professional costs includes \u00a35.9 million (2024: \u00a312.3 million) of R&D costs not capitalised. This does not include any costs of colleagues working on these projects that are included in the people costs line. Including these costs we spent \u00a38.7 million (2024: \u00a325.1 million) on R&D costs not capitalised. Included within legal and regulatory fees is \u00a32.5 million (2024: \u00a32.5 million) in respect of the Bank of England (BoE) levy. Transformation and remediation costs, and Capability and Innovation Fund Further details on transformation and remediation costs, and Capability and Innovation Fund can be found on page 207. 8. Fees payable to the Group\u2019s auditor During the year, the Group (including its subsidiaries) obtained the following services from our auditors, PricewaterhouseCoopers LLP:
2025 2024
Group \u00a3\u2019thousand \u00a3\u2019thousand
Audit of the Consolidated and Company financial statements
108
105
Audit of the financial statements of the Company\u2019s subsidiaries
2,451
2,783
Audit-related assurance services
151
162
Other assurance services
160
\u2013
Total fees payable to the Group\u2019s auditors
2,870
3,050
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-314": { "value": "
7. People costs
2025 2024
\u00a3\u2019million \u00a3\u2019million
Wages and salaries
1
162.2
174.0
Social security costs
1
22.0
20.7
Pension costs
1
10.9
12.9
Equity-settled share-based payments
2.7
2.0
Total people costs
197.8
209.6
1. Amounts are net of people costs which are capitalised as well as those relating to C&I (see note 23) as these costs
will be offset against the C&I grant income in note 5. Amounts are also net of people cost relating to restructure.
Most of the cost was provided for in 2024, and details of provision and drawdown can be found in note 24.
The average monthly number of persons employed during the year was 2,859 (2024: 3,455).
2025
2024
Customer-facing
1,222
1,437
Non-customer-facing
1,637
2,018
Total number of persons employed
2,859
3,455
Pension costs
We operate a defined contribution pension scheme for our colleagues. Contributions to
colleagues\u2019 individual personal pension plans are made on a contractual basis, with no
further payment obligations once the contributions have been paid. These contributions
are recognised as an expense when they fall due.
Payments were made amounting to \u00a311.5 million (2024: \u00a313.7 million) to colleagues\u2019 individual
personal pension plans during the year. This includes pension contributions that were
capitalised as well as those relating to colleagues working on C&I which are not included
in the figures above.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-315": { "value": "
8. Fees payable to the Group\u2019s auditor
During the year, the Group (including its subsidiaries) obtained the following services from
our auditors, PricewaterhouseCoopers LLP:
2025 2024
Group \u00a3\u2019thousand \u00a3\u2019thousand
Audit of the Consolidated and Company financial statements
108
105
Audit of the financial statements of the Company\u2019s subsidiaries
2,451
2,783
Audit-related assurance services
151
162
Other assurance services
160
\u2013
Total fees payable to the Group\u2019s auditors
2,870
3,050
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-316": { "value": "9. Taxation Accounting policy Current tax Our current tax comprises the expected tax payable or receivable on the taxable profit for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Where we have tax losses that can be relieved only by carry-forward against taxable profits of future periods, a deductible temporary difference arises. Those losses carried forward are set off against deferred tax liabilities carried in the balance sheet. Deferred tax Deferred tax is recognised in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the balance sheet and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. The principal differences arise from trading losses, depreciation of property, plant and equipment and relief on research and development expenditure. We recognise a deferred tax asset to the extent that it is probable that future taxable profits will be available against which they can be used and deferred tax liabilities are provided on taxable temporary differences. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised or the deferred tax liability settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax liabilities and where the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle on a net basis.
Tax (expense)/credit
The components of tax expense for the year ended 31 December 2025 and 2024 are:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Current tax
Current tax
(9.2)
\u2013
Adjustment in respect of prior years
\u2013
\u2013
Total current tax (expense)
(9.2)
\u2013
Deferred tax
Origination and reversal of temporary differences
(12.4)
254.1
Effect of changes in tax rates
\u2013
\u2013
Adjustment in respect of prior years
4.1
0.5
Total deferred tax (expense)/credit
(8.3)
254.6
Total tax (expense)/credit
(17.5)
254.6
Reconciliation of the total tax (expense)/credit
The tax expense shown in the income statement differs from the tax expense that would apply if all accounting losses had been taxed at the UK corporation tax rate. A reconciliation
between the expense and the accounting profit/(loss) multiplied by the UK corporation rate is as follows:
Effective Effective
2025 tax rate 2024 tax rate
Group \u00a3\u2019million % \u00a3\u2019million %
Accounting profit/(loss) before tax
87.2
\u2013
(212.1)
\u2013
Tax (expense)/credit at statutory corporation tax rate of 25%
(21.8)
25.0%
53.0
25.0%
Tax effects of:
Non-deductible expenses \u2013 depreciation on non-qualifying fixed assets
(3.0)
3.4%
(3.0)
(1.4%)
Non-deductible expenses \u2013 other
(0.1)
0.1%
(7.7)
(3.6%)
AT1 interest
4.3
(4.9%)
\u2013
\u2013
Share-based payments
(1.0)
1.1%
(0.2)
(0.1%)
Adjustment in respect of prior years
4.1
(4.7%)
0.6
0.3%
Movement in recognised DTA for unused tax losses
\u2013
\u2013
211.9
99.9%
Tax (expense)/credit reported in the consolidated income statement
(17.5)
20.2%
254.6
120.0%
The effective tax rate for the period is 20.2% (2024: 120.0%). The main reasons for this, in addition to the reported accounting loss before tax for the year, are set out below:
AT1 interest
In line with IAS 12, the tax impact of the coupon payable on the AT1 instrument is credited to the income statement, resulting in a current tax credit.
Adjustment in respect of prior years
Adjustments in respect of prior years reflect true ups arising on finalisation of our corporate tax returns.
Deferred tax
A deferred tax asset must be regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not there will be suitable
tax profits from which the future of the underlying timing differences can be deducted.
The following table shows deferred tax recorded in the statement of financial position and changes recorded in the tax expense:
31 December 2025
31 December 2024
Investment Investment
securities Share- Property, securities Share- Property,
Unused and based plant and Intangible Unused and based plant and Intangible
tax losses impairments payments equipment assets Total tax losses impairments payments equipment assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Deferred tax assets
259
1
\u2013
\u2013
\u2013
260
269
1
1
\u2013
\u2013
271
Deferred tax liabilities
\u2013
1
\u2013
(30)
(1)
(30)
\u2013
3
\u2013
(31)
(3)
(31)
Deferred tax assets (net)
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
At 1 January
269
4
1
(31)
(3)
240
14
6
1
(29)
(5)
(13)
Prior year movement
\u2013
\u2013
\u2013
2
2
4
(1)
(1)
\u2013
\u2013
1
(1)
Income statement
(10)
(1)
(1)
(1)
\u2013
(13)
256
\u2013
\u2013
(2)
1
255
Other comprehensive income
\u2013
(1)
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
(1)
Equity
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
Deferred tax on unused tax losses
We have recognised deferred tax assets on all tax losses. The Bank has forecasts showing an expectation of future profit which support recognition of the deferred tax asset. The value of
the deferred tax asset in respect of tax losses is expected to be fully recovered by 2032.
Pillar Two global minimum tax
The Group has assessed the potential impact of the OECD\u2019s Pillar Two model rules, as enacted in the UK through the Finance (No. 2) Act 2023, which introduce a global minimum
effective tax rate of 15% for large multinational groups with consolidated revenues in excess of \u20ac750 million. As at the reporting date, the Group has concluded that it is not expected
to be subject to a Pillar Two top-up tax liability, as the Group\u2019s profits are predominantly generated in the United Kingdom, where the statutory corporation tax rate exceeds the 15%
minimum rate. In accordance with the amendments to IAS 12 Income Taxes, the Group has applied the mandatory temporary exception from recognising and disclosing deferred tax
assets and liabilities related to Pillar Two income taxes.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-398": { "value": "Accounting policy Current tax Our current tax comprises the expected tax payable or receivable on the taxable profit for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Where we have tax losses that can be relieved only by carry-forward against taxable profits of future periods, a deductible temporary difference arises. Those losses carried forward are set off against deferred tax liabilities carried in the balance sheet. Deferred tax Deferred tax is recognised in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the balance sheet and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. The principal differences arise from trading losses, depreciation of property, plant and equipment and relief on research and development expenditure. We recognise a deferred tax asset to the extent that it is probable that future taxable profits will be available against which they can be used and deferred tax liabilities are provided on taxable temporary differences. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised or the deferred tax liability settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax liabilities and where the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle on a net basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-413": { "value": "Deferred tax Deferred tax is recognised in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the balance sheet and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. The principal differences arise from trading losses, depreciation of property, plant and equipment and relief on research and development expenditure. We recognise a deferred tax asset to the extent that it is probable that future taxable profits will be available against which they can be used and deferred tax liabilities are provided on taxable temporary differences. Deferred tax assets and liabilities are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised or the deferred tax liability settled. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax liabilities and where the deferred tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle on a net basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-387": { "value": "Tax (expense)/credit The components of tax expense for the year ended 31 December 2025 and 2024 are:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Current tax
Current tax
(9.2)
\u2013
Adjustment in respect of prior years
\u2013
\u2013
Total current tax (expense)
(9.2)
\u2013
Deferred tax
Origination and reversal of temporary differences
(12.4)
254.1
Effect of changes in tax rates
\u2013
\u2013
Adjustment in respect of prior years
4.1
0.5
Total deferred tax (expense)/credit
(8.3)
254.6
Total tax (expense)/credit
(17.5)
254.6
Reconciliation of the total tax (expense)/credit The tax expense shown in the income statement differs from the tax expense that would apply if all accounting losses had been taxed at the UK corporation tax rate. A reconciliation between the expense and the accounting profit/(loss) multiplied by the UK corporation rate is as follows:
Effective Effective
2025 tax rate 2024 tax rate
Group \u00a3\u2019million % \u00a3\u2019million %
Accounting profit/(loss) before tax
87.2
\u2013
(212.1)
\u2013
Tax (expense)/credit at statutory corporation tax rate of 25%
(21.8)
25.0%
53.0
25.0%
Tax effects of:
Non-deductible expenses \u2013 depreciation on non-qualifying fixed assets
(3.0)
3.4%
(3.0)
(1.4%)
Non-deductible expenses \u2013 other
(0.1)
0.1%
(7.7)
(3.6%)
AT1 interest
4.3
(4.9%)
\u2013
\u2013
Share-based payments
(1.0)
1.1%
(0.2)
(0.1%)
Adjustment in respect of prior years
4.1
(4.7%)
0.6
0.3%
Movement in recognised DTA for unused tax losses
\u2013
\u2013
211.9
99.9%
Tax (expense)/credit reported in the consolidated income statement
(17.5)
20.2%
254.6
120.0%
The effective tax rate for the period is 20.2% (2024: 120.0%). The main reasons for this, in addition to the reported accounting loss before tax for the year, are set out below: AT1 interest In line with IAS 12, the tax impact of the coupon payable on the AT1 instrument is credited to the income statement, resulting in a current tax credit. Adjustment in respect of prior years Adjustments in respect of prior years reflect true ups arising on finalisation of our corporate tax returns. Deferred tax A deferred tax asset must be regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not there will be suitable tax profits from which the future of the underlying timing differences can be deducted. The following table shows deferred tax recorded in the statement of financial position and changes recorded in the tax expense:
31 December 2025
31 December 2024
Investment Investment
securities Share- Property, securities Share- Property,
Unused and based plant and Intangible Unused and based plant and Intangible
tax losses impairments payments equipment assets Total tax losses impairments payments equipment assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Deferred tax assets
259
1
\u2013
\u2013
\u2013
260
269
1
1
\u2013
\u2013
271
Deferred tax liabilities
\u2013
1
\u2013
(30)
(1)
(30)
\u2013
3
\u2013
(31)
(3)
(31)
Deferred tax assets (net)
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
At 1 January
269
4
1
(31)
(3)
240
14
6
1
(29)
(5)
(13)
Prior year movement
\u2013
\u2013
\u2013
2
2
4
(1)
(1)
\u2013
\u2013
1
(1)
Income statement
(10)
(1)
(1)
(1)
\u2013
(13)
256
\u2013
\u2013
(2)
1
255
Other comprehensive income
\u2013
(1)
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
(1)
Equity
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
Deferred tax on unused tax losses We have recognised deferred tax assets on all tax losses. The Bank has forecasts showing an expectation of future profit which support recognition of the deferred tax asset. The value of the deferred tax asset in respect of tax losses is expected to be fully recovered by 2032. Pillar Two global minimum tax The Group has assessed the potential impact of the OECD\u2019s Pillar Two model rules, as enacted in the UK through the Finance (No. 2) Act 2023, which introduce a global minimum effective tax rate of 15% for large multinational groups with consolidated revenues in excess of \u20ac750 million. As at the reporting date, the Group has concluded that it is not expected to be subject to a Pillar Two top-up tax liability, as the Group\u2019s profits are predominantly generated in the United Kingdom, where the statutory corporation tax rate exceeds the 15% minimum rate. In accordance with the amendments to IAS 12 Income Taxes, the Group has applied the mandatory temporary exception from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes.", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-346": { "value": "Deferred tax A deferred tax asset must be regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not there will be suitable tax profits from which the future of the underlying timing differences can be deducted. The following table shows deferred tax recorded in the statement of financial position and changes recorded in the tax expense:
31 December 2025
31 December 2024
Investment Investment
securities Share- Property, securities Share- Property,
Unused and based plant and Intangible Unused and based plant and Intangible
tax losses impairments payments equipment assets Total tax losses impairments payments equipment assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Deferred tax assets
259
1
\u2013
\u2013
\u2013
260
269
1
1
\u2013
\u2013
271
Deferred tax liabilities
\u2013
1
\u2013
(30)
(1)
(30)
\u2013
3
\u2013
(31)
(3)
(31)
Deferred tax assets (net)
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
At 1 January
269
4
1
(31)
(3)
240
14
6
1
(29)
(5)
(13)
Prior year movement
\u2013
\u2013
\u2013
2
2
4
(1)
(1)
\u2013
\u2013
1
(1)
Income statement
(10)
(1)
(1)
(1)
\u2013
(13)
256
\u2013
\u2013
(2)
1
255
Other comprehensive income
\u2013
(1)
\u2013
\u2013
\u2013
(1)
\u2013
(1)
\u2013
\u2013
\u2013
(1)
Equity
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
At 31 December
259
2
\u2013
(30)
(1)
230
269
4
1
(31)
(3)
240
Deferred tax on unused tax losses We have recognised deferred tax assets on all tax losses. The Bank has forecasts showing an expectation of future profit which support recognition of the deferred tax asset. The value of the deferred tax asset in respect of tax losses is expected to be fully recovered by 2032. Pillar Two global minimum tax The Group has assessed the potential impact of the OECD\u2019s Pillar Two model rules, as enacted in the UK through the Finance (No. 2) Act 2023, which introduce a global minimum effective tax rate of 15% for large multinational groups with consolidated revenues in excess of \u20ac750 million. As at the reporting date, the Group has concluded that it is not expected to be subject to a Pillar Two top-up tax liability, as the Group\u2019s profits are predominantly generated in the United Kingdom, where the statutory corporation tax rate exceeds the 15% minimum rate. In accordance with the amendments to IAS 12 Income Taxes, the Group has applied the mandatory temporary exception from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes.", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-362": { "value": "Pillar Two global minimum tax The Group has assessed the potential impact of the OECD\u2019s Pillar Two model rules, as enacted in the UK through the Finance (No. 2) Act 2023, which introduce a global minimum effective tax rate of 15% for large multinational groups with consolidated revenues in excess of \u20ac750 million. As at the reporting date, the Group has concluded that it is not expected to be subject to a Pillar Two top-up tax liability, as the Group\u2019s profits are predominantly generated in the United Kingdom, where the statutory corporation tax rate exceeds the 15% minimum rate. In accordance with the amendments to IAS 12 Income Taxes, the Group has applied the mandatory temporary exception from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes.", "dimensions": { "concept": "ifrs-full:DisclosureOfKnownOrReasonablyEstimableInformationAboutExposureToPillarTwoIncomeTaxesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-347": { "value": "10. Financial instruments Accounting policy Repurchase agreements Where we sell financial assets subject to sale and repurchase agreements, the financial assets are retained in their respective balance sheet categories, however become encumbered and are not available for transfer or sale. The associated liabilities are included in the repurchase agreements line. The difference between the sale and repurchase price of repurchase agreements is treated as interest and accrued over the life of the agreements using the effective interest method as set out in note 2. Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Other financial instruments Our accounting policies in respect of our other financial instruments can be found in their respective notes, where applicable. Our financial instruments primarily comprise customer deposits, loans and advances to customers and investment securities, all of which arise as a result of our normal operations. The main financial risks arising from our financial instruments are credit risk, liquidity risk and market risks (price and interest rate risk). Further details on these risks can be found within the Risk report on pages 104 to 138. The financial instruments we hold are simple in nature and we do not consider that we have made any significant or material judgements relating to the classification and measurement of financial instruments under IFRS 9. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the following table. Classification of financial instruments
31 December 2025
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
8,823
8,823
Investment securities
\u2013
218
3,942
4,160
Derivative financial assets
23
\u2013
\u2013
23
Liabilities
Deposits from customers
\u2013
\u2013
13,445
13,445
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
684
684
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
Repurchase agreements
\u2013
\u2013
73
73
31 December 2024
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
9,013
9,013
Investment securities
\u2013
377
4,113
4,490
Derivative financial assets
16
\u2013
\u2013
16
Liabilities
Deposits from customers
\u2013
\u2013
14,458
14,458
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
675
675
Derivative financial liabilities
1
\u2013
\u2013
1
Repurchase agreements
\u2013
\u2013
391
391
Financial assets pledged as collateral We have pledged \u00a3755 million (2024: \u00a31,034 million) of the financial assets left as encumbered collateral which can be called upon in the event of default. Of this, \u00a387 million (2024: \u00a3445 million) is made up of high-quality securities and \u00a3669 million (2024: \u00a3589 million) is from our own loan portfolio. This does not include cash balances pledged as collateral which are shown separately within note 17. 34. Fair value of financial instruments Accounting policy Determination of fair value \u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below: \u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date \u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3 \u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the table below as the carrying value of those assets are a close approximation of their fair value.
31 December 2025
31 December 2024
With With
Quoted Using significant Quoted Using significant
market observable unobservable market observable unobservable
Carrying price inputs inputs Total fair Carrying price inputs inputs Total fair
value Level 1 Level 2 Level 3 value value Level 1 Level 2 Level 3 value
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
8,823
\u2013
\u2013
8,867
8,867
9,013
\u2013
\u2013
8,981
8,981
Investment securities held at fair value through other
comprehensive income
218
218
\u2013
\u2013
218
377
377
\u2013
\u2013
377
Investment securities held at amortised cost
3,942
2,641
1,250
\u2013
3,891
4,113
2,857
1,122
\u2013
3,979
Derivative financial assets
23
\u2013
23
\u2013
23
16
\u2013
16
\u2013
16
Financial assets held at fair value through profit and loss
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Liabilities
Deposits from customers
13,445
\u2013
\u2013
13,444
13,444
14,458
\u2013
\u2013
14,458
14,458
Deposits from central bank
400
\u2013
\u2013
400
400
400
\u2013
\u2013
400
400
Debt securities
684
\u2013
780
\u2013
780
675
\u2013
711
\u2013
711
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
1
\u2013
1
Repurchase agreements
73
\u2013
\u2013
73
73
391
\u2013
\u2013
391
391
Cash and balances with other banks, trade and other receivables, trade and other payables, assets classified as held for sale and other assets and liabilities which meet the definition of financial instruments are not included in the tables. Their carrying amount is a reasonable approximation of fair value. Information on how fair values are calculated for the financial assets and liabilities noted above are explained below: Loans and advances to customers Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the balance sheet date, adjusted for future credit losses and prepayments, if considered material. Investment securities The fair value of investment securities is based on either observed market prices for those securities that have an active trading market (fair value Level 1 assets), or using observable inputs (in the case of fair value Level 2 assets). Deposits from customers Fair values are estimated using discounted cash flows, applying current rates offered for deposits of similar remaining maturities. The fair value of a deposit repayable on demand is approximated by its carrying value. Debt securities Fair values are determined using the quoted market price at the balance sheet date. Deposits from central banks/repurchase agreements Fair values are estimated using discounted cash flows, applying current rates. Fair values approximate carrying amounts as their balances are generally short-dated or the instrument is priced at a variable rate which is in line with market movement. Derivative financial assets The fair values of derivatives are obtained from discounted cash flow models or option pricing models as appropriate.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-378": { "value": "10. Financial instruments Accounting policy Repurchase agreements Where we sell financial assets subject to sale and repurchase agreements, the financial assets are retained in their respective balance sheet categories, however become encumbered and are not available for transfer or sale. The associated liabilities are included in the repurchase agreements line. The difference between the sale and repurchase price of repurchase agreements is treated as interest and accrued over the life of the agreements using the effective interest method as set out in note 2. Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Other financial instruments Our accounting policies in respect of our other financial instruments can be found in their respective notes, where applicable. Our financial instruments primarily comprise customer deposits, loans and advances to customers and investment securities, all of which arise as a result of our normal operations. The main financial risks arising from our financial instruments are credit risk, liquidity risk and market risks (price and interest rate risk). Further details on these risks can be found within the Risk report on pages 104 to 138. The financial instruments we hold are simple in nature and we do not consider that we have made any significant or material judgements relating to the classification and measurement of financial instruments under IFRS 9. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the following table. Classification of financial instruments
31 December 2025
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
8,823
8,823
Investment securities
\u2013
218
3,942
4,160
Derivative financial assets
23
\u2013
\u2013
23
Liabilities
Deposits from customers
\u2013
\u2013
13,445
13,445
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
684
684
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
Repurchase agreements
\u2013
\u2013
73
73
31 December 2024
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
9,013
9,013
Investment securities
\u2013
377
4,113
4,490
Derivative financial assets
16
\u2013
\u2013
16
Liabilities
Deposits from customers
\u2013
\u2013
14,458
14,458
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
675
675
Derivative financial liabilities
1
\u2013
\u2013
1
Repurchase agreements
\u2013
\u2013
391
391
Financial assets pledged as collateral We have pledged \u00a3755 million (2024: \u00a31,034 million) of the financial assets left as encumbered collateral which can be called upon in the event of default. Of this, \u00a387 million (2024: \u00a3445 million) is made up of high-quality securities and \u00a3669 million (2024: \u00a3589 million) is from our own loan portfolio. This does not include cash balances pledged as collateral which are shown separately within note 17. 34. Fair value of financial instruments Accounting policy Determination of fair value \u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below: \u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date \u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3 \u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the table below as the carrying value of those assets are a close approximation of their fair value.
31 December 2025
31 December 2024
With With
Quoted Using significant Quoted Using significant
market observable unobservable market observable unobservable
Carrying price inputs inputs Total fair Carrying price inputs inputs Total fair
value Level 1 Level 2 Level 3 value value Level 1 Level 2 Level 3 value
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
8,823
\u2013
\u2013
8,867
8,867
9,013
\u2013
\u2013
8,981
8,981
Investment securities held at fair value through other
comprehensive income
218
218
\u2013
\u2013
218
377
377
\u2013
\u2013
377
Investment securities held at amortised cost
3,942
2,641
1,250
\u2013
3,891
4,113
2,857
1,122
\u2013
3,979
Derivative financial assets
23
\u2013
23
\u2013
23
16
\u2013
16
\u2013
16
Financial assets held at fair value through profit and loss
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Liabilities
Deposits from customers
13,445
\u2013
\u2013
13,444
13,444
14,458
\u2013
\u2013
14,458
14,458
Deposits from central bank
400
\u2013
\u2013
400
400
400
\u2013
\u2013
400
400
Debt securities
684
\u2013
780
\u2013
780
675
\u2013
711
\u2013
711
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
1
\u2013
1
Repurchase agreements
73
\u2013
\u2013
73
73
391
\u2013
\u2013
391
391
Cash and balances with other banks, trade and other receivables, trade and other payables, assets classified as held for sale and other assets and liabilities which meet the definition of financial instruments are not included in the tables. Their carrying amount is a reasonable approximation of fair value. Information on how fair values are calculated for the financial assets and liabilities noted above are explained below: Loans and advances to customers Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the balance sheet date, adjusted for future credit losses and prepayments, if considered material. Investment securities The fair value of investment securities is based on either observed market prices for those securities that have an active trading market (fair value Level 1 assets), or using observable inputs (in the case of fair value Level 2 assets). Deposits from customers Fair values are estimated using discounted cash flows, applying current rates offered for deposits of similar remaining maturities. The fair value of a deposit repayable on demand is approximated by its carrying value. Debt securities Fair values are determined using the quoted market price at the balance sheet date. Deposits from central banks/repurchase agreements Fair values are estimated using discounted cash flows, applying current rates. Fair values approximate carrying amounts as their balances are generally short-dated or the instrument is priced at a variable rate which is in line with market movement. Derivative financial assets The fair values of derivatives are obtained from discounted cash flow models or option pricing models as appropriate.", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-317": { "value": "10. Financial instruments Accounting policy Repurchase agreements Where we sell financial assets subject to sale and repurchase agreements, the financial assets are retained in their respective balance sheet categories, however become encumbered and are not available for transfer or sale. The associated liabilities are included in the repurchase agreements line. The difference between the sale and repurchase price of repurchase agreements is treated as interest and accrued over the life of the agreements using the effective interest method as set out in note 2. Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Other financial instruments Our accounting policies in respect of our other financial instruments can be found in their respective notes, where applicable. Our financial instruments primarily comprise customer deposits, loans and advances to customers and investment securities, all of which arise as a result of our normal operations. The main financial risks arising from our financial instruments are credit risk, liquidity risk and market risks (price and interest rate risk). Further details on these risks can be found within the Risk report on pages 104 to 138. The financial instruments we hold are simple in nature and we do not consider that we have made any significant or material judgements relating to the classification and measurement of financial instruments under IFRS 9. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the following table.
Classification of financial instruments
31 December 2025
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
8,823
8,823
Investment securities
\u2013
218
3,942
4,160
Derivative financial assets
23
\u2013
\u2013
23
Liabilities
Deposits from customers
\u2013
\u2013
13,445
13,445
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
684
684
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
Repurchase agreements
\u2013
\u2013
73
73
31 December 2024
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
9,013
9,013
Investment securities
\u2013
377
4,113
4,490
Derivative financial assets
16
\u2013
\u2013
16
Liabilities
Deposits from customers
\u2013
\u2013
14,458
14,458
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
675
675
Derivative financial liabilities
1
\u2013
\u2013
1
Repurchase agreements
\u2013
\u2013
391
391
Financial assets pledged as collateral
We have pledged \u00a3755 million (2024: \u00a31,034 million) of the financial assets left as
encumbered collateral which can be called upon in the event of default. Of this,
\u00a387 million (2024: \u00a3445 million) is made up of high-quality securities and \u00a3669 million
(2024: \u00a3589 million) is from our own loan portfolio. This does not include cash balances
pledged as collateral which are shown separately within note 17.
20. Debt securities Accounting policy Debt securities in issue are recognised initially at fair value, being proceeds less transaction costs. Subsequently debt securities are measured at amortised cost using the effective interest method.
Amount
issued Coupon Maturity
Name
Issue date
Currency
\u00a3\u2019million
rate
Call date
date
Fixed Rate Reset Callable
Subordinated Notes
30/11/2023
GBP
525
12.00%
30/04/28
30/04/29
Fixed Rate Reset Senior
Non-Preferred Notes
30/11/2023
GBP
150
14.00%
30/04/29
30/04/34
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
675
694
Issuances
\u2013
\u2013
Costs associated with issuance
\u2013
\u2013
Movements in micro hedging
8
(20)
Unwind of issuance costs
1
1
31 December
684
675
The fixed rate reset callable notes (MREL), which are listed on the London Stock Exchange, constitute subordinated and unsecured obligations. The notes have a call date of 30 April 2028, where they may be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark gilt plus a credit spread of 7.814%. The notes are contractually obliged to mature on the maturity date of 30 April 2029. The fixed rate reset subordinated callable notes (Tier 2), which are listed on the London Stock Exchange, constitute subordinated and unsecured obligations. The notes have a call date of 30 April 2029, where they may be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark gilt plus a credit spread of 9.822%. The notes are contractually obliged to mature on the maturity date of 30 April 2034. 21. Derivatives Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness.
We use derivatives as part of our approach to hedging interest rate and foreign exchange exposure. Our derivative financial instruments are analysed in the table below.
31 December 2025
31 December 2024
Fair Value Fair Value
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps \u2013 Designated as hedging instruments
3,227
23
\u2013
1,253
16
\u2013
Interest rate swaps \u2013 Designated as held at fair value through profit and loss
500
8
(8)
502
7
(7)
Foreign currency swaps \u2013 Designated as held at fair value through profit and loss
58
\u2013
\u2013
50
\u2013
(1)
Tota l
3,785
31
(8)
1,805
23
(8)
Offsetting derivative
(500)
(8)
8
(502)
(7)
7
Grand total
3,285
23
\u2013
1,303
16
(1)
Hedge accounting
Our hedging strategy is driven by macro and micro hedges. The designated risk
components of hedged items are benchmark interest rate risk. Other risks such as credit
risk and liquidity risk are managed separately and are not included in the hedge accounting
relationship. The changes in the designated risk component usually account for the largest
portion of the overall change in fair value of the hedged item.
Macro fair value hedges
We operate a macro hedging programme and use interest rate swaps to manage our interest
rate risk.
We determine hedged items by analysing portfolios of fixed-rate lending and relevant NIBLs,
and allocating them into repricing time buckets based on expected, rather than contractual,
repricing profiles. The hedging instruments are designated appropriately to those repricing
time buckets. The hedge relationship is tested for effectiveness prospectively at the
designation date, and retrospectively on a monthly basis. This is done by comparing fair value
movements of the designated proportion of the relevant hedged item, against the fair value
movements of the hedging instruments.
In a portfolio fair value hedge of interest rate risk, the change in fair value of the hedged
exposures attributable to the hedged risk is recognised on the balance sheet. The hedging
derivatives are measured at fair value with changes recognised in profit or loss. At the end
of every month, we de-designate the hedge relationships and redesignate them as new
hedges in order to minimise the ineffectiveness from early repayments and accommodate
new exposures. At de-designation, the fair value hedge accounting adjustments are
amortised on a straight-line basis over the remaining period until the repricing of the
hedged item. Amortisation begins at the date of de-designation.
Micro fair value hedges
We use this hedging strategy on fixed rate asset and liabilities held at fair value through other
comprehensive income and amortised cost as well as on our fixed rate debt issuance.
Hedge ineffectiveness
Hedge ineffectiveness within fair value hedges can occur due to a number of potential
sources, such as non-zero derivative designated in a hedge relationship; mismatches
between contractual terms such as basis, timing, principal and notionals; or change in
credit risk of interest rate swaps. The total ineffectiveness on our fair value hedges are
recognised in note 5.
Offsetting derivatives
The Tier 2 and MREL debt held until renegotiation in late 2023 were designated as hedge
items in fair value hedge relationships to manage our exposure to interest rate risk.
Following the renegotiation of our debt in November 2023, these hedge relationships were
de-designated. We entered into equal and opposite interest rate swaps with a notional of
\u00a3600 million to fully offset the interest rate swaps used to hedge the old MREL and Tier 2
debt securities. Cash flows are offset at a central clearing party and both set of swaps will
mature at the same time. Further details are included in note 20.
Master netting arrangement and collateral
We either receive or provide collateral related to our hedging arrangements. As at
31 December 2025, we have provided collateral of \u00a33.3 million which is reflected in
Other Assets.
Summary of hedging instruments in designated hedge relationships
The amounts relating to items designated as hedging instruments in fair value hedge relationships to manage our exposure to interest rate are:
31 December 2025
31 December 2024
Carrying amount Carrying amount
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps
3,227
23
\u2013
1,253
16
\u2013
Total derivatives designated as fair value hedges
3,227
23
\u2013
1,253
16
\u2013
Summary of hedged items in designated hedge relationships
The items designated as hedged items in fair value hedge relationships to manage our exposure to interest rates are:
31 December 2025
31 December 2024
Accumulated Accumulated
amount of fair value amount of fair value
hedge adjustments hedge adjustments
included in the included in the
carrying amount of carrying amount of
Carrying amount
the hedged item
Carrying amount
the hedged item
Assets Liabilities Assets Liabilities
Group and Company \u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
Interest rate risk
Fixed rate mortgages
1
450
\u2013
\u2013
\u2013
\u2013
\u2013
Fixed rate debt securities
2
\u2013
688
(13)
\u2013
675
4
Fixed rate investment securities held at FVOCI
3
189
\u2013
(4)
293
\u2013
8
Fixed rate investment securities held at AC
4
310
\u2013
15
271
\u2013
\u2013
Non-interest bearing liabilities
5
\u2013
1607
(6)
\u2013
\u2013
\u2013
Fixed rate loans
1
\u2013
\u2013
\u2013
1
\u2013
\u2013
Total items designated as fair value hedges
949
2,295
(8)
565
675
12
1. Hedged item and the cumulative fair value changes are recorded in Loans and advances to customers.
2. Hedged item and the cumulative fair value changes are recorded in Debt securities.
3. Hedged items and the cumulative fair value changes are recorded in Investment Securities held at FVOCI.
4. Hedged item and the cumulative fair value changes are recorded in Investment Securities held at AC.
5. Hedged item and the cumulative fair value changes are recorded in Deposits from customers.
Summary of ineffectiveness from designated hedge relationships
An analysis of the hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships are set out below:
Total hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships is a loss of \u00a32.9 million (2024: gain of \u00a32.0 million).
33. Offsetting of financial assets and liabilities Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
31 December 2025
31 December 2024
Effects of offsetting Effects of offsetting
on the balance sheet on the balance sheet
Net amounts Net amounts
Gross amounts presented Gross amounts presented
Gross offset in the in the balance Gross offset in the in the balance
amount balance sheet sheet amount balance sheet sheet
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and
advances to
customers
8,823
\u2013
8,823
9,013
\u2013
9,013
Investment
securities
1
4,160
\u2013
4,160
4,490
\u2013
4,490
Derivative
financial assets
31
(8)
23
23
(7)
16
Deferred
tax assets
260
(30)
230
271
(31)
240
Other assets
2
125
\u2013
125
82
\u2013
82
Liabilities
Derivative
financial liabilities
8
(8)
\u2013
8
(7)
1
Repurchase
agreements
1
73
\u2013
73
391
\u2013
391
Deposits from
central banks
1
400
\u2013
400
400
\u2013
400
Deferred
tax liabilities
30
(30)
\u2013
31
(31)
\u2013
1. We have pledged \u00a3755 million (2024: \u00a31,034 million) against repos, deposits from central banks and other assets
as encumbered collateral which can be called upon in the event of default.
2. Includes \u00a384 million (2024: \u00a353 million) pledged as cash collateral. None of the cash collateral has been offset
in the balance sheet.
34. Fair value of financial instruments Accounting policy Determination of fair value \u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below: \u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date \u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3 \u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the table below as the carrying value of those assets are a close approximation of their fair value.
31 December 2025
31 December 2024
With With
Quoted Using significant Quoted Using significant
market observable unobservable market observable unobservable
Carrying price inputs inputs Total fair Carrying price inputs inputs Total fair
value Level 1 Level 2 Level 3 value value Level 1 Level 2 Level 3 value
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
8,823
\u2013
\u2013
8,867
8,867
9,013
\u2013
\u2013
8,981
8,981
Investment securities held at fair value through other
comprehensive income
218
218
\u2013
\u2013
218
377
377
\u2013
\u2013
377
Investment securities held at amortised cost
3,942
2,641
1,250
\u2013
3,891
4,113
2,857
1,122
\u2013
3,979
Derivative financial assets
23
\u2013
23
\u2013
23
16
\u2013
16
\u2013
16
Financial assets held at fair value through profit and loss
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Liabilities
Deposits from customers
13,445
\u2013
\u2013
13,444
13,444
14,458
\u2013
\u2013
14,458
14,458
Deposits from central bank
400
\u2013
\u2013
400
400
400
\u2013
\u2013
400
400
Debt securities
684
\u2013
780
\u2013
780
675
\u2013
711
\u2013
711
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
1
\u2013
1
Repurchase agreements
73
\u2013
\u2013
73
73
391
\u2013
\u2013
391
391
Cash and balances with other banks, trade and other receivables, trade and other
payables, assets classified as held for sale and other assets and liabilities which meet the
definition of financial instruments are not included in the tables. Their carrying amount
is a reasonable approximation of fair value.
Information on how fair values are calculated for the financial assets and liabilities noted
above are explained below:
Loans and advances to customers
Fair value is calculated based on the present value of future principal and interest cash
flows, discounted at the market rate of interest at the balance sheet date, adjusted for
future credit losses and prepayments, if considered material.
Investment securities
The fair value of investment securities is based on either observed market prices for those
securities that have an active trading market (fair value Level 1 assets), or using observable
inputs (in the case of fair value Level 2 assets).
Deposits from customers
Fair values are estimated using discounted cash flows, applying current rates offered for
deposits of similar remaining maturities. The fair value of a deposit repayable on demand
is approximated by its carrying value.
Debt securities
Fair values are determined using the quoted market price at the balance sheet date.
Deposits from central banks/repurchase agreements
Fair values are estimated using discounted cash flows, applying current rates. Fair
values approximate carrying amounts as their balances are generally short-dated or the
instrument is priced at a variable rate which is in line with market movement.
Derivative financial assets
The fair values of derivatives are obtained from discounted cash flow models or option
pricing models as appropriate.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-399": { "value": "Accounting policy Repurchase agreements Where we sell financial assets subject to sale and repurchase agreements, the financial assets are retained in their respective balance sheet categories, however become encumbered and are not available for transfer or sale. The associated liabilities are included in the repurchase agreements line. The difference between the sale and repurchase price of repurchase agreements is treated as interest and accrued over the life of the agreements using the effective interest method as set out in note 2. Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Other financial instruments Our accounting policies in respect of our other financial instruments can be found in their respective notes, where applicable. Accounting policy Debt securities in issue are recognised initially at fair value, being proceeds less transaction costs. Subsequently debt securities are measured at amortised cost using the effective interest method. Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Accounting policy Determination of fair value \u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below: \u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date \u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3 \u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the table below as the carrying value of those assets are a close approximation of their fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-414": { "value": "Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-423": { "value": "Derivative financial instruments Derivative instruments are contracts whose value is derived from one or more underlying financial instruments or indices defined in the contract. Notional amounts of the contracts are not recorded on the balance sheet. All derivative instruments are held at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-388": { "value": "Classification of financial instruments
31 December 2025
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
8,823
8,823
Investment securities
\u2013
218
3,942
4,160
Derivative financial assets
23
\u2013
\u2013
23
Liabilities
Deposits from customers
\u2013
\u2013
13,445
13,445
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
684
684
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
Repurchase agreements
\u2013
\u2013
73
73
31 December 2024
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
9,013
9,013
Investment securities
\u2013
377
4,113
4,490
Derivative financial assets
16
\u2013
\u2013
16
Liabilities
Deposits from customers
\u2013
\u2013
14,458
14,458
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
675
675
Derivative financial liabilities
1
\u2013
\u2013
1
Repurchase agreements
\u2013
\u2013
391
391
33. Offsetting of financial assets and liabilities Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
31 December 2025
31 December 2024
Effects of offsetting Effects of offsetting
on the balance sheet on the balance sheet
Net amounts Net amounts
Gross amounts presented Gross amounts presented
Gross offset in the in the balance Gross offset in the in the balance
amount balance sheet sheet amount balance sheet sheet
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and
advances to
customers
8,823
\u2013
8,823
9,013
\u2013
9,013
Investment
securities
1
4,160
\u2013
4,160
4,490
\u2013
4,490
Derivative
financial assets
31
(8)
23
23
(7)
16
Deferred
tax assets
260
(30)
230
271
(31)
240
Other assets
2
125
\u2013
125
82
\u2013
82
Liabilities
Derivative
financial liabilities
8
(8)
\u2013
8
(7)
1
Repurchase
agreements
1
73
\u2013
73
391
\u2013
391
Deposits from
central banks
1
400
\u2013
400
400
\u2013
400
Deferred
tax liabilities
30
(30)
\u2013
31
(31)
\u2013
1. We have pledged \u00a3755 million (2024: \u00a31,034 million) against repos, deposits from central banks and other assets as encumbered collateral which can be called upon in the event of default. 2. Includes \u00a384 million (2024: \u00a353 million) pledged as cash collateral. None of the cash collateral has been offset in the balance sheet.
31 December 2025
31 December 2024
With With
Quoted Using significant Quoted Using significant
market observable unobservable market observable unobservable
Carrying price inputs inputs Total fair Carrying price inputs inputs Total fair
value Level 1 Level 2 Level 3 value value Level 1 Level 2 Level 3 value
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
8,823
\u2013
\u2013
8,867
8,867
9,013
\u2013
\u2013
8,981
8,981
Investment securities held at fair value through other
comprehensive income
218
218
\u2013
\u2013
218
377
377
\u2013
\u2013
377
Investment securities held at amortised cost
3,942
2,641
1,250
\u2013
3,891
4,113
2,857
1,122
\u2013
3,979
Derivative financial assets
23
\u2013
23
\u2013
23
16
\u2013
16
\u2013
16
Financial assets held at fair value through profit and loss
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Liabilities
Deposits from customers
13,445
\u2013
\u2013
13,444
13,444
14,458
\u2013
\u2013
14,458
14,458
Deposits from central bank
400
\u2013
\u2013
400
400
400
\u2013
\u2013
400
400
Debt securities
684
\u2013
780
\u2013
780
675
\u2013
711
\u2013
711
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
1
\u2013
1
Repurchase agreements
73
\u2013
\u2013
73
73
391
\u2013
\u2013
391
391
", "dimensions": { "concept": "ifrs-full:DisclosureOfRepurchaseAndReverseRepurchaseAgreementsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-363": { "value": "Classification of financial instruments
31 December 2025
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
8,823
8,823
Investment securities
\u2013
218
3,942
4,160
Derivative financial assets
23
\u2013
\u2013
23
Liabilities
Deposits from customers
\u2013
\u2013
13,445
13,445
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
684
684
Derivative financial liabilities
\u2013
\u2013
\u2013
\u2013
Repurchase agreements
\u2013
\u2013
73
73
31 December 2024
Fair value Fair value
through through other
profit and comprehensive Amortised
loss income cost Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and advances to customers
\u2013
\u2013
9,013
9,013
Investment securities
\u2013
377
4,113
4,490
Derivative financial assets
16
\u2013
\u2013
16
Liabilities
Deposits from customers
\u2013
\u2013
14,458
14,458
Deposits from central banks
\u2013
\u2013
400
400
Debt securities
\u2013
\u2013
675
675
Derivative financial liabilities
1
\u2013
\u2013
1
Repurchase agreements
\u2013
\u2013
391
391
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-348": { "value": "11. Cash and balances with other banks Accounting policy Cash and balances with other banks consists of both cash on hand and demand deposits, both at other banks as well as the Bank of England. In addition it includes highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. Investment securities are only classified as cash if they have a short maturity of three months or less from the date of acquisition and are in substance cash equivalents, e.g. debt investments with fixed redemption dates that are acquired within a short period of their maturity. Where cash is pledged as collateral and as such is not available on demand this is included within other assets in note 17.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Unrestricted balances with the Bank of England
1,979
2,585
Cash and unrestricted balances with other banks
107
111
Money market placements
99
115
Total cash and balances with other banks
2,185
2,811
The expected credit loss held against cash and balances with the Bank of England is \u00a30.2 million (31 December 2024: \u00a30.1 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndBankBalancesAtCentralBanksExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-318": { "value": "11. Cash and balances with other banks Accounting policy Cash and balances with other banks consists of both cash on hand and demand deposits, both at other banks as well as the Bank of England. In addition it includes highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. Investment securities are only classified as cash if they have a short maturity of three months or less from the date of acquisition and are in substance cash equivalents, e.g. debt investments with fixed redemption dates that are acquired within a short period of their maturity. Where cash is pledged as collateral and as such is not available on demand this is included within other assets in note 17.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Unrestricted balances with the Bank of England
1,979
2,585
Cash and unrestricted balances with other banks
107
111
Money market placements
99
115
Total cash and balances with other banks
2,185
2,811
The expected credit loss held against cash and balances with the Bank of England is \u00a30.2 million (31 December 2024: \u00a30.1 million).", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-400": { "value": "Accounting policy Cash and balances with other banks consists of both cash on hand and demand deposits, both at other banks as well as the Bank of England. In addition it includes highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value. Investment securities are only classified as cash if they have a short maturity of three months or less from the date of acquisition and are in substance cash equivalents, e.g. debt investments with fixed redemption dates that are acquired within a short period of their maturity. Where cash is pledged as collateral and as such is not available on demand this is included within other assets in note 17. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-319": { "value": "
12. Loans and advances to customers
Accounting policy
Loans and advances to customers are classified as held at amortised cost. All customer
lending is held to collect cash flows, with no sales expected in the normal course of
business. We aim to offer products with simple terms to customers, and as a result, all
loans comprise solely payments of principal and interest. Loans are initially recognised
when cash is advanced to the borrower at fair value \u2013 which is the cash consideration
to originate the loan including any transaction costs \u2013 and measured subsequently
at amortised cost using the effective interest rate method, which is detailed further
in note 2. Interest on loans is included in the income statement and is reported as
\u2018Interest income\u2019. Expected credit losses (ECL) are reported as a deduction from the
carrying value of the loan. Changes to the ECL during the year are recognised in the
income statement as \u2018Expected credit loss expense\u2019 .
31 December 2025
31 December 2024
Gross Net Gross Net
carrying ECL carrying carrying ECL carrying
amount allowance amount amount allowance amount
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Consumer lending
114
(67)
47
745
(108)
637
Retail mortgages
4,940
(16)
4,924
5,145
(15)
5,130
Corporate and commercial
lending
3,939
(87)
3,852
3,314
(68)
3,246
Total loans and advances
to customers
8,993
(170)
8,823
9,204
(191)
9,013
Further information on the movements in gross carrying amounts and ECL can be found
in note 30.
An analysis of the gross loans and advances by product category is set out below:
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Overdrafts
33
39
Credit cards
13
20
Term loans
63
679
Consumer auto finance
5
7
Total consumer lending
114
745
Residential owner occupied
3,500
3,692
Retail buy-to-let
1,440
1,453
Total retail mortgages
4,940
5,145
Total retail lending
5,054
5,890
Professional buy-to-let
177
283
Bounce back loans
185
346
Coronavirus business interruption loans
18
47
Recovery Loan Scheme
1
166
260
Core corporate and commercial lending
2,363
1,599
Corporate and commercial term loans
2,909
2,535
Overdrafts and revolving credit facilities
221
220
Credit cards
10
7
SME Asset Finance Ltd and SME Invoice Finance Ltd
799
552
Total corporate and commercial lending
3,939
3,314
Gross loans and advances to customers
8,993
9,204
1. Recovery Loan Scheme (RLS) includes \u00a328 million acquired from third parties under forward flow arrangements
(31 December 2024: \u00a345 million). The loans are held in a trust arrangement in which we hold 99% of the beneficial
interest, with the issuer retaining the remaining 1% (the trust retains the legal title loans).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLoansAndAdvancesToCustomersExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-401": { "value": "Accounting policy Loans and advances to customers are classified as held at amortised cost. All customer lending is held to collect cash flows, with no sales expected in the normal course of business. We aim to offer products with simple terms to customers, and as a result, all loans comprise solely payments of principal and interest. Loans are initially recognised when cash is advanced to the borrower at fair value \u2013 which is the cash consideration to originate the loan including any transaction costs \u2013 and measured subsequently at amortised cost using the effective interest rate method, which is detailed further in note 2. Interest on loans is included in the income statement and is reported as \u2018Interest income\u2019. Expected credit losses (ECL) are reported as a deduction from the carrying value of the loan. Changes to the ECL during the year are recognised in the income statement as \u2018Expected credit loss expense\u2019 ", "dimensions": { "concept": "metrobankholdingsplc:DescriptionOfAccountingPolicyForLoansAndAdvancesToCustomers", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-320": { "value": "13. Investment securities Accounting policy Our investment securities may be categorised as amortised cost, fair value through other comprehensive income (FVOCI) or fair value through profit and loss. Currently all investment securities are non-complex, with cash flows comprising solely payments of principal and interest. We hold some securities to collect cash flows; other securities are held to collect cash flows, and to sell if the need arises (e.g. to manage and meet day-to-day liquidity needs). Therefore, we have a mixed business model and securities are classified as either amortised cost or FVOCI as appropriate. We do not categorise any investment securities as fair value through profit and loss. Settlement date accounting is used when recording financial asset transactions where a trade is settled through the regular settlement cycle for that particular investment. Investment securities held at amortised cost Investment securities held at amortised cost consist entirely of debt instruments. They are accounted for using the effective interest method, less any impairment losses. Investment securities held at FVOCI Investment securities held at FVOCI consist entirely of debt instruments. Investment securities held at FVOCI are initially recognised at fair value, which is the cash consideration including any transaction costs, and measured subsequently at fair value with gains and losses being recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the investment security is derecognised. Interest is calculated using the effective interest method.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Fair value through other comprehensive income
218
377
Amortised cost
3,942
4,113
Total investment securities
4,160
4,490
Fair value through other comprehensive income
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Sovereign bonds
62
149
Covered bonds
31
83
Multi-lateral development bank bonds
125
145
Total investment securities held at FVOCI
218
377
Amortised cost
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Sovereign bonds
982
875
Residential mortgage-backed securities
935
876
Covered bonds
438
478
Multi-lateral development bank bonds
1,273
1,576
Asset backed securities
314
308
Total investment securities held at amortised cost
3,942
4,113
", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-402": { "value": "Accounting policy Our investment securities may be categorised as amortised cost, fair value through other comprehensive income (FVOCI) or fair value through profit and loss. Currently all investment securities are non-complex, with cash flows comprising solely payments of principal and interest. We hold some securities to collect cash flows; other securities are held to collect cash flows, and to sell if the need arises (e.g. to manage and meet day-to-day liquidity needs). Therefore, we have a mixed business model and securities are classified as either amortised cost or FVOCI as appropriate. We do not categorise any investment securities as fair value through profit and loss. Settlement date accounting is used when recording financial asset transactions where a trade is settled through the regular settlement cycle for that particular investment. Investment securities held at amortised cost Investment securities held at amortised cost consist entirely of debt instruments. They are accounted for using the effective interest method, less any impairment losses. Investment securities held at FVOCI Investment securities held at FVOCI consist entirely of debt instruments. Investment securities held at FVOCI are initially recognised at fair value, which is the cash consideration including any transaction costs, and measured subsequently at fair value with gains and losses being recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses, until the investment security is derecognised. Interest is calculated using the effective interest method. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentsOtherThanInvestmentsAccountedForUsingEquityMethodExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-389": { "value": "14. Property, plant and equipment Accounting policy Property, plant and equipment Our property, plant and equipment primarily consists of investments and improvements in our store network and is stated at cost less accumulated depreciation and any recognised impairment. We depreciate property, plant and equipment on a straight-line basis to its residual value using the following useful economic lives:
Leasehold improvements
Lower of the remaining life of the lease or the useful life of the asset
Freehold land
Not depreciated
Buildings
Up to 50 years
Fixtures, fittings and
equipment
5 years
IT hardware
3 to 5 years
We keep depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment under review to take account of any change in circumstances. All items of property, plant and equipment are reviewed at the end of each reporting period for indicators of impairment. Right-of-use assets (RoU) Our leases within the scope of IFRS 16 primarily relate to our stores and head office properties. Upon the recognition of a lease liability (see note 22 for further details) a corresponding right-of-use asset is recognised. This is adjusted for any initial direct costs incurred, lease incentives paid or received and any restoration costs at the end of the lease (where applicable). The right-of-use asset is depreciated on a straight-line basis over the life of the lease. All right-of-use assets are reviewed at the end of each reporting period for indicators of impairment. Investment property Investment property is also stated at cost less accumulated depreciation and any recognised impairment. Depreciation is calculated on a consistent basis with that applied to land and buildings as disclosed.
2025
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
12
244
436
23
12
255
982
Additions
\u2013
3
27
\u2013
3
1
34
Disposals
(2)
(4)
\u2013
\u2013
\u2013
(39)
(45)
Write-offs
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
Transfers
\u2013
(6)
6
\u2013
\u2013
\u2013
\u2013
31 December 2025
9
237
469
23
15
217
970
Accumulated
depreciation
1 January 2025
8
81
57
22
8
95
271
Charge for the year
\u2013
16
2
\u2013
3
10
31
Disposals
(2)
\u2013
\u2013
\u2013
\u2013
(35)
(37)
Transfers
\u2013
(2)
2
\u2013
\u2013
\u2013
\u2013
31 December 2025
6
95
61
22
11
70
265
Net book value
3
142
408
1
4
147
705
2024
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
12
256
386
23
10
279
966
Additions
\u2013
1
37
\u2013
2
1
41
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
(25)
Transfers
\u2013
(13)
13
\u2013
\u2013
\u2013
\u2013
31 December 2024
12
244
436
23
12
255
982
Accumulated
depreciation
1 January 2024
8
79
42
21
4
89
243
Charge for the year
\u2013
5
12
1
4
12
34
Impairments
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
Transfers
\u2013
(3)
3
\u2013
\u2013
\u2013
\u2013
31 December 2024
8
81
57
22
8
95
271
Net book value
4
163
379
1
4
160
711
", "dimensions": { "concept": "ifrs-full:DisclosureOfReconciliationOfChangesInPropertyPlantAndEquipmentIncludingRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-321": { "value": "14. Property, plant and equipment Accounting policy Property, plant and equipment Our property, plant and equipment primarily consists of investments and improvements in our store network and is stated at cost less accumulated depreciation and any recognised impairment. We depreciate property, plant and equipment on a straight-line basis to its residual value using the following useful economic lives:
Leasehold improvements
Lower of the remaining life of the lease or the useful life of the asset
Freehold land
Not depreciated
Buildings
Up to 50 years
Fixtures, fittings and
equipment
5 years
IT hardware
3 to 5 years
We keep depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment under review to take account of any change in circumstances. All items of property, plant and equipment are reviewed at the end of each reporting period for indicators of impairment. Right-of-use assets (RoU) Our leases within the scope of IFRS 16 primarily relate to our stores and head office properties. Upon the recognition of a lease liability (see note 22 for further details) a corresponding right-of-use asset is recognised. This is adjusted for any initial direct costs incurred, lease incentives paid or received and any restoration costs at the end of the lease (where applicable). The right-of-use asset is depreciated on a straight-line basis over the life of the lease. All right-of-use assets are reviewed at the end of each reporting period for indicators of impairment. Investment property Investment property is also stated at cost less accumulated depreciation and any recognised impairment. Depreciation is calculated on a consistent basis with that applied to land and buildings as disclosed.
2025
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
12
244
436
23
12
255
982
Additions
\u2013
3
27
\u2013
3
1
34
Disposals
(2)
(4)
\u2013
\u2013
\u2013
(39)
(45)
Write-offs
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
Transfers
\u2013
(6)
6
\u2013
\u2013
\u2013
\u2013
31 December 2025
9
237
469
23
15
217
970
Accumulated
depreciation
1 January 2025
8
81
57
22
8
95
271
Charge for the year
\u2013
16
2
\u2013
3
10
31
Disposals
(2)
\u2013
\u2013
\u2013
\u2013
(35)
(37)
Transfers
\u2013
(2)
2
\u2013
\u2013
\u2013
\u2013
31 December 2025
6
95
61
22
11
70
265
Net book value
3
142
408
1
4
147
705
Fair value of investment property
Our investment property typically consists of shops and offices which are located
within the same buildings as some of our stores, where we have acquired the freehold
interest. As at 31 December 2025 our investment property had a fair value of \u00a34 million
(31 December 2024: \u00a34 million). The fair value has been provided by a qualified
independent valuer.
Impairments
During the year, impairment indicators were identified in respect of other items of our
property, plant and equipment. The assets, which included our stores, were tested for
impairment. We do not consider individual stores to be cash generating units (CGUs), on
the basis that they do not generate sufficiently independent cash flows. Instead all of our
stores and associated assets are deemed to belong to our retail bank CGU. Further details
on the impairment testing of our CGUs can be found in note 15. The recoverable amount
of the retail bank CGU was found to be in excess of its carrying amount and as such no
impairment was recognised.
2024
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
12
256
386
23
10
279
966
Additions
\u2013
1
37
\u2013
2
1
41
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
(25)
Transfers
\u2013
(13)
13
\u2013
\u2013
\u2013
\u2013
31 December 2024
12
244
436
23
12
255
982
Accumulated
depreciation
1 January 2024
8
79
42
21
4
89
243
Charge for the year
\u2013
5
12
1
4
12
34
Impairments
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
Transfers
\u2013
(3)
3
\u2013
\u2013
\u2013
\u2013
31 December 2024
8
81
57
22
8
95
271
Net book value
4
163
379
1
4
160
711
Write-offs
The write-offs made during the year relate to items are no longer being used or no longer
providing the Group with any economic benefit.
Transfers
Transfers represent costs associated with the improvements made to the one (2024: two)
previously leased stores which have been purchased during the year. These stores were
purchased where there was a strong commercial rationale for doing so.
Contractual commitment for the acquisition of property, plant and equipment
As at 31 December 2025 we had no contractual commitments relating to the acquisition
of property, plant and equipment that are not reflected in the aforementioned tables
(31 December 2024: \u00a3nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-403": { "value": "Accounting policy Property, plant and equipment Our property, plant and equipment primarily consists of investments and improvements in our store network and is stated at cost less accumulated depreciation and any recognised impairment. We depreciate property, plant and equipment on a straight-line basis to its residual value using the following useful economic lives:
Leasehold improvements
Lower of the remaining life of the lease or the useful life of the asset
Freehold land
Not depreciated
Buildings
Up to 50 years
Fixtures, fittings and
equipment
5 years
IT hardware
3 to 5 years
We keep depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment under review to take account of any change in circumstances. All items of property, plant and equipment are reviewed at the end of each reporting period for indicators of impairment. Right-of-use assets (RoU) Our leases within the scope of IFRS 16 primarily relate to our stores and head office properties. Upon the recognition of a lease liability (see note 22 for further details) a corresponding right-of-use asset is recognised. This is adjusted for any initial direct costs incurred, lease incentives paid or received and any restoration costs at the end of the lease (where applicable). The right-of-use asset is depreciated on a straight-line basis over the life of the lease. All right-of-use assets are reviewed at the end of each reporting period for indicators of impairment. Investment property Investment property is also stated at cost less accumulated depreciation and any recognised impairment. Depreciation is calculated on a consistent basis with that applied to land and buildings as disclosed. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-415": { "value": "Property, plant and equipment Our property, plant and equipment primarily consists of investments and improvements in our store network and is stated at cost less accumulated depreciation and any recognised impairment. We depreciate property, plant and equipment on a straight-line basis to its residual value using the following useful economic lives:
Leasehold improvements
Lower of the remaining life of the lease or the useful life of the asset
Freehold land
Not depreciated
Buildings
Up to 50 years
Fixtures, fittings and
equipment
5 years
IT hardware
3 to 5 years
We keep depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and equipment under review to take account of any change in circumstances. All items of property, plant and equipment are reviewed at the end of each reporting period for indicators of impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-416": { "value": "Investment property Investment property is also stated at cost less accumulated depreciation and any recognised impairment. Depreciation is calculated on a consistent basis with that applied to land and buildings as disclosed. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-349": { "value": "
2025
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
12
244
436
23
12
255
982
Additions
\u2013
3
27
\u2013
3
1
34
Disposals
(2)
(4)
\u2013
\u2013
\u2013
(39)
(45)
Write-offs
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
Transfers
\u2013
(6)
6
\u2013
\u2013
\u2013
\u2013
31 December 2025
9
237
469
23
15
217
970
Accumulated
depreciation
1 January 2025
8
81
57
22
8
95
271
Charge for the year
\u2013
16
2
\u2013
3
10
31
Disposals
(2)
\u2013
\u2013
\u2013
\u2013
(35)
(37)
Transfers
\u2013
(2)
2
\u2013
\u2013
\u2013
\u2013
31 December 2025
6
95
61
22
11
70
265
Net book value
3
142
408
1
4
147
705
Fair value of investment property Our investment property typically consists of shops and offices which are located within the same buildings as some of our stores, where we have acquired the freehold interest. As at 31 December 2025 our investment property had a fair value of \u00a34 million (31 December 2024: \u00a34 million). The fair value has been provided by a qualified independent valuer. Impairments During the year, impairment indicators were identified in respect of other items of our property, plant and equipment. The assets, which included our stores, were tested for impairment. We do not consider individual stores to be cash generating units (CGUs), on the basis that they do not generate sufficiently independent cash flows. Instead all of our stores and associated assets are deemed to belong to our retail bank CGU. Further details on the impairment testing of our CGUs can be found in note 15. The recoverable amount of the retail bank CGU was found to be in excess of its carrying amount and as such no impairment was recognised.
2024
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
12
256
386
23
10
279
966
Additions
\u2013
1
37
\u2013
2
1
41
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
(25)
Transfers
\u2013
(13)
13
\u2013
\u2013
\u2013
\u2013
31 December 2024
12
244
436
23
12
255
982
Accumulated
depreciation
1 January 2024
8
79
42
21
4
89
243
Charge for the year
\u2013
5
12
1
4
12
34
Impairments
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
Transfers
\u2013
(3)
3
\u2013
\u2013
\u2013
\u2013
31 December 2024
8
81
57
22
8
95
271
Net book value
4
163
379
1
4
160
711
Write-offs The write-offs made during the year relate to items are no longer being used or no longer providing the Group with any economic benefit. Transfers Transfers represent costs associated with the improvements made to the one (2024: two) previously leased stores which have been purchased during the year. These stores were purchased where there was a strong commercial rationale for doing so. Contractual commitment for the acquisition of property, plant and equipment As at 31 December 2025 we had no contractual commitments relating to the acquisition of property, plant and equipment that are not reflected in the aforementioned tables (31 December 2024: \u00a3nil). Right-of-use assets All of our disclosures relating to right-of-use assets, including our accounting policy, can be found in note 14. ", "dimensions": { "concept": "ifrs-full:DisclosureOfQuantitativeInformationAboutRightofuseAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-364": { "value": "
2025
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
12
244
436
23
12
255
982
Additions
\u2013
3
27
\u2013
3
1
34
Disposals
(2)
(4)
\u2013
\u2013
\u2013
(39)
(45)
Write-offs
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
Transfers
\u2013
(6)
6
\u2013
\u2013
\u2013
\u2013
31 December 2025
9
237
469
23
15
217
970
Accumulated
depreciation
1 January 2025
8
81
57
22
8
95
271
Charge for the year
\u2013
16
2
\u2013
3
10
31
Disposals
(2)
\u2013
\u2013
\u2013
\u2013
(35)
(37)
Transfers
\u2013
(2)
2
\u2013
\u2013
\u2013
\u2013
31 December 2025
6
95
61
22
11
70
265
Net book value
3
142
408
1
4
147
705
Fair value of investment property Our investment property typically consists of shops and offices which are located within the same buildings as some of our stores, where we have acquired the freehold interest. As at 31 December 2025 our investment property had a fair value of \u00a34 million (31 December 2024: \u00a34 million). The fair value has been provided by a qualified independent valuer. Impairments During the year, impairment indicators were identified in respect of other items of our property, plant and equipment. The assets, which included our stores, were tested for impairment. We do not consider individual stores to be cash generating units (CGUs), on the basis that they do not generate sufficiently independent cash flows. Instead all of our stores and associated assets are deemed to belong to our retail bank CGU. Further details on the impairment testing of our CGUs can be found in note 15. The recoverable amount of the retail bank CGU was found to be in excess of its carrying amount and as such no impairment was recognised.
2024
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
12
256
386
23
10
279
966
Additions
\u2013
1
37
\u2013
2
1
41
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
(25)
Transfers
\u2013
(13)
13
\u2013
\u2013
\u2013
\u2013
31 December 2024
12
244
436
23
12
255
982
Accumulated
depreciation
1 January 2024
8
79
42
21
4
89
243
Charge for the year
\u2013
5
12
1
4
12
34
Impairments
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
Transfers
\u2013
(3)
3
\u2013
\u2013
\u2013
\u2013
31 December 2024
8
81
57
22
8
95
271
Net book value
4
163
379
1
4
160
711
Write-offs The write-offs made during the year relate to items are no longer being used or no longer providing the Group with any economic benefit. Transfers Transfers represent costs associated with the improvements made to the one (2024: two) previously leased stores which have been purchased during the year. These stores were purchased where there was a strong commercial rationale for doing so. Contractual commitment for the acquisition of property, plant and equipment As at 31 December 2025 we had no contractual commitments relating to the acquisition of property, plant and equipment that are not reflected in the aforementioned tables (31 December 2024: \u00a3nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-379": { "value": "
2025
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
12
244
436
23
12
255
982
Additions
\u2013
3
27
\u2013
3
1
34
Disposals
(2)
(4)
\u2013
\u2013
\u2013
(39)
(45)
Write-offs
(1)
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
Transfers
\u2013
(6)
6
\u2013
\u2013
\u2013
\u2013
31 December 2025
9
237
469
23
15
217
970
Accumulated
depreciation
1 January 2025
8
81
57
22
8
95
271
Charge for the year
\u2013
16
2
\u2013
3
10
31
Disposals
(2)
\u2013
\u2013
\u2013
\u2013
(35)
(37)
Transfers
\u2013
(2)
2
\u2013
\u2013
\u2013
\u2013
31 December 2025
6
95
61
22
11
70
265
Net book value
3
142
408
1
4
147
705
Fair value of investment property Our investment property typically consists of shops and offices which are located within the same buildings as some of our stores, where we have acquired the freehold interest. As at 31 December 2025 our investment property had a fair value of \u00a34 million (31 December 2024: \u00a34 million). The fair value has been provided by a qualified independent valuer. Impairments During the year, impairment indicators were identified in respect of other items of our property, plant and equipment. The assets, which included our stores, were tested for impairment. We do not consider individual stores to be cash generating units (CGUs), on the basis that they do not generate sufficiently independent cash flows. Instead all of our stores and associated assets are deemed to belong to our retail bank CGU. Further details on the impairment testing of our CGUs can be found in note 15. The recoverable amount of the retail bank CGU was found to be in excess of its carrying amount and as such no impairment was recognised.
2024
Freehold Fixtures,
Investment Leasehold land and fittings and IT
property improvements buildings equipment hardware RoU assets Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
12
256
386
23
10
279
966
Additions
\u2013
1
37
\u2013
2
1
41
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(25)
(25)
Transfers
\u2013
(13)
13
\u2013
\u2013
\u2013
\u2013
31 December 2024
12
244
436
23
12
255
982
Accumulated
depreciation
1 January 2024
8
79
42
21
4
89
243
Charge for the year
\u2013
5
12
1
4
12
34
Impairments
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
Disposals
\u2013
\u2013
\u2013
\u2013
\u2013
(7)
(7)
Transfers
\u2013
(3)
3
\u2013
\u2013
\u2013
\u2013
31 December 2024
8
81
57
22
8
95
271
Net book value
4
163
379
1
4
160
711
Write-offs The write-offs made during the year relate to items are no longer being used or no longer providing the Group with any economic benefit. Transfers Transfers represent costs associated with the improvements made to the one (2024: two) previously leased stores which have been purchased during the year. These stores were purchased where there was a strong commercial rationale for doing so. Contractual commitment for the acquisition of property, plant and equipment As at 31 December 2025 we had no contractual commitments relating to the acquisition of property, plant and equipment that are not reflected in the aforementioned tables (31 December 2024: \u00a3nil). ", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-390": { "value": "Impairments During the year, impairment indicators were identified in respect of other items of our property, plant and equipment. The assets, which included our stores, were tested for impairment. We do not consider individual stores to be cash generating units (CGUs), on the basis that they do not generate sufficiently independent cash flows. Instead all of our stores and associated assets are deemed to belong to our retail bank CGU. Further details on the impairment testing of our CGUs can be found in note 15. The recoverable amount of the retail bank CGU was found to be in excess of its carrying amount and as such no impairment was recognised. ", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-391": { "value": "15. Intangible assets Accounting policy Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment assessment, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period. The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present value of its expected future cash flows. If the recoverable amount is less than the carrying value, an impairment loss is charged to the income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment is recognised immediately as an expense and is not subsequently reversed. Other intangible assets Software includes both purchased items and internally developed systems, which consists principally of identifiable and directly associated internal colleague, contractor and other costs. Purchased intangible assets and costs directly associated with the development of systems are capitalised as intangible assets where there is an identifiable asset which we control and which will generate future economic benefits in accordance with IAS 38. Costs to establish feasibility or to maintain existing performance are recognised as an expense. Intangible assets are amortised on a straight-line basis within the income statement using the following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019 with the upgrade assessed as having a 15-year life. All intangible assets are reviewed at the end of each reporting period for indicators of impairment.
2025
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
10
2
289
301
Additions
\u2013
\u2013
48
48
Write-offs
\u2013
\u2013
\u2013
\u2013
Deferred grant (see note 23)
\u2013
\u2013
\u2013
\u2013
31 December 2025
10
2
337
349
Accumulated amortisation
1 January 2025
\u2013
1
174
175
Charge for the year
\u2013
\u2013
31
31
Impairments
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
31 December 2025
\u2013
1
205
206
Net book value
10
1
132
143
2024
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
10
2
355
367
Additions
\u2013
\u2013
19
19
Write-offs
\u2013
\u2013
(85)
(85)
31 December 2024
10
2
289
301
Accumulated amortisation
1 January 2024
\u2013
1
173
174
Charge for the year
\u2013
\u2013
43
43
Impairments
Write-offs
\u2013
\u2013
(42)
(42)
31 December 2024
\u2013
1
174
175
Net book value
10
1
115
126
Software Software consists of both internally generated and externally acquired assets. As at 31 December 2025, externally acquired licences had a net book value of \u00a36 million (31 December 2024: \u00a35 million). Out of our total intangible assets, \u00a354 million of software assets were under the course of construction at 31 December 2025 (31 December 2024: \u00a320 million). As at 31 December 2025, no impairment indicators had been identified in relation to software. Write-offs The write-offs in the year consisted primarily of software and applications that are no longer being used and are no longer providing any further economic benefits. Goodwill and impairment testing of cash generating units An impairment test on the carrying value of the assets in our CGUs has been undertaken. As at 31 December 2025, we had two main CGUs being the retail bank and our asset and invoice finance business and no changes have been made to our CGUs during the year. Both of our CGUs contain goodwill and as such are tested annually for impairment. Additional impairment indicators were identified in relation to the retail bank CGU in relation to both its intangible assets as well as property, plant and equipment (see note 14).
2025
\u00a3\u2019million
Asset and invoice financing
4
Retail bank
6
Tota l
10
The recoverable amount for both CGUs was determined by a value-in-use (VIU) calculation. The VIU was higher than their carrying value and therefore no impairment charge has been recognised for the current year (2024: no charge). The VIU calculation is based on our Board-approved Long Term Plan (LTP) which covers the five-year period from 2026 to 2030 inclusive. Our LTP is constructed using our best estimate of the future performance of the business, adjusted for execution risk and encompasses commercially sensitive estimates including lending and deposit yields and volumes, as well as costs forecasts over the period. The LTP is built on the assumption that we remain appropriately capitalised to fund our anticipated growth. We have determined that we will be able to meet the appropriate regulatory requirements, which has been based on an analysis of both our existing and planned capital structure. This is consistent with the assessment undertaken by the Directors in respect of assessing viability, which can be found on pages 45 to 46. The profitability for each CGU per the LTP is adjusted for non-cash items (including depreciation and amortisation), capital expenditure and long-term funding costs (which are reflected in the discount rate) and certain cash flows which are not permitted to be included under IAS 36, to establish the cash flows for the VIU. In the outer years beyond the LTP period, we have assumed a terminal growth rate of 2% which represents the predicted long-term GDP growth rate of the UK economy (the only market both CGUs operate in). The period of projection and growth rates used reflects our anticipated growth profile after the five-year planning period, as well as the nature and life of the assets within the CGUs. The VIU cash flows are compared to the carrying value of the CGUs, which exclude long-term debt. A pre-tax discount rate of 9.6% (31 December 2024: 13.8%) has been used for the VIU calculation. The discount rate is based on our post-tax weighted average cost of capital of 7.7% (31 December 2024: 11.4%) (which is grossed up to a pre-tax rate), based on the cost of equity and long-term debt, weighted by the market value of the equity and debt. The VIU is most sensitive to changes in the projected profitability per the LTP and the discount rate applied (which are dependent on the assumptions regarding capital outlined above). If adjusted independently of all other variables, reasonable changes to the assumption in either of these factors over the next 12 months would not cause the recoverable of either CGU to fall below its carrying amount.", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-380": { "value": "15. Intangible assets Accounting policy Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment assessment, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period. The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present value of its expected future cash flows. If the recoverable amount is less than the carrying value, an impairment loss is charged to the income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment is recognised immediately as an expense and is not subsequently reversed. Other intangible assets Software includes both purchased items and internally developed systems, which consists principally of identifiable and directly associated internal colleague, contractor and other costs. Purchased intangible assets and costs directly associated with the development of systems are capitalised as intangible assets where there is an identifiable asset which we control and which will generate future economic benefits in accordance with IAS 38. Costs to establish feasibility or to maintain existing performance are recognised as an expense. Intangible assets are amortised on a straight-line basis within the income statement using the following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019 with the upgrade assessed as having a 15-year life. All intangible assets are reviewed at the end of each reporting period for indicators of impairment.
2025
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
10
2
289
301
Additions
\u2013
\u2013
48
48
Write-offs
\u2013
\u2013
\u2013
\u2013
Deferred grant (see note 23)
\u2013
\u2013
\u2013
\u2013
31 December 2025
10
2
337
349
Accumulated amortisation
1 January 2025
\u2013
1
174
175
Charge for the year
\u2013
\u2013
31
31
Impairments
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
31 December 2025
\u2013
1
205
206
Net book value
10
1
132
143
2024
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
10
2
355
367
Additions
\u2013
\u2013
19
19
Write-offs
\u2013
\u2013
(85)
(85)
31 December 2024
10
2
289
301
Accumulated amortisation
1 January 2024
\u2013
1
173
174
Charge for the year
\u2013
\u2013
43
43
Impairments
Write-offs
\u2013
\u2013
(42)
(42)
31 December 2024
\u2013
1
174
175
Net book value
10
1
115
126
Software Software consists of both internally generated and externally acquired assets. As at 31 December 2025, externally acquired licences had a net book value of \u00a36 million (31 December 2024: \u00a35 million). Out of our total intangible assets, \u00a354 million of software assets were under the course of construction at 31 December 2025 (31 December 2024: \u00a320 million). As at 31 December 2025, no impairment indicators had been identified in relation to software. Write-offs The write-offs in the year consisted primarily of software and applications that are no longer being used and are no longer providing any further economic benefits. Goodwill and impairment testing of cash generating units An impairment test on the carrying value of the assets in our CGUs has been undertaken. As at 31 December 2025, we had two main CGUs being the retail bank and our asset and invoice finance business and no changes have been made to our CGUs during the year. Both of our CGUs contain goodwill and as such are tested annually for impairment. Additional impairment indicators were identified in relation to the retail bank CGU in relation to both its intangible assets as well as property, plant and equipment (see note 14).
2025
\u00a3\u2019million
Asset and invoice financing
4
Retail bank
6
Tota l
10
The recoverable amount for both CGUs was determined by a value-in-use (VIU) calculation. The VIU was higher than their carrying value and therefore no impairment charge has been recognised for the current year (2024: no charge). The VIU calculation is based on our Board-approved Long Term Plan (LTP) which covers the five-year period from 2026 to 2030 inclusive. Our LTP is constructed using our best estimate of the future performance of the business, adjusted for execution risk and encompasses commercially sensitive estimates including lending and deposit yields and volumes, as well as costs forecasts over the period. The LTP is built on the assumption that we remain appropriately capitalised to fund our anticipated growth. We have determined that we will be able to meet the appropriate regulatory requirements, which has been based on an analysis of both our existing and planned capital structure. This is consistent with the assessment undertaken by the Directors in respect of assessing viability, which can be found on pages 45 to 46. The profitability for each CGU per the LTP is adjusted for non-cash items (including depreciation and amortisation), capital expenditure and long-term funding costs (which are reflected in the discount rate) and certain cash flows which are not permitted to be included under IAS 36, to establish the cash flows for the VIU. In the outer years beyond the LTP period, we have assumed a terminal growth rate of 2% which represents the predicted long-term GDP growth rate of the UK economy (the only market both CGUs operate in). The period of projection and growth rates used reflects our anticipated growth profile after the five-year planning period, as well as the nature and life of the assets within the CGUs. The VIU cash flows are compared to the carrying value of the CGUs, which exclude long-term debt. A pre-tax discount rate of 9.6% (31 December 2024: 13.8%) has been used for the VIU calculation. The discount rate is based on our post-tax weighted average cost of capital of 7.7% (31 December 2024: 11.4%) (which is grossed up to a pre-tax rate), based on the cost of equity and long-term debt, weighted by the market value of the equity and debt. The VIU is most sensitive to changes in the projected profitability per the LTP and the discount rate applied (which are dependent on the assumptions regarding capital outlined above). If adjusted independently of all other variables, reasonable changes to the assumption in either of these factors over the next 12 months would not cause the recoverable of either CGU to fall below its carrying amount.", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-322": { "value": "15. Intangible assets Accounting policy Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment assessment, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period. The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present value of its expected future cash flows. If the recoverable amount is less than the carrying value, an impairment loss is charged to the income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment is recognised immediately as an expense and is not subsequently reversed. Other intangible assets Software includes both purchased items and internally developed systems, which consists principally of identifiable and directly associated internal colleague, contractor and other costs. Purchased intangible assets and costs directly associated with the development of systems are capitalised as intangible assets where there is an identifiable asset which we control and which will generate future economic benefits in accordance with IAS 38. Costs to establish feasibility or to maintain existing performance are recognised as an expense. Intangible assets are amortised on a straight-line basis within the income statement using the following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019 with the upgrade assessed as having a 15-year life. All intangible assets are reviewed at the end of each reporting period for indicators of impairment.
2025
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2025
10
2
289
301
Additions
\u2013
\u2013
48
48
Write-offs
\u2013
\u2013
\u2013
\u2013
Deferred grant (see note 23)
\u2013
\u2013
\u2013
\u2013
31 December 2025
10
2
337
349
Accumulated amortisation
1 January 2025
\u2013
1
174
175
Charge for the year
\u2013
\u2013
31
31
Impairments
\u2013
\u2013
\u2013
\u2013
Write-offs
\u2013
\u2013
\u2013
\u2013
31 December 2025
\u2013
1
205
206
Net book value
10
1
132
143
2024
Goodwill Brands Software Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Cost
1 January 2024
10
2
355
367
Additions
\u2013
\u2013
19
19
Write-offs
\u2013
\u2013
(85)
(85)
31 December 2024
10
2
289
301
Accumulated amortisation
1 January 2024
\u2013
1
173
174
Charge for the year
\u2013
\u2013
43
43
Impairments
Write-offs
\u2013
\u2013
(42)
(42)
31 December 2024
\u2013
1
174
175
Net book value
10
1
115
126
Software
Software consists of both internally generated and externally acquired assets. As at
31 December 2025, externally acquired licences had a net book value of \u00a36 million
(31 December 2024: \u00a35 million). Out of our total intangible assets, \u00a354 million of software assets
were under the course of construction at 31 December 2025 (31 December 2024: \u00a320 million).
As at 31 December 2025, no impairment indicators had been identified in relation to software.
Write-offs
The write-offs in the year consisted primarily of software and applications that are no
longer being used and are no longer providing any further economic benefits.
Goodwill and impairment testing of cash generating units
An impairment test on the carrying value of the assets in our CGUs has been undertaken.
As at 31 December 2025, we had two main CGUs being the retail bank and our asset
and invoice finance business and no changes have been made to our CGUs during the
year. Both of our CGUs contain goodwill and as such are tested annually for impairment.
Additional impairment indicators were identified in relation to the retail bank CGU in
relation to both its intangible assets as well as property, plant and equipment (see note 14).
2025
\u00a3\u2019million
Asset and invoice financing
4
Retail bank
6
Tota l
10
The recoverable amount for both CGUs was determined by a value-in-use (VIU) calculation.
The VIU was higher than their carrying value and therefore no impairment charge has
been recognised for the current year (2024: no charge). The VIU calculation is based on
our Board-approved Long Term Plan (LTP) which covers the five-year period from 2026 to
2030 inclusive. Our LTP is constructed using our best estimate of the future performance
of the business, adjusted for execution risk and encompasses commercially sensitive
estimates including lending and deposit yields and volumes, as well as costs forecasts over
the period. The LTP is built on the assumption that we remain appropriately capitalised
to fund our anticipated growth. We have determined that we will be able to meet the
appropriate regulatory requirements, which has been based on an analysis of both our
existing and planned capital structure. This is consistent with the assessment undertaken
by the Directors in respect of assessing viability, which can be found on pages 45 to 46.
The profitability for each CGU per the LTP is adjusted for non-cash items (including
depreciation and amortisation), capital expenditure and long-term funding costs (which
are reflected in the discount rate) and certain cash flows which are not permitted to be
included under IAS 36, to establish the cash flows for the VIU. In the outer years beyond
the LTP period, we have assumed a terminal growth rate of 2% which represents the
predicted long-term GDP growth rate of the UK economy (the only market both CGUs
operate in). The period of projection and growth rates used reflects our anticipated growth
profile after the five-year planning period, as well as the nature and life of the assets within
the CGUs. The VIU cash flows are compared to the carrying value of the CGUs, which
exclude long-term debt.
A pre-tax discount rate of 9.6% (31 December 2024: 13.8%) has been used for the VIU
calculation. The discount rate is based on our post-tax weighted average cost of capital of
7.7% (31 December 2024: 11.4%) (which is grossed up to a pre-tax rate), based on the cost of
equity and long-term debt, weighted by the market value of the equity and debt.
The VIU is most sensitive to changes in the projected profitability per the LTP and the
discount rate applied (which are dependent on the assumptions regarding capital
outlined above). If adjusted independently of all other variables, reasonable changes to
the assumption in either of these factors over the next 12 months would not cause the
recoverable of either CGU to fall below its carrying amount.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-404": { "value": "Accounting policy Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment assessment, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period. The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present value of its expected future cash flows. If the recoverable amount is less than the carrying value, an impairment loss is charged to the income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment is recognised immediately as an expense and is not subsequently reversed. Other intangible assets Software includes both purchased items and internally developed systems, which consists principally of identifiable and directly associated internal colleague, contractor and other costs. Purchased intangible assets and costs directly associated with the development of systems are capitalised as intangible assets where there is an identifiable asset which we control and which will generate future economic benefits in accordance with IAS 38. Costs to establish feasibility or to maintain existing performance are recognised as an expense. Intangible assets are amortised on a straight-line basis within the income statement using the following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019 with the upgrade assessed as having a 15-year life. All intangible assets are reviewed at the end of each reporting period for indicators of impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-417": { "value": "Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over our interest in net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree. For the purpose of impairment assessment, goodwill acquired in a business combination is allocated to each of the cash-generating units (CGUs), or groups of CGUs, that is expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is not amortised, however it is reviewed for impairment at the end of each reporting period. The recoverable amount of a CGU is the higher of its fair value less cost to sell, and the present value of its expected future cash flows. If the recoverable amount is less than the carrying value, an impairment loss is charged to the income statement. Goodwill is stated at cost less accumulated impairment losses. Any impairment is recognised immediately as an expense and is not subsequently reversed. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-418": { "value": "Other intangible assets Software includes both purchased items and internally developed systems, which consists principally of identifiable and directly associated internal colleague, contractor and other costs. Purchased intangible assets and costs directly associated with the development of systems are capitalised as intangible assets where there is an identifiable asset which we control and which will generate future economic benefits in accordance with IAS 38. Costs to establish feasibility or to maintain existing performance are recognised as an expense. Intangible assets are amortised on a straight-line basis within the income statement using the following useful economic lives:
Core banking software
1
up to 20 years
Other banking software
3 to 10 years
Software licences
licence period
Brands
5 years
Customer contracts
10 years
1. Core banking software consists of our central banking transaction platform. The original platform was assessed as having a 20-year life due to it being the central component of our digital infrastructure. It was upgraded during 2019 with the upgrade assessed as having a 15-year life. All intangible assets are reviewed at the end of each reporting period for indicators of impairment. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-323": { "value": "
16. Prepayments and accrued income
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Prepayments
33
36
Accrued income
1
48
56
VAT receivable
\u2013
1
Total prepayments and accrued income
81
93
Current portion
81
93
Non-current portion
\u2013
\u2013
1. Includes accrued interest receivable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-324": { "value": "
17. Other assets
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash pledged as collateral
84
53
Amounts owed by Group undertaking
\u2013
1
Other
1
41
28
Total other assets
125
82
Current portion
59
27
Non-current portion
66
55
1. Other balance primarily comprises customer transactions in process or items in the course of collection over
year end.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-365": { "value": "17. Other assets
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash pledged as collateral
84
53
Amounts owed by Group undertaking
\u2013
1
Other
1
41
28
Total other assets
125
82
Current portion
59
27
Non-current portion
66
55
1. Other balance primarily comprises customer transactions in process or items in the course of collection over year end.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-350": { "value": "17. Other assets
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Cash pledged as collateral
84
53
Amounts owed by Group undertaking
\u2013
1
Other
1
41
28
Total other assets
125
82
Current portion
59
27
Non-current portion
66
55
1. Other balance primarily comprises customer transactions in process or items in the course of collection over year end.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-325": { "value": "
18. Deposits from customers
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits from retail customers
6,597
7,753
Deposits from corporate and commercial customers
6,848
6,705
Total deposits from customers
13,445
14,458
The total deposits from customers as at 31 December 2025 consisted of 49% from retail
customers (31 December 2024: 54%) and 51% from corporate and commercial customers
(31 December 2024: 46%).
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Demand: current accounts
5,862
5,791
Demand: savings accounts
6,901
7,534
Fixed-term savings accounts
682
1,133
Total deposits from customers
13,445
14,458
As at 31 December 2025, 44% of deposits from customer consisted of instant access
current accounts (31 December 2024: 40%). Fixed-term saving accounts made up 5%
of balances (31 December 2024: 8%).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromCustomersExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-326": { "value": "
19. Deposits from central banks
Deposits from central banks consist solely of amounts drawn down under the Bank
of England\u2019s Term Funding Scheme with additional incentives for SMEs (TFSME).
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Amounts drawn down under TFSME
400
400
Deposits from central banks
400
400
The remaining drawdowns of \u00a3400 million will mature in 2031.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepositsFromBanksExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-351": { "value": "20. Debt securities Accounting policy Debt securities in issue are recognised initially at fair value, being proceeds less transaction costs. Subsequently debt securities are measured at amortised cost using the effective interest method.
Amount
issued Coupon Maturity
Name
Issue date
Currency
\u00a3\u2019million
rate
Call date
date
Fixed Rate Reset Callable
Subordinated Notes
30/11/2023
GBP
525
12.00%
30/04/28
30/04/29
Fixed Rate Reset Senior
Non-Preferred Notes
30/11/2023
GBP
150
14.00%
30/04/29
30/04/34
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
675
694
Issuances
\u2013
\u2013
Costs associated with issuance
\u2013
\u2013
Movements in micro hedging
8
(20)
Unwind of issuance costs
1
1
31 December
684
675
The fixed rate reset callable notes (MREL), which are listed on the London Stock Exchange, constitute subordinated and unsecured obligations. The notes have a call date of 30 April 2028, where they may be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark gilt plus a credit spread of 7.814%. The notes are contractually obliged to mature on the maturity date of 30 April 2029. The fixed rate reset subordinated callable notes (Tier 2), which are listed on the London Stock Exchange, constitute subordinated and unsecured obligations. The notes have a call date of 30 April 2029, where they may be redeemed at par. If not called, the interest rate will be reset and fixed based on a benchmark gilt plus a credit spread of 9.822%. The notes are contractually obliged to mature on the maturity date of 30 April 2034. ", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-419": { "value": "Accounting policy Debt securities in issue are recognised initially at fair value, being proceeds less transaction costs. Subsequently debt securities are measured at amortised cost using the effective interest method. ", "dimensions": { "concept": "metrobankholdingsplc:DescriptionOfAccountingPolicyForDebtSecurities", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-366": { "value": "21. Derivatives Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. We use derivatives as part of our approach to hedging interest rate and foreign exchange exposure. Our derivative financial instruments are analysed in the table below.
31 December 2025
31 December 2024
Fair Value Fair Value
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps \u2013 Designated as hedging instruments
3,227
23
\u2013
1,253
16
\u2013
Interest rate swaps \u2013 Designated as held at fair value through profit and loss
500
8
(8)
502
7
(7)
Foreign currency swaps \u2013 Designated as held at fair value through profit and loss
58
\u2013
\u2013
50
\u2013
(1)
Tota l
3,785
31
(8)
1,805
23
(8)
Offsetting derivative
(500)
(8)
8
(502)
(7)
7
Grand total
3,285
23
\u2013
1,303
16
(1)
Hedge accounting Our hedging strategy is driven by macro and micro hedges. The designated risk components of hedged items are benchmark interest rate risk. Other risks such as credit risk and liquidity risk are managed separately and are not included in the hedge accounting relationship. The changes in the designated risk component usually account for the largest portion of the overall change in fair value of the hedged item. Macro fair value hedges We operate a macro hedging programme and use interest rate swaps to manage our interest rate risk. We determine hedged items by analysing portfolios of fixed-rate lending and relevant NIBLs, and allocating them into repricing time buckets based on expected, rather than contractual, repricing profiles. The hedging instruments are designated appropriately to those repricing time buckets. The hedge relationship is tested for effectiveness prospectively at the designation date, and retrospectively on a monthly basis. This is done by comparing fair value movements of the designated proportion of the relevant hedged item, against the fair value movements of the hedging instruments. In a portfolio fair value hedge of interest rate risk, the change in fair value of the hedged exposures attributable to the hedged risk is recognised on the balance sheet. The hedging derivatives are measured at fair value with changes recognised in profit or loss. At the end of every month, we de-designate the hedge relationships and redesignate them as new hedges in order to minimise the ineffectiveness from early repayments and accommodate new exposures. At de-designation, the fair value hedge accounting adjustments are amortised on a straight-line basis over the remaining period until the repricing of the hedged item. Amortisation begins at the date of de-designation. Micro fair value hedges We use this hedging strategy on fixed rate asset and liabilities held at fair value through other comprehensive income and amortised cost as well as on our fixed rate debt issuance. Hedge ineffectiveness Hedge ineffectiveness within fair value hedges can occur due to a number of potential sources, such as non-zero derivative designated in a hedge relationship; mismatches between contractual terms such as basis, timing, principal and notionals; or change in credit risk of interest rate swaps. The total ineffectiveness on our fair value hedges are recognised in note 5. Offsetting derivatives The Tier 2 and MREL debt held until renegotiation in late 2023 were designated as hedge items in fair value hedge relationships to manage our exposure to interest rate risk. Following the renegotiation of our debt in November 2023, these hedge relationships were de-designated. We entered into equal and opposite interest rate swaps with a notional of \u00a3600 million to fully offset the interest rate swaps used to hedge the old MREL and Tier 2 debt securities. Cash flows are offset at a central clearing party and both set of swaps will mature at the same time. Further details are included in note 20. Master netting arrangement and collateral We either receive or provide collateral related to our hedging arrangements. As at 31 December 2025, we have provided collateral of \u00a33.3 million which is reflected in Other Assets. Summary of hedging instruments in designated hedge relationships The amounts relating to items designated as hedging instruments in fair value hedge relationships to manage our exposure to interest rate are:
31 December 2025
31 December 2024
Carrying amount Carrying amount
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps
3,227
23
\u2013
1,253
16
\u2013
Total derivatives designated as fair value hedges
3,227
23
\u2013
1,253
16
\u2013
Summary of hedged items in designated hedge relationships The items designated as hedged items in fair value hedge relationships to manage our exposure to interest rates are:
31 December 2025
31 December 2024
Accumulated Accumulated
amount of fair value amount of fair value
hedge adjustments hedge adjustments
included in the included in the
carrying amount of carrying amount of
Carrying amount
the hedged item
Carrying amount
the hedged item
Assets Liabilities Assets Liabilities
Group and Company \u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
Interest rate risk
Fixed rate mortgages
1
450
\u2013
\u2013
\u2013
\u2013
\u2013
Fixed rate debt securities
2
\u2013
688
(13)
\u2013
675
4
Fixed rate investment securities held at FVOCI
3
189
\u2013
(4)
293
\u2013
8
Fixed rate investment securities held at AC
4
310
\u2013
15
271
\u2013
\u2013
Non-interest bearing liabilities
5
\u2013
1607
(6)
\u2013
\u2013
\u2013
Fixed rate loans
1
\u2013
\u2013
\u2013
1
\u2013
\u2013
Total items designated as fair value hedges
949
2,295
(8)
565
675
12
1. Hedged item and the cumulative fair value changes are recorded in Loans and advances to customers. 2. Hedged item and the cumulative fair value changes are recorded in Debt securities. 3. Hedged items and the cumulative fair value changes are recorded in Investment Securities held at FVOCI. 4. Hedged item and the cumulative fair value changes are recorded in Investment Securities held at AC. 5. Hedged item and the cumulative fair value changes are recorded in Deposits from customers. Summary of ineffectiveness from designated hedge relationships An analysis of the hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships are set out below: Total hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships is a loss of \u00a32.9 million (2024: gain of \u00a32.0 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfHedgeAccountingExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-352": { "value": "21. Derivatives Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. We use derivatives as part of our approach to hedging interest rate and foreign exchange exposure. Our derivative financial instruments are analysed in the table below.
31 December 2025
31 December 2024
Fair Value Fair Value
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps \u2013 Designated as hedging instruments
3,227
23
\u2013
1,253
16
\u2013
Interest rate swaps \u2013 Designated as held at fair value through profit and loss
500
8
(8)
502
7
(7)
Foreign currency swaps \u2013 Designated as held at fair value through profit and loss
58
\u2013
\u2013
50
\u2013
(1)
Tota l
3,785
31
(8)
1,805
23
(8)
Offsetting derivative
(500)
(8)
8
(502)
(7)
7
Grand total
3,285
23
\u2013
1,303
16
(1)
Hedge accounting Our hedging strategy is driven by macro and micro hedges. The designated risk components of hedged items are benchmark interest rate risk. Other risks such as credit risk and liquidity risk are managed separately and are not included in the hedge accounting relationship. The changes in the designated risk component usually account for the largest portion of the overall change in fair value of the hedged item. Macro fair value hedges We operate a macro hedging programme and use interest rate swaps to manage our interest rate risk. We determine hedged items by analysing portfolios of fixed-rate lending and relevant NIBLs, and allocating them into repricing time buckets based on expected, rather than contractual, repricing profiles. The hedging instruments are designated appropriately to those repricing time buckets. The hedge relationship is tested for effectiveness prospectively at the designation date, and retrospectively on a monthly basis. This is done by comparing fair value movements of the designated proportion of the relevant hedged item, against the fair value movements of the hedging instruments. In a portfolio fair value hedge of interest rate risk, the change in fair value of the hedged exposures attributable to the hedged risk is recognised on the balance sheet. The hedging derivatives are measured at fair value with changes recognised in profit or loss. At the end of every month, we de-designate the hedge relationships and redesignate them as new hedges in order to minimise the ineffectiveness from early repayments and accommodate new exposures. At de-designation, the fair value hedge accounting adjustments are amortised on a straight-line basis over the remaining period until the repricing of the hedged item. Amortisation begins at the date of de-designation. Micro fair value hedges We use this hedging strategy on fixed rate asset and liabilities held at fair value through other comprehensive income and amortised cost as well as on our fixed rate debt issuance. Hedge ineffectiveness Hedge ineffectiveness within fair value hedges can occur due to a number of potential sources, such as non-zero derivative designated in a hedge relationship; mismatches between contractual terms such as basis, timing, principal and notionals; or change in credit risk of interest rate swaps. The total ineffectiveness on our fair value hedges are recognised in note 5. Offsetting derivatives The Tier 2 and MREL debt held until renegotiation in late 2023 were designated as hedge items in fair value hedge relationships to manage our exposure to interest rate risk. Following the renegotiation of our debt in November 2023, these hedge relationships were de-designated. We entered into equal and opposite interest rate swaps with a notional of \u00a3600 million to fully offset the interest rate swaps used to hedge the old MREL and Tier 2 debt securities. Cash flows are offset at a central clearing party and both set of swaps will mature at the same time. Further details are included in note 20. Master netting arrangement and collateral We either receive or provide collateral related to our hedging arrangements. As at 31 December 2025, we have provided collateral of \u00a33.3 million which is reflected in Other Assets. Summary of hedging instruments in designated hedge relationships The amounts relating to items designated as hedging instruments in fair value hedge relationships to manage our exposure to interest rate are:
31 December 2025
31 December 2024
Carrying amount Carrying amount
Notional Asset Liability Notional Asset Liability
Group and Company \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Interest rate swaps
3,227
23
\u2013
1,253
16
\u2013
Total derivatives designated as fair value hedges
3,227
23
\u2013
1,253
16
\u2013
Summary of hedged items in designated hedge relationships The items designated as hedged items in fair value hedge relationships to manage our exposure to interest rates are:
31 December 2025
31 December 2024
Accumulated Accumulated
amount of fair value amount of fair value
hedge adjustments hedge adjustments
included in the included in the
carrying amount of carrying amount of
Carrying amount
the hedged item
Carrying amount
the hedged item
Assets Liabilities Assets Liabilities
Group and Company \u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
\u00a3\u2019million
Interest rate risk
Fixed rate mortgages
1
450
\u2013
\u2013
\u2013
\u2013
\u2013
Fixed rate debt securities
2
\u2013
688
(13)
\u2013
675
4
Fixed rate investment securities held at FVOCI
3
189
\u2013
(4)
293
\u2013
8
Fixed rate investment securities held at AC
4
310
\u2013
15
271
\u2013
\u2013
Non-interest bearing liabilities
5
\u2013
1607
(6)
\u2013
\u2013
\u2013
Fixed rate loans
1
\u2013
\u2013
\u2013
1
\u2013
\u2013
Total items designated as fair value hedges
949
2,295
(8)
565
675
12
1. Hedged item and the cumulative fair value changes are recorded in Loans and advances to customers. 2. Hedged item and the cumulative fair value changes are recorded in Debt securities. 3. Hedged items and the cumulative fair value changes are recorded in Investment Securities held at FVOCI. 4. Hedged item and the cumulative fair value changes are recorded in Investment Securities held at AC. 5. Hedged item and the cumulative fair value changes are recorded in Deposits from customers. Summary of ineffectiveness from designated hedge relationships An analysis of the hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships are set out below: Total hedge ineffectiveness recognised in profit or loss for the designated fair value hedge relationships is a loss of \u00a32.9 million (2024: gain of \u00a32.0 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-394": { "value": "Accounting policy In accordance with our risk management strategy, to the extent not naturally hedged, we use interest rate swaps to manage our exposure to interest rate risk. On adoption of IFRS 9 we chose to continue applying the hedge accounting rules set out in IAS 39 as adopted by the EU (EU-IFRS) as we employ dynamic portfolio hedge accounting of interest rate risk across fixed rate financial assets and fixed rate financial liabilities. Relevant differences between IFRS as issued by the IASB and EU-IFRS specifically relate to our dynamic hedges of non-interest bearing liabilities and fixed rate mortgages. Where we are using interest rate swaps to hedge the changes in fair value attributable to the interest rate risk of a recognised asset or liability that could affect profit or loss, we apply fair value hedge accounting. If there is an effective hedge relationship, the hedged item (such as fixed rate mortgages or non-interest bearing customer deposits) is adjusted for fair value changes in respect of the hedged risk. These fair value changes are recognised in the income statement together with the fair value movements on the hedging instrument (the interest rate swaps). Where we are using interest rate swaps to hedge the exposure to variability in cash flows attributable to interest rate risk on a recognised asset or liability or a highly probable forecast transaction that could affect profit or loss, we apply cash flow hedge accounting. If there is an effective hedge relationship, the effective portion of the movement in fair value of the hedging instrument (the interest rate swap) is recognised in other comprehensive income (OCI) and taken to the cash flow hedge reserve. The financial hedged item (such as floating rate loans and advances to customers) is accounted for as normal in line with IFRS 9 accounting requirements. Hedge accounting is discontinued when a hedge ceases to be highly effective, a derivative expires or is sold, the underlying hedged item matures or is repaid, or periodically if a new underlying hedged item or hedging instrument is added to the hedge relationship. Where a fair value hedge is de-designated (either due to becoming ineffective or as part of our dynamic approach to hedge accounting) any hedge adjustments accrued to that point are amortised over the remaining life of the hedged item. When a cash flow hedge is de-designated any accumulated amounts in the cash flow hedge reserve are recycled to profit or loss as and when the hedged forecast cash flows impact the income statement so long as the hedged forecast cash flows are still expected. At the inception of every hedge, we produce hedge documentation which identifies the hedged risk, hedged item and hedging instrument. This documentation sets out the methodology used for testing hedge effectiveness. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-327": { "value": "22. Leases Accounting policy At the inception of a contract we assess whether the contract contains a lease. At the commencement of a lease we recognise a lease liability and right-of-use asset (see note 14 for further details). The lease liability is initially measured as the present value for the future lease payments discounted at the rate implicit in the lease (where available) or our incremental cost of borrowing. Generally we use our deemed incremental cost of borrowing as the discount rate. Following initial recognition, the lease liability is measured using the effective interest method. Where we are reasonably certain to exercise a break in the lease, only the lease payments up until the date of the break are included. We subsequently remeasure the lease liability when there is a change to an index or rate used or when there is a change in expectation that we will exercise a purchase option or break clause or if we extend the lease. When such an adjustment is made to the lease liability a corresponding adjustment is made to the right-of-use asset. Irrecoverable VAT on lease payments is excluded from the lease liability and is taken to the income statement over the period which is due. This is included within note 6, General operating expenses, under \u2018occupancy costs\u2019. We have elected not to recognise a lease liability and right-of-use assets for any leases that have a term of less than 12 months, or are for an asset which is deemed to be of low value (item is worth less than \u00a35,000). For these leases, the lease payments are recognised as an expense in the income statement on a straight-line basis over the life of the lease. All of our leases within the scope of IFRS 16 relate to our stores and head office properties.
Lease liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
205
234
Additions and modifications
1
1
Disposals
(13)
(20)
Lease payments made
(19)
(22)
Interest on lease liabilities
11
12
31 December
185
205
Current
18
19
Non-current
167
186
Right-of-use assets
All of our disclosures relating to right-of-use assets, including our accounting policy, can be
found in note 14.
Disposals
The disposals during the year relate to the two (2024: two) stores where we purchased
the freehold or long-lease during the year. Following the purchase both the lease
liabilities and right-of-use assets relating to these stores were derecognised. Additionally
we derecognised one of the leases relating to the three stores we closed during 2025
following the surrendering of this lease back to the landlord.
Low value and short leases
During the year ended 31 December 2025, \u00a30.01 million (year ended 31 December 2024:
\u00a30.04 million) was recognised in the income statement with respect to assets of low value or
a lease of less than 12 months.
Future income due under non-cancellable property leases
We lease out surplus space in some of our properties. The table below sets out the cash
payments expected over the remaining non-cancellable term of each lease, exclusive of VAT.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Within one year
1
1
Due in one to five years
2
2
Due in more than five years
3
3
Tota l
6
6
Due in more than five years
Through our asset finance business we lease a variety of assets to third parties, which
typically consist of plant, machinery and vehicles. These rentals typically cover the assets\u2019
useful economic life and as such any residual value is minimal. Amounts receivable are
classified as loans and advances to customers and are categorised within our asset and
invoice finance lending per the breakdown provided in note 12.
31 December 2025
31 December 2024
Total future Unearned Total future Unearned
minimum finance Present minimum finance Present
payments income value payments income value
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Within one year
7
(2)
5
6
(1)
5
Due in one to five years
12
(3)
9
11
(1)
10
Due in more than five years
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Tota l
19
(5)
14
17
(2)
15
Minimum lease payments
Future undiscounted minimum payments under lease liabilities, exclusive of VAT, as at
31 December are as follows:
2025 2024
\u00a3\u2019million \u00a3\u2019million
Within one year
19
20
Due in one to five years
68
74
Due in more than five years
80
101
Tota l
167
195
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-405": { "value": "Accounting policy At the inception of a contract we assess whether the contract contains a lease. At the commencement of a lease we recognise a lease liability and right-of-use asset (see note 14 for further details). The lease liability is initially measured as the present value for the future lease payments discounted at the rate implicit in the lease (where available) or our incremental cost of borrowing. Generally we use our deemed incremental cost of borrowing as the discount rate. Following initial recognition, the lease liability is measured using the effective interest method. Where we are reasonably certain to exercise a break in the lease, only the lease payments up until the date of the break are included. We subsequently remeasure the lease liability when there is a change to an index or rate used or when there is a change in expectation that we will exercise a purchase option or break clause or if we extend the lease. When such an adjustment is made to the lease liability a corresponding adjustment is made to the right-of-use asset. Irrecoverable VAT on lease payments is excluded from the lease liability and is taken to the income statement over the period which is due. This is included within note 6, General operating expenses, under \u2018occupancy costs\u2019. We have elected not to recognise a lease liability and right-of-use assets for any leases that have a term of less than 12 months, or are for an asset which is deemed to be of low value (item is worth less than \u00a35,000). For these leases, the lease payments are recognised as an expense in the income statement on a straight-line basis over the life of the lease. All of our leases within the scope of IFRS 16 relate to our stores and head office properties. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-367": { "value": "Future income due under non-cancellable property leases We lease out surplus space in some of our properties. The table below sets out the cash payments expected over the remaining non-cancellable term of each lease, exclusive of VAT.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Within one year
1
1
Due in one to five years
2
2
Due in more than five years
3
3
Tota l
6
6
Minimum lease payments Future undiscounted minimum payments under lease liabilities, exclusive of VAT, as at 31 December are as follows:
2025 2024
\u00a3\u2019million \u00a3\u2019million
Within one year
19
20
Due in one to five years
68
74
Due in more than five years
80
101
Tota l
167
195
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaturityAnalysisOfOperatingLeasePaymentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-368": { "value": "23. Deferred government grants Accounting policy Government grants are recognised where there is reasonable assurance that we will both receive the grant and will be able to comply with all the attached conditions. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to the purchase of an asset, it is recognised directly against the cost of the asset.
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
13
16
Released to the income statement
(3)
(3)
31 December
10
13
Our only deferred grant relates to amounts awarded in relation to the Capability and Innovation Fund which formed part of the RBS alternative remedies programme. The programme was aimed to increase competition in the UK business banking marketplace.", "dimensions": { "concept": "ifrs-full:DisclosureOfGovernmentGrantsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-328": { "value": "23. Deferred government grants Accounting policy Government grants are recognised where there is reasonable assurance that we will both receive the grant and will be able to comply with all the attached conditions. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to the purchase of an asset, it is recognised directly against the cost of the asset.
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
13
16
Released to the income statement
(3)
(3)
31 December
10
13
Our only deferred grant relates to amounts awarded in relation to the Capability and Innovation Fund which formed part of the RBS alternative remedies programme. The programme was aimed to increase competition in the UK business banking marketplace.", "dimensions": { "concept": "metrobankholdingsplc:DisclosureOfDeferredGrants", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-406": { "value": "Accounting policy Government grants are recognised where there is reasonable assurance that we will both receive the grant and will be able to comply with all the attached conditions. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to the purchase of an asset, it is recognised directly against the cost of the asset. ", "dimensions": { "concept": "metrobankholdingsplc:DescriptionOfAccountingPolicyForDeferredGrants", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-381": { "value": "24. Provisions Accounting policy We recognise provisions when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. The provision is measured at its current present value.
Provision
Description
Restructuring
Restructuring provisions are recognised at the point we have developed a
detailed formal plan and we have raised a valid expectation that it will be
implemented. This is typically at the point the plan is announced to affected
colleagues.
Customer We are committed to doing the right thing but occasionally we identify issues
remediation that have caused detriment as a result of our actions.
Where we have to refund costs to customers we provide for this at the
point the obligation arises. The amounts recognised include any associated
interest due.
Dilapidations
Dilapidations provisions are recognised in regard to certain properties
we lease.
The majority of our stores and offices have an automatic right to renewal at
the end of the lease under the provisions of the Landlord and Tenant Act 1954
(\u2018the act\u2019). Where this is the case we do not provide for restorations on these site
since we have no intention of vacating at the end of the lease term. For sites that
that are outside the act or sites within the act where we think there is a chance
we will vacate a site at the end of its lease a provision is made for dilapidations.
The provision is made in line with the underlying obligations contained within
the lease.
Onerous Onerous contract provisions are recognised when the unavoidable costs of
contracts meeting the obligations under the contract exceed the economic benefits we
expect to be received under it. The provision is recognised as the net cost of
exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Legal and Provisions are made relating to the outcome of legal cases and regulatory
regulatory investigations based on our best estimate of settlement following
consultation with our lawyers and advisors. The inclusion of a provision
does not constitute any admission of wrongdoing or legal liability. Details
of individual cases are provided where these are material to our financial
statements and disclosure would not be prejudicial to the outcome of
the case.
Other provisions
Other provisions consist of other immaterial amounts that are provided for in
the ordinary course of our business.
No provision has been recognised in relation to any of the legal and regulatory matters set out in note 32.
2025
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
2
1
1
5
\u2013
2
11
Additions
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Released
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(1)
Utilised
(2)
\u2013
\u2013
(2)
\u2013
\u2013
(4)
31 December
\u2013
\u2013
1
3
\u2013
2
6
2024
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
15
3
1
2
\u2013
2
23
Additions
8
\u2013
\u2013
3
\u2013
\u2013
11
Released
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(3)
Utilised
(20)
\u2013
\u2013
\u2013
\u2013
\u2013
(20)
31 December
2
1
1
5
\u2013
2
11
All additions for both the current and prior year have been recognised in the income statement, with the exception of the \u00a32 million provision for dilapidations in 2021 and a further \u00a30.3 million provision for dilapidations in 2024. This was recognised as an addition to the right-of-use assets (see note 14). Dilapidations The amounts provided in respect of dilapidations are calculated based on assessments by an independent qualified valuer. They represent the best estimate of the present value to restore the site to the condition required under the lease. As the date restoration is required may be up to 25 years in the future, there is uncertainty in this estimation. Additionally, for sites that are outside the act, should we be successful in renewing the lease at the end of its term, it is possible that the provision recognised may not be utilised. Onerous contract Onerous contracts primarily relate to the non-rental costs of fulfilling property contracts from which we will no longer benefit, including closed stores and head office space. The provision is determined with reference to the occupancy costs from the date of closure through to the next lease break. Rental costs on these sites from which we will receive no future economic benefits are represented by an impairment to the right-of-use asset. The which have either been surrendered back to the landlord or fully sublet for the remainder of the lease term.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-369": { "value": "24. Provisions Accounting policy We recognise provisions when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. The provision is measured at its current present value.
Provision
Description
Restructuring
Restructuring provisions are recognised at the point we have developed a
detailed formal plan and we have raised a valid expectation that it will be
implemented. This is typically at the point the plan is announced to affected
colleagues.
Customer We are committed to doing the right thing but occasionally we identify issues
remediation that have caused detriment as a result of our actions.
Where we have to refund costs to customers we provide for this at the
point the obligation arises. The amounts recognised include any associated
interest due.
Dilapidations
Dilapidations provisions are recognised in regard to certain properties
we lease.
The majority of our stores and offices have an automatic right to renewal at
the end of the lease under the provisions of the Landlord and Tenant Act 1954
(\u2018the act\u2019). Where this is the case we do not provide for restorations on these site
since we have no intention of vacating at the end of the lease term. For sites that
that are outside the act or sites within the act where we think there is a chance
we will vacate a site at the end of its lease a provision is made for dilapidations.
The provision is made in line with the underlying obligations contained within
the lease.
Onerous Onerous contract provisions are recognised when the unavoidable costs of
contracts meeting the obligations under the contract exceed the economic benefits we
expect to be received under it. The provision is recognised as the net cost of
exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Legal and Provisions are made relating to the outcome of legal cases and regulatory
regulatory investigations based on our best estimate of settlement following
consultation with our lawyers and advisors. The inclusion of a provision
does not constitute any admission of wrongdoing or legal liability. Details
of individual cases are provided where these are material to our financial
statements and disclosure would not be prejudicial to the outcome of
the case.
Other provisions
Other provisions consist of other immaterial amounts that are provided for in
the ordinary course of our business.
No provision has been recognised in relation to any of the legal and regulatory matters set out in note 32.
2025
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
2
1
1
5
\u2013
2
11
Additions
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Released
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(1)
Utilised
(2)
\u2013
\u2013
(2)
\u2013
\u2013
(4)
31 December
\u2013
\u2013
1
3
\u2013
2
6
2024
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
15
3
1
2
\u2013
2
23
Additions
8
\u2013
\u2013
3
\u2013
\u2013
11
Released
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(3)
Utilised
(20)
\u2013
\u2013
\u2013
\u2013
\u2013
(20)
31 December
2
1
1
5
\u2013
2
11
All additions for both the current and prior year have been recognised in the income statement, with the exception of the \u00a32 million provision for dilapidations in 2021 and a further \u00a30.3 million provision for dilapidations in 2024. This was recognised as an addition to the right-of-use assets (see note 14). Dilapidations The amounts provided in respect of dilapidations are calculated based on assessments by an independent qualified valuer. They represent the best estimate of the present value to restore the site to the condition required under the lease. As the date restoration is required may be up to 25 years in the future, there is uncertainty in this estimation. Additionally, for sites that are outside the act, should we be successful in renewing the lease at the end of its term, it is possible that the provision recognised may not be utilised. Onerous contract Onerous contracts primarily relate to the non-rental costs of fulfilling property contracts from which we will no longer benefit, including closed stores and head office space. The provision is determined with reference to the occupancy costs from the date of closure through to the next lease break. Rental costs on these sites from which we will receive no future economic benefits are represented by an impairment to the right-of-use asset. The which have either been surrendered back to the landlord or fully sublet for the remainder of the lease term.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-329": { "value": "24. Provisions Accounting policy We recognise provisions when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. The provision is measured at its current present value.
Provision
Description
Restructuring
Restructuring provisions are recognised at the point we have developed a
detailed formal plan and we have raised a valid expectation that it will be
implemented. This is typically at the point the plan is announced to affected
colleagues.
Customer We are committed to doing the right thing but occasionally we identify issues
remediation that have caused detriment as a result of our actions.
Where we have to refund costs to customers we provide for this at the
point the obligation arises. The amounts recognised include any associated
interest due.
Dilapidations
Dilapidations provisions are recognised in regard to certain properties
we lease.
The majority of our stores and offices have an automatic right to renewal at
the end of the lease under the provisions of the Landlord and Tenant Act 1954
(\u2018the act\u2019). Where this is the case we do not provide for restorations on these site
since we have no intention of vacating at the end of the lease term. For sites that
that are outside the act or sites within the act where we think there is a chance
we will vacate a site at the end of its lease a provision is made for dilapidations.
The provision is made in line with the underlying obligations contained within
the lease.
Onerous Onerous contract provisions are recognised when the unavoidable costs of
contracts meeting the obligations under the contract exceed the economic benefits we
expect to be received under it. The provision is recognised as the net cost of
exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Legal and Provisions are made relating to the outcome of legal cases and regulatory
regulatory investigations based on our best estimate of settlement following
consultation with our lawyers and advisors. The inclusion of a provision
does not constitute any admission of wrongdoing or legal liability. Details
of individual cases are provided where these are material to our financial
statements and disclosure would not be prejudicial to the outcome of
the case.
Other provisions
Other provisions consist of other immaterial amounts that are provided for in
the ordinary course of our business.
No provision has been recognised in relation to any of the legal and regulatory matters set out in note 32.
2025
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
2
1
1
5
\u2013
2
11
Additions
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Released
\u2013
(1)
\u2013
\u2013
\u2013
\u2013
(1)
Utilised
(2)
\u2013
\u2013
(2)
\u2013
\u2013
(4)
31 December
\u2013
\u2013
1
3
\u2013
2
6
2024
Customer Onerous Legal and Other
Restructuring remediation Dilapidations contracts regulatory provisions Total
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
1 January
15
3
1
2
\u2013
2
23
Additions
8
\u2013
\u2013
3
\u2013
\u2013
11
Released
(1)
(2)
\u2013
\u2013
\u2013
\u2013
(3)
Utilised
(20)
\u2013
\u2013
\u2013
\u2013
\u2013
(20)
31 December
2
1
1
5
\u2013
2
11
All additions for both the current and prior year have been recognised in the income
statement, with the exception of the \u00a32 million provision for dilapidations in 2021 and a
further \u00a30.3 million provision for dilapidations in 2024. This was recognised as an addition
to the right-of-use assets (see note 14).
Dilapidations
The amounts provided in respect of dilapidations are calculated based on assessments
by an independent qualified valuer. They represent the best estimate of the present
value to restore the site to the condition required under the lease. As the date restoration
is required may be up to 25 years in the future, there is uncertainty in this estimation.
Additionally, for sites that are outside the act, should we be successful in renewing the
lease at the end of its term, it is possible that the provision recognised may not be utilised.
Onerous contract
Onerous contracts primarily relate to the non-rental costs of fulfilling property contracts from
which we will no longer benefit, including closed stores and head office space. The provision
is determined with reference to the occupancy costs from the date of closure through to the
next lease break. Rental costs on these sites from which we will receive no future economic
benefits are represented by an impairment to the right-of-use asset. The which have either
been surrendered back to the landlord or fully sublet for the remainder of the lease term.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-407": { "value": "Accounting policy We recognise provisions when it is probable that an outflow of economic benefits will be required to settle a present legal or constructive obligation that has arisen as a result of past events and for which a reliable estimate can be made. The provision is measured at its current present value.
Provision
Description
Restructuring
Restructuring provisions are recognised at the point we have developed a
detailed formal plan and we have raised a valid expectation that it will be
implemented. This is typically at the point the plan is announced to affected
colleagues.
Customer We are committed to doing the right thing but occasionally we identify issues
remediation that have caused detriment as a result of our actions.
Where we have to refund costs to customers we provide for this at the
point the obligation arises. The amounts recognised include any associated
interest due.
Dilapidations
Dilapidations provisions are recognised in regard to certain properties
we lease.
The majority of our stores and offices have an automatic right to renewal at
the end of the lease under the provisions of the Landlord and Tenant Act 1954
(\u2018the act\u2019). Where this is the case we do not provide for restorations on these site
since we have no intention of vacating at the end of the lease term. For sites that
that are outside the act or sites within the act where we think there is a chance
we will vacate a site at the end of its lease a provision is made for dilapidations.
The provision is made in line with the underlying obligations contained within
the lease.
Onerous Onerous contract provisions are recognised when the unavoidable costs of
contracts meeting the obligations under the contract exceed the economic benefits we
expect to be received under it. The provision is recognised as the net cost of
exiting from the contract, which is the lower of the cost of fulfilling it and any
compensation or penalties arising from failure to fulfil it.
Legal and Provisions are made relating to the outcome of legal cases and regulatory
regulatory investigations based on our best estimate of settlement following
consultation with our lawyers and advisors. The inclusion of a provision
does not constitute any admission of wrongdoing or legal liability. Details
of individual cases are provided where these are material to our financial
statements and disclosure would not be prejudicial to the outcome of
the case.
Other provisions
Other provisions consist of other immaterial amounts that are provided for in
the ordinary course of our business.
No provision has been recognised in relation to any of the legal and regulatory matters set out in note 32. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-301": { "value": "
25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-392": { "value": "25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherCurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-382": { "value": "25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredIncomeExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-370": { "value": "25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-353": { "value": "25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-330": { "value": "25. Other liabilities
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
Trade creditors
\u2013
1
Other taxation and social security costs
6
8
Accruals
1
105
107
Deferred income
22
24
Other liabilities
55
105
Total other liabilities
188
245
Current portion
163
211
Non-current portion
25
34
1. Includes accrued interest payable.", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-331": { "value": "
26. Share capital, share premium and other equity instruments
Accounting policy
On issue of new shares, incremental directly attributable costs are shown in equity as
a deduction from the proceeds.
Called-up ordinary share capital, issued and fully paid
2025
Total share
capital
Number Share and share Other equity
of shares Share capital premium premium instruments
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
At 1 January
673.0
\u2013
144.4
144.4
\u2013
Issued to staff under existing employee
share schemes
0.3
0.2
1.4
1.6
\u2013
AT1 securities issuance
\u2013
\u2013
\u2013
\u2013
241.8
At 31 December
673.3
0.2
145.8
146.0
241.8
2024
Total share
capital
Number Share and share Other equity
of shares Share capital premium premium instruments
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
At 1 January
672.7
\u2013
144.4
144.4
\u2013
Issued to staff under existing employee
share schemes
0.3
\u2013
\u2013
\u2013
\u2013
At 31 December
673.0
\u2013
144.4
144.4
\u2013
Called-up share capital
Called-up share capital comprises 673.3 million (31 December 2024: 673.0 million) ordinary
shares of 0.0001p each, authorised and in issue. At 31 December 2025, our called-up share
capital was \u00a3673.29 (31 December 2024: \u00a3672.98).
Share premium
The share premium reserve is used to record the excess consideration of any shares we
have issued over the nominal share value.
Redeemable preference shares
As at 31 December 2024, in addition to the share capital set out above, Metro Bank Holdings
PLC had \u00a350,000 of redeemable preference shares which were issued to Robert Sharpe
(Chair) and Daniel Frumkin (Chief Executive Officer) upon the initial incorporation of the legal
entity on 29 September 2022. On 31 March 2025, these shares were redeemed.
Other equity instruments
Other equity instruments of \u00a3242 million (31 December 2024: nil) include AT1 securities
issued by Metro Bank Holdings PLC. The AT1 securities are perpetual securities with no
fixed maturity or redemption date and are structured to qualify as AT1 instruments under
prevailing capital rules applicable as at the relevant issue date.
In 2025, there was one issuance of AT1 instruments, in the form of Fixed Rate Resetting
Perpetual Subordinated Contingent Convertible Securities, for \u00a3250 million (2024: \u00a3nil).
These AT1 securities are classified as an equity instrument under IAS 32 \u2018Financial
Instruments: Presentation\u2019 with the proceeds recognised in equity net of transaction costs
of \u00a38 million. Interest payments on these securities are recognised as distributions from
equity in the period in which they are paid.
AT1 equity instruments
2025
Initial call date \u00a3\u2019million
At 1 January
Issued during the year:
13.875% Fixed Rate Resetting Perpetual Subordinated Contingent
Convertible Securities
26-Mar-30
250
Cost of issuance
(8)
Profit for the year attributable to other equity holders
17
Distributions on other equity instruments
(17)
At 31 December
242
The principal terms of the AT1 securities are described below:
The securities rank behind the claims against Metro Bank PLC of:
a) unsubordinated creditors;
b) claims which are expressed to be subordinated to the claims of unsubordinated
creditors of Metro Bank PLC but not further or otherwise; or
c) claims which are, or are expressed to be, junior to the claims of other creditors of Metro
Bank PLC, whether subordinated or unsubordinated, other than claims which rank, or
are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1
securities.
The securities are undated and are redeemable, at the option of Metro Bank Holdings PLC,
in whole on:
a) the initial reset date, or on any fifth anniversary after the initial reset date; or
b) any day falling in a named period ending on the initial reset date, or on any fifth
anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at
the option of Metro Bank Holdings PLC, in whole in the event of certain changes in the
tax or regulatory treatment of the securities. Any redemptions require the prior consent
of the PRA.
Interest on the securities will be due and payable only at the sole discretion of Metro
Bank Holdings PLC, and Metro Bank Holdings PLC has sole and absolute discretion at all
times and for any reason to cancel (in whole or in part) any interest payment that would
otherwise be payable on any interest payment date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-371": { "value": "26. Share capital, share premium and other equity instruments Accounting policy On issue of new shares, incremental directly attributable costs are shown in equity as a deduction from the proceeds. Called-up ordinary share capital, issued and fully paid
2025
Total share
capital
Number Share and share Other equity
of shares Share capital premium premium instruments
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
At 1 January
673.0
\u2013
144.4
144.4
\u2013
Issued to staff under existing employee
share schemes
0.3
0.2
1.4
1.6
\u2013
AT1 securities issuance
\u2013
\u2013
\u2013
\u2013
241.8
At 31 December
673.3
0.2
145.8
146.0
241.8
2024
Total share
capital
Number Share and share Other equity
of shares Share capital premium premium instruments
\u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
At 1 January
672.7
\u2013
144.4
144.4
\u2013
Issued to staff under existing employee
share schemes
0.3
\u2013
\u2013
\u2013
\u2013
At 31 December
673.0
\u2013
144.4
144.4
\u2013
Called-up share capital Called-up share capital comprises 673.3 million (31 December 2024: 673.0 million) ordinary shares of 0.0001p each, authorised and in issue. At 31 December 2025, our called-up share capital was \u00a3673.29 (31 December 2024: \u00a3672.98). Share premium The share premium reserve is used to record the excess consideration of any shares we have issued over the nominal share value. Redeemable preference shares As at 31 December 2024, in addition to the share capital set out above, Metro Bank Holdings PLC had \u00a350,000 of redeemable preference shares which were issued to Robert Sharpe (Chair) and Daniel Frumkin (Chief Executive Officer) upon the initial incorporation of the legal entity on 29 September 2022. On 31 March 2025, these shares were redeemed. Other equity instruments Other equity instruments of \u00a3242 million (31 December 2024: nil) include AT1 securities issued by Metro Bank Holdings PLC. The AT1 securities are perpetual securities with no fixed maturity or redemption date and are structured to qualify as AT1 instruments under prevailing capital rules applicable as at the relevant issue date. In 2025, there was one issuance of AT1 instruments, in the form of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities, for \u00a3250 million (2024: \u00a3nil). These AT1 securities are classified as an equity instrument under IAS 32 \u2018Financial Instruments: Presentation\u2019 with the proceeds recognised in equity net of transaction costs of \u00a38 million. Interest payments on these securities are recognised as distributions from equity in the period in which they are paid. AT1 equity instruments
2025
Initial call date \u00a3\u2019million
At 1 January
Issued during the year:
13.875% Fixed Rate Resetting Perpetual Subordinated Contingent
Convertible Securities
26-Mar-30
250
Cost of issuance
(8)
Profit for the year attributable to other equity holders
17
Distributions on other equity instruments
(17)
At 31 December
242
The principal terms of the AT1 securities are described below: The securities rank behind the claims against Metro Bank PLC of: a) unsubordinated creditors; b) claims which are expressed to be subordinated to the claims of unsubordinated creditors of Metro Bank PLC but not further or otherwise; or c) claims which are, or are expressed to be, junior to the claims of other creditors of Metro Bank PLC, whether subordinated or unsubordinated, other than claims which rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the AT1 securities. The securities are undated and are redeemable, at the option of Metro Bank Holdings PLC, in whole on: a) the initial reset date, or on any fifth anniversary after the initial reset date; or b) any day falling in a named period ending on the initial reset date, or on any fifth anniversary after the initial reset date. In addition, the AT1 securities are redeemable, at the option of Metro Bank Holdings PLC, in whole in the event of certain changes in the tax or regulatory treatment of the securities. Any redemptions require the prior consent of the PRA. Interest on the securities will be due and payable only at the sole discretion of Metro Bank Holdings PLC, and Metro Bank Holdings PLC has sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any interest payment date. 27. Retained earnings Retained earnings records our cumulative earnings since our formation.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
1,022
978
Profit for the year
69
43
Distributions on other equity instruments
(17)
\u2013
Other movements in share option charges
1
1
1
31 December
1,075
1,022
1. Includes lapsed and expired share options. No dividends were paid or declared on ordinary shares during the year (2024: none).
28. Other reserves
Share option reserve
The share option reserve is used to record movements in relation to share options
awarded under our CSOP, DVRP, LTIP and SVAP plans.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
24
23
Equity-settled share-based payment charges
3
2
Other movements in share option charges
1
(3)
(1)
31 December
24
24
1. Includes lapsed and expired share options.
Fair value though other comprehensive income (FVOCI) reserves
The FVOCI reserve is used to record changes in the fair value of investment securities
designated at FVOCI. When investment securities held at FVOCI are sold any accumulated
gains or losses are transferred to the income statement.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
(7)
(11)
Changes in fair value
5
5
Deferred tax movements (note 9)
(1)
(1)
31 December
(3)
(7)
Treasury shares
We have a small number of shares held in Treasury relating to awards originally granted in
2016 and those held to satisfy schemes granted from 2023 onwards. These are held by an
employee benefit trust, which is consolidated within the Group accounts. The balance on
the reserve is less than \u00a31 million (31 December 2024: less than \u00a31 million) and therefore
has not been separately disclosed as a component of reserves.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-408": { "value": "26. Share capital, share premium and other equity instruments Accounting policy On issue of new shares, incremental directly attributable costs are shown in equity as a deduction from the proceeds. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-332": { "value": "28. Other reserves Share option reserve The share option reserve is used to record movements in relation to share options awarded under our CSOP, DVRP, LTIP and SVAP plans.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
24
23
Equity-settled share-based payment charges
3
2
Other movements in share option charges
1
(3)
(1)
31 December
24
24
1. Includes lapsed and expired share options. Fair value though other comprehensive income (FVOCI) reserves The FVOCI reserve is used to record changes in the fair value of investment securities designated at FVOCI. When investment securities held at FVOCI are sold any accumulated gains or losses are transferred to the income statement.
31 December 31 December
2025 2024
\u00a3\u2019million \u00a3\u2019million
1 January
(7)
(11)
Changes in fair value
5
5
Deferred tax movements (note 9)
(1)
(1)
31 December
(3)
(7)
Treasury shares We have a small number of shares held in Treasury relating to awards originally granted in 2016 and those held to satisfy schemes granted from 2023 onwards. These are held by an employee benefit trust, which is consolidated within the Group accounts. The balance on the reserve is less than \u00a31 million (31 December 2024: less than \u00a31 million) and therefore has not been separately disclosed as a component of reserves.", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-354": { "value": "Treasury shares We have a small number of shares held in Treasury relating to awards originally granted in 2016 and those held to satisfy schemes granted from 2023 onwards. These are held by an employee benefit trust, which is consolidated within the Group accounts. The balance on the reserve is less than \u00a31 million (31 December 2024: less than \u00a31 million) and therefore has not been separately disclosed as a component of reserves.", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-333": { "value": "29. Share options Accounting policy The grant date fair value of options awarded to colleagues is recognised as an expense over the period in which colleagues become unconditionally entitled to the options. The expense (representing the value of the services received by us) is measured by reference to the fair value of the awards granted on the date of the grant. The cost of the colleague services received in respect of the awards granted is recognised in the consolidated income statement over the period that the services are received, which is the vesting period. Graded vesting is applied where relevant. Vesting conditions are limited to service conditions and performance conditions. For performance-based schemes, the relevant performance measures are projected to the end of the performance period in order to determine the number of options expected to vest. This estimate of the performance measures is used to determine the option fair value, discounted to present value. The Group revises the number of options that are expected to vest, including an estimate of forfeitures at each reporting date based on forecast performance measures. The impact of the revision to original estimates, if any, is recognised in the income statement, with a corresponding adjustment to equity. The fair value of colleague awards plans is calculated at the grant date using a Black-Scholes and Monte Carlo model. The resulting cost is charged to the income statement over the vesting period. The value of the charge is adjusted to reflect expected and actual levels of vesting. We provide share award schemes to colleagues as part of their remuneration packages, and we operates a number of share-based compensation schemes, namely the Deferred Variable Reward Plan (DVRP), Long Term Incentive Plan (LTIP) and Shareholder Value Alignment Plan (SVAP). The granting of awards is designed to incentivise colleagues to deliver long-term returns. No individual has a contractual right to participate in the plans or to receive any guaranteed benefits and the granting of awards remains at the discretion of the Remuneration Committee. Standard share options are granted for no consideration, are not pensionable and carry no voting rights.
Long Term Incentive Plan (LTIP)
The LTIP is the primary long-term incentive plan awarded to senior colleagues. It was first
approved by shareholders at the 2021 AGM with subsequent iterations since. Under the plan,
annual awards, based on a percentage of salary, may be offered. The extent to which an
award vests is measured against financial targets over the agreed performance period and
continued employment within the Group. Under the 2025 plan these financial targets consist
of return on tangible equity, relative total shareholder return and cost: income ratio, and the
performance period is three years from date of grant.
Deferred Variable Reward Plan (DVRP)
The DVRP was first introduced in 2010 and the latest plan was approved by shareholders
at the 2021 AGM. Although originally designed for all colleagues, the changes approved
in 2021 mean it is now operated primarily for senior managers (in 2021 this only consisted
of the Executive Committee). Under the current rules participants are required to defer
a proportion of any bonus paid into nominal price awards, a proportion of which vest
immediately and the remainder of which vest over seven years. There are no further
performance conditions on these shares, other than continued employment within the
Group. All awards under the DVRP are subject to a one-year holding period once exercised
and all awards have a life of 10 years from the date of grant.
More information in relation to both the DVRP and LTIP is available within the
Remuneration report.
Shareholder Value Alignment Plan (SVAP)
During the year, the Group introduced the SVAP for Executive Directors, an arrangement
under which participants are granted nil-cost share options entitling them to share in 5%
of the growth in value of the Company above the baseline. Awards vest subject to the
achievement of specified market-based performance conditions, including share price and
market capitalisation hurdles, and continued employment over the vesting period. Awards
will vest in tranches between three and seven years from the grant of the SVAP, with
each tranche subject to a one-year holding period. Vested awards may be paid as a cash
equivalent of the market value of shares instead of shares.
Awards outstanding
The table below summarises the movements in the number of options outstanding and
their weighted average exercise price:
2025
2024
Weighted Weighted
average average
Number exercise Number exercise
of options price of options price
Group \u2018000 \u00a3 \u2018000 \u00a3
Outstanding at 1 January
15,011
5.06
16,235
5.24
Granted
4,007
0.00
613
0.00
Exercised
(592)
0.23
(559)
0.00
Lapsed
(4,092)
3.19
(1,278)
7.54
Outstanding at 31 December
14,334
4.02
15,011
5.03
Exercisable at 31 December
6,881
8.35
7,608
9.92
The average share price during 2025 was 111p (2024: 52p). For share options exercised during
the period, the weighted average share price at the date of exercise was 119p (2024: 67p).
All our options are equity-settled and we have no legal or constructive obligation to
repurchase the shares or settle the options in cash. Exercises of awards granted are
satisfied via the issuance of new shares or market repurchase.
Total share-based compensation charges totalled \u00a32.7 million in the year ended 2025
(2024: \u00a32.0 million).
SVAP grants a percentage entitlement rather than a fixed number of options and is a nil
cost award. The number of options to be issued will be determined only when the market
conditions are satisfied and the SVAP value is known. No awards had vested during the
year and there were no leavers and forfeitures.
Fair value of options granted
The number of options outstanding at year end was as follows:
2025
2024
Weighted Weighted
average average
Number remaining Number remaining
of options contractual life of options contractual life
Exercise price \u2018000 years \u2018000 years
\u00a30.00
1
5,411
6.7
9,174
7.7
\u00a30.00
2
4,578
9.3
570
9.6
\u00a30.93
1,817
4.3
1,972
5.3
\u00a37.94
651
3.2
651
4.2
\u00a312.00
\u2013
\u2013
\u2013
\u2013
\u00a313.00
4
\u2013
\u2013
\u2013
\u00a313.50
9
n/a
\u2013
n/a
\u00a314.00
7
n/a
194
n/a
\u00a316.00
22
n/a
615
n/a
\u00a320.00
445
0.2
445
1.2
\u00a332.73
633
1.2
633
2.2
\u00a335.36
757
2.2
757
3.2
Tota l
14,334
6.4
15,011
6.2
1. Nominal price awards with exercise price of 0.0001p.
2. Nominal price awards with exercise price of 0.01p.
The total fair value of options granted in 2025 was \u00a33.1 million (2024: \u00a30.4 million), based
on the following assumptions:
2025
LTIP
DVRP
Risk-free interest rate
4.03%
3.62% to 4.50%
Expected life
\u2013
\u2013
Expected volatility
54%
187%
Expected dividend yield
\u2013
\u2013
Share price at grant date
\u00a30.89
\u00a31.17
Exercise price
\u00a30.00
\u00a30.00
2025
SVAP
Share price at grant date
119p
Baseline market capitalisation
\u00a3538.4 million
Volatility
0.35
Risk-free interest rate
0.04
Dividend yield
\u00a30.00
Performance period
to 31 December 2029
Discount for post-vesting holding period
0.081
Exercise price
\u00a30.00
Volatility for CSOP and DVRP schemes has been estimated by taking the historical volatility
in the Group\u2019s share price since we listed in 2016. Volatility on the SVAP and LTIP schemes has
considered a shorter term, more reflective of the expected future volatility and adjusted for
additional considerations including the volatility of similar FTSE 250 companies.
An assumption is also made in respect of how many shares will lapse due to the vesting
criteria not being met. For awards granted since 2022, the lapse assumption has been set
to 0% on the basis these have only been made to members of the Executive Committee.
The fair value charges recognised in the income statement for these schemes are adjusted
annually to reflect actual lapses. For all other schemes the assumption is updated annually.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-409": { "value": "Accounting policy The grant date fair value of options awarded to colleagues is recognised as an expense over the period in which colleagues become unconditionally entitled to the options. The expense (representing the value of the services received by us) is measured by reference to the fair value of the awards granted on the date of the grant. The cost of the colleague services received in respect of the awards granted is recognised in the consolidated income statement over the period that the services are received, which is the vesting period. Graded vesting is applied where relevant. Vesting conditions are limited to service conditions and performance conditions. For performance-based schemes, the relevant performance measures are projected to the end of the performance period in order to determine the number of options expected to vest. This estimate of the performance measures is used to determine the option fair value, discounted to present value. The Group revises the number of options that are expected to vest, including an estimate of forfeitures at each reporting date based on forecast performance measures. The impact of the revision to original estimates, if any, is recognised in the income statement, with a corresponding adjustment to equity. The fair value of colleague awards plans is calculated at the grant date using a Black-Scholes and Monte Carlo model. The resulting cost is charged to the income statement over the vesting period. The value of the charge is adjusted to reflect expected and actual levels of vesting. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-372": { "value": "30. Expected credit loss Accounting policy We assess on a forward-looking basis, the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date. Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly. Risk of default and ECL must incorporate forward-looking and macroeconomic information. Loans and advances Sophisticated impairment models have been developed for our retail and corporate and commercial loan portfolios, with three core models: revolving products; fixed term loans; and mortgages. Expected credit losses are calculated for drawn loans, and for committed lending. The same broad calculation approach is applied for each core model. ECL is calculated by multiplying three main components, being the PD, LGD and the EAD, discounted at the original effective interest rate. Key model inputs, judgements and estimates include: \u2022 consideration of when a SICR occurs \u2022 PD, LGD and EAD as well as their modelled impact \u2022 macroeconomic scenarios and weightings applied. Significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:
Stage
Description
ECL recognised
Stage 1
Financial assets that have had no significant increase in credit risk since initial
12-month ECL
recognition or that have low credit risk (high-quality investment securities only) at the Total losses expected on defaults which may occur within the next 12 months. Losses
reporting date. are adjusted for probability-weighted macroeconomic scenarios.
Stage 2
Financial assets that have had a significant increase in credit risk since initial recognition
Lifetime ECL
but that do not have objective evidence of impairment. Losses expected on defaults which may occur at any point in a loan\u2019s lifetime. Losses are
In addition, for corporate and commercial counterparties, the Early Warning List is used adjusted for probability-weighted macroeconomic scenarios.
to inform qualitative triggers for SICR.
SICR includes the rebuttable presumption that financial instruments falling 30 DPD
due on contractually defined payments are to be considered as having deteriorated
significantly since origination and should trigger Stage 2.
Stage 3
Financial assets that are credit impaired at the reporting date. A financial asset is
Lifetime ECL
credit impaired when it has met the definition of default. We define default to have Losses calculated based on default parameters. Losses are adjusted for probability-
occurred when a loan is greater than 90 days past due (non-performing loan) or where weighted macroeconomic scenarios.
the borrower is considered unlikely to pay. This includes customers in corporate and
commercial who are categorised as Early Warning List 3 (EWL3) or forbearance. Interest income is calculated on the carrying amount of the loan net of credit allowance.
Purchased or originated Financial assets that have been purchased and had objective evidence of being \u2018non- Lifetime ECL
credit-impaired performing\u2019 or \u2018credit impaired\u2019 at the point of purchase. At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
(POCI) assets are incorporated into the calculation of the asset\u2019s effective interest rate. Subsequent
changes to the estimate of lifetime ECL are recognised as a loss allowance.
A SICR may be identified in a number of ways: \u2022 Quantitative criteria \u2013 where the numerically calculated PD on a loan has increased significantly since initial recognition. This is assessed using detailed models which assess whether the lifetime PD at observation is greater than the lifetime PD at origination by a portfolio specific threshold. Given the different nature of the products and the dissimilar level of lifetime PDs at origination, we implement different thresholds by sub-products within each portfolio (term loans, revolving loan facilities and mortgages). \u2022 Qualitative criteria \u2013 instruments that are 30 days past due or more are allocated to Stage 2, regardless of the results of the quantitative analysis. In addition, instruments classified on the Early Warning List as higher risk are allocated to Stage 2, regardless of the results of the quantitative analysis. A loan will be considered to be \u2018non-performing\u2019 or \u2018credit impaired\u2019 when it meets our definition of default \u2013 that is to say, the loan is 90 days past due, or the borrower is considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed through the presence of triggers including the loan being in repossession, the customer having been declared bankrupt, or evidence of financial distress leading to forbearance. A loan may also be considered to be non-performing when it is subject to forbearance measures, consisting of concessions in relation to either: \u2022 a modification of the previous terms and conditions of the loan which the borrower is not considered able to comply with \u2022 a total or partial refinancing of a troubled debt contract that would not have been granted had the borrower not been in financial difficulties. It may not be possible to identify a single discrete event which defines an asset as \u2018non-performing\u2019 or \u2018credit impaired\u2019. Instead, the combined effect of several events may cause financial assets to become credit impaired. A probation period of at least three months is implemented before transferring a financial instrument to a lower stage (e.g. from Stage 3 to Stage 2). Specifically, in order to move an account from Stage 3, where an asset is showing improving trends and is no longer considered non-performing or credit impaired. Probability of default (PD) PD represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the loan (for Stage 2 and 3 accounts). A PD is calculated for all loans based on historical data and incorporates: \u2022 credit quality scores \u2022 life cycle trends depending on a loan\u2019s vintage \u2022 factors indicating the quality of the vintage \u2022 characteristics of the current and future economic environment. Loss given default (LGD) LGD represents our expectation of the extent of a loss on a defaulted exposure and is expressed as a percentage considering expected recoveries on defaulted accounts. We apply two LGD rates \u2013 one for unsecured lending and one for secured lending. LGD rates have been modelled considering a range of inputs, including: \u2022 value of collateral on secured portfolios \u2013 a key driver of the expected recovery in the event of default \u2022 expected haircut applied to the collateral value to reflect a forced sale discount \u2022 price index forecasts applied to project collateral values into the future \u2022 stress factors based on macroeconomic scenarios. Exposure at default (EAD) This is the amount that we expect to be owed at the point of default. This is subject to judgement since a balance will not necessarily remain static between the balance sheet date and the point of expected default. For example: \u2022 interest should be accrued \u2022 repayments may be received \u2022 for a revolving product, further drawings may be taken between the current point in time and the point of default \u2022 estimations of these factors will be incorporated into our estimate of EAD. PD, LGD and EAD are calculated and applied at an individual account level for secured lending. For unsecured lending, PD and EAD are calculated and applied at an individual account level, but LGD is assessed at a portfolio level and applied to accounts on an individual basis. Macroeconomic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios and including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL, and are designed to capture material \u2018non-linearities\u2019 (i.e. where the increase in credit losses if conditions deteriorate exceeds the decrease in credit losses if conditions improve). In the normal course of business, we use four scenarios. These represent a \u2018most likely outcome\u2019 (the \u2018Baseline\u2019 scenario) and three, less likely, \u2018Outer\u2019 scenarios, referred to as an \u2018Upside\u2019, a \u2018Downside\u2019 and a \u2018Severe downside\u2019 scenario respectively. The Baseline scenario captures the most likely economic future; the Downside and Severe Downside scenarios reflect adverse economic conditions; and the Upside scenario presents more favourable economic conditions. Key scenario assumptions are set using data sourced from independent external economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the use of independent information. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied as at 31 December 2025 and 31 December 2024: \u2022 UK interest rates (Bank of England Base Rate and five-year mortgage rate) \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics are considered to have a direct impact on PDs and were selected following a search and data calibration exercise of possible drivers. A list of around 15 potential drivers were initially considered, representing drivers which capture trends in the economy at large, and may indicate economic trends which will impact UK borrowers. The list included variables which impact economic output, interest rates, inflation, share prices, borrower income and the UK housing market. An algorithm was then used to choose the subset of drivers which had the greatest significance and predictive fit to our data. Each scenario was determined by flexing the Baseline scenario, taking into account a number of factors in the global and UK economy such as commodity prices, global interest rates, UK investment spend and exchange rates, as well as the possible impact of recessionary conditions or financial shocks. A simulation process was designed to determine the weighting to apply to each scenario based on its severity and the range of possible scenarios for which that scenario was representative. A summary of each scenario and weighting used at 31 December 2025 is as follows: \u2022 Baseline scenario: Reflects the projection of the median, or \u201850%\u2019 scenario, meaning that in the assessment there is an equal probability that the economy might perform better or worse than the baseline forecast \u2022 Upside scenario: This above-baseline scenario is designed so there is a 10% probability the economy will perform better than in this scenario, broadly speaking, and a 90% probability it will perform worse \u2022 Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 90% probability the economy will perform better, broadly speaking, and a 10% probability it will perform worse \u2022 Severe downside scenario: In this recession scenario, in which a deep downturn develops, there is a 96% probability the economy will perform better, broadly speaking, and a 4% probability it will perform worse. These assumptions are considered sufficient to capture any material non-linearities. The weightings applied to each scenario at 31 December 2025 were Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5% (31 December 2024: Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5%). Economic variable assumptions The period-end assumptions used for the ECL estimate as at 31 December 2025 are as follows:
31 December 2025
31 December 2024
Macroeconomic variable
Scenario
2026
2027
2028
2029
2030
2025
2026
2027
2028
2029
Five-year mortgage rate (%)
Baseline
4.16%
4.14%
4.11%
4.07%
4.05%
4.51%
4.24%
3.95%
3.96%
4.00%
Upside
4.37%
4.23%
4.10%
4.07%
4.05%
4.74%
4.25%
3.95%
3.95%
4.00%
Downside
2.61%
2.13%
2.63%
3.30%
3.84%
3.51%
2.41%
2.44%
3.09%
3.71%
Severe downside
2.19%
1.67%
2.03%
2.54%
3.31%
2.81%
2.08%
1.96%
2.43%
3.29%
BoE interest rate (%)
Baseline
3.25%
2.75%
2.75%
2.50%
2.50%
4.10%
2.75%
2.50%
2.50%
2.50%
Upside
3.46%
3.16%
2.87%
2.50%
2.50%
4.28%
2.97%
2.56%
2.50%
2.50%
Downside
1.94%
1.04%
1.25%
1.60%
1.95%
2.71%
1.11%
1.38%
1.72%
1.95%
Severe downside
1.36%
0.70%
0.70%
0.83%
1.04%
2.13%
0.76%
0.75%
0.94%
1.04%
Unemployment (%)
Baseline
5.11%
5.00%
4.93%
4.89%
4.89%
4.41%
4.50%
4.59%
4.67%
4.76%
Upside
4.47%
4.14%
4.12%
4.28%
4.49%
3.78%
3.64%
3.78%
4.07%
4.36%
Downside
7.01%
7.72%
7.60%
7.10%
6.40%
6.32%
7.22%
7.25%
6.89%
6.27%
Severe downside
8.24%
8.82%
8.54%
8.20%
7.46%
7.55%
8.32%
8.19%
7.99%
7.33%
House price index (YoY%)
Baseline
2.13%
2.32%
1.57%
1.93%
2.45%
2.24%
3.89%
2.62%
1.47%
2.07%
Upside
16.49%
5.41%
(0.97% )
(2.13% )
0.11%
16.62%
7.03%
0.06%
(2.57% )
(0.26% )
Downside
(9.11% )
(7.05% )
0.83%
4.69%
5.76%
(9.01% )
(5.62% )
1.88%
4.22%
5.37%
Severe downside
(15.29% )
(10.96% )
1.24%
3.37%
5.03%
(15.20% )
(9.60% )
2.29%
2.91%
4.64%
UK GDP (YoY%)
Baseline
1.35%
1.52%
1.65%
1.73%
1.73%
2.08%
1.18%
2.07%
1.43%
1.87%
Upside
4.89%
1.77%
1.60%
1.76%
1.94%
5.65%
1.42%
2.02%
1.46%
2.08%
Downside
(3.95% )
1.82%
2.80%
1.79%
1.65%
(3.50% )
1.49%
3.28%
1.43%
1.79%
Severe downside
(4.85% )
0.56%
3.96%
2.45%
1.61%
(4.61% )
0.15%
4.56%
2.26%
1.85%
Commercial real estate (YoY%)
Baseline
(1.12% )
(0.22% )
(0.35% )
(0.25% )
(0.16% )
(0.86% )
0.45%
(0.31% )
(1.34% )
(1.04% )
Upside
13.82%
1.57%
(3.16% )
(4.11% )
(2.20% )
14.42%
2.33%
(3.27% )
(5.24% )
(3.08% )
Downside
(15.91% )
(6.47% )
0.64%
3.17%
3.66%
(16.02% )
(5.62% )
0.83%
1.97%
2.75%
Severe downside
(25.20% )
(8.51% )
2.48%
2.37%
3.97%
(25.06% )
(8.49% )
2.57%
1.24%
3.06%
Following the initial four-year projection period, the Upside, Downside and Severe downside scenarios converge to the Baseline scenario. The rate of convergence varies based on the macroeconomic factor, but at a minimum convergence takes place three years from the initial four-year projection period. We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL in all economic environments. The scenarios applied comprise our best estimate of economic impacts on the ECL, and the actual outcome may be significantly different. Critical accounting judgement Measurement of the expected credit loss allowance The measurement of ECL is complex and involves the use of significant judgements. We consider that the following represent key judgements in respect of the measurement of the ECL. Measurement of the expected credit loss allowance \u2013 significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans as a lifetime ECL is recognised compared to a 12-month ECL for performing loans. This is considered based on a staging approach. Financial assets that have had no SICR since initial recognition, or that have low credit risk at the reporting date, are considered to be performing loans and are classified as \u2018Stage 1\u2019. Losses are calculated based on our expectation of defaults which may occur within the next 12 months. Assets which are considered to have experienced a SICR since initial recognition, but that do not have objective evidence of impairment, are classified as \u2018Stage 2\u2019. Losses are calculated based on defaults which may occur at any point in the asset\u2019s lifetime. Judgement is required to determine when a SICR has occurred. An assessment of whether credit risk has increased significantly since initial recognition, resulting in transfer to Stage 2, is performed at each reporting period by considering the change in the PD expected over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the PD occurring at the reporting date compared to that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions. Measurement of the expected credit loss allowance \u2013 use of post model adjustments and Management Overlays We have applied expert judgement to the measurement of the ECL in the form of post model adjustments and Management Overlays. Post model adjustments refer to increases/decreases in ECL to address known model limitations, either in model methodology or model inputs. These rely on analysis of model inputs and parameters to determine the change required to improve model accuracy. These may be applied at an aggregated level, however they will usually be applied at account level. Management Overlays reflect management judgement. These rely more heavily on expert judgement and will usually be applied at an aggregated level. For example, where recent changes in market and economic conditions have not yet been captured in the macroeconomic factor inputs to models (e.g., industry-specific stress event). PMAs have been reassessed during the period to ensure an appropriate level of ECL that continues to account for the macroeconomic uncertainty. The level of PMAs increased during 2025 with the total percentage of ECL stock standing at 14% as at 31 December 2025 (31 December 2024: 10%). The increase in the PMA percentage relates to the removal of negative PMAs following model enhancements and the reduction in the overall ECL stock due to portfolio sales. There are no Management Overlays being used as at 31 December 2025. PMAs make up \u00a324.3 million of the ECL stock as at 31 December 2025 (31 December 2024: \u00a318.7 million) and comprise the following: \u2022 Macro correlation uncertainty \u2013 applied to address the risk that the Commercial PD model may under-reflect macroeconomic sensitivity. (31 December 2025: \u00a312.3 million; 31 December 2024: \u00a311.5 million). The adjustment is informed by PD \u2013 Observed Default Rate monitoring, the limited maturity of the expanded 2025 portfolio, and expert judgement on how macro-relationships may normalise. The adjustment is reviewed quarterly, with reduction considered once sufficient post-origination performance evidence becomes available \u2022 Commercial model enhancements \u2013 held in anticipation of model updates for the corporate and commercial portfolio (31 December 2025: \u00a36.01 million; 31 December 2024: \u00a34.6 million). The increase in the overlay over the period is to reflect the impact from the Enhanced Business Overdrafts portfolio growth which utilises the IFRS 9 commercial models as a proxy for ECL assessment \u2022 Mortgage model and data enhancements \u2013 will be removed once the model and data enhancements are implemented into production (31 December 2025: \u00a32.9 million; 31 December 2024: \u00a32.9 million) \u2022 Climate change impact \u2013 reflects the impact of climate change on property values for the mortgage and corporate and commercial portfolios (31 December 2025: \u00a32.8 million; 31 December 2024: \u00a32.8 million) \u2022 Commercial real estate adjustment \u2013 reflects potential downside risk in property price indices beyond the latest scenarios for the corporate and commercial property portfolios (31 December 2025: \u00a30.3 million; 31 December 2024: \u00a30.7 million). Critical accounting estimate Measurement of the expected credit loss allowance We consider that the key source of estimation uncertainty relates to the formulation and incorporation of multiple forward-looking economic scenarios into the ECL estimates to meet the measurement objective of IFRS 9. Multiple forward-looking economic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios, including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied: \u2022 UK interest rates \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. The weightings applied to each scenario at 31 December 2025 and 31 December 2024 are:
Full year Full year
31 December 31 December
2025 2024
Scenarios % %
Baseline
50%
50%
Upside
20%
20%
Downside
25%
25%
Severe downside
5%
5%
The weightings used are reviewed each reporting period to ensure these remain appropriate and as such are considered to represent significant accounting estimates. We have performed an assessment of the impact on the ECL if each of the Baseline, Upside, Downside and Severe downside scenarios were applied to the ECL calculation using a 100% weighting (that is, ignoring all other scenarios in each case):
31 December 2025
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
32
18
120
170
Baseline
29
15
118
162
Upside
25
13
116
154
Downside
40
24
126
190
Severe downside
45
32
129
206
31 December 2024
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
39
29
123
191
Baseline
36
26
121
183
Upside
33
23
120
176
Downside
44
37
129
210
Severe downside
48
50
132
230
The sensitivities disclosed above represent example scenarios and may not represent actual scenarios which occur in the future. If one of these scenarios did arise then at that time the ECL would not equal the amount disclosed above, as the amounts disclosed do not take account of the alternative possible scenarios which would also be considered at that time. Individually assessed Stage 3 cases have not been sensitised. Write-off policy We write off financial assets (either partially or fully) when there is no realistic expectation of receiving further payment from the customer. Indicators that there is no reasonable expectation of recovery include debt sale to a third party and ceasing enforcement activity. We may write off financial assets that are still subject to enforcement activity. Expected credit loss expense
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Retail mortgages
1
(4)
Consumer lending
1
(9)
\u2013
Commercial lending
19
(4)
Write-offs and other movements
3
15
Tota l
14
7
1. Adjusted for the \u00a3584 million sale of unsecured personal loans. Write-offs and other movements are predominantly driven by loan and debt sales within the year. Investment securities All investment securities held at FVOCI are deemed to be in Stage 1. Any credit loss allowance is, however, included as part of the revaluation amount in the FVOCI reserve. At 31 December 2025, the loss allowance included within the FVOCI reserve is \u00a30.1 million (31 December 2024: \u00a30.1 million). All investment securities held at amortised cost are deemed to be in Stage 1. The total ECL expense recognised for these assets at 31 December 2025 is \u00a30.8 million (31 December 2024: \u00a30.6 million). The following tables explain the changes in both the gross carrying amount and loss allowances of our loans and advances during the year. Total
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Transfers to/(from) Stage 1
1
301
(288)
(13)
\u2013
\u2013
(8)
7
1
\u2013
\u2013
293
(281)
(12)
\u2013
\u2013
Transfers to/(from) Stage 2
(281)
285
(3)
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(279)
283
(3)
\u2013
1
Transfers to/(from) Stage 3
(111)
(37)
148
\u2013
\u2013
\u2013
3
(4)
\u2013
(1)
(111)
(34)
144
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
7
(8)
(23)
\u2013
(24)
7
(8)
(23)
\u2013
(24)
New lending
3
2,228
94
2
\u2013
2,324
(14)
(1)
(1)
\u2013
(16)
2,214
93
1
\u2013
2,308
Repayments, additional drawdowns
and interest accrued
(384)
(36)
(20)
\u2013
(440)
\u2013
\u2013
\u2013
\u2013
\u2013
(384)
(36)
(20)
\u2013
(440)
Derecognitions
4
(1,657)
(283)
(156)
\u2013
(2,096)
15
10
33
\u2013
58
(1,642)
(273)
(123)
\u2013
(2,038)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
5
2
(3)
\u2013
4
5
2
(3)
\u2013
4
31 December 2025
7,819
713
462
(1)
8,993
(32)
(18)
(121)
1
(170)
7,787
695
341
\u2013
8,823
Off-balance sheet items
Commitments and guarantees
6
1,041
\u2013
1,041
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
10,596
1,511
389
\u2013
12,496
(63)
(43)
(93)
\u2013
(199)
10,533
1,468
296
\u2013
12,297
Transfers to/(from) Stage 1
1
385
(368)
(17)
\u2013
\u2013
(11)
10
1
\u2013
\u2013
374
(358)
(16)
\u2013
\u2013
Transfers to/(from) Stage 2
(409)
416
(7)
\u2013
\u2013
2
(2)
\u2013
\u2013
\u2013
(407)
414
(7)
\u2013
\u2013
Transfers to/(from) Stage 3
(192)
(100)
292
\u2013
\u2013
4
7
(11)
\u2013
\u2013
(188)
(93)
281
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
9
(14)
(40)
\u2013
(45)
9
(14)
(40)
\u2013
(45)
New lending
3
1,716
147
1
\u2013
1,864
(11)
(3)
(1)
\u2013
(15)
1,704
144
\u2013
\u2013
1,849
Repayments, additional drawdowns
and interest accrued
(618)
(121)
(33)
(1)
(773)
\u2013
\u2013
\u2013
\u2013
\u2013
(618)
(121)
(33)
(1)
(773)
Derecognitions
4
(3,755)
(507)
(121)
\u2013
(4,383)
11
11
20
\u2013
42
(3,744)
(496)
(101)
\u2013
(4,341)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
20
5
(1)
1
25
20
5
(1)
1
25
31 December 2024
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Off-balance sheet items
Commitments and guarantees
6
718
\u2013
718
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer. In addition it includes any ECL change resulting from model assumptions and forward-looking information on these loans. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed as well as any ECL that has been recognised in relation to these loans during the year. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, sold or written off. 5. Represents the change in ECL to those loans that remain within the same stage through the year. 6. Represents undrawn lending facilities. Further details can be found in note 31. Consumer lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
Transfers to/(from) Stage 1
1
7
(6)
(1)
\u2013
\u2013
(2)
1
1
\u2013
\u2013
5
(5)
\u2013
\u2013
\u2013
Transfers to/(from) Stage 2
(1)
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(1)
(4)
5
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(1)
(3)
4
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
\u2013
(3)
\u2013
(1)
2
\u2013
(3)
\u2013
(1)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(12)
\u2013
(5)
\u2013
(17)
\u2013
\u2013
\u2013
\u2013
\u2013
(12)
\u2013
(5)
\u2013
(17)
Derecognitions
4
(456)
(140)
(22)
\u2013
(618)
11
6
20
\u2013
37
(445)
(134)
(2)
\u2013
(581)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
4
\u2013
5
1
\u2013
4
\u2013
5
31 December 2025
37
4
74
(1)
114
\u2013
(1)
(67)
1
(67)
37
3
7
\u2013
47
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
906
314
77
\u2013
1,297
(26)
(16)
(66)
\u2013
(108)
880
298
11
\u2013
1,189
Transfers to/(from) Stage 1
1
80
(79)
(1)
\u2013
\u2013
(3)
3
\u2013
\u2013
\u2013
77
(76)
(1)
\u2013
\u2013
Transfers to/(from) Stage 2
(74)
74
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(73)
73
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(27)
(14)
41
\u2013
\u2013
1
4
(5)
\u2013
\u2013
(26)
(10)
36
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
(4)
(25)
\u2013
(27)
2
(4)
(25)
\u2013
(27)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(226)
(83)
(10)
(1)
(320)
\u2013
\u2013
\u2013
\u2013
\u2013
(226)
(83)
(10)
(1)
(320)
Derecognitions
4
(167)
(59)
(10)
\u2013
(236)
4
2
9
\u2013
15
(163)
(57)
(1)
\u2013
(221)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
9
3
(1)
1
12
9
3
(1)
1
12
31 December 2024
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile. Corporate and commercial lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
Transfers to/(from) Stage 1
1
82
(80)
(2)
\u2013
\u2013
(5)
5
\u2013
\u2013
\u2013
77
(75)
(2)
\u2013
\u2013
Transfers to/(from) Stage 2
(138)
139
\u2013
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(136)
137
\u2013
\u2013
1
Transfers to/(from) Stage 3
(62)
(9)
71
\u2013
\u2013
\u2013
1
(2)
\u2013
(1)
(62)
(8)
69
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
4
(7)
(18)
\u2013
(21)
4
(7)
(18)
\u2013
(21)
New lending
3
1,619
28
1
\u2013
1,648
(13)
(1)
(1)
\u2013
(15)
1,606
27
\u2013
\u2013
1,633
Repayments, additional drawdowns and interest
accrued
(265)
(27)
(16)
\u2013
(308)
\u2013
\u2013
\u2013
\u2013
\u2013
(265)
(27)
(16)
\u2013
(308)
Derecognitions
4
(547)
(79)
(90)
\u2013
(716)
4
4
11
\u2013
19
(543)
(75)
(79)
\u2013
(697)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
4
2
(7)
\u2013
(1)
4
2
(7)
\u2013
(1)
31 December 2025
3,558
213
168
\u2013
3,939
(27)
(14)
(46)
\u2013
(87)
3,531
199
122
\u2013
3,852
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,803
413
166
\u2013
3,382
(30)
(21)
(21)
\u2013
(72)
2,773
392
145
\u2013
3,310
Transfers to/(from) Stage 1
1
159
(151)
(8)
\u2013
\u2013
(7)
6
1
\u2013
\u2013
152
(145)
(7)
\u2013
\u2013
Transfers to/(from) Stage 2
(164)
169
(5)
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(163)
168
(5)
\u2013
\u2013
Transfers to/(from) Stage 3
(112)
(40)
152
\u2013
\u2013
3
2
(5)
\u2013
\u2013
(109)
(38)
147
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
6
(9)
(13)
\u2013
(16)
6
(9)
(13)
\u2013
(16)
New lending
3
985
21
1
\u2013
1,007
(10)
(1)
(1)
\u2013
(12)
975
20
\u2013
\u2013
994
Repayments, additional drawdowns and interest
accrued
(279)
(26)
(24)
\u2013
(329)
\u2013
\u2013
\u2013
\u2013
\u2013
(279)
(26)
(24)
\u2013
(329)
Derecognitions
4
(522)
(145)
(78)
\u2013
(745)
4
7
9
\u2013
20
(518)
(138)
(69)
\u2013
(725)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
10
1
1
\u2013
12
10
1
1
\u2013
12
31 December 2024
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile.
Retail mortgages
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
Transfers to/(from) Stage 1
1
212
(202)
(10)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
211
(201)
(10)
\u2013
\u2013
Transfers to/(from) Stage 2
(142)
145
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(142)
145
(3)
\u2013
\u2013
Transfers to/(from) Stage 3
(48)
(24)
72
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(48)
(23)
71
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
605
66
1
\u2013
672
(1)
\u2013
\u2013
\u2013
(1)
604
66
1
\u2013
671
Repayments, additional drawdowns and interest
accrued
(107)
(9)
1
\u2013
(115)
\u2013
\u2013
\u2013
\u2013
\u2013
(107)
(9)
1
\u2013
(115)
Derecognitions
4
(654)
(64)
(44)
\u2013
(762)
\u2013
\u2013
2
\u2013
2
(654)
(64)
(42)
\u2013
(760)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
31 December 2025
4,224
496
220
\u2013
4,940
(5)
(3)
(8)
\u2013
(16)
4,219
493
212
\u2013
4,924
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
6,887
784
146
\u2013
7,817
(7)
(6)
(6)
\u2013
(19)
6,880
778
140
\u2013
7,798
Transfers to/(from) Stage 1
1
146
(138)
(8)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
145
(137)
(8)
\u2013
\u2013
Transfers to/(from) Stage 2
(171)
173
(2)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(171)
173
(2)
\u2013
\u2013
Transfers to/(from) Stage 3
(53)
(46)
99
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(53)
(45)
98
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
728
126
\u2013
\u2013
854
(1)
(2)
\u2013
\u2013
(3)
726
124
\u2013
\u2013
851
Repayments, additional drawdowns and interest
accrued
(113)
(13)
1
\u2013
(124)
\u2013
\u2013
\u2013
\u2013
\u2013
(113)
(12)
1
\u2013
(124)
Derecognitions
4
(3,066)
(303)
(33)
\u2013
(3,402)
3
2
2
\u2013
7
(3,063)
(301)
(31)
\u2013
(3,395)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
\u2013
\u2013
2
1
1
\u2013
\u2013
2
31 December 2024
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
1. Represents stage transfers prior to any ECL remeasurements.
2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information.
3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed.
4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off.
5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile .
Credit risk exposures Retail mortgages
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
4,221
450
59
\u2013
4,356
504
57
\u2013
1 to 29 days past due
3
17
9
\u2013
2
21
11
\u2013
30 to 89 days past due
\u2013
29
31
\u2013
\u2013
59
21
\u2013
90+ days past due
\u2013
\u2013
121
\u2013
\u2013
\u2013
114
\u2013
Gross carrying amount
4,224
496
220
\u2013
4,358
584
203
\u2013
Consumer lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
36
2
4
\u2013
496
141
2
(1)
1 to 29 days past due
\u2013
1
\u2013
\u2013
\u2013
2
1
\u2013
30 to 89 days past due
1
1
1
\u2013
\u2013
10
5
\u2013
90+ days past due
\u2013
\u2013
69
(1)
\u2013
\u2013
89
\u2013
Gross carrying amount
37
4
74
(1)
496
153
97
(1)
Corporate and commercial lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
3,544
176
78
\u2013
2,842
203
86
\u2013
1 to 29 days past due
14
28
5
\u2013
27
16
2
\u2013
30 to 89 days past due
\u2013
9
5
\u2013
\u2013
21
60
\u2013
90+ days past due
\u2013
\u2013
80
\u2013
\u2013
\u2013
56
\u2013
Gross carrying amount
3,558
213
168
\u2013
2,869
241
204
\u2013
Tota l
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
7,801
628
141
\u2013
7,693
848
145
(1)
1 to 29 days past due
17
46
14
\u2013
29
40
13
\u2013
30 to 89 days past due
1
39
37
\u2013
\u2013
90
87
\u2013
90+ days past due
\u2013
\u2013
270
(1)
\u2013
\u2013
260
\u2013
Gross carrying amount
7,819
713
462
(1)
7,722
978
505
(1)
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-355": { "value": "30. Expected credit loss Accounting policy We assess on a forward-looking basis, the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date. Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly. Risk of default and ECL must incorporate forward-looking and macroeconomic information. Loans and advances Sophisticated impairment models have been developed for our retail and corporate and commercial loan portfolios, with three core models: revolving products; fixed term loans; and mortgages. Expected credit losses are calculated for drawn loans, and for committed lending. The same broad calculation approach is applied for each core model. ECL is calculated by multiplying three main components, being the PD, LGD and the EAD, discounted at the original effective interest rate. Key model inputs, judgements and estimates include: \u2022 consideration of when a SICR occurs \u2022 PD, LGD and EAD as well as their modelled impact \u2022 macroeconomic scenarios and weightings applied. Significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:
Stage
Description
ECL recognised
Stage 1
Financial assets that have had no significant increase in credit risk since initial
12-month ECL
recognition or that have low credit risk (high-quality investment securities only) at the Total losses expected on defaults which may occur within the next 12 months. Losses
reporting date. are adjusted for probability-weighted macroeconomic scenarios.
Stage 2
Financial assets that have had a significant increase in credit risk since initial recognition
Lifetime ECL
but that do not have objective evidence of impairment. Losses expected on defaults which may occur at any point in a loan\u2019s lifetime. Losses are
In addition, for corporate and commercial counterparties, the Early Warning List is used adjusted for probability-weighted macroeconomic scenarios.
to inform qualitative triggers for SICR.
SICR includes the rebuttable presumption that financial instruments falling 30 DPD
due on contractually defined payments are to be considered as having deteriorated
significantly since origination and should trigger Stage 2.
Stage 3
Financial assets that are credit impaired at the reporting date. A financial asset is
Lifetime ECL
credit impaired when it has met the definition of default. We define default to have Losses calculated based on default parameters. Losses are adjusted for probability-
occurred when a loan is greater than 90 days past due (non-performing loan) or where weighted macroeconomic scenarios.
the borrower is considered unlikely to pay. This includes customers in corporate and
commercial who are categorised as Early Warning List 3 (EWL3) or forbearance. Interest income is calculated on the carrying amount of the loan net of credit allowance.
Purchased or originated Financial assets that have been purchased and had objective evidence of being \u2018non- Lifetime ECL
credit-impaired performing\u2019 or \u2018credit impaired\u2019 at the point of purchase. At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
(POCI) assets are incorporated into the calculation of the asset\u2019s effective interest rate. Subsequent
changes to the estimate of lifetime ECL are recognised as a loss allowance.
A SICR may be identified in a number of ways: \u2022 Quantitative criteria \u2013 where the numerically calculated PD on a loan has increased significantly since initial recognition. This is assessed using detailed models which assess whether the lifetime PD at observation is greater than the lifetime PD at origination by a portfolio specific threshold. Given the different nature of the products and the dissimilar level of lifetime PDs at origination, we implement different thresholds by sub-products within each portfolio (term loans, revolving loan facilities and mortgages). \u2022 Qualitative criteria \u2013 instruments that are 30 days past due or more are allocated to Stage 2, regardless of the results of the quantitative analysis. In addition, instruments classified on the Early Warning List as higher risk are allocated to Stage 2, regardless of the results of the quantitative analysis. A loan will be considered to be \u2018non-performing\u2019 or \u2018credit impaired\u2019 when it meets our definition of default \u2013 that is to say, the loan is 90 days past due, or the borrower is considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed through the presence of triggers including the loan being in repossession, the customer having been declared bankrupt, or evidence of financial distress leading to forbearance. A loan may also be considered to be non-performing when it is subject to forbearance measures, consisting of concessions in relation to either: \u2022 a modification of the previous terms and conditions of the loan which the borrower is not considered able to comply with \u2022 a total or partial refinancing of a troubled debt contract that would not have been granted had the borrower not been in financial difficulties. It may not be possible to identify a single discrete event which defines an asset as \u2018non-performing\u2019 or \u2018credit impaired\u2019. Instead, the combined effect of several events may cause financial assets to become credit impaired. A probation period of at least three months is implemented before transferring a financial instrument to a lower stage (e.g. from Stage 3 to Stage 2). Specifically, in order to move an account from Stage 3, where an asset is showing improving trends and is no longer considered non-performing or credit impaired. Probability of default (PD) PD represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the loan (for Stage 2 and 3 accounts). A PD is calculated for all loans based on historical data and incorporates: \u2022 credit quality scores \u2022 life cycle trends depending on a loan\u2019s vintage \u2022 factors indicating the quality of the vintage \u2022 characteristics of the current and future economic environment. Loss given default (LGD) LGD represents our expectation of the extent of a loss on a defaulted exposure and is expressed as a percentage considering expected recoveries on defaulted accounts. We apply two LGD rates \u2013 one for unsecured lending and one for secured lending. LGD rates have been modelled considering a range of inputs, including: \u2022 value of collateral on secured portfolios \u2013 a key driver of the expected recovery in the event of default \u2022 expected haircut applied to the collateral value to reflect a forced sale discount \u2022 price index forecasts applied to project collateral values into the future \u2022 stress factors based on macroeconomic scenarios. Exposure at default (EAD) This is the amount that we expect to be owed at the point of default. This is subject to judgement since a balance will not necessarily remain static between the balance sheet date and the point of expected default. For example: \u2022 interest should be accrued \u2022 repayments may be received \u2022 for a revolving product, further drawings may be taken between the current point in time and the point of default \u2022 estimations of these factors will be incorporated into our estimate of EAD. PD, LGD and EAD are calculated and applied at an individual account level for secured lending. For unsecured lending, PD and EAD are calculated and applied at an individual account level, but LGD is assessed at a portfolio level and applied to accounts on an individual basis. Macroeconomic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios and including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL, and are designed to capture material \u2018non-linearities\u2019 (i.e. where the increase in credit losses if conditions deteriorate exceeds the decrease in credit losses if conditions improve). In the normal course of business, we use four scenarios. These represent a \u2018most likely outcome\u2019 (the \u2018Baseline\u2019 scenario) and three, less likely, \u2018Outer\u2019 scenarios, referred to as an \u2018Upside\u2019, a \u2018Downside\u2019 and a \u2018Severe downside\u2019 scenario respectively. The Baseline scenario captures the most likely economic future; the Downside and Severe Downside scenarios reflect adverse economic conditions; and the Upside scenario presents more favourable economic conditions. Key scenario assumptions are set using data sourced from independent external economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the use of independent information. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied as at 31 December 2025 and 31 December 2024: \u2022 UK interest rates (Bank of England Base Rate and five-year mortgage rate) \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics are considered to have a direct impact on PDs and were selected following a search and data calibration exercise of possible drivers. A list of around 15 potential drivers were initially considered, representing drivers which capture trends in the economy at large, and may indicate economic trends which will impact UK borrowers. The list included variables which impact economic output, interest rates, inflation, share prices, borrower income and the UK housing market. An algorithm was then used to choose the subset of drivers which had the greatest significance and predictive fit to our data. Each scenario was determined by flexing the Baseline scenario, taking into account a number of factors in the global and UK economy such as commodity prices, global interest rates, UK investment spend and exchange rates, as well as the possible impact of recessionary conditions or financial shocks. A simulation process was designed to determine the weighting to apply to each scenario based on its severity and the range of possible scenarios for which that scenario was representative. A summary of each scenario and weighting used at 31 December 2025 is as follows: \u2022 Baseline scenario: Reflects the projection of the median, or \u201850%\u2019 scenario, meaning that in the assessment there is an equal probability that the economy might perform better or worse than the baseline forecast \u2022 Upside scenario: This above-baseline scenario is designed so there is a 10% probability the economy will perform better than in this scenario, broadly speaking, and a 90% probability it will perform worse \u2022 Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 90% probability the economy will perform better, broadly speaking, and a 10% probability it will perform worse \u2022 Severe downside scenario: In this recession scenario, in which a deep downturn develops, there is a 96% probability the economy will perform better, broadly speaking, and a 4% probability it will perform worse. These assumptions are considered sufficient to capture any material non-linearities. The weightings applied to each scenario at 31 December 2025 were Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5% (31 December 2024: Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5%). Economic variable assumptions The period-end assumptions used for the ECL estimate as at 31 December 2025 are as follows:
31 December 2025
31 December 2024
Macroeconomic variable
Scenario
2026
2027
2028
2029
2030
2025
2026
2027
2028
2029
Five-year mortgage rate (%)
Baseline
4.16%
4.14%
4.11%
4.07%
4.05%
4.51%
4.24%
3.95%
3.96%
4.00%
Upside
4.37%
4.23%
4.10%
4.07%
4.05%
4.74%
4.25%
3.95%
3.95%
4.00%
Downside
2.61%
2.13%
2.63%
3.30%
3.84%
3.51%
2.41%
2.44%
3.09%
3.71%
Severe downside
2.19%
1.67%
2.03%
2.54%
3.31%
2.81%
2.08%
1.96%
2.43%
3.29%
BoE interest rate (%)
Baseline
3.25%
2.75%
2.75%
2.50%
2.50%
4.10%
2.75%
2.50%
2.50%
2.50%
Upside
3.46%
3.16%
2.87%
2.50%
2.50%
4.28%
2.97%
2.56%
2.50%
2.50%
Downside
1.94%
1.04%
1.25%
1.60%
1.95%
2.71%
1.11%
1.38%
1.72%
1.95%
Severe downside
1.36%
0.70%
0.70%
0.83%
1.04%
2.13%
0.76%
0.75%
0.94%
1.04%
Unemployment (%)
Baseline
5.11%
5.00%
4.93%
4.89%
4.89%
4.41%
4.50%
4.59%
4.67%
4.76%
Upside
4.47%
4.14%
4.12%
4.28%
4.49%
3.78%
3.64%
3.78%
4.07%
4.36%
Downside
7.01%
7.72%
7.60%
7.10%
6.40%
6.32%
7.22%
7.25%
6.89%
6.27%
Severe downside
8.24%
8.82%
8.54%
8.20%
7.46%
7.55%
8.32%
8.19%
7.99%
7.33%
House price index (YoY%)
Baseline
2.13%
2.32%
1.57%
1.93%
2.45%
2.24%
3.89%
2.62%
1.47%
2.07%
Upside
16.49%
5.41%
(0.97% )
(2.13% )
0.11%
16.62%
7.03%
0.06%
(2.57% )
(0.26% )
Downside
(9.11% )
(7.05% )
0.83%
4.69%
5.76%
(9.01% )
(5.62% )
1.88%
4.22%
5.37%
Severe downside
(15.29% )
(10.96% )
1.24%
3.37%
5.03%
(15.20% )
(9.60% )
2.29%
2.91%
4.64%
UK GDP (YoY%)
Baseline
1.35%
1.52%
1.65%
1.73%
1.73%
2.08%
1.18%
2.07%
1.43%
1.87%
Upside
4.89%
1.77%
1.60%
1.76%
1.94%
5.65%
1.42%
2.02%
1.46%
2.08%
Downside
(3.95% )
1.82%
2.80%
1.79%
1.65%
(3.50% )
1.49%
3.28%
1.43%
1.79%
Severe downside
(4.85% )
0.56%
3.96%
2.45%
1.61%
(4.61% )
0.15%
4.56%
2.26%
1.85%
Commercial real estate (YoY%)
Baseline
(1.12% )
(0.22% )
(0.35% )
(0.25% )
(0.16% )
(0.86% )
0.45%
(0.31% )
(1.34% )
(1.04% )
Upside
13.82%
1.57%
(3.16% )
(4.11% )
(2.20% )
14.42%
2.33%
(3.27% )
(5.24% )
(3.08% )
Downside
(15.91% )
(6.47% )
0.64%
3.17%
3.66%
(16.02% )
(5.62% )
0.83%
1.97%
2.75%
Severe downside
(25.20% )
(8.51% )
2.48%
2.37%
3.97%
(25.06% )
(8.49% )
2.57%
1.24%
3.06%
Following the initial four-year projection period, the Upside, Downside and Severe downside scenarios converge to the Baseline scenario. The rate of convergence varies based on the macroeconomic factor, but at a minimum convergence takes place three years from the initial four-year projection period. We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL in all economic environments. The scenarios applied comprise our best estimate of economic impacts on the ECL, and the actual outcome may be significantly different. Critical accounting judgement Measurement of the expected credit loss allowance The measurement of ECL is complex and involves the use of significant judgements. We consider that the following represent key judgements in respect of the measurement of the ECL. Measurement of the expected credit loss allowance \u2013 significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans as a lifetime ECL is recognised compared to a 12-month ECL for performing loans. This is considered based on a staging approach. Financial assets that have had no SICR since initial recognition, or that have low credit risk at the reporting date, are considered to be performing loans and are classified as \u2018Stage 1\u2019. Losses are calculated based on our expectation of defaults which may occur within the next 12 months. Assets which are considered to have experienced a SICR since initial recognition, but that do not have objective evidence of impairment, are classified as \u2018Stage 2\u2019. Losses are calculated based on defaults which may occur at any point in the asset\u2019s lifetime. Judgement is required to determine when a SICR has occurred. An assessment of whether credit risk has increased significantly since initial recognition, resulting in transfer to Stage 2, is performed at each reporting period by considering the change in the PD expected over the remaining life of the financial instrument. The assessment explicitly or implicitly compares the PD occurring at the reporting date compared to that at initial recognition, taking into account reasonable and supportable information, including information about past events, current conditions and future economic conditions. Measurement of the expected credit loss allowance \u2013 use of post model adjustments and Management Overlays We have applied expert judgement to the measurement of the ECL in the form of post model adjustments and Management Overlays. Post model adjustments refer to increases/decreases in ECL to address known model limitations, either in model methodology or model inputs. These rely on analysis of model inputs and parameters to determine the change required to improve model accuracy. These may be applied at an aggregated level, however they will usually be applied at account level. Management Overlays reflect management judgement. These rely more heavily on expert judgement and will usually be applied at an aggregated level. For example, where recent changes in market and economic conditions have not yet been captured in the macroeconomic factor inputs to models (e.g., industry-specific stress event). PMAs have been reassessed during the period to ensure an appropriate level of ECL that continues to account for the macroeconomic uncertainty. The level of PMAs increased during 2025 with the total percentage of ECL stock standing at 14% as at 31 December 2025 (31 December 2024: 10%). The increase in the PMA percentage relates to the removal of negative PMAs following model enhancements and the reduction in the overall ECL stock due to portfolio sales. There are no Management Overlays being used as at 31 December 2025. PMAs make up \u00a324.3 million of the ECL stock as at 31 December 2025 (31 December 2024: \u00a318.7 million) and comprise the following: \u2022 Macro correlation uncertainty \u2013 applied to address the risk that the Commercial PD model may under-reflect macroeconomic sensitivity. (31 December 2025: \u00a312.3 million; 31 December 2024: \u00a311.5 million). The adjustment is informed by PD \u2013 Observed Default Rate monitoring, the limited maturity of the expanded 2025 portfolio, and expert judgement on how macro-relationships may normalise. The adjustment is reviewed quarterly, with reduction considered once sufficient post-origination performance evidence becomes available \u2022 Commercial model enhancements \u2013 held in anticipation of model updates for the corporate and commercial portfolio (31 December 2025: \u00a36.01 million; 31 December 2024: \u00a34.6 million). The increase in the overlay over the period is to reflect the impact from the Enhanced Business Overdrafts portfolio growth which utilises the IFRS 9 commercial models as a proxy for ECL assessment \u2022 Mortgage model and data enhancements \u2013 will be removed once the model and data enhancements are implemented into production (31 December 2025: \u00a32.9 million; 31 December 2024: \u00a32.9 million) \u2022 Climate change impact \u2013 reflects the impact of climate change on property values for the mortgage and corporate and commercial portfolios (31 December 2025: \u00a32.8 million; 31 December 2024: \u00a32.8 million) \u2022 Commercial real estate adjustment \u2013 reflects potential downside risk in property price indices beyond the latest scenarios for the corporate and commercial property portfolios (31 December 2025: \u00a30.3 million; 31 December 2024: \u00a30.7 million). Critical accounting estimate Measurement of the expected credit loss allowance We consider that the key source of estimation uncertainty relates to the formulation and incorporation of multiple forward-looking economic scenarios into the ECL estimates to meet the measurement objective of IFRS 9. Multiple forward-looking economic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios, including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied: \u2022 UK interest rates \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. The weightings applied to each scenario at 31 December 2025 and 31 December 2024 are:
Full year Full year
31 December 31 December
2025 2024
Scenarios % %
Baseline
50%
50%
Upside
20%
20%
Downside
25%
25%
Severe downside
5%
5%
The weightings used are reviewed each reporting period to ensure these remain appropriate and as such are considered to represent significant accounting estimates. We have performed an assessment of the impact on the ECL if each of the Baseline, Upside, Downside and Severe downside scenarios were applied to the ECL calculation using a 100% weighting (that is, ignoring all other scenarios in each case):
31 December 2025
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
32
18
120
170
Baseline
29
15
118
162
Upside
25
13
116
154
Downside
40
24
126
190
Severe downside
45
32
129
206
31 December 2024
Scenario
Stage 1
Stage 2
Stage 3
ECL \u00a3\u2019million
Weighted
39
29
123
191
Baseline
36
26
121
183
Upside
33
23
120
176
Downside
44
37
129
210
Severe downside
48
50
132
230
The sensitivities disclosed above represent example scenarios and may not represent actual scenarios which occur in the future. If one of these scenarios did arise then at that time the ECL would not equal the amount disclosed above, as the amounts disclosed do not take account of the alternative possible scenarios which would also be considered at that time. Individually assessed Stage 3 cases have not been sensitised. Write-off policy We write off financial assets (either partially or fully) when there is no realistic expectation of receiving further payment from the customer. Indicators that there is no reasonable expectation of recovery include debt sale to a third party and ceasing enforcement activity. We may write off financial assets that are still subject to enforcement activity. Expected credit loss expense
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Retail mortgages
1
(4)
Consumer lending
1
(9)
\u2013
Commercial lending
19
(4)
Write-offs and other movements
3
15
Tota l
14
7
1. Adjusted for the \u00a3584 million sale of unsecured personal loans. Write-offs and other movements are predominantly driven by loan and debt sales within the year. Investment securities All investment securities held at FVOCI are deemed to be in Stage 1. Any credit loss allowance is, however, included as part of the revaluation amount in the FVOCI reserve. At 31 December 2025, the loss allowance included within the FVOCI reserve is \u00a30.1 million (31 December 2024: \u00a30.1 million). All investment securities held at amortised cost are deemed to be in Stage 1. The total ECL expense recognised for these assets at 31 December 2025 is \u00a30.8 million (31 December 2024: \u00a30.6 million). The following tables explain the changes in both the gross carrying amount and loss allowances of our loans and advances during the year. Total
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Transfers to/(from) Stage 1
1
301
(288)
(13)
\u2013
\u2013
(8)
7
1
\u2013
\u2013
293
(281)
(12)
\u2013
\u2013
Transfers to/(from) Stage 2
(281)
285
(3)
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(279)
283
(3)
\u2013
1
Transfers to/(from) Stage 3
(111)
(37)
148
\u2013
\u2013
\u2013
3
(4)
\u2013
(1)
(111)
(34)
144
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
7
(8)
(23)
\u2013
(24)
7
(8)
(23)
\u2013
(24)
New lending
3
2,228
94
2
\u2013
2,324
(14)
(1)
(1)
\u2013
(16)
2,214
93
1
\u2013
2,308
Repayments, additional drawdowns
and interest accrued
(384)
(36)
(20)
\u2013
(440)
\u2013
\u2013
\u2013
\u2013
\u2013
(384)
(36)
(20)
\u2013
(440)
Derecognitions
4
(1,657)
(283)
(156)
\u2013
(2,096)
15
10
33
\u2013
58
(1,642)
(273)
(123)
\u2013
(2,038)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
5
2
(3)
\u2013
4
5
2
(3)
\u2013
4
31 December 2025
7,819
713
462
(1)
8,993
(32)
(18)
(121)
1
(170)
7,787
695
341
\u2013
8,823
Off-balance sheet items
Commitments and guarantees
6
1,041
\u2013
1,041
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
10,596
1,511
389
\u2013
12,496
(63)
(43)
(93)
\u2013
(199)
10,533
1,468
296
\u2013
12,297
Transfers to/(from) Stage 1
1
385
(368)
(17)
\u2013
\u2013
(11)
10
1
\u2013
\u2013
374
(358)
(16)
\u2013
\u2013
Transfers to/(from) Stage 2
(409)
416
(7)
\u2013
\u2013
2
(2)
\u2013
\u2013
\u2013
(407)
414
(7)
\u2013
\u2013
Transfers to/(from) Stage 3
(192)
(100)
292
\u2013
\u2013
4
7
(11)
\u2013
\u2013
(188)
(93)
281
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
9
(14)
(40)
\u2013
(45)
9
(14)
(40)
\u2013
(45)
New lending
3
1,716
147
1
\u2013
1,864
(11)
(3)
(1)
\u2013
(15)
1,704
144
\u2013
\u2013
1,849
Repayments, additional drawdowns
and interest accrued
(618)
(121)
(33)
(1)
(773)
\u2013
\u2013
\u2013
\u2013
\u2013
(618)
(121)
(33)
(1)
(773)
Derecognitions
4
(3,755)
(507)
(121)
\u2013
(4,383)
11
11
20
\u2013
42
(3,744)
(496)
(101)
\u2013
(4,341)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
20
5
(1)
1
25
20
5
(1)
1
25
31 December 2024
7,723
978
504
(1)
9,204
(39)
(29)
(124)
1
(191)
7,684
949
380
\u2013
9,013
Off-balance sheet items
Commitments and guarantees
6
718
\u2013
718
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer. In addition it includes any ECL change resulting from model assumptions and forward-looking information on these loans. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed as well as any ECL that has been recognised in relation to these loans during the year. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, sold or written off. 5. Represents the change in ECL to those loans that remain within the same stage through the year. 6. Represents undrawn lending facilities. Further details can be found in note 31. Consumer lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
Transfers to/(from) Stage 1
1
7
(6)
(1)
\u2013
\u2013
(2)
1
1
\u2013
\u2013
5
(5)
\u2013
\u2013
\u2013
Transfers to/(from) Stage 2
(1)
1
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(1)
(4)
5
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(1)
(3)
4
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
\u2013
(3)
\u2013
(1)
2
\u2013
(3)
\u2013
(1)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(12)
\u2013
(5)
\u2013
(17)
\u2013
\u2013
\u2013
\u2013
\u2013
(12)
\u2013
(5)
\u2013
(17)
Derecognitions
4
(456)
(140)
(22)
\u2013
(618)
11
6
20
\u2013
37
(445)
(134)
(2)
\u2013
(581)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
\u2013
4
\u2013
5
1
\u2013
4
\u2013
5
31 December 2025
37
4
74
(1)
114
\u2013
(1)
(67)
1
(67)
37
3
7
\u2013
47
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
906
314
77
\u2013
1,297
(26)
(16)
(66)
\u2013
(108)
880
298
11
\u2013
1,189
Transfers to/(from) Stage 1
1
80
(79)
(1)
\u2013
\u2013
(3)
3
\u2013
\u2013
\u2013
77
(76)
(1)
\u2013
\u2013
Transfers to/(from) Stage 2
(74)
74
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(73)
73
\u2013
\u2013
\u2013
Transfers to/(from) Stage 3
(27)
(14)
41
\u2013
\u2013
1
4
(5)
\u2013
\u2013
(26)
(10)
36
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
2
(4)
(25)
\u2013
(27)
2
(4)
(25)
\u2013
(27)
New lending
3
4
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
\u2013
\u2013
4
\u2013
\u2013
\u2013
4
Repayments, additional drawdowns and interest
accrued
(226)
(83)
(10)
(1)
(320)
\u2013
\u2013
\u2013
\u2013
\u2013
(226)
(83)
(10)
(1)
(320)
Derecognitions
4
(167)
(59)
(10)
\u2013
(236)
4
2
9
\u2013
15
(163)
(57)
(1)
\u2013
(221)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
9
3
(1)
1
12
9
3
(1)
1
12
31 December 2024
496
153
97
(1)
745
(12)
(9)
(88)
1
(108)
484
144
9
\u2013
637
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile. Corporate and commercial lending
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
Transfers to/(from) Stage 1
1
82
(80)
(2)
\u2013
\u2013
(5)
5
\u2013
\u2013
\u2013
77
(75)
(2)
\u2013
\u2013
Transfers to/(from) Stage 2
(138)
139
\u2013
\u2013
1
2
(2)
\u2013
\u2013
\u2013
(136)
137
\u2013
\u2013
1
Transfers to/(from) Stage 3
(62)
(9)
71
\u2013
\u2013
\u2013
1
(2)
\u2013
(1)
(62)
(8)
69
\u2013
(1)
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
4
(7)
(18)
\u2013
(21)
4
(7)
(18)
\u2013
(21)
New lending
3
1,619
28
1
\u2013
1,648
(13)
(1)
(1)
\u2013
(15)
1,606
27
\u2013
\u2013
1,633
Repayments, additional drawdowns and interest
accrued
(265)
(27)
(16)
\u2013
(308)
\u2013
\u2013
\u2013
\u2013
\u2013
(265)
(27)
(16)
\u2013
(308)
Derecognitions
4
(547)
(79)
(90)
\u2013
(716)
4
4
11
\u2013
19
(543)
(75)
(79)
\u2013
(697)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
4
2
(7)
\u2013
(1)
4
2
(7)
\u2013
(1)
31 December 2025
3,558
213
168
\u2013
3,939
(27)
(14)
(46)
\u2013
(87)
3,531
199
122
\u2013
3,852
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
2,803
413
166
\u2013
3,382
(30)
(21)
(21)
\u2013
(72)
2,773
392
145
\u2013
3,310
Transfers to/(from) Stage 1
1
159
(151)
(8)
\u2013
\u2013
(7)
6
1
\u2013
\u2013
152
(145)
(7)
\u2013
\u2013
Transfers to/(from) Stage 2
(164)
169
(5)
\u2013
\u2013
1
(1)
\u2013
\u2013
\u2013
(163)
168
(5)
\u2013
\u2013
Transfers to/(from) Stage 3
(112)
(40)
152
\u2013
\u2013
3
2
(5)
\u2013
\u2013
(109)
(38)
147
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
6
(9)
(13)
\u2013
(16)
6
(9)
(13)
\u2013
(16)
New lending
3
985
21
1
\u2013
1,007
(10)
(1)
(1)
\u2013
(12)
975
20
\u2013
\u2013
994
Repayments, additional drawdowns and interest
accrued
(279)
(26)
(24)
\u2013
(329)
\u2013
\u2013
\u2013
\u2013
\u2013
(279)
(26)
(24)
\u2013
(329)
Derecognitions
4
(522)
(145)
(78)
\u2013
(745)
4
7
9
\u2013
20
(518)
(138)
(69)
\u2013
(725)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
10
1
1
\u2013
12
10
1
1
\u2013
12
31 December 2024
2,869
241
204
\u2013
3,314
(23)
(16)
(29)
\u2013
(68)
2,846
225
175
\u2013
3,246
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile. Retail mortgages
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
To tal
Stage 1
Stage 2
Stage 3
POCI
To t a l
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2025
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
Transfers to/(from) Stage 1
1
212
(202)
(10)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
211
(201)
(10)
\u2013
\u2013
Transfers to/(from) Stage 2
(142)
145
(3)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(142)
145
(3)
\u2013
\u2013
Transfers to/(from) Stage 3
(48)
(24)
72
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(48)
(23)
71
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
605
66
1
\u2013
672
(1)
\u2013
\u2013
\u2013
(1)
604
66
1
\u2013
671
Repayments, additional drawdowns and interest
accrued
(107)
(9)
1
\u2013
(115)
\u2013
\u2013
\u2013
\u2013
\u2013
(107)
(9)
1
\u2013
(115)
Derecognitions
4
(654)
(64)
(44)
\u2013
(762)
\u2013
\u2013
2
\u2013
2
(654)
(64)
(42)
\u2013
(760)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
31 December 2025
4,224
496
220
\u2013
4,940
(5)
(3)
(8)
\u2013
(16)
4,219
493
212
\u2013
4,924
Gross carrying amount
Loss allowance
Net carrying amount
\u00a3\u2019million
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
1 January 2024
6,887
784
146
\u2013
7,817
(7)
(6)
(6)
\u2013
(19)
6,880
778
140
\u2013
7,798
Transfers to/(from) Stage 1
1
146
(138)
(8)
\u2013
\u2013
(1)
1
\u2013
\u2013
\u2013
145
(137)
(8)
\u2013
\u2013
Transfers to/(from) Stage 2
(171)
173
(2)
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
(171)
173
(2)
\u2013
\u2013
Transfers to/(from) Stage 3
(53)
(46)
99
\u2013
\u2013
\u2013
1
(1)
\u2013
\u2013
(53)
(45)
98
\u2013
\u2013
Net remeasurement due to transfers
2
\u2013
\u2013
\u2013
\u2013
\u2013
1
(1)
(2)
\u2013
(2)
1
(1)
(2)
\u2013
(2)
New lending
3
728
126
\u2013
\u2013
854
(1)
(2)
\u2013
\u2013
(3)
726
124
\u2013
\u2013
851
Repayments, additional drawdowns and interest
accrued
(113)
(13)
1
\u2013
(124)
\u2013
\u2013
\u2013
\u2013
\u2013
(113)
(12)
1
\u2013
(124)
Derecognitions
4
(3,066)
(303)
(33)
\u2013
(3,402)
3
2
2
\u2013
7
(3,063)
(301)
(31)
\u2013
(3,395)
Changes to model assumptions
5
\u2013
\u2013
\u2013
\u2013
\u2013
1
1
\u2013
\u2013
2
1
1
\u2013
\u2013
2
31 December 2024
4,358
584
203
\u2013
5,145
(4)
(4)
(7)
\u2013
(15)
4,354
580
196
\u2013
5,130
1. Represents stage transfers prior to any ECL remeasurements. 2. Represents the remeasurement between the 12-month and lifetime ECL due to stage transfer, including any changes to the model assumptions and forward-looking information. 3. Represents the increase in balances resulting from loans and advances that have been newly originated, purchased or renewed. 4. Represents the decrease in balances resulting from loans and advances that have been fully repaid, disposed of or written off. 5. Represents the change in loss allowances resulting from changes to the model assumptions, forward-looking information and changes in the customers risk profile Credit risk exposures Retail mortgages
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
4,221
450
59
\u2013
4,356
504
57
\u2013
1 to 29 days past due
3
17
9
\u2013
2
21
11
\u2013
30 to 89 days past due
\u2013
29
31
\u2013
\u2013
59
21
\u2013
90+ days past due
\u2013
\u2013
121
\u2013
\u2013
\u2013
114
\u2013
Gross carrying amount
4,224
496
220
\u2013
4,358
584
203
\u2013
Consumer lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
36
2
4
\u2013
496
141
2
(1)
1 to 29 days past due
\u2013
1
\u2013
\u2013
\u2013
2
1
\u2013
30 to 89 days past due
1
1
1
\u2013
\u2013
10
5
\u2013
90+ days past due
\u2013
\u2013
69
(1)
\u2013
\u2013
89
\u2013
Gross carrying amount
37
4
74
(1)
496
153
97
(1)
Corporate and commercial lending
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
3,544
176
78
\u2013
2,842
203
86
\u2013
1 to 29 days past due
14
28
5
\u2013
27
16
2
\u2013
30 to 89 days past due
\u2013
9
5
\u2013
\u2013
21
60
\u2013
90+ days past due
\u2013
\u2013
80
\u2013
\u2013
\u2013
56
\u2013
Gross carrying amount
3,558
213
168
\u2013
2,869
241
204
\u2013
Tota l
31 December 2025
31 December 2024
Stage 1 Stage 2 Stage 3 POCI Stage 1 Stage 2 Stage 3 POCI
\u00a3\u2019million 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL
Up to date
7,801
628
141
\u2013
7,693
848
145
(1)
1 to 29 days past due
17
46
14
\u2013
29
40
13
\u2013
30 to 89 days past due
1
39
37
\u2013
\u2013
90
87
\u2013
90+ days past due
\u2013
\u2013
270
(1)
\u2013
\u2013
260
\u2013
Gross carrying amount
7,819
713
462
(1)
7,722
978
505
(1)
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-410": { "value": "Accounting policy We assess on a forward-looking basis, the ECL associated with the assets carried at amortised cost and FVOCI and recognise a loss allowance for such losses at each reporting date. Impairment provisions are driven by changes in the credit risk of loans and securities, with a provision for lifetime ECL recognised where the risk of default of an instrument has increased significantly. Risk of default and ECL must incorporate forward-looking and macroeconomic information. Loans and advances Sophisticated impairment models have been developed for our retail and corporate and commercial loan portfolios, with three core models: revolving products; fixed term loans; and mortgages. Expected credit losses are calculated for drawn loans, and for committed lending. The same broad calculation approach is applied for each core model. ECL is calculated by multiplying three main components, being the PD, LGD and the EAD, discounted at the original effective interest rate. Key model inputs, judgements and estimates include: \u2022 consideration of when a SICR occurs \u2022 PD, LGD and EAD as well as their modelled impact \u2022 macroeconomic scenarios and weightings applied. Significant increase in credit risk IFRS 9 requires a higher level of ECL to be recognised for underperforming loans. This is considered based on a staging approach:
Stage
Description
ECL recognised
Stage 1
Financial assets that have had no significant increase in credit risk since initial
12-month ECL
recognition or that have low credit risk (high-quality investment securities only) at the Total losses expected on defaults which may occur within the next 12 months. Losses
reporting date. are adjusted for probability-weighted macroeconomic scenarios.
Stage 2
Financial assets that have had a significant increase in credit risk since initial recognition
Lifetime ECL
but that do not have objective evidence of impairment. Losses expected on defaults which may occur at any point in a loan\u2019s lifetime. Losses are
In addition, for corporate and commercial counterparties, the Early Warning List is used adjusted for probability-weighted macroeconomic scenarios.
to inform qualitative triggers for SICR.
SICR includes the rebuttable presumption that financial instruments falling 30 DPD
due on contractually defined payments are to be considered as having deteriorated
significantly since origination and should trigger Stage 2.
Stage 3
Financial assets that are credit impaired at the reporting date. A financial asset is
Lifetime ECL
credit impaired when it has met the definition of default. We define default to have Losses calculated based on default parameters. Losses are adjusted for probability-
occurred when a loan is greater than 90 days past due (non-performing loan) or where weighted macroeconomic scenarios.
the borrower is considered unlikely to pay. This includes customers in corporate and
commercial who are categorised as Early Warning List 3 (EWL3) or forbearance. Interest income is calculated on the carrying amount of the loan net of credit allowance.
Purchased or originated Financial assets that have been purchased and had objective evidence of being \u2018non- Lifetime ECL
credit-impaired performing\u2019 or \u2018credit impaired\u2019 at the point of purchase. At initial recognition, POCI assets do not carry an impairment allowance. Lifetime ECL
(POCI) assets are incorporated into the calculation of the asset\u2019s effective interest rate. Subsequent
changes to the estimate of lifetime ECL are recognised as a loss allowance.
A SICR may be identified in a number of ways: \u2022 Quantitative criteria \u2013 where the numerically calculated PD on a loan has increased significantly since initial recognition. This is assessed using detailed models which assess whether the lifetime PD at observation is greater than the lifetime PD at origination by a portfolio specific threshold. Given the different nature of the products and the dissimilar level of lifetime PDs at origination, we implement different thresholds by sub-products within each portfolio (term loans, revolving loan facilities and mortgages). \u2022 Qualitative criteria \u2013 instruments that are 30 days past due or more are allocated to Stage 2, regardless of the results of the quantitative analysis. In addition, instruments classified on the Early Warning List as higher risk are allocated to Stage 2, regardless of the results of the quantitative analysis. A loan will be considered to be \u2018non-performing\u2019 or \u2018credit impaired\u2019 when it meets our definition of default \u2013 that is to say, the loan is 90 days past due, or the borrower is considered unlikely to pay without realisation of collateral. Unlikeliness to pay is assessed through the presence of triggers including the loan being in repossession, the customer having been declared bankrupt, or evidence of financial distress leading to forbearance. A loan may also be considered to be non-performing when it is subject to forbearance measures, consisting of concessions in relation to either: \u2022 a modification of the previous terms and conditions of the loan which the borrower is not considered able to comply with \u2022 a total or partial refinancing of a troubled debt contract that would not have been granted had the borrower not been in financial difficulties. It may not be possible to identify a single discrete event which defines an asset as \u2018non-performing\u2019 or \u2018credit impaired\u2019. Instead, the combined effect of several events may cause financial assets to become credit impaired. A probation period of at least three months is implemented before transferring a financial instrument to a lower stage (e.g. from Stage 3 to Stage 2). Specifically, in order to move an account from Stage 3, where an asset is showing improving trends and is no longer considered non-performing or credit impaired. Probability of default (PD) PD represents the likelihood of a borrower defaulting on its financial obligation either over the next 12 months (for Stage 1 accounts), or over the remaining lifetime of the loan (for Stage 2 and 3 accounts). A PD is calculated for all loans based on historical data and incorporates: \u2022 credit quality scores \u2022 life cycle trends depending on a loan\u2019s vintage \u2022 factors indicating the quality of the vintage \u2022 characteristics of the current and future economic environment. Loss given default (LGD) LGD represents our expectation of the extent of a loss on a defaulted exposure and is expressed as a percentage considering expected recoveries on defaulted accounts. We apply two LGD rates \u2013 one for unsecured lending and one for secured lending. LGD rates have been modelled considering a range of inputs, including: \u2022 value of collateral on secured portfolios \u2013 a key driver of the expected recovery in the event of default \u2022 expected haircut applied to the collateral value to reflect a forced sale discount \u2022 price index forecasts applied to project collateral values into the future \u2022 stress factors based on macroeconomic scenarios. Exposure at default (EAD) This is the amount that we expect to be owed at the point of default. This is subject to judgement since a balance will not necessarily remain static between the balance sheet date and the point of expected default. For example: \u2022 interest should be accrued \u2022 repayments may be received \u2022 for a revolving product, further drawings may be taken between the current point in time and the point of default \u2022 estimations of these factors will be incorporated into our estimate of EAD. PD, LGD and EAD are calculated and applied at an individual account level for secured lending. For unsecured lending, PD and EAD are calculated and applied at an individual account level, but LGD is assessed at a portfolio level and applied to accounts on an individual basis. Macroeconomic scenarios The ECL recognised in the financial statements reflects the effect on ECL of a range of possible outcomes, calculated on a probability-weighted basis, based on a number of economic scenarios and including Management Overlays where required. These scenarios are representative of our view of forecast economic conditions, sufficient to calculate unbiased ECL, and are designed to capture material \u2018non-linearities\u2019 (i.e. where the increase in credit losses if conditions deteriorate exceeds the decrease in credit losses if conditions improve). In the normal course of business, we use four scenarios. These represent a \u2018most likely outcome\u2019 (the \u2018Baseline\u2019 scenario) and three, less likely, \u2018Outer\u2019 scenarios, referred to as an \u2018Upside\u2019, a \u2018Downside\u2019 and a \u2018Severe downside\u2019 scenario respectively. The Baseline scenario captures the most likely economic future; the Downside and Severe Downside scenarios reflect adverse economic conditions; and the Upside scenario presents more favourable economic conditions. Key scenario assumptions are set using data sourced from independent external economists. This helps ensure that the IFRS 9 scenarios are unbiased and maximise the use of independent information. The following assumptions, considered to be the key drivers of ECL, have been used for the scenarios applied as at 31 December 2025 and 31 December 2024: \u2022 UK interest rates (Bank of England Base Rate and five-year mortgage rate) \u2022 UK unemployment rates \u2022 UK HPI changes, year-on-year \u2022 UK GDP changes, year-on-year \u2022 UK commercial real estate index, year-on-year. Macroeconomic scenarios impact the ECL calculation through varying PDs and LGDs. We use UK HPI to index mortgage collateral which has a direct impact on LGDs. Other metrics are considered to have a direct impact on PDs and were selected following a search and data calibration exercise of possible drivers. A list of around 15 potential drivers were initially considered, representing drivers which capture trends in the economy at large, and may indicate economic trends which will impact UK borrowers. The list included variables which impact economic output, interest rates, inflation, share prices, borrower income and the UK housing market. An algorithm was then used to choose the subset of drivers which had the greatest significance and predictive fit to our data. Each scenario was determined by flexing the Baseline scenario, taking into account a number of factors in the global and UK economy such as commodity prices, global interest rates, UK investment spend and exchange rates, as well as the possible impact of recessionary conditions or financial shocks. A simulation process was designed to determine the weighting to apply to each scenario based on its severity and the range of possible scenarios for which that scenario was representative. A summary of each scenario and weighting used at 31 December 2025 is as follows: \u2022 Baseline scenario: Reflects the projection of the median, or \u201850%\u2019 scenario, meaning that in the assessment there is an equal probability that the economy might perform better or worse than the baseline forecast \u2022 Upside scenario: This above-baseline scenario is designed so there is a 10% probability the economy will perform better than in this scenario, broadly speaking, and a 90% probability it will perform worse \u2022 Downside scenario: In this recession scenario, in which a deep downturn develops, there is a 90% probability the economy will perform better, broadly speaking, and a 10% probability it will perform worse \u2022 Severe downside scenario: In this recession scenario, in which a deep downturn develops, there is a 96% probability the economy will perform better, broadly speaking, and a 4% probability it will perform worse. These assumptions are considered sufficient to capture any material non-linearities. The weightings applied to each scenario at 31 December 2025 were Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5% (31 December 2024: Baseline \u2013 50%, Upside \u2013 20%, Downside \u2013 25% and Severe downside scenario \u2013 5%). Economic variable assumptions The period-end assumptions used for the ECL estimate as at 31 December 2025 are as follows:
31 December 2025
31 December 2024
Macroeconomic variable
Scenario
2026
2027
2028
2029
2030
2025
2026
2027
2028
2029
Five-year mortgage rate (%)
Baseline
4.16%
4.14%
4.11%
4.07%
4.05%
4.51%
4.24%
3.95%
3.96%
4.00%
Upside
4.37%
4.23%
4.10%
4.07%
4.05%
4.74%
4.25%
3.95%
3.95%
4.00%
Downside
2.61%
2.13%
2.63%
3.30%
3.84%
3.51%
2.41%
2.44%
3.09%
3.71%
Severe downside
2.19%
1.67%
2.03%
2.54%
3.31%
2.81%
2.08%
1.96%
2.43%
3.29%
BoE interest rate (%)
Baseline
3.25%
2.75%
2.75%
2.50%
2.50%
4.10%
2.75%
2.50%
2.50%
2.50%
Upside
3.46%
3.16%
2.87%
2.50%
2.50%
4.28%
2.97%
2.56%
2.50%
2.50%
Downside
1.94%
1.04%
1.25%
1.60%
1.95%
2.71%
1.11%
1.38%
1.72%
1.95%
Severe downside
1.36%
0.70%
0.70%
0.83%
1.04%
2.13%
0.76%
0.75%
0.94%
1.04%
Unemployment (%)
Baseline
5.11%
5.00%
4.93%
4.89%
4.89%
4.41%
4.50%
4.59%
4.67%
4.76%
Upside
4.47%
4.14%
4.12%
4.28%
4.49%
3.78%
3.64%
3.78%
4.07%
4.36%
Downside
7.01%
7.72%
7.60%
7.10%
6.40%
6.32%
7.22%
7.25%
6.89%
6.27%
Severe downside
8.24%
8.82%
8.54%
8.20%
7.46%
7.55%
8.32%
8.19%
7.99%
7.33%
House price index (YoY%)
Baseline
2.13%
2.32%
1.57%
1.93%
2.45%
2.24%
3.89%
2.62%
1.47%
2.07%
Upside
16.49%
5.41%
(0.97% )
(2.13% )
0.11%
16.62%
7.03%
0.06%
(2.57% )
(0.26% )
Downside
(9.11% )
(7.05% )
0.83%
4.69%
5.76%
(9.01% )
(5.62% )
1.88%
4.22%
5.37%
Severe downside
(15.29% )
(10.96% )
1.24%
3.37%
5.03%
(15.20% )
(9.60% )
2.29%
2.91%
4.64%
UK GDP (YoY%)
Baseline
1.35%
1.52%
1.65%
1.73%
1.73%
2.08%
1.18%
2.07%
1.43%
1.87%
Upside
4.89%
1.77%
1.60%
1.76%
1.94%
5.65%
1.42%
2.02%
1.46%
2.08%
Downside
(3.95% )
1.82%
2.80%
1.79%
1.65%
(3.50% )
1.49%
3.28%
1.43%
1.79%
Severe downside
(4.85% )
0.56%
3.96%
2.45%
1.61%
(4.61% )
0.15%
4.56%
2.26%
1.85%
Commercial real estate (YoY%)
Baseline
(1.12% )
(0.22% )
(0.35% )
(0.25% )
(0.16% )
(0.86% )
0.45%
(0.31% )
(1.34% )
(1.04% )
Upside
13.82%
1.57%
(3.16% )
(4.11% )
(2.20% )
14.42%
2.33%
(3.27% )
(5.24% )
(3.08% )
Downside
(15.91% )
(6.47% )
0.64%
3.17%
3.66%
(16.02% )
(5.62% )
0.83%
1.97%
2.75%
Severe downside
(25.20% )
(8.51% )
2.48%
2.37%
3.97%
(25.06% )
(8.49% )
2.57%
1.24%
3.06%
Following the initial four-year projection period, the Upside, Downside and Severe downside scenarios converge to the Baseline scenario. The rate of convergence varies based on the macroeconomic factor, but at a minimum convergence takes place three years from the initial four-year projection period. We recognise that applying the above scenarios will not always be sufficient to determine an appropriate ECL in all economic environments. The scenarios applied comprise our best estimate of economic impacts on the ECL, and the actual outcome may be significantly different. ", "dimensions": { "concept": "metrobankholdingsplc:DescriptionOfAccountingPolicyForExpectedCreditLosses", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-334": { "value": "31. Financial commitments Accounting policy To meet the financial needs of our customers, we enter into various irrevocable commitments. These generally consist of financial guarantees, letters of credit and other undrawn commitments to lend. Even though these obligations are not recognised on the balance sheet, they do contain credit risk and an ECL is calculated and recognised for them (see note 30). When these commitments are drawn down or called upon, and meet the recognition criteria as detailed in note 30, these are recognised within our loans and advances to customers. At 31 December 2025, we had undrawn facilities granted to retail and commercial customers of \u00a31,041 million (2024: \u00a3881 million). As part of our retail and commercial operations, this includes commitments of \u00a3254 million (2024: \u00a3241 million) for credit card and overdraft facilities. These commitments represent agreements to lend in the future, subject to certain conditions. Such commitments are cancellable, subject to notice requirements, and given their nature are not expected to be drawn down to the full level of exposure. 32. Legal and regulatory matters As part of the normal course of business we are subject to legal and regulatory matters. It is not always practicable to predict the outcome, if any, of certain matters or reliably estimate any financial impact, and in such cases, a provision may not be recognised in the financial statements but a contingent liability disclosed. Any inclusion does not constitute an admission of wrongdoing or legal liability. As at 31 December 2025, we do not have any material contingent liabilities.", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-356": { "value": "31. Financial commitments Accounting policy To meet the financial needs of our customers, we enter into various irrevocable commitments. These generally consist of financial guarantees, letters of credit and other undrawn commitments to lend. Even though these obligations are not recognised on the balance sheet, they do contain credit risk and an ECL is calculated and recognised for them (see note 30). When these commitments are drawn down or called upon, and meet the recognition criteria as detailed in note 30, these are recognised within our loans and advances to customers. At 31 December 2025, we had undrawn facilities granted to retail and commercial customers of \u00a31,041 million (2024: \u00a3881 million). As part of our retail and commercial operations, this includes commitments of \u00a3254 million (2024: \u00a3241 million) for credit card and overdraft facilities. These commitments represent agreements to lend in the future, subject to certain conditions. Such commitments are cancellable, subject to notice requirements, and given their nature are not expected to be drawn down to the full level of exposure. ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-411": { "value": "Accounting policy To meet the financial needs of our customers, we enter into various irrevocable commitments. These generally consist of financial guarantees, letters of credit and other undrawn commitments to lend. Even though these obligations are not recognised on the balance sheet, they do contain credit risk and an ECL is calculated and recognised for them (see note 30). When these commitments are drawn down or called upon, and meet the recognition criteria as detailed in note 30, these are recognised within our loans and advances to customers. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialGuaranteesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-357": { "value": "
32. Legal and regulatory matters
As part of the normal course of business we are subject to legal and regulatory matters.
It is not always practicable to predict the outcome, if any, of certain matters or reliably
estimate any financial impact, and in such cases, a provision may not be recognised in the
financial statements but a contingent liability disclosed. Any inclusion does not constitute
an admission of wrongdoing or legal liability. As at 31 December 2025, we do not have any
material contingent liabilities.
", "dimensions": { "concept": "metrobankholdingsplc:DisclsoureOfLegalAndRegulatoryMatters", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-358": { "value": "33. Offsetting of financial assets and liabilities Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
31 December 2025
31 December 2024
Effects of offsetting Effects of offsetting
on the balance sheet on the balance sheet
Net amounts Net amounts
Gross amounts presented Gross amounts presented
Gross offset in the in the balance Gross offset in the in the balance
amount balance sheet sheet amount balance sheet sheet
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and
advances to
customers
8,823
\u2013
8,823
9,013
\u2013
9,013
Investment
securities
1
4,160
\u2013
4,160
4,490
\u2013
4,490
Derivative
financial assets
31
(8)
23
23
(7)
16
Deferred
tax assets
260
(30)
230
271
(31)
240
Other assets
2
125
\u2013
125
82
\u2013
82
Liabilities
Derivative
financial liabilities
8
(8)
\u2013
8
(7)
1
Repurchase
agreements
1
73
\u2013
73
391
\u2013
391
Deposits from
central banks
1
400
\u2013
400
400
\u2013
400
Deferred
tax liabilities
30
(30)
\u2013
31
(31)
\u2013
1. We have pledged \u00a3755 million (2024: \u00a31,034 million) against repos, deposits from central banks and other assets as encumbered collateral which can be called upon in the event of default. 2. Includes \u00a384 million (2024: \u00a353 million) pledged as cash collateral. None of the cash collateral has been offset in the balance sheet. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOffsettingOfFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-373": { "value": "33. Offsetting of financial assets and liabilities Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
31 December 2025
31 December 2024
Effects of offsetting Effects of offsetting
on the balance sheet on the balance sheet
Net amounts Net amounts
Gross amounts presented Gross amounts presented
Gross offset in the in the balance Gross offset in the in the balance
amount balance sheet sheet amount balance sheet sheet
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and
advances to
customers
8,823
\u2013
8,823
9,013
\u2013
9,013
Investment
securities
1
4,160
\u2013
4,160
4,490
\u2013
4,490
Derivative
financial assets
31
(8)
23
23
(7)
16
Deferred
tax assets
260
(30)
230
271
(31)
240
Other assets
2
125
\u2013
125
82
\u2013
82
Liabilities
Derivative
financial liabilities
8
(8)
\u2013
8
(7)
1
Repurchase
agreements
1
73
\u2013
73
391
\u2013
391
Deposits from
central banks
1
400
\u2013
400
400
\u2013
400
Deferred
tax liabilities
30
(30)
\u2013
31
(31)
\u2013
1. We have pledged \u00a3755 million (2024: \u00a31,034 million) against repos, deposits from central banks and other assets as encumbered collateral which can be called upon in the event of default. 2. Includes \u00a384 million (2024: \u00a353 million) pledged as cash collateral. None of the cash collateral has been offset in the balance sheet. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOffsettingOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-383": { "value": "33. Offsetting of financial assets and liabilities Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
31 December 2025
31 December 2024
Effects of offsetting Effects of offsetting
on the balance sheet on the balance sheet
Net amounts Net amounts
Gross amounts presented Gross amounts presented
Gross offset in the in the balance Gross offset in the in the balance
amount balance sheet sheet amount balance sheet sheet
Group \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million \u00a3\u2019million
Assets
Loans and
advances to
customers
8,823
\u2013
8,823
9,013
\u2013
9,013
Investment
securities
1
4,160
\u2013
4,160
4,490
\u2013
4,490
Derivative
financial assets
31
(8)
23
23
(7)
16
Deferred
tax assets
260
(30)
230
271
(31)
240
Other assets
2
125
\u2013
125
82
\u2013
82
Liabilities
Derivative
financial liabilities
8
(8)
\u2013
8
(7)
1
Repurchase
agreements
1
73
\u2013
73
391
\u2013
391
Deposits from
central banks
1
400
\u2013
400
400
\u2013
400
Deferred
tax liabilities
30
(30)
\u2013
31
(31)
\u2013
1. We have pledged \u00a3755 million (2024: \u00a31,034 million) against repos, deposits from central banks and other assets as encumbered collateral which can be called upon in the event of default. 2. Includes \u00a384 million (2024: \u00a353 million) pledged as cash collateral. None of the cash collateral has been offset in the balance sheet. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOffsettingOfFinancialAssetsAndFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-420": { "value": "Accounting policy Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-421": { "value": "Accounting policy Determination of fair value \u2018Fair value\u2019 is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which we have access at that date. The fair value of a liability reflects its non-performance risk. In order to show how fair values have been derived, financial instruments are classified based on a hierarchy of valuation techniques, as summarised below: \u2022 Level 1 financial instruments: Those where the inputs used in the valuation are unadjusted quoted prices from active markets for identical assets or liabilities that we have access to at the measurement date. We consider markets as active only if there are sufficient trading activities with regards to the volume and liquidity of the identical assets or liabilities and when there are binding and exercisable price quotes available on the balance sheet date \u2022 Level 2 financial instruments: Those where the inputs that are used for valuation and are significant, are derived from directly or indirectly observable market data available over the entire period of the instrument\u2019s life. Such inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical instruments in inactive markets and observable inputs other than quoted prices such as interest rates and yield curves, implied volatilities, and credit spreads. In addition, adjustments may be required for the condition or location of the asset or the extent to which it relates to items that are comparable to the valued instrument. However, if such adjustments are based on unobservable inputs which are significant to the entire measurement, we will classify the instruments as Level 3 \u2022 Level 3 financial instruments: Those that include one or more unobservable input that is significant to the measurement as whole. Cash and balances with other banks, trade and other receivables, trade and other payables and other assets and liabilities which meet the definition of financial instruments are not included in the table below as the carrying value of those assets are a close approximation of their fair value. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-335": { "value": "
35. Related parties
Key management personnel
Our key management personnel, and persons connected with them, are considered to be
related parties. Key management personnel are defined as those persons having authority
and responsibility for planning, directing and controlling the activities of the Group. The
Directors and members of the Executive leadership team are considered to be the key
management personnel for disclosure purposes.
Key management compensation
Total compensation cost for key management personnel for the year by category of
benefit was as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Short-term benefits
6.9
5.5
Post-employment benefits
0.1
0.1
Share-based payment costs
3.6
1.1
Termination benefits
0.1
0.4
Total compensation for key management personnel
10.7
7.1
Short-term employee benefits include salary, medical insurance, bonuses and cash
allowances paid to key management personnel. The share-based payment cost represents
the IFRS 2 charge for the year which includes awards granted in prior years that have not
yet vested.
Banking transactions with key management personnel
Loan transactions during the year and the balances outstanding at 31 December were
as follows:
2025 2024
\u00a3\u2019million \u00a3\u2019million
Loans outstanding at 1 January
2.6
2.0
Loans relating to persons and companies newly considered
related parties
\u2013
0.4
Loans relating to persons and companies no longer considered
related parties
\u2013
\u2013
Loans issued during the year
\u2013
0.2
Net loan repayments during the year
\u2013
\u2013
Loans outstanding as at 31 December
2.6
2.6
Interest expense on loans payable to the Group (\u00a3\u2019000)
63
62
There were four (31 December 2024: four) loans outstanding at 31 December 2025
totalling \u00a32.6 million (31 December 2024: \u00a32.6 million). All are residential mortgages
secured on property; all loans were provided on our standard commercial terms.
In addition to the loans detailed above, the bank has issued credit cards and granted
overdraft facilities on current accounts to Directors and key management personnel.
Credit card balances outstanding at 31 December were as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Credit cards outstanding as at 31 December
\u2013
\u2013
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits held at 1 January
0.8
1.0
Deposits relating to persons and companies newly considered
related parties
\u2013
0.1
Deposits relating to persons and companies no longer considered
related parties
(0.6)
(0.3)
Net amounts (withdrawn)/deposited
0.1
\u2013
Deposits outstanding as at 31 December
0.3
0.8
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-374": { "value": "35. Related parties Key management personnel Our key management personnel, and persons connected with them, are considered to be related parties. Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group. The Directors and members of the Executive leadership team are considered to be the key management personnel for disclosure purposes. Key management compensation Total compensation cost for key management personnel for the year by category of benefit was as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Short-term benefits
6.9
5.5
Post-employment benefits
0.1
0.1
Share-based payment costs
3.6
1.1
Termination benefits
0.1
0.4
Total compensation for key management personnel
10.7
7.1
Short-term employee benefits include salary, medical insurance, bonuses and cash allowances paid to key management personnel. The share-based payment cost represents the IFRS 2 charge for the year which includes awards granted in prior years that have not yet vested. Banking transactions with key management personnel Loan transactions during the year and the balances outstanding at 31 December were as follows:
2025 2024
\u00a3\u2019million \u00a3\u2019million
Loans outstanding at 1 January
2.6
2.0
Loans relating to persons and companies newly considered
related parties
\u2013
0.4
Loans relating to persons and companies no longer considered
related parties
\u2013
\u2013
Loans issued during the year
\u2013
0.2
Net loan repayments during the year
\u2013
\u2013
Loans outstanding as at 31 December
2.6
2.6
Interest expense on loans payable to the Group (\u00a3\u2019000)
63
62
There were four (31 December 2024: four) loans outstanding at 31 December 2025 totalling \u00a32.6 million (31 December 2024: \u00a32.6 million). All are residential mortgages secured on property; all loans were provided on our standard commercial terms. In addition to the loans detailed above, the bank has issued credit cards and granted overdraft facilities on current accounts to Directors and key management personnel. Credit card balances outstanding at 31 December were as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Credit cards outstanding as at 31 December
\u2013
\u2013
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits held at 1 January
0.8
1.0
Deposits relating to persons and companies newly considered
related parties
\u2013
0.1
Deposits relating to persons and companies no longer considered
related parties
(0.6)
(0.3)
Net amounts (withdrawn)/deposited
0.1
\u2013
Deposits outstanding as at 31 December
0.3
0.8
", "dimensions": { "concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-359": { "value": "35. Related parties Key management personnel Our key management personnel, and persons connected with them, are considered to be related parties. Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group. The Directors and members of the Executive leadership team are considered to be the key management personnel for disclosure purposes. Key management compensation Total compensation cost for key management personnel for the year by category of benefit was as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Short-term benefits
6.9
5.5
Post-employment benefits
0.1
0.1
Share-based payment costs
3.6
1.1
Termination benefits
0.1
0.4
Total compensation for key management personnel
10.7
7.1
Short-term employee benefits include salary, medical insurance, bonuses and cash allowances paid to key management personnel. The share-based payment cost represents the IFRS 2 charge for the year which includes awards granted in prior years that have not yet vested. Banking transactions with key management personnel Loan transactions during the year and the balances outstanding at 31 December were as follows:
2025 2024
\u00a3\u2019million \u00a3\u2019million
Loans outstanding at 1 January
2.6
2.0
Loans relating to persons and companies newly considered
related parties
\u2013
0.4
Loans relating to persons and companies no longer considered
related parties
\u2013
\u2013
Loans issued during the year
\u2013
0.2
Net loan repayments during the year
\u2013
\u2013
Loans outstanding as at 31 December
2.6
2.6
Interest expense on loans payable to the Group (\u00a3\u2019000)
63
62
There were four (31 December 2024: four) loans outstanding at 31 December 2025 totalling \u00a32.6 million (31 December 2024: \u00a32.6 million). All are residential mortgages secured on property; all loans were provided on our standard commercial terms. In addition to the loans detailed above, the bank has issued credit cards and granted overdraft facilities on current accounts to Directors and key management personnel. Credit card balances outstanding at 31 December were as follows:
2025 2024
Group \u00a3\u2019million \u00a3\u2019million
Credit cards outstanding as at 31 December
\u2013
\u2013
2025 2024
\u00a3\u2019million \u00a3\u2019million
Deposits held at 1 January
0.8
1.0
Deposits relating to persons and companies newly considered
related parties
\u2013
0.1
Deposits relating to persons and companies no longer considered
related parties
(0.6)
(0.3)
Net amounts (withdrawn)/deposited
0.1
\u2013
Deposits outstanding as at 31 December
0.3
0.8
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-336": { "value": "
36. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit/(loss) attributable to
ordinary shareholders of Metro Bank by the weighted average number of ordinary shares
in issue during the period.
Diluted EPS has been calculated by dividing the profit attributable to our ordinary
shareholders by the weighted average number of ordinary shares in issue during the
year plus the weighted average number of ordinary shares that would be issued on the
conversion to shares of options granted to colleagues.
2025
2024
Profit attributable to ordinary shareholders (\u00a3\u2019million)
52.4
42.5
Weighted average number of ordinary shares in issue (thousands)
Basic
673,151
672,784
Adjustment for share awards
7,979
2,466
Diluted
681,130
675,250
Earnings per share (pence)
Basic
7.8
6.3
Diluted
7.7
6.3
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-337": { "value": "
37. Non-cash items
The table below sets out the non-cash items included in profit/(loss) before tax. These have
been adjusted for in the cash flow statements on page 151.
2025 2024
\u00a3\u2019million \u00a3\u2019million
Interest receivable
(725)
(935)
Interest payable
265
558
Depreciation and amortisation
62
77
Impairment and write-offs of property, plant, equipment
and intangible assets
1
44
Expected credit loss expense
14
7
Share option charge
3
2
Grant income recognised in the income statement
(3)
(3)
Amounts provided for (net of amounts released)
(4)
(8)
Gain/(loss) on sale of assets
(5)
(101)
Total adjustments for non-cash items
(392)
(359)
", "dimensions": { "concept": "metrobankholdingsplc:DisclosureOfNonCashItems", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "fact-338": { "value": "
38. Post balance sheet events
There are no post balance sheet events to note.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:984500CDDEAD6C2EDQ64", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } } } }