213800ZBKL9BHSL2K459-2025-12-31-T01

Mortgages – financed emissions
Physical intensity (kgCO2 e/m²)



OSB GROUP PLC Annual Report and Accounts 2025		1

What’s inside…





Overview
2	Highlights
4	Why invest in OSB Group?
5	Progress on the Group’s strategy

Strategic report
8	Chair of the Board’s statement
10	Chief Executive Officer’s statement
13	Market review
16	Our business model
22	Strategic framework
24	Strategy in action
25	Key performance indicators
28	Financial review
37	Segments review
44	Risk review
49	Principal risks and uncertainties
66	Viability statement
68	Sustainability report
95	Task Force on Climate-related Financial Disclosures
103	Non-financial and sustainability information statement





Governance
105	Board of Directors
107	Executive Committee
109	Corporate Governance Report
124	Group Nomination and Governance Committee Report
131	Group Audit Committee Report
138	Group Risk Committee Report
141	Group Remuneration and People Committee Report
146	Directors’ Remuneration Report
169	Directors’ Report: other information
174	Statement of Directors’ Responsibilities





Financial Statements
176	Independent Auditor’s Report
186	Consolidated Statement of Comprehensive Income
187	Consolidated Statement of Financial Position
188	Consolidated Statement of Changes in Equity
189	Consolidated Statement of Cash Flows
190	Notes to the Consolidated Financial Statements
248	Company Statement of Financial Position
249	Company Statement of Changes in Equity
250	Company Statement of Cash Flows
251	Notes to the Company Financial Statements





Appendices
255	Forward-looking statements
256	Independent Reasonable Assurance Report on Selected Alternative Performance Measures
258	Independent Limited Assurance Report on selected Environmental, Social and Governance metrics
261	Alternative Performance Measures
263	Independent auditor’s reasonable assurance report on the compliance of the Electronic Format Annual Financial report
265	Glossary
266	Company information



	For the latest investor relations content www.osb.co.uk/investors

PAGES

2–103

PAGES

104–174

PAGES

175–253

PAGES

254–266



OSB GROUP PLC Annual Report and Accounts 2025		2

Highlights

The highlights demonstrate

the Group’s resilient

performance in 2025.

For definitions and calculation of the metrics

listed here, see Appendix 4.

The Group’s external auditor performed an

independent reasonable assurance review of

certain metrics as marked with the symbol Δ

– see Appendix 2 for the auditor’s assurance

report.

Financial performance

Originations^Δ

+19%

Net loan book

+3.2%

Net interest margin (NIM)^Δ

-2bps

* 2025 statutory NIM is comparable with 2024

underlying NIM as both metrics exclude acquisition-

related items, which were fully written off in 2024.

Loan loss ratio^Δ

+9bps

Cost to income ratio^Δ

+1.7ppt

Profit before tax

-9%



OSB GROUP PLC Annual Report and Accounts 2025		3

Highlights continued

Ret urn on tangible equity

(RoTE) ^Δ

-1.2ppt

Common Equity Tier 1 ratio

-50bps

Tangible net asset value per share^Δ

+6%

Basic EPS^Δ

(pence per share)

-3%

Ordinary dividend^Δ

+5%

Non-financial performance

Women in senior management¹

no change

OSB

Reduction in direct emissions²

57%


		tCO2e

	tCO2 e

CCFS

1.Employees at grades A (Executive Director)

to grade E (including function heads with senior

direct reports or employees in specialist roles

of a senior nature).

2.Direct emissions are Scope 1 and Scope 2 using

market-based methodology.

Savings customer satisfaction –

Net Promoter Score

-5

-9



OSB GROUP PLC Annual Report and Accounts 2025		4

Why invest in OSB Group?

OSB Group is a leading specialist mortgage lender, primarily focused

on carefully selected sub-segments of the UK mortgage market.


	A leading specialist lender				Highly capital-generative

	OSB Group operates a comprehensive lending strategy and is an experienced and diversified lender with deep expertise in Buy-to-Let, Specialist Residential, Commercial, Asset finance, Residential development and Bridging. For 2024, OSB Group was the largest independent Buy-to-Let lender in the UK.¹				The Group is strongly capitalised with a proven track record of capital generation through profitability. This allows it to support growth as well as distributions to shareholders. In 2026, dividend per share is expected to increase by 5% per year and the Group is committed to returning excess capital to shareholders.

	2025 new business market share²				2025 dividend per share
	4.7%				35.3p


	Consistent returns				Our competitive advantage

	Since its IPO, the Group has consistently generated attractive returns, driven by strong growth in its specialist sub-segments and sound risk management.				The Group offers a breadth of complementary yet differentiated lending propositions, speed of lending decisions and long-standing reputation among intermediaries built over many years of strong relationships. It is funded by two award-winning retail savings brands: Kent Reliance and Charter Savings Bank as well as opportunistic wholesale issuances. The wholly-owned subsidiary OSB India provides a structural advantage, with access to talent, excellent customer service and cost effectiveness.

	Return on tangible equity
	13.7%

1. UK Finance, Largest Mortgage Lenders, July 2025

2. UK Finance BTLA1, Feb 2026.



OSB GROUP PLC Annual Report and Accounts 2025		5

Investor update

Progress on the Group’s strategy

In March 2025 the Group presented its five-year Plan and medium-term aspirations:



	Building on the strengths that have delivered success				Transforming the way we operate our business

	• Relationships with intermediaries and borrowers with proven capability to grow • Credit expertise in a wide range of specialist secured lending segments				• We are building our new leading technology platform • Efficient growth without expanding headcount

	Driving growth and diversification				#1 Specialist lender

	• Accelerated growth in lending, optimising risk adjusted returns • Speed to market for lending and savings products taking advantage of opportunities				• Improving RoTE and Net Interest Margin • Positive cost jaws with operational leverage

In 2025, the first year of the transition period, the Group met its guidance.


	2025 results		2025 guidance

Loan book growth	3.2%	ü	Low single digit

Net interest margin	2.28%	ü	c.2.25%

Administrative expenses	£270.1m	ü	c.£270m

RoTE	13.7%	ü	Low teens

Distributions	35.3p up 5% (2024: 33.6p) and a new £100m buyback	ü	5% growth in dividend per share and commitment to return excess capital


	2026 guidance and medium-term aspirations

		2026 Guidance	2027–2029 Aspirations

	Loan book growth	Broadly similar to 2025 outcome	Mid single digit if returns meet our requirements

	NIM	circa 225bps

	Loan book diversification		Buy-to-Let to comprise ≤60% of the net loan book

	Administrative expenses	c.£280m¹	Gradual improvement to low 30s% cost to income ratio and positive jaws

	RoTE	Low teens	Mid teens in 2027-28 increasing to the top end of mid teens in 2029

	Distributions	5% growth in dividend per share and commitment to return excess capital	Progressive dividend per share and commitment to return excess capital


1. Additional costs related to the new CEO transition and buyout are not included



OSB GROUP PLC Annual Report and Accounts 2025		6

Investor update continued



Group’s gross loans as at 31 December
	Buy-to-let	Residential	Commercial	Asset & development finance	Bridging & other


2%


3%

2025

Loan mix shift

The Group’s strategy to prioritise returns is

supported by its key strengths:

• Intermediary strategy – trusted leadership

with intermediaries, offering a single point

of entry to the Group’s diversified product

range, through its 100+ sales relationship

managers with deep product expertise

• Deep experience and credit expertise in

a range of higher-yielding¹specialist

segments – with increasing diversification

and ability to grow, delivering strong risk-

adjusted returns

• Structurally lower cost base – focus

on delivering cost efficiency and an

increasing proportion of colleagues based

in our wholly-owned subsidiary OSB India


		Buy-to-Let to comprise ≤60% of the net loan book
		Buy-to-Let to comprise ≤60% of the net loan book

2029

• Building the bank for the future – entering

the fourth year of a five-year

transformation programme optimising

operations for a digital future, which will

transform the experience of

intermediaries, brokers and colleagues

• Improving the broker and customer

experience – combining our successful

intermediary lending strategy with the

transformation programme to deliver our

optimised lending growth plan with a

higher-yielding, diversified loan book

This will maintain the Group’s leading

position in specialist lending, delivering

margin expansion, positive cost jaws,

improved returns and enhanced

distributions to shareholders.

Transformation programme

During the year, the Group progressed its

transformation programme, launching a new

lending platform for Buy-to-Let borrowers

and enhancing the range of products

available on its new savings platform.

Further details are provided on page 24.


	2025	2024	change
Originations	£m	£m	%
Buy-to-Let	1,951.4	1,889.0	3
Residential	774.5	770.5	1
Higher-yielding sub-segments ¹	1,984.1	1,294.2	53
Total originations	4,710.0	3,953.7	19

1. Includes Commercial, Asset finance, Residential development, Bridging and funding lines.

2027-29

RoTE

High end of

mid-teens



OSB GROUP PLC Annual Report and Accounts 2025		7

Strategic

Re port


8	Chair of the Board’s statement
13	Market review
10	Chief Executive Officer’s statement
16	Our business model
22	Strategic framework
24	Strategy in action
25	Key performance indicators
28	Financial review
34	Portfolio overview
37	Segments review
44	Risk review
49	Principal risks and uncertainties
66	Viability statement
68	Sustainability report
95	Task Force on Climate-related Financial Disclosures
103	Non-financial and sustainability information statement

The Strategic report has been

approved by the Board of Directors

on 4 March 2026 and signed on its

behalf by the Chair of the Board.

David Weymouth

Chair of the Board

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		8

Chair of the Board’s statement



	2025 was a year of solid progress against an uncertain economic, fiscal and regulatory backdrop. I am pleased with the progress the team has made on delivering the strategic commitments we set out at our Investor update in March last year.

I would like to highlight some of the key

achievements of 2025:

• a well-received Investor update outlining

how OSB will deliver value to our owners in

both, short and longer term;

• continued roll out of our new technology

across both lending and savings;

• launch of our new Rely brand

consolidating our Buy-to-Let offerings;

and

• good financial performance against

guidance.

We also focused on developing a Board ‘fit

for the future’. In the year, we welcomed

Sally Jones-Evans and Gareth Hoskin to the

Board, who bring a wealth of skills and

experience. Gareth Hoskin became the

Senior Independent Director in October.

I have already seen positive changes in

Board governance and oversight and the

influence of the new members in the

discussions and the Group’s direction.

I am looking forward to working with the

new Board in the year ahead.

I am pleased that the Group remains well

capitalised and continues to generate capital

through profitability. Given the greater

clarity over the Basel 3.1 rules and our

confirmed MREL status, we have taken a

decision to revise our CET1 target to

13%-13.5%, allowing for shareholder

distributions and the Basel 3.1 impact.

As stated in our Investor update, the Board

has recommended a final dividend of 24.1

pence per share for 2025, which is an

increase of 5% from the prior year. Together

with an interim dividend of 11.2 pence per

share, this represents a progressive total

ordinary dividend for the year of 35.3 pence

per share (2024: 33.6 pence). Following the

successful completion of the £100m share

repurchase programme announced in 2025,

I am pleased to announce a new £100m

share repurchase over the next 12 months

that will commence on 6 March 2026.

The Board is confident that our focus on the

new strategy and the five year Plan will

deliver on our medium-term aspirations, with

capital generation supporting further capital

returns to our owners, and a progressive

dividend per share.

Total ordinary dividend,

pence per share

35.3

2024: 33.6

Share repurchase

£100m

2024: £100m



OSB GROUP PLC Annual Report and Accounts 2025		9

Chair of the Board’s statement continued

I would like to thank all of our colleagues

across our offices in the UK and India for their

hard work and dedication throughout the

year. And, of course, Andy, who has

Companies Act 2006

Section 172 Compliance

statement

The Directors are bound by their

duties under section 172(1)(a) to (f)

of the Companies Act 2006 and the

manner in which these have been

discharged; in particular their duty to

act in the way they consider, in good

faith, promotes the success of the

Company for the benefit of its

shareholders as a whole.

Pages 120-123 in the Corporate

Governance Report demonstrate

how the Board has engaged with

the Group’s key stakeholders

(customers, intermediaries,

colleagues, shareholders, suppliers,

regulators and the local communities

in which we are located). Examples

of strategic decisions which

have impacted the Group’s key

stakeholders are set out on

pages 114-115.

announced his intention to retire by the end

of the year. His enthusiasm in taking what

was Kent Reliance Building Society to

become OSB Group, the largest listed

specialist lender, has been outstanding. We

wish him well in the next phase of his career.

Also, Noël Harwerth who is stepping down at

the AGM, having reached the end of her 9

year term. I would like to thank Noël for her

significant contribution during her term.

Finally, I will reach the end of my nine year

tenure as Chair of the Board this summer.

The Board invited me to extend my tenure to

ensure continuity of leadership during the

CEO transition and I intend to step down

from the Board by September 2027.

David Weymouth

Chair of the Board

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		10

Chief Executive Officer’s statement

2025 was a year of achievement for the Group,

both financially, with year end results in line

with 2025 guidance, and operationally.

We also made tangible progress against our

strategy that we set out at the Investor update

in March last year. I am pleased that the Group’s

MREL resolution strategy was reclassified to

Transfer from Bail-in, which will bring benefits in

the later stages of our Plan.

Our lending discipline and focus on returns

were demonstrated in strong growth in our

higher-yielding sub-segments and return on

tangible equity of 13.7% for the year. In

addition, we made progress in the

transformation programme, with the launch

of our new lending platform and our

dedicated Buy-to-Let brand, Rely.

Strategic progress

The Buy-to-Let market saw an improvement

in activity in 2025, with gross new lending

rising to £41.7bn, growth of 23% compared to

£34.0bn in 2024.¹ The Group’s Buy-to-Let

originations reached £1,951.4m, an increase

of 3% from £1,889.0m in 2024, which

represented new business market share of

4.7% for 2025. For 2024, The Group was

ranked the largest independent Buy-to-Let

lender in the UK in terms of gross new lending

with a market share of 5.3% in 2024.²

Combined originations in our higher-yielding

sub-segments increased by 53% to £1,984.1m

(2024: £1,294.2m), in line with our

diversification strategy.

Buy-to-Let mortgages remained the largest

part of the Group’s portfolio, with £17,691.9m

of gross loans at the end of December,

broadly flat compared to £17,568.5m in the

prior year. However, as a proportion of the

...the Board has recommended a final dividend per

share of 24.1 pence to deliver a progressive full

year dividend per share of 35.3 pence, representing

a payout ratio of 46% of earnings and a new £100m

share repurchase programme...

Group’s total gross loan book, Buy-to-Let

reduced to 68% from 70% at the end of 2024,

in line with our diversification strategy.

Higher-yielding segments represented 12% of

the total gross loan book compared to 9%

in 2024.

Throughout the year, we continued to serve

the professional landlords, with 92% of Kent

Reliance completions coming from

professional, multi-property landlords

in 2025.

I’m particularly pleased with the full market

launch of our new lending platform in

November and the benefits it brings to our

broker partners and to the Group. Powered

by technology, it allows for a fast and easy

journey from broker registration through to

various stages of securing a mortgage. Our

broker partners and borrowers are benefiting

from the new platform, with automation

reducing the time from application to offer to

as little as two hours and mortgage

agreement in principle in less than

10 minutes.



OSB GROUP PLC Annual Report and Accounts 2025		11

Chief Executive Officer’s statement continued

It also brings a strategic advantage for the

Group in terms of product design, speed to

market and improved decision-making.

Our Buy‑to‑Let product range can now be

repriced within hours, a considerable

reduction from the previous process.

The first products offered are new Buy-to-Let

mortgages under our newly launched Rely

brand. Kent Reliance for Intermediaries and

Precise brands no longer offer new Buy-to-

Let mortgages and Precise has been focusing

on Residential and Bridging mortgages, all

part of our strategy to simplify our brands.

2025 was also a successful year for the

savings transformation programme. Having

launched fixed rate bonds, joint accounts

and easy access accounts for new savers on

the new savings platform earlier in the year,

in October we commenced migrating the

existing easy access accounts. In the first

quarter of 2026, this will be extended to fixed

rate bonds. The benefits of the new savings

platform were reflected in a 19% increase in

the number of accounts opened in the year

and strong retention rates of 89% and 85%

for Kent Reliance and Charter Savings

Bank, respectively.

AI and advanced analytics form part of the

transformation programme, supporting

stronger risk management, improved

operational efficiency and better customer

outcomes. In January 2026, as part of a

longer term programme, senior managers

participated in a dedicated training focused

on understanding how AI can be leveraged

responsibly across the Group.

Attractive shareholder returns

The Board has recommended a final dividend

per share of 24.1 pence (2024: 22.9 pence),

which together with the interim dividend of

11.2 pence (2024: 10.7 pence), represents a

total ordinary dividend per share of 35.3

pence for 2025, an increase of 5% from the

prior year as guided.

The Board is committed to returning excess

capital to shareholders and has today

announced a new £100m share repurchase

programme over the next twelve months to

commence on 6 March 2026.

Looking ahead

In November, I announced my intention to

retire at the end of 2026. It has been a great

journey and a privilege to lead the Group for

the last 14 years. Further, the Board recently

announced the successful conclusion of the

search for a new CEO, with the appointment

of Enrique Alvarez Labiano (subject to

regulatory approval). I wish him every

success as he takes the business forward.

In 2026, we will continue to exercise discipline

as we grow our lending portfolio, balancing

returns and opportunity to optimise the

composition of our book. Professional Buy-

to-Let remains an attractive market for us,

supported by sustained tenant demand

and growth in rental income, while we will

continue to deploy our expertise to

increase scale in higher-yielding sub-

£ 382.5m

Profit before tax

2024: £ 418.1m

53%

Growth in higher-yielding

sub-segments

segments.



OSB GROUP PLC Annual Report and Accounts 2025		12

Chief Executive Officer’s statement continued

The previously communicated direction for

2026 has been refined as guidance as

follows:

• net loan book growth is now expected to

be broadly similar to 2025 outcome,

• net interest margin is expected to be circa

225bps, reflecting the same key drivers as

in 2025: a continuation of lending back

book dynamics; new business written at

sustainable margins; and a gradual

normalisation of the cost of retail funding

from the current elevated levels,

• administrative expenses are expected to

be c.£280m³ with core costs increasing at

no more than the rate of inflation and as

we continue to invest in the

transformation programme,

• finally, we anticipate a low-teens return

on tangible equity and a dividend per

share increasing by 5% in 2026.

Return on tangible equity remains our key

focus. We continue to expect mid teens RoTE in

2027-28, increasing to the top end of mid

teens in 2029 driven by the successful

execution of our strategy, capital optimisation

and the MREL qualifying debt securities

reaching their respective call dates.


	2026 Guidance	2027–2029 Aspirations
Loan book growth	Broadly similar to 2025 outcome	Mid single digit if returns meet our requirements
NIM	circa 225bps
Loan book diversification		Buy-to-Let to comprise ≤60% of the net loan book
Administrative expenses	c.£280m³	Gradual improvement to low 30s% cost to income ratio and positive jaws
RoTE	Low teens	Mid teens in 2027-28 increasing to the top end of mid teens in 2029
Distributions	5% dividend per share growth and commitment to return excess capital	Progressive dividend per share and commitment to return excess capital
CET1 ratio		13 – 13.5% post implementation of Basel 3.1

The Group is well capitalised, with strong liquidity and a high-quality secured loan book. We are focused on making progress through the

second year of the transition period to deliver on our medium-term aspirations, prioritising good outcomes for our stakeholders and strong

returns for our shareholders.

Andy Golding

Chief Executive Officer

4 March 2026

1. UK Finance, BTLA1, February 20262. UK Finance, Largest Mortgage Lenders, July 2025.3. Additional costs related to the new CEO transition and buyout are not included.



OSB GROUP PLC Annual Report and Accounts 2025		13

Market review

Activity in the housing and mortgage markets

was strong, supported by falling interest rates

and improving borrowers’ affordability.

The UK housing and

mortgage market

The UK housing and mortgage market

outperformed the initially modest outlook for

2025, with strong growth observed in

property transactions, mortgage approvals

and gross mortgage lending during the year:


	2025	2024	change
Property transactions¹	1.21m	1.10m	+10.0%
Mortgage approvals²	1.36m	1.24m	+9.6%
Gross mortgage lending²	£291bn	£242bn	+20.2%

This performance can be attributed to the

following factors:

• Increased purchase activity ahead of the

Stamp Duty changes: In April 2025, the

Stamp Duty nil-rate threshold reverted to

£125,000 from £250,000 following the

expiry of a temporary increase. This

boosted activity in the first quarter of the

year, with purchase completions totalling

£26.9bn in March compared to £10.9bn a

year earlier². Purchases represented 71%

of all mortgage completions by value in

the first quarter, compared to 63% for the

remainder of the year.²

• Elevated refinancing activity driven by a

high volume of maturing fixed rate

mortgages: According to UK Finance, 1.6m

fixed rate mortgages reached maturity in

2025, reflecting five-year fixed rate

products taken out during the record-low

rate environment of 2020.³ Remortgage

completions rose to £91bn (2024: £78bn) a

17% increase,² while product transfers grew

18% to £258bn (2024: £217bn).⁴

• Falling rate environment and a lower

expected Bank Base Rate (BBR): Demand

for borrowing strengthened as the Bank of

England implemented four further rate

cuts, reducing the BBR from 4.75% to

3.75% supported by inflation moving

UK Buy-to-Let gross advances £

+23%

closer to the 2% target.⁵ This easing was

reflected in mortgage pricing: the average

quoted rate on a two-year fixed, 75% LTV

mortgage fell 63bps to 3.97% in December

2025 compared to a year earlier, while

the average five-year fixed rate mortgage

declined 37bps to 4.00% over the same

period.⁶

Source: UK Finance, Feb 2026

• Improving mortgage affordability:

Borrowers’ affordability continued to

UK average house price inflation

2.4%

strengthen as falling interest rates

combined with easing cost-of-living

pressures. Nominal earnings growth

consistently outpaced inflation and house

prices, with real earnings growth positive

for 30 consecutive months to October

2025.⁷ According to Nationwide, the UK

house price-to-earnings ratio fell to 4.7 in

the fourth quarter of the year, down from

its mid-2022 peak of 5.8.⁸

Source: Land Registry, Feb 2026



OSB GROUP PLC Annual Report and Accounts 2025		14

Market review continued

The UK savings market

Savings balances in the UK increased by 4%

in 2025 to close the year at £2,370bn,

compared to a 5% increase recorded a year

earlier.⁹ The household savings ratio

decreased quarter on quarter throughout the

year indicative of ongoing cost of living

pressures.¹⁰

Speculation around potential reductions to

cash ISA limits, which were partially realised

in the November Budget, led to a £60.0bn

increase in cash ISA deposits, a 16% growth

year on year. This was accompanied by a

shift in customer balances toward liquidity,

with instant access balances rising by 3%

over the year and fixed‑term deposits

declining by 3%.¹¹

The Bank of England base rate reduced by

100bps over the course of 2025, from 4.75%

to 3.75%. In contrast, average rates on

instant access accounts and one year fixed

rate bonds fell by only 39 and 35 basis

points, respectively. Competitive pressures

within the variable rate cash ISA market

further constrained reductions, resulting in

average rates in this market decreasing by

just 15bps year on year.¹²

At the end of December 2025, 2,319 savings

products were actively promoted in the

market, representing a 10% increase from the

2,117 accounts advertised a year earlier. The

total number of savings providers also

increased by 5% to 156 during 2025.¹³

The Group’s savings performance in 2025

broadly reflected the wider market trends.

Retail deposit balances grew by 2% as the

Group replaced its TFSME funding. Instant

access savings increased to 46% of total

deposits at 31 December 2025 from 36% a

year earlier, as customers sought higher

near-term rates.

The Group’s lending

segments

Buy-to-Let

The Private Rented Sector (PRS) comprised

4.7m households in 2023-24, according to

the English Housing Survey, an increase of

52% since 2008-09, and accounted for 19%

of all households, making it England’s second

largest tenure and a critical component of

housing supply.¹⁴

The English Private Landlord Survey

highlighted the central role of professional,

multi-property landlords: 17% of landlords

owned five or more rental properties yet

accounted for 49% of all tenancies.¹⁵ It is

these experienced, professional landlords

that constitute the Group’s core customer

base.

The operating environment for landlords

during the year was shaped by the Renters’

Rights Act and measures in the UK Budget:

• The Renters’ Rights Act 2025 which

gained Royal Assent in October 2025

ahead of phased implementation in 2026,

will introduce major changes including

ending no-fault evictions, a shift to open

ended periodic tenancies and limits on

rent increases to once a year. It will also

establish new regulatory structures such

as a PRS database, ombudsman and the

application of the Decent Homes

Standard to the sector.

• The 2025 Budget introduced a new

property income tax rate set at 2% above

the standard income tax rates that will be

introduced from April 2027.

These measures will increase compliance

requirements and tax burdens on landlords.

However they are likely to disproportionately

affect landlords with smaller portfolios, who

do not benefit from economies of scale,

potentially accelerating the market

repositioning towards professional landlords.

The Group remains well-placed to serve

these landlords as they look to re-leverage

their portfolios to maximise profitability.


	2025	2024
Increase in private rents – 12 months to December¹⁶	4.0%	9.0%
Rental yield – Q4¹⁷	6.4%	6.4%

Rental growth declined to 4.0% in the year to

December, though it continued to exceed the

rate of consumer price inflation for 30

consecutive months. Tenant demand, while

still firm, softened through the year. RICS

reported weaker demand in late 2025, and

Pegasus Insight noted that the share of

landlords seeing ‘high demand’ fell from 83%

to 61% since the start of 2024.¹⁷

Buy-to-Let lending remained resilient.

Outstanding mortgage balances grew 4%

to £312bn (2024: £299bn). Gross advances

reached £42bn in the 12 months to December

2025, up from £34bn in 2024. Product

transfers rose 10% to £51bn, accounting

for 63% of Buy-to-Let refinancing.¹⁸

The Group’s Buy‑to‑Let gross loans increased

by 1% in 2025, in line with its portfolio

optimisation strategy, although this was at

a slower pace than the wider market.

Residential

Residential gross mortgage advances to

homeowners grew by 20% to £247bn in the

12 months to December 2025, from £205bn

in 2024, according to UK Finance. Within this

total, purchase activity increased by 21%

to £176bn (2024: £145bn), while remortgage

volumes increased by 17% to £71bn

(2024: £60bn).¹⁹



OSB GROUP PLC Annual Report and Accounts 2025		15

Market review continued

Product transfers remained popular amongst

owner occupiers, totalling £258bn in the 12

months to December 2025, an 18% year-on-

year rise (2024: £217bn), and continued to

account for 77% of all regulated refinancing

activity (2024: 77%).⁴

The reduction in the Group’s residential

lending balances reflected the strategic

decision towards the end of the year to offer

residential products exclusively under the

Precise brand. As a result, Kent Reliance

residential gross loans declined by 10% over

the year, while Precise grew by 4%,

supported by new products launched in the

second quarter of the year.

Commercial

CBRE data for the UK commercial property

market indicated that growth in capital

values moderated to 1% in 2025, compared

with 2% in the prior year, as asset prices

continued to adjust to the higher interest rate

environment. Rental values increased by 3%,

consistent with 2024, supported by resilient

occupier demand across selected sectors.²⁰

According to CoStar Group Research, office

sector transaction volumes totalled £9bn in

2025, with average yields of 9%,²¹ broadly

unchanged from the previous year. Capital

values within the office sector increased by

2% year‑on‑year. Leasing activity improved

in 2025, with net absorption turning positive

as 4.1 million square feet more space was

occupied than vacated, reflecting stabilising

demand.^20,21

In the retail sector, transaction volumes

reached £7bn, achieving an average yield of

8%,²² consistent with 2024, while capital

values remained broadly stable. National

retail leasing activity increased to a six‑year

high, rising by 15% year‑on‑year²², supported

by an improvement in consumer confidence.

The Office for National Statistics reported a

1% increase in annual retail sales volumes,

with growth observed across food, non‑food

and non‑store retailers.²³

The industrial sector remained comparatively

robust in 2025. Total transaction volumes

reached £6bn in the year, with average

yields of 7%,²⁴ while capital values increased

by 5%. Leasing demand remained resilient,

with take up volumes of industrial and

logistics premises rising by 22% year-on-year

and market rents increasing by 4%. The

vacancy rate increased to 6%, largely

reflecting the return of second hand space to

the market rather than a deterioration in

occupier demand.^20,24

The Group delivered 38% growth in its

commercial and semi-commercial loan book

in 2025, consistent with its diversification

strategy towards higher-yielding sub-

segments. The portfolio is predominantly

secured against lower value assets in

secondary and tertiary locations, which

typically attract local occupiers and

investors. Performance across these markets

can be more nuanced than that of prime

assets in major urban centres. While such

properties remain exposed to broader

economic and political conditions, the

diversification of asset types, geographies

and occupier profiles provide a degree of

insulation from the volatility often

experienced at the larger, institutional end of

the commercial property market.

Residential development

A lower level of activity in the residential

development sector reflected the subdued

wider housing market as developers reduced

the number and scale of projects in response

to the higher cost of financing and lower

demand from homebuyers.

In the 12 months to 30 June 2025 new-build

completions across the UK market were 11%

lower than a year earlier, whilst new build

starts declined by 22%.²⁵

Heritable Development Finance, the Group’s

residential development brand, outperformed

the wider market, increasing its committed

number of units by 45% in the year to 31

December 2025, supported by strong

developer relationships and a focus on

developments outside of major city centres.

1.HM Revenue and Customs, Monthly Property

Transactions, Jan 2026.

2.Bank of England, Jan 2026.

3.UK Finance, Mortgage Market Forecast, Dec 2025.

4. UK Finance, Lending and affordability for new

refinancing and releveraging mortgages, Feb 2026

5. Office for National Statistics, Consumer Price Inflation,

Jan 2026.

6.Bank of England, Quoted household interest rates,

Jan 2026.

7.Office for National Statistics; Average Weekly Earnings,

Jan 2026.

8.Nationwide, Affordability report, Jan 2026.

9.BoE, Sterling retail deposits (VRJX), Feb 2025.

10.ONS, Household Saving Ratio, Dec 2025.

11. Bank of England, Sterling Household Deposits

(LPMB5S9, LPMZ3TT, LPMZ3TZ, LPMB8S4), Feb 2026.

12.Building Societies Association, Savings interest Rates,

Feb 2026.

13.Moneyfacts, Treasury Reports on UK Savings Trends,

Dec 2024 to Dec 2025.

14.UK Government: English Housing Survey 2023 to 2025.

15.UK Government: English Private Landlord Survey 2024.

16.ONS: Price Index of Private Rents, Jan 2026.

17.Pegasus Insight Landlord Trends Q4 2025.

18.UK Finance, BTL mortgages outstanding, Feb 2026.

19.UK Finance, new mortgages and affordability,

Feb 2026.

20.CBRE, UK Monthly Index, Jan 2026.

21.CoStar Research, Office national report, Jan 2025.

22.CoStar Research, Retail national report, Jan 2025.

23.ONS, Retail sales, Great Britain, Dec 2025.

24.CoStar Research, Industrial national report, Jan 2025.

25.ONS, UK House building: permanent dwellings started

and completed, Jan 2026.



OSB GROUP PLC Annual Report and Accounts 2025		16

Our business model

We are a leading specialist mortgage lender, supported by diversified and stable funding platforms

and a unique and cost-efficient operating model.


	Sophisticated funding platforms
	Our lending is predominantly funded by retail deposits sourced under Kent Reliance (KR) and Charter Savings Bank (CSB) brands. The Group’s issuance of high-quality residential mortgage-backed securities and access to Bank of England facilities provide funding diversification.

	Group’s funding channels as at 31 December 2025		Retail deposits £24.3 bn 2024 : £ 23.8 bn
			27 securitisations since 2013 worth £14.1bn 2024: 26 securitisations worth £13.5bn


	Retail deposits 86%
	SME deposits 2%
	Wholesale 4%
	Debt 3%
	ILTR¹ 5%


	Competitive advantages
	Brands and heritage KR and CSB are award-winning retail savings brands. KR has over 160 years of heritage and six branches.	Capital markets expertise Our strategy is to be dynamic and nimble with issuance plans providing cost-efficient term funding.
	Read more on pages 19-20.	1. Indexed Long-Term Repo.


	Specialist mortgage lending
	The Group offers a breadth of complementary yet differentiated lending propositions and speed of lending decisions delivered through strong relationships with intermediaries.

	Gross loans as at 31 December 2025		Net loans to customers £ 25.9bn 2024: £25.1bn
			Originations £4.7bn 2024: £4.0bn


5% Other
	Bridging 2%
	Asset finance 2%
	Residential development 1%


	7% Commercial


68% Buy-to-Let
	CCFS
	OSB


20% Residential
	CCFS
	OSB

Value we

create


	Competitive advantages
	Relationships with intermediaries We have a long-standing reputation among intermediaries built over many years of strong relationships.	Breadth of propositions Our diverse brands allow us to tailor our lending propositions to better meet the needs of our borrowers.
	Read more on page 18.


Unique operating model The Group operates customer service functions in multiple locations, including our wholly-owned subsidiary OSB India. The Group also has expertise in credit assessment, case management, in-house real estate expertise and collections. Read more on page 21.	OSB savings customer NPS +67 2024: +72 Cost to income ratio 40.4% 2024: 38.7%	CSB savings customer NPS +53 2024: +62	Outstanding customer service OSB India offers excellent customer service, demonstrated by customer Net Promoter Scores (NPS). It provides a structural advantage to the Group with access to talent and cost effectiveness.	Deep credit expertise Our deep credit expertise and strong data analytical capabilities offer valuable insights and learning from the performance of mortgage products.
		CSB savings customer NPS +53 2024: +62

Competitive advantages



OSB GROUP PLC Annual Report and Accounts 2025		17

Our business model continued

Value we create



For shareholders
Our proven business strategy and capital generation capability support consistent capital returns including a progressive dividend per share.

Ordinary dividend per share 35.3p 2024: 33.6p	TNAV per share 579p 2024: 544p

For employees
We strive to create a positive, collaborative and inclusive environment for all colleagues. We invest in training, development and employee engagement activities and offer competitive remuneration and attractive benefits.

Women in senior management roles³ 36% 2024 : 36%	Number of Group employees promoted in 2025 386 2024: 325



For savers
We offer fair and transparent products that meet our customers’ needs and recognise loyalty with special rates for existing savers. Our commitment to excellent customer service is reflected in our strong NPS scores.

OSB customer retention¹ 89% 2024: 90%	CCFS customer retention¹ 85% 2024: 85%

For the environment
We are committed to environmental stewardship, reducing our impact on the environment, supporting the transition to a low-carbon economy and achieving net zero across our value chain.

Reduction in direct emissions in year ⁴ 57% 2024: 41%	Electricity purchased in the UK from renewable tariffs 98% 2024 : 100%



For intermediaries
Our Sales teams have strong relationships with intermediaries, helping them to understand our products. We structure bespoke solutions for our borrowers, delivering clear, accurate and fast decisions that are recognised for their quality, fairness and consistency.

OSB broker NPS ² +55 2024: +57	CCFS broker NPS² +59 2024 : +52

For our communities
We support our national and local community partnerships through a variety of volunteering initiatives, fundraising events and sponsorships.

Group sponsorships and donations over £376k 2024 : over £394k

1.Retention is defined as average maturing fixed contractual retail deposits that remain with the Group on their maturity date.

2.OSB broker NPS relates to Kent Reliance brokers and CCFS broker NPS relates to Precise brokers.

3.Employees at grades A (Executive Director) to grade E (including function heads with senior direct reports or employees in specialist roles of a senior nature).

4.Direct emissions are Scope 1 and Scope 2 using market-based methodology. Reduction since 2022 (Baseline year).



OSB GROUP PLC Annual Report and Accounts 2025		18

Our business model explained

Sp ecialist mortgage lending

The breadth of complementary yet differentiated lending propositions,

speed of lending decisions and strong relationships with intermediaries

make the Group a leading specialist lender in the UK.

The Group reports its lending business under two segments: OneSavings

Bank and Charter Court Financial Services.



OneSavings Bank segment		Charter Court Financial Services segment
Our differentiated lending propositions allow us to cater to the specific needs of our borrowers. In November, as part of the transformation programme, Rely was launched and became the Group’s dedicated Buy-to-Let brand. The Group also launched its new lending platform which streamlines and enhances the application process, reducing the administrative burden on underwriters and intermediaries. We consider each loan on its own merits, responding quickly and flexibly to offer an attractive solution for each of our customers. No case is too complex for us, and for those borrowers with more tailored or larger borrowing requirements, our Transactional Credit Committee meets three times a week, demonstrating the speed of lending decisions.		As a result of the launch of Rely in November, CCFS has been focusing on residential and bridging mortgages under the Precise brand. Precise is a leading bridging lender with a strong reputation amongst the intermediaries. Precise has always used an automated underwriting approach to manage mortgage applications and to deliver a rapid decision in principle. In 2026, residential and bridging products under Precise brand will be originated on the new lending platform, further improving and simplifying the experience for our intermediaries and colleagues.

Complementary lending propositions


Buy-to-Let

Focusing on professional landlords with specialist property types including houses of multiple occupations and multi-unit properties

New brand launched for originations:	Back book brands:


Residential

Specialising in credit impaired, high-net worth individuals, first time buyers and borrowers with multiple or irregular income sources


Higher-yielding segments

Providing commercial and semi-commercial mortgages, asset finance, bridging and development finance



OSB GROUP PLC Annual Report and Accounts 2025		19

Our business model explained continued

S ophisticated funding platforms

The Group’s lending business is supported by diversified and stable

funding platforms. This enables cost of funds optimisation, while

prudently managing funding and liquidity risks.

Retail savings

The Group is predominantly funded by retail

savings deposits sourced under two brands:

Kent Reliance and Charter Savings Bank

(CSB).

Kent Reliance is an award-winning retail

savings franchise with over 160 years of

heritage. It takes deposits online as well as at

six branches in the South East. CSB, a multi-

award-winning retail savings bank, offers its

products online.

Both Banks have a wide range of savings

products, including easy access, fixed term

bonds, cash ISAs and business savings

accounts. CSB and Kent Reliance have

diversified their retail funding sources

through pooled funding platforms with a

range of products offered, including easy

access, longer-term bonds and non-retail

deposits.

In 2025 , our savings products received

industry recognition: Charter Savings Bank

won Best Overall Savings Provider for the

eighth year running from Personal Finance

Awards, Best Cash ISA Provider at the

YourMoney.com awards and Personal

Savings Provider of the Year at the

Moneycomms Top Performer Awards.

Moneynet Personal Finance Awards named

Kent Reliance as Best Children’s Savings

Provider.

Kent Reliance’s proposition for savers is

simple: to offer consistently good-value

savings products that meet customer needs

for cash savings with loyalty rates for

existing customers.

CSB’s philosophy is to maintain and develop

its award-winning business, offering

competitively priced savings products.

As part of the transformation programme,

fixed rate bonds, joint accounts and easy

access accounts were launched on the new

savings platform during 2025. The platform

offers fully digital onboarding and real time

payments improving experience for our

savers.

In July, the Group received a Domestic

Liquidity Subgroup (DoLSub) Permission

which allows full fungibility of liquidity and

funding across the Group’s two banking

entities. As liquidity will now be measured at

the Group level, the Group will be able to

leverage its savings brands more efficiently

to support its funding requirements.

Securitisation platforms

The Group accesses the securitisation market

to provide attractive long-term wholesale

funding to complement its retail deposit

franchise and to optimise its funding mix.

Securitisations also provide efficient access

to commercial and central bank

repo facilities.

The Group’s strategy is to be fleet-of-foot

and dynamic rather than deterministic with

its securitisation issuance plans. This enables

it to maximise opportunities with repeat

issuances during periods of buoyant market

activity and to use other funding when the

market is less favourable.

The Group is a programmatic issuer of high-

quality prime residential mortgage-backed

securities through the Precise Mortgage

Funding (PMF), Charter Mortgage Funding

(CMF) and Canterbury Finance securitisation

programmes. OSB has also issued three

securitisations of owner-occupied and Buy-

to-Let acquired mortgages via Rochester

Financing since 2013.

The Group was active in the securitisation

market in 2025, with the issuance of CMF

2025-1, a £578m transaction backed by a

pool of prime owner-occupied mortgages

originated under the Precise brand. The

transaction was designated as Simple,

Transparent and Standardised (STS) under

the UK securitisation Regulation.

CMF 2025-1 was well received by investors

and demonstrated the Group’s ability to

utilise its wholesale funding programmes to

deliver cost-efficient AAA-rated funding.

In total, the Group has completed 27

securitisations worth more than £14.1bn since

2013.

Retail deposits

£24.3bn

2024: £ 23.8bn

Securitisations

securitisations since 2013,

across OSB and CCFS, worth

£14.1bn

2024: 26 securitisations

worth £13.5bn



OSB GROUP PLC Annual Report and Accounts 2025		20

Our business model explained continued

Other funding

Bank of England Schemes

The Group takes advantage of the Bank of

England’s facilities. Drawings under the Term

Funding Scheme for SMEs (TFSME) were fully

repaid in 2025. Drawings under Index Long-

Term Repo were £1,509.9 m as at

31 December 2025 (31 December 2024:

£380.3m).

Debt issuance

In November, the Group successfully issued

£150m of AT1 securities, generating

significant interest from both new and

existing investors and achieving more

favourable pricing on a spread basis relative

to the existing AT1 instrument. In parallel, the

Group launched an early tender offer for the

purchase of the current AT1 securities with

many existing investors participating.

The Group’s bonds continued to be actively

traded in the secondary markets.

The Group significantly

expanded its debt

investor base.

Jens Bech, Group Commercial Director



OSB GROUP PLC Annual Report and Accounts 2025		21

Our business model explained continued

Un ique operating model

The lending and savings businesses operate

through the Group’s unique and cost-efficient

operating model.

Customer service

The Group operates customer service

functions in multiple locations across the UK

including Chatham, Wolverhampton,

Fareham, London and Fleet. These, together

with OSB India, help deliver on the aim of

putting customers first.

The Group has proven collection capabilities

and expertise in case management and

supporting customers in financial difficulty.

This offers valuable insights into, as well as

the opportunity to learn from, the

performance of mortgage products.

The Group has deep credit expertise through

strong data analytical capabilities.

The Group delivers cost efficiencies through

excellent process design and management

with strong IT security and continues to

invest in enhancing the digital offering as

customer demand changes.

OSB India

OSB India (OSBI) is a wholly-owned

subsidiary, strategically located in Bangalore

and Hyderabad. As the Group’s Global

Capability Centre, OSBI plays a key role in

delivering scalable and cost-effective

solutions across Customer Service, Business

Operations and Technology.

OSBI leverages India’s deep talent pool and

digital infrastructure to support

transformation across the Group. We invest

in high-calibre talent at competitive cost and

provide training to ensure our operations are

aligned to evolving business needs in both

India and the UK.

Our operating model is built around

excellence in service delivery, process

efficiency and technological innovation.

We reward performance based on customer

outcomes, operational impact and the

development of future-fit solutions, as

evidenced by strong Net Promoter Scores,

lean processes and modern platforms.

In 2025, OSBI maintained a stable workforce

with a regretted attrition rate¹ of 10%, and

retained its ‘Great Place to Work’

certification for the 9th consecutive year,

underscoring our strong culture and high

level of employee engagement.

Our offices are fully paperless and purpose-

built for a modern, digital-first workforce.

All data and processing remain within the UK,

ensuring compliance and operational

integrity.

OSB India colleagues at the end

of 2025

1,031

2024: 949

OSBI regretted attrition rate1

10%

2024 : 12%

Group colleagues at the end of 2025

2,489

2024 : 2,498

Women in senior management roles²

36%

2024: 36%

Reduction in direct emissions³

57%

2025: 44.27 tCO2e

2024: 101.83 tCO 2e

Total benefit to all charities/

organisations

over £376k

2024: over £394k

Sustainability

The Group operates in a sustainable way,

with key Environmental, Social and

Governance considerations guiding its

actions and decisions.

We are aware of the positive impact we can

make in society through our activities and

the responsibility we have to minimise our

impact on the planet.

The Group strives to create a diverse and

inclusive workplace, one that supports the

development of all colleagues.

Our Community Impact Strategy supports a

range of community initiatives and in 2025

we donated over £376k to charitable causes

and colleagues contributed over 7,385 hours

of volunteering.

Whilst reducing the environmental impact of

our lending remains challenging, we have

continued to reduce the impact from our

offices and branches, reducing emissions by

57% in the year.

1.Employees electing to leave the Group by way of

resignation, excluding those retiring or resigning due

to formal performance or absence process.

2.Employees at grades A (Executive Director) to grade E

(including function heads with senior direct reports or

employees in specialist roles of a senior nature).

3.Direct emissions are Scope 1 and Scope 2 using market-

based methodology.



OSB GROUP PLC Annual Report and Accounts 2025		22

Strategic framework

O ur Vision is to be

recognised as the UK’s

number one specialist

lender, through our

commitment to

exceptional service,

strong relationships and

competitive propositions.

A leading specialist lender



Grow and diversify the portfolio in areas of existing expertise

Our goals • Exercise lending discipline, deploying our expertise across all of our lending segments and balancing returns and opportunity to optimise the composition of the loan book • Buy-to-Let lending to comprise ≤60% of the net loan book by 2029 2025 • Continued execution of the optimised lending plan, balancing returns and opportunity across the sub- segments delivered a 13.7% return on tangible equity • Originations were £4.7bn (2024: £4.0bn) with an 53% increase in originations in our higher-yielding sub- segments • Buy-to-Let remained the largest part of the portfolio, with £17.7bn of gross loans (2024: £17.6bn) and it represented 68% of the total gross loan book (2024: 70%) • The Group was the largest independent Buy-to-Let lender in the UK in 2024¹ Looking forward • Continue to deploy scale and resources on new lending opportunities Key risks • Political and economic uncertainty affecting demand for specialist lending • Potential regulatory changes, including legislative focus on Buy-to-Let and environmental regulation • New specialist lenders entering the market
1. UK Finance, Largest Mortgage Lenders, July 2025.
Originations £4.7bn 2024: £4.0bn	Return on tangible equity 13.7% 2024: 14.9%

Focus on quality underwriting and

credit risk management

Our goals

• Deploy deep credit expertise across our products to

deliver high-quality lending decisions

• Provide a differentiated underwriting approach that

blends speed and precision: offering a seamless,

automated path for straightforward cases, while

providing experience-driven, expert manual underwriting

for more complex cases

• Combine judgement with intelligent automation to deliver

credit decisions that are clear, accurate and recognised

by intermediaries for their quality and speed

2025

• The Transactional Credit Committee met three times a

week to offer expert advice and deliver rapid decisions

for over 240 high-value and more complex cases

• Launched a new lending platform, initially for Buy-to-Let

borrowers, that intelligently determines the most

appropriate underwriting pathway for each case

Looking forward

• Continue embedding a technology-enabled approach to

better serve borrowers’ needs across our products

• Adopt smart automation to drive higher conversion rates

and simplified journeys

Key risks

• Evolving regulation reshaping underwriting frameworks

• Challenges in attracting and retaining experienced

underwriters

• Rising intermediary expectations for speed, flexibility and

innovation

Loan loss ratio

5bps

2024: -4bps



OSB GROUP PLC Annual Report and Accounts 2025		23

Strategic framework continued

A leading specialist lender continued



Deepen relationships and reputation for delivery with intermediaries

Our goals • Be the go-to for intermediaries, offering an unparalleled one-stop lending shop with a broad, easy to navigate and consistent experience • Offer a personalised understanding of an individual borrower, an essential driver of success for specialist lenders 2025 • Launched a new lending platform that reduces broker data requirements by 50% and accelerates the application‑to‑offer process to as little as two hours • Launched the Rely brand for Buy-to-Let mortgages, pooling and enhancing our range of existing products Looking forward • Residential mortgages to be offered on the new platform • Ongoing platform optimisation with enhanced speed to market from a more agile product set Key risks • Competitive pressures and changing macroeconomic conditions leading to peaks and troughs in demand, potentially affecting service levels

OSB broker NPS +55 2024: +57	CCFS broker NPS +59 2024: +52

Multi-channel funding platforms

Maintain stable, high-quality, diversified

funding platforms

Our goals

• Maintain resilient and diversified funding platforms to

support future growth, ensure that liquidity requirements

are met and cost of funds is optimised

• Be primarily funded through attracting and retaining

loyal retail savings customers, whilst maintaining a

sophisticated securitisation funding programme and

balance sheet management capability

• Make further progress in the transformation programme

2025

• Opened over 282,000 new savings accounts across both

savings brands in 2025 (2024: over 237,000)

• Launched a range of Kent Reliance products on the new

saving platform and implemented real time payments for

new customers

• Completed a £578m securitisation of residential

mortgages under the CMF programme

• Received DoLSub permission allowing full fungibility of

funding across the Group

Looking forward

• Complete the migration of Kent Reliance and Charter

Savings Bank customers on to the new savings platform

• Launch an innovative app for savings customers

• Benefit from the ability to execute structured balance

sheet management transactions

Key risks

• Maintaining price competitiveness in the retail savings

market

• Volatility of capital markets on demand and price

Savings accounts opened

over 282,000

2024 : over 237,000

Unique operating model

Enhance operational efficiency and scalability

Our goals

• Deliver best-in-class customer service

• Maintain centres of excellence across existing locations

in Chatham, Wolverhampton, Bangalore and

Hyderabad

• Scale which allows operational efficiencies, creating a

structural cost advantage and a greater origination

capability for the Group

2025

• Maintained strong savings customer NPS of +67 for

Kent Reliance and +53 for Charter Savings Bank

reflecting our focus on customer service with

transparent and fair savings products

• New lending platform delivered significant operational

efficiencies such as reducing the time to train an

underwriter from six months to one month

Looking forward

• Continue to scale data capabilities, ensuring even

greater flexibility, deeper analytics and faster

innovation

• Deliver faster innovation cycles, helping the Group to

bring new products to market quickly and efficiently

Key risks

• Achieving continuous service improvement as the

Group grows, whilst anticipating customers’ evolving

expectations

• Increasing complexity from compliance with changing

regulation

• Maintaining operational resilience as the Group grows

Cost to income ratio

40.4%

2024: 38.7%



OSB GROUP PLC Annual Report and Accounts 2025		24

Strategy in action

Investing

in our future

The Group presented its transformation programme

at the Investor update in March 2025. In its third

year, the programme progressed to target in 2025…

Savings

The new savings platform enables a fully

digital customer onboarding and real-time

payments for instant deposits and

withdrawals. It delivers an enhanced

experience for our savers and self-service

options to access and manage accounts

anytime, anywhere. It also enables the

Group to optimise new deposit pricing, act

with speed in the market and innovate its

products.

In the year, Kent Reliance fixed-rate bonds,

joint accounts and easy access accounts for

new savers were added to the savings

platform. In October, the Group also

commenced the migration of the existing

easy access accounts onto the new savings

platform.

Lending

After a successful pilot involving over 50

broker firms and feedback from more than

500 brokers, in November, the Group

launched its new lending platform to the

market. The platform is powered by

technology that allows for a simple and fast

journey for our brokers: enhancing

everything from broker registration,

agreement-in-principle through to

underwriting, valuations, risk assessment

and document handling.

At the same time, Rely was launched, a

dedicated Buy-to-Let brand which enhances

and streamlines the Buy-to-Let offering

across the Group. Rely will serve our first-

time landlords as well as large professional

investors. Rely sales teams will support

brokers with more complex or unusual cases.

Rely became the Group’s Buy-to-Let

powerhouse. All Buy-to-Let products for new

borrowers under Precise and Kent Reliance

brands were withdrawn. Precise will continue

to focus on residential and bridging

mortgages, its area of expertise.

The new platform has delivered tangible

benefits, including automated valuations for

c.10% of cases, where none existed

previously.

Foundations

We have built our core banking system

underpinned by the modern, resilient and

high-performing savings and lending

platforms.

In the year, we continued to invest in cloud,

data and engineering to create foundations

that reduce costs, accelerate speed to

market of our products and enhance

customer experience.

Mortgage agreement in

principle (AIP) in less than

10 minutes

Mortgage application

to offer in as little as

2 hours

40k

accounts migrated onto

the new savings platform

Savers enjoy new

self-service features



OSB GROUP PLC Annual Report and Accounts 2025		25

Key performance indicators

Key performance indicators

(KPIs) demonstrate the

Group’s resilient

performance in 2025

compared to 2024.

The Board and Management

use KPIs when assessing and

measuring performance of

the Group against

strategic priorities.

For calculation of key performance

indicators, see Appendix 4.

The Group’s external auditor performed an

independent reasonable assurance review of

certain KPIs as marked with the symbol Δ –

see Appendix 2 for the auditor’s

assurance report.


Originations ^Δ	Net interest margin (NIM)^Δ	Cost to income ratio^Δ

+19%	-2bps	+1.7ppt


Definition Gross new lending before redemptions. 2025 performance Originations increased in the year as the Group focused on returns and loan book diversification into higher-yielding sub- segments.	Definition Net interest income as a percentage of a 13-point average of interest earning assets (cash, investment securities, loans and advances to customers and credit institutions). It represents the margin earned on loans and advances and liquid assets after swap expense/income and cost of funds. 2025 performance The reduction in NIM was due to more costly spreads to SONIA from new retail funding in the year that more than offset more resilient lending margin.	Definition Administrative expenses as a percentage of total income. It is a measure of operational efficiency. 2025 performance The cost to income ratio increased as a result of higher administrative expenses largely reflecting continued investment in the Group’s transformation programme.

* 2025 statutory NIM is comparable with 2024

underlying NIM as both metrics exclude acquisition-

related items, which were fully written off in 2024



OSB GROUP PLC Annual Report and Accounts 2025		26

Key performance indicators continued


Management expense ratio^Δ	Loan loss ratio^Δ	Basic EPS^Δ (pence per share)	Ordinary dividend per share ^Δ (pence per share)

+5bps	+9bps	-3%	+5%


Definition Administrative expenses as a percentage of a 13-point average of total assets. It is a measure of operational efficiency. 2025 performance The management expense ratio increased in the year as a result of higher administrative expenses largely reflecting the continued investment in the Group’s transformation programme and a smaller net loan book balance throughout 2025 impacting average assets. In December 2024, the Group completed a £1.25bn securitisation and deconsolidation of Precise Buy-to-Let loans.	Definition Expected credit losses as a percentage of a 13-point average of gross loans and advances. It is a measure of the credit performance of the loan book. 2025 performance The loan loss ratio was impacted by an increase in provision for accounts in arrears, changes in borrowers’ profiles as they transitioned through impairment stages, loan book growth, write-offs and other adjustments. These were partially offset by updated macroeconomic scenarios, model and post-model adjustments and other releases.	Definition Profit attributable to ordinary shareholders, which is profit after tax and after deducting coupons on AT1 securities, gross of tax, divided by the weighted average number of ordinary shares in issue. 2025 performance Basic EPS decreased due to a lower profit after tax, more than offsetting the benefit of a lower number of shares in issue as a result of the £100m share repurchase programme in progress during the year.	Definition The sum of the recommended final dividend per share and any interim dividend per share for the year. 2025 performance The Board has recommended a final dividend of 24.1 pence per share, which together with the 2025 interim dividend of 11.2 pence represents a total ordinary dividend of 35.3 pence per share.



OSB GROUP PLC Annual Report and Accounts 2025		27

Key performance indicators continued


Return on tangible equity^Δ	Tangible net asset value per share^Δ	CRD IV Common Equity – Tier 1 capital ratio	Savings customer satisfaction – Net Promoter Score

-1.2ppt	+6%	-50bps	-5


			-9


Definition Profit attributable to ordinary shareholders, which is profit after tax and after deducting coupons on AT1 securities, as a percentage of a 13-point average of shareholders’ equity, excluding 13-point average of intangible assets and AT1 securities. 2025 performance Return on tangible equity reduced due to lower profitability in the year.	Definition Shareholders’ equity excluding intangible assets and AT1 securities as at the end of the year end divided by the number of shares outstanding as at the end of the year. 2025 performance Tangible net asset value per share improved largely as a result of lower number of shares outstanding.	Definition Common Equity Tier 1 (CET1) capital as a percentage of risk-weighted assets (calculated on a standardised basis for credit risk and operational risk) and is a measure of the capital strength of the Group (for more information, see note 49 to the Consolidated Financial Statements). 2025 performance The CET1 ratio decreased, as profit for the year was more than offset by the 2025 dividend, share repurchase programme and loan book growth as well as an increase in risk-weighted assets.	Definition The NPS measures customers’ satisfaction with services and products. It is based on customer responses to the question of whether they would recommend us to a friend. The response scale is 0 for absolutely not to 10 for definitely yes. Based on the score, a customer is a detractor between 0 and 6, a passive between 7 and 8 and a promoter between 9 and 10. Subtracting the percentage of detractors from promoters gives an NPS of between -100 and +100. 2025 performance Savings customer NPS remained strong, however reduced in the year as the strong ISA season had some impact on customer service.

OSB

CCFS



OSB GROUP PLC Annual Report and Accounts 2025		28

Financial review

Our focus throughout the year was delivering

against the first year of the transition period

and building towards medium-term aspirations

presented to the market in March 2025. I am

pleased, therefore, that the financial results

were delivered in line with guidance.

These results reflect our strong discipline in both

lending and cost management, including

investment in the transformation programme.

We delivered 13.7% return on tangible equity for

the year.

2025 guidance delivered

The Group’s net loan book increased by 3.2%

to £25.9bn as at 31 December 2025 from

£25.1bn in the prior year, in line with the full

year guidance. The growth was supported by

originations of £4.7bn during the year (2024:

£4.0bn), with a 53% increase in combined

originations from higher-yielding sub-

segments, including Commercial, Asset

finance, Bridging and Residential

development.

Net interest margin (NIM) for 2025 was also

in line with guidance at 228bps. However, it

reduced by 2bps compared to the underlying

NIM of 230bps in 2024, the equivalent

comparative which also excludes acquisition-

related items. The reduction was due to more

costly spreads to SONIA from new retail

funding in the year that more than offset

more resilient lending margin.

The Group’s NIM excluding liquid assets¹was

267bps for the year (2024: 266bps) enabling

a more meaningful comparison with our

closest peers.

We again demonstrated our strong cost

discipline and operational efficiency.

Administrative expenses for 2025 were

£270.1m (2024: £258.1m), in line with

guidance, with the increase mainly driven

by further investment in the transformation

programme. I am pleased that core

administrative expenses¹ across the UK

and India increased by only 0.8%compared

to 2024.

Lending and funding

Our focus on returns was reflected in our

lending discipline as we continued to write

business at sustainable margins. We were

disciplined when pricing new and retention

business as well as shifting the composition

of the loan book towards higher-yielding sub-

segments. This approach delivered another

year of new business written at sustainable

returns and margin, that met our risk appetite

and capital requirements. However, as the

back book matures, some of that benefit was

offset by the roll-off of historical higher yielding

Buy-to-Let and Residential mortgages.

Retail deposits remained the primary source

of funding for the Group. In 2025, the retail

deposit market was competitive leading to

some pressure on the Group’s cost of funds

from the second quarter of the year. In the

second half, funding costs remained

elevated. As we entered 2026, the December

Bank of England’s rate cut was not fully

passed onto the savers.

As at the end of 2025, retail deposits reached

£24.3bn, an increase of 2% from £23.8bn at the

end of 2024. In September, the Group fully

repaid its TFSME drawings and continued to

utilise other Bank of England funding schemes,

including Indexed Long-Term Repo with a

balance of £1,509.9m at the end of 2025 (31

December 2024: £380.3m).

In September, the Group completed a £578m

securitisation of owner-occupied prime

mortgages under the CMF programme,

achieving our best-ever pricing for this

transaction. We will continue to complement

retail savings with attractive price and

duration funding options as we actively

manage our overall cost of funds.



OSB GROUP PLC Annual Report and Accounts 2025		29

Financial review continued

Strong capital position

I am pleased that the Group’s Minimum

Requirement for Own Funds and Eligible

Liabilities (MREL) resolution strategy was

reclassified to Transfer from Bail-in, effective

from 1 January 2026. The Group’s MREL

requirement will now be equal to its minimum

capital requirement, which is the sum of Pillar

1 and Pillar 2A. This change is expected to

positively impact the Group’s RoTE from

2029. The Group continues to evaluate the

optimal approach to its existing MREL

qualifying debt securities as they approach

their respective call dates.

We continue to expect that the

implementation of Basel 3.1 rules as written,

would reduce the CET1 ratio as at 31

December 2025 by 1.3% as a result of a 9%

uplift in the RWAs. This is compared to just

over 1% as at 31 December 2024. The

increase in impact on the CET1 ratio is largely

due to the growth and change in the mix of

the Group’s loan book.

With greater clarity over the Basel 3.1 rules

and our confirmed MREL status, the Board

reviewed the Group’s capital position and set

a new CET1 target in the range of 13% –

13.5%. The Group continues to generate

enough capital to support loan book growth

and a progressive dividend. The Board

remains committed to returning excess

capital to shareholders as the Group

progresses towards its new CET1 target post

Basel 3.1 implementation. As at 31 December

2025, the Group’s CET1 ratio was 15.8%,

after the £100m of share repurchase

programme announced in March 2025 (31

December 2024: 16.3%).

During the year, we continued to optimise

our capital structure, issuing £150m of AT1

securities. The transaction attracted

significant interest from new and existing

investors and priced more favourably on a

spread basis than the AT1 security in issue. In

parallel, the Group launched an early tender

offer for the purchase of the current AT1

security with many existing investors

participating.

The Group continues to engage with the PRA

on its IRB application and is waiting for

clarity on the possible introduction of a

foundation IRB approach for residential

mortgage exposures.

Outlook

For 2025, net interest margin is expected to

be circa 225bps, reflecting the same key

drivers as in 2025: a continuation of lending

back book dynamics; new business written at

sustainable margins; and a gradual

normalisation of the cost of retail funding

from the current elevated levels.

Return on tangible equity remains our key

focus. We continue to expect low teens RoTE

in 2026, mid teens RoTE in 2027-28

increasing to the top end of mid teens in

2029 driven by the successful execution of

our strategy, capital optimisation and the

MREL qualifying debt securities reaching

their respective call dates.

In 2025, we made strong progress against

the strategic priorities, both financial and

operational and I am pleased with the

outcome in the first year of our

transition period.

Victoria Hyde

Chief Financial Officer

4 March 2026

1. See Appendix 4 for definition and calculation of APMs.



OSB GROUP PLC Annual Report and Accounts 2025		30

Financial review continued


	FY 2025	FY 2024	Change
Summary Profit or Loss	£m	£m
Net interest income	679.4	666.4	2%
Net fair value loss on financial instruments	(22.1)	(1.5)	n/m
Gain/(loss) on sale of financial instruments	3.4	(2.4)	n/m
Other operating income	7.3	4.7	55%
Total income	668.0	667.2	–%
Administrative expenses	(270.1)	(258.1)	5%
Profit before provisions and impairment of financial assets	397.9	409.1	(3%)
Provisions	(2.4)	(2.7)	(11%)
Impairment of financial assets	(13.0)	11.7	n/m
Profit before tax	382.5	418.1	(9%)
Profit after tax	285.7	308.1	(7%)


Key ratios - see Appendix 4 for more information
Net interest margin, bps	228	221	7
Cost to income ratio, %	40.4	38.7	1.7ppt
Management expense ratio, bps	90	85	5
Loan loss ratio, bps	5	(4)	9
Return on tangible equity, %	13.7%	14.9%	(1.2)ppt
Basic earnings per share, pence	75.6	77.6	(3%)
Ordinary dividend per share, pence	35.3	33.6	5%
Common Equity Tier 1 ratio	15.8%	16.3%	(0.5)ppt
Tangible net asset value per share, pence	579	544	6%


	31-Dec-25	31-Dec-24
Extracts from the Statement of Financial Position	£m	£m	Change
Loans and advances to customers	25,920.6	25,126.3	3.2%
Retail deposits	24,251.1	23,820.3	2%
Total assets	31,122.7	30,243.6	3%
Risk-weighted assets	12,541.7	11,915.7	5%

Profit before tax


	FY 2025	FY 2024	Change
Profit before tax	£382.5m	£418.1m	(9%)
Earnings per share	75.6p	77.6p	(3%)
Return on tangible equity	13.7%	14.9%	(1.2)ppt

Profit before tax decreased due to an impairment charge compared to an impairment credit in

2024, an increase in fair value loss on financial instruments and higher administrative

expenses. These movements were partially offset by an increase in net interest income, a gain

on sale of the second charge mortgage portfolio and an increase in commissions and servicing

fees income.

The Group’s effective tax rate remained broadly flat in 2025 at 25.3% (2024: 26.1%), see note

11 to the Consolidated Financial Statements.

Return on tangible equity and basic earnings per share decreased predominantly due to a

reduction in profit after tax compared to the prior year.

Net interest income and net interest margin


	FY 2025	FY 2024	Change
Net interest income	£679.4m	£666.4m	2%
Underlying net interest income*	–	£690.6m	n/m
Net interest margin	228bps	221bps	7bps
Underlying net interest margin*	–	230bps	n/m
Other operating income	£7.3m	£4.7m	55%

* 2025 statutory NIM is comparable with 2024 underlying NIM as both metrics exclude acquisition-related items, which

were fully written off in 2024.

Net interest income and net interest margin reduced by 2% and 2bps, respectively, compared

to underlying results in 2024. The reduction was primarily driven by more costly spreads to

SONIA from new retail funding which more than offset more resilient back book performance

and new business written at sustainable margin. NIM was further impacted by higher average

liquid assets balance compared to the prior year.

Other operating income mainly comprised CCFS’ commissions and servicing fees, including

those relating to securitised loans, which have been derecognised from the Group’s

balance sheet.



OSB GROUP PLC Annual Report and Accounts 2025		31

Financial review continued

Net fair value loss on financial instruments


	FY 2025	FY 2024	Change
Net fair value loss on financial instruments	£22.1m	£1.5m	n/m

Net fair value loss on financial instruments included a loss of £1.7m (2024: £19.8m loss) from

hedge ineffectiveness and a net loss on unmatched swaps of £16.2m (2024: £21.2m gain). The

Group also recorded a £9.4m loss from the amortisation of hedge accounting inception

adjustments (2024: £5.5m loss), £nil from the amortisation of acquisition-related inception

adjustments (2024: £2.3m gain), and a gain of £5.2m from other items (2024: £0.3m gain); see

note 5 to the Consolidated Financial Statements.

The loss in respect of the ineffective portion of hedges arose from recent swap volatility and

will unwind over the remaining life of the hedged items.

The net loss on unmatched swaps related primarily to fair value movements on mortgage

pipeline swaps, prior to them being matched against completed mortgages, and was caused

by a decrease in interest rate outlook on the SONIA yield curve. The Group economically

hedges its committed pipeline of mortgages and this unrealised loss will unwind over the life of

the swaps through hedge accounting inception adjustments.

Gain/(loss) on sale of financial instruments


	FY 2025	FY 2024	Change
Gain/(loss) on sale of financial instruments	£3.4m	£(2.4)m	n/m

In September 2025, the Group sold its second charge mortgage portfolio for £134.2m. The

Group recognised a profit on sale of £3.4m from this transaction due to the difference between

proceeds received and the carrying value of the items derecognised from the Group’s balance

sheet.

In December 2024, the Group completed PMF 2024-2 transaction which securitised £1,249.9m

of CCFS Buy-to-Let mortgages. The Group recognised a loss on sale of £2.4m from this

transaction.

Administrative expenses


	FY 2025	FY 2024	Change
Administrative expenses	£270.1m	£258.1m	5%
Cost to income ratio	40.4%	38.7%	1.7ppt
Management expense ratio	90bps	85bps	5bps

Administrative expenses increased mainly due to further investment in the Group’s

transformation programme. Core administrative expenses increased by 0.8%¹ compared to the

prior year.

The Group’s cost to income and management expense ratios increased as a result of higher

administrative expenses. The management expense ratio was further impacted by a smaller

net loan book balance throughout 2025 affecting total assets due to the £1.25bn securitisation

and deconsolidation of Precise Buy-to-Let loans completed in December 2024.

Impairment of financial assets


	FY 2025	FY 2024	Change
Impairment charge/(credit)	£13.0m	£(11.7)m	n/m
Loan loss ratio	5bps	(4)bps	9bps

The Group recorded an impairment charge and an adverse loan loss ratio in 2025 compared

to an impairment credit and a favourable loan loss ratio in the prior year.

The impairment charge was primarily due to a £11.8m charge relating to an increase in

provision for accounts with arrears of three months or more, a £3.9m increase in Stage 1

provisions in respect of loan book growth and a £2.9m charge for individually assessed

provisions. Write-offs and other adjustments amounted to a charge of £16.3m in the year.

These were partially offset by updated macroeconomic scenarios and valuations resulting in a

release of £2.4m, a £13.3m release due to a reduction in model and post-model adjustments

and a £6.2m release from IFRS 9 stage migration.

In 2024, the impairment credit was largely due to more favourable macroeconomic scenarios,

partially offset by an increase in provisions for accounts in arrears, changes in the credit

profile of borrowers as they transitioned through modelled IFRS 9 impairment stages and

higher individually assessed provisions and write-offs.

1. See Appendix 4 for calculation of APMs.



OSB GROUP PLC Annual Report and Accounts 2025		32

Financial review continued

Dividend

The Board has recommended a final dividend of 24.1 pence per share for 2025 which, together

with the interim dividend of 11.2 pence per share, represents a total ordinary dividend of 35.3

pence per share.

The recommended final dividend is subject to approval at the AGM on 7 May 2026. The final

dividend will be paid on 13 May 2026, with an ex-dividend date of 2 April 2026 and a record

date of 7 April 2026.

Balance sheet growth


	31-Dec-25	31-Dec-24	Change
Net loans and advances to customers	£25,920.6m	£25,126.3m	3.2%
Total assets	£31,122.7m	£30,243.6m	3%
Retail deposits	£24,251.1m	£23,820.3m	2%

Net loans and advances to customers increased in the year supported by a 19% growth in

mortgage originations to £4.7bn from £4.0bn in 2024.

Total assets increased largely due to growth in loans and advances to customers and balances

related to mortgage hedging. The Group’s liquid assets remained broadly flat in the year as

an increase in investment securities was partially offset by a reduction in liquidity balances

held with the Bank of England.

Retail deposits continued to be the main source of funding in the year, as the Group repaid its

final TFSME drawings in September. The main source of additional funding was provided by

the Bank of England’s Indexed Long-Term Repo with drawings of £1,509.9m as at the end of

the year (31 December 2024: £380.3m).

Liquidity


	31-Dec-25	31-Dec-24	Change
High-quality liquid assets – Group	£3,676.2m	£3,631.6m	1%
High-quality liquid assets – DoLSub	£3,678.3m	n/a	n/a

Liquidity coverage ratio – Group	203%	217%	(14)ppt
Liquidity coverage ratio – DoLSub	197%	n/a	n/a

In July, the PRA granted permission for OSB and CCFS to be combined to form a Domestic

Liquidity Sub Group (DoLSub) for the purposes of liquidity management and liquidity coverage

ratio (LCR) compliance, alongside the requirements at a Group level. DoLSub allows full

fungibility of liquidity and funding across the Group’s two banking entities.

The DoLSub and Group hold a significant liquidity buffer of LCR eligible high-quality liquid

assets (HQLA).

The DoLSub operates within a target liquidity runway in excess of the minimum LCR regulatory

requirement. The DoLSub has a range of contingent liquidity and funding options available for

possible stress periods, including portfolios of unencumbered pre-positioned Bank of England

level B and C eligible collateral in the Bank of England Single Collateral Pool.

As at 31 December 2025, LCRs for the Group and DoLSub were all significantly in excess of the

regulatory minimum of 100% plus Individual Liquidity Guidance.

Capital


Key ratios	31-Dec-25	31-Dec-24	Change
CET1 ratio	15.8%	16.3%	(0.5)ppt
Total capital ratio	19.1%	19.7%	(0.6)ppt
Risk-weighted assets	£12,541.7m	£11,915.7m	5%
Leverage ratio	7.4%	7.7%	(30)bps

The Group’s capital position remained strong. Profit generated in the year increased the CET1

ratio by 2.3%, which was more than offset by 1.1% for the 2025 dividend, 0.8% for the £100m

share repurchase programme announced in 2025 and 0.8% for loan book growth. Other

movements in the CET1 reduced the ratio by a further 0.1%.

The Group had a Pillar 2a requirement of 1.35% of risk-weighted assets (excluding a static

add-on of £17.4m for transformation risk) as the end of the year, unchanged from the

requirement as at 31 December 2024.



OSB GROUP PLC Annual Report and Accounts 2025		33

Financial review continued

Summary cash flow statement


	31-Dec-25	31-Dec-24
	£m	£m
Profit before tax	382.5	418.1
Net cash generated/(used in):
Operating activities	243.6	2,235.7
Investing activities	(332.4)	(29.3)
Financing activities	(343.9)	(1,489.0)
Net increase/(decrease) in cash and cash equivalents	(432.7)	717.4
Cash and cash equivalents at the beginning of the year	3,231.4	2,514.0
Cash and cash equivalents at the end of the year	2,798.7	3,231.4

Cash flow statement

The Group’s cash and cash equivalents decreased by £432.7m during the year to £2,798.7m

as at 31 December 2025.

In 2025, loans and advances to customers increased by £807.0m, primarily funded by

£430.8m of deposits from retail customers and a £373.5m increase in amounts owed to other

customers. The Group repaid £160.0m of cash collateral received and paid £82.3m of cash

collateral on derivative exposures reflecting a reduction in swap pricing over the year. Cash

used in financing activities of £343.9m included financing repaid: TFSME scheme repayments

of £1,394.9m, repayment of £258.0m towards securitisation funding and the £133.2m

redemption of AT1 securities. It also included interest on financing of £192.4m as well as

£125.5m of dividends paid and £89.4m used under the share repurchase programme. These

were partially offset by £1,129.6m of financing drawn from the ILTR scheme, funding through

securitisations and senior note issuances which raised £248.8m, commercial repo drawings of

£328.2m and £148.0m of proceeds from the issuance of AT1 securities. Cash used in investing

activities was £332.4m.

In 2024, loans and advances to customers increased by £135.0m, primarily funded by

£1,693.7m of deposits from retail customers. The Group repaid £52.8m of cash collateral

received on derivative exposures and received £64.4m of initial margin, reflecting a reduction

in swap pricing over the year. Cash used in financing activities of £1,489.0m included

financing repaid: TFSME scheme repayments of £1,957.1m and repayment of £548.4m towards

securitisation funding and repayment of PSBs of £15.0m. It also included interest on financing

of £273.3m as well as £126.4m of dividends paid and £90.6m used under the share repurchase

programme. These were partially offset by funding through securitisations and senior note

issuances which raised £1,142.1m and £370.2m of financing drawn from the ILTR scheme.

Cash used in investing activities was £29.3m.

Profit before tax

£382.5m

2024: £ 418.1m

Common Equity Tier 1 ratio

15.8%

2024 : 16.3%



OSB GROUP PLC Annual Report and Accounts 2025		34

Portfolio overview

The Group reports its lending business under two segments: OneSavings Bank (OSB) and Charter Court

Financial Services (CCFS).

The consolidated view by product is presented below.

Originations


	2025		2024		Change
	£m		£m		%
OSB Buy-to-Let	1,754.7		1,372.3		28
CCFS Buy-to-Let	196.7		516.7		(62)
Total Buy-to-Let		1,951.4		1,889.0	3
OSB Residential	118.4		255.9		(54)
CCFS Residential	656.1		514.6		27
Total Residential		774.5		770.5	1
Commercial		701.0		446.8	57
Asset finance		242.1		182.1	33
Residential development		301.9		189.1	60
Bridging		724.9		460.1	58
Funding lines		14.2		16.1	(12)
Total originations		4,710.0		3,953.7	19

Originations by segment


	2025	2024	Change
	£m	£m	%
OSB segment	3,132.3	2,462.3	27
CCFS segment	1,577.7	1,491.4	6
Total originations	4,710.0	3,953.7	19

Originations as a percentage of total


41% Buy-to-Let
	CCFS
	OSB


27% Other
	Bridging
	Asset finance
	Residential development


17% Residential
	CCFS
	OSB


	15% Commercial



OSB GROUP PLC Annual Report and Accounts 2025		35

Portfolio overview continued

Gross loans


	31 December 2025		31 December 2024		Change
	£m		£m		%
OSB Buy-to-Let	12,061.9		11,201.2		8
CCFS Buy-to-Let	5,630.0		6,367.3		(12)
Total Buy-to-Let		17,691.9		17,568.5	1
OSB Residential	1,967.1		2,181.2		(10)
CCFS Residential	3,130.9		3,005.7		4
Total Residential		5,098.0		5,186.9	(2)
Commercial		1,866.1		1,356.0	38
Asset finance		424.2		316.9	34
Residential development		343.1		262.0	31
Bridging		594.3		364.5	63
Other ¹		26.6		198.4	(87)
Total gross loans		26,044.2		25,253.2	3

Gross loans by segment


	31 December 2025	31 December 2024	Change
	£m	£m	%
OSB segment	16,677.4	15,439.0	8
CCFS segment	9,366.8	9,814.2	(5)
Total gross loans	26,044.2	25,253.2	3

Gross loans by product as a percentage of total loan book


	31 December 2025		31 December 2024
	£m	% of total	£m	% of total
Buy-to-Let	17,691.9	68	17,568.5	70
Residential	5,098.0	20	5,186.9	21
Commercial	1,866.1	7	1,356.0	5
Asset finance	424.2	2	316.9	1
Residential development	343.1	1	262.0	1
Bridging	594.3	2	364.5	1
Other¹	26.6	–	198.4	1
Total gross loans	26,044.2		25,253.2

1.Other includes funding lines, second charge books in 2024 which were sold in September 2025 and a portfolio of

residential mortgages recognised at fair value through profit and loss (FVTPL).


	Gross loans as a percentage of total loan book


5% Other
	Bridging 2%
	Asset finance 2%
	Residential development 1%


	7% Commercial


68% Buy-to-Let
	CCFS
	OSB


20% Residential
	CCFS
	OSB



OSB GROUP PLC Annual Report and Accounts 2025		36

Portfolio overview continued



BUY-TO-LET
Lending under Kent Reliance (KR) and Precise brands, reported under OSB and CCFS segments, respectively

Completions in 2025

Five-year fixed rate completions	Completions represented by refinance



Weighted average new lending LTV	Weighted average interest coverage ratio
Precise 74%
Proportion of professional, multi-property landlords	Borrowing via a limited company²

Kent Reliance 92%	KR 92%	Precise 66%
Net loan book


Customer retention ¹	Average loan size

	Kent Reliance £270k	Precise £188k


Weighted average book LTV	1.Customers refinancing with the Group within three months of their fixed rate product ending. 2.KR includes purchases, while Precise includes both purchases and remortgages.



	RESIDENTIAL
	Lending under KR and Precise brands, reported under OSB and CCFS segments, respectively

	Originations in 2025

	Weighted average origination LTV ²

	Net loan book

	Weighted average book LTV ³

	3.KR Residential sub-segment weighted average LTVs include first and second charge lending.



COMMERCIAL
Lending under the InterBay brand, reported under OSB segment

Weighted average book LTV 71%		Average loan size £460k

BRIDGING
Lending under the Precise brand, reported under CCFS segment
Originations £725 m

RESIDENTIAL DEVELOPMENT
Lending under the Heritable brand, reported under OSB segment

Loan book £343m	+	Committed £258m

Representing 3,138 residential units



OSB GROUP PLC Annual Report and Accounts 2025		37

Segments review

The Group reports its lending

business under two segments:

OneSavings Bank and Charter

Court Financial Services.

OneSavings

Bank (OSB)

segment

The OSB segment comprises two sub-

segments: BTL/SME

Buy-to-Let mortgages secured on residential property

held for investment purposes by experienced and

professional landlords, commercial mortgages secured

on commercial and semi-commercial properties held for

investment purposes or for owner occupation, asset

finance and residential development finance to small

and medium-sized developers.

Residential

First charge mortgages to owner-occupiers, secured

against a residential home and under shared

ownership schemes.

The following tables present OSB’s contribution to profit and loans and advances to customers:

Contribution to profit


For the year ended 31 December 2025	BTL/SME £m	Residential £m	Total £m
Net interest income	347.2	66.7	413.9
Other (expense)/income	(11.5)	0.5	(11.0)
Total income	335.7	67.2	402.9
Impairment of financial assets	(15.8)	(0.5)	(16.3)
Contribution to profit	319.9	66.7	386.6


For the year ended 31 December 2024	BTL/SME £m	Residential £m	Total £m
Net interest income (restated) ¹	313.0	76.0	389.0
Other expense	(2.9)	(0.6)	(3.5)
Total income (restated) ¹	310.1	75.4	385.5
Impairment of financial assets	8.6	(5.7)	2.9
Contribution to profit (restated) ¹	318.7	69.7	388.4

Loans and advances to customers


	BTL/SME	Residential	Total
As at 31 December 2025	£m	£m	£m
Gross loans and advances to customers	14,710.3	1,967.1	16,677.4
Expected credit losses	(96.0)	(8.5)	(104.5)
Net loans and advances to customers	14,614.3	1,958.6	16,572.9

Risk-weighted assets	7,530.7	857.5	8,388.2


	BTL/SME	Residential	Total
As at 31 December 2024	£m	£m	£m
Gross loans and advances to customers	13,155.8	2,283.2	15,439.0
Expected credit losses	(90.5)	(10.6)	(101.1)
Net loans and advances to customers	13,065.3	2,272.6	15,337.9

Risk-weighted assets	6,592.6	1,040.3	7,632.9

1. Prior period interest income, total income and contribution to profit were restated due to a change in swap cost allocation methodology.



OSB GROUP PLC Annual Report and Accounts 2025		38

Segments review continued OSB segment continued

Buy-to-Let/SME sub-segment


Loans and advances to customers	31-Dec-2025	31-Dec-2024	Change
	£m	£m	%
Buy-to-Let	12,061.9	11,201.2	8
Commercial	1,866.1	1,356.0	38
Asset finance	424.2	316.9	34
Residential development	343.1	262.0	31
Funding lines	15.0	19.7	(24)
Gross loans	14,710.3	13,155.8	12
Expected credit losses	(96.0)	(90.5)	6
Net loans	14,614.3	13,065.3	12

The Buy-to-Let/SME net loan book increased by 12% to £ 14,614.3m (31 December 2024:

£13,065.3m) supported by originations across all sub-segments of £3,013.9m, which increased

by 37% from £2,206.4m in the prior year, in line with the Group’s diversification strategy.

Net interest income in this sub-segment increased by 11% to £347.2m (2024 restated¹: £313.0m)

due to growth in the net loan book, more resilient back book performance and new business

written at sustainable margin, partially offset by more costly spreads to SONIA from new retail

deposit funding.

Other expenses were £11.5m and related primarily to losses from the Group’s hedging activities

(2024: £2.9m). The impairment charge of £15.8m (2024: £8.6m credit) was driven by modelled

IFRS 9 stage migration, an increase in accounts with arrears and loan book growth. Overall,

the Buy-to-Let/SME sub-segment made a contribution to profit of £319.9m, broadly flat

compared to the prior year (2024 restated¹: £318.7m).

The Group remained highly focused on the risk assessment of new lending, as demonstrated

by the average loan to value (LTV) for Buy-to-Let/SME originations² of 72% (2024 : 70%). The

average book LTV in this sub-segment² increased to 70%, with 5.1% of loans exceeding 90%

LTV (31 December 2024: 68% and 4.5%, respectively).

Buy-to-Let

The Buy-to-Let gross loan book increased by

8% to £12,061.9m as at the end of December

2025 from £11,201.2m at the end of the prior

year. Originations increased by 28% to

£1,754.7m from £1,372.3m in 2024.

The proportion of Kent Reliance Buy-to-Let

completions represented by refinance

increased to 67% from 62% in 2024. Product

transfers were at 71% of existing borrowers

choosing a new product within three months

of their initial rate mortgage coming to an

end (2024: 70%).

New borrowers continued to favour five-year

fixed rate mortgages, which represented 69%

of Kent Reliance Buy-to-Let completions

(2024: 72%). The majority of Kent Reliance

existing customers transferring to a new

product at maturity preferred the flexibility of

shorter-term mortgages.

Landlords continued to optimise their

businesses from a tax perspective, with 92%

of Kent Reliance mortgage purchase

applications coming from landlords

borrowing through a limited company,

unchanged from 2024. Professional, multi-

property landlords represented 92% of

completions by value for the Kent Reliance

brand in 2025 (2024: 91%).

Research conducted by Pegasus Insight in

the fourth quarter of 2025, found that 61% of

landlords reported strong tenant demand in

the regions where they currently let property

and that rental yields exceeded 6% for eight

consecutive quarters to the end of 2025, the

highest level recorded in ten years.

The weighted average LTV of the Buy-to-Let

book as at 31 December 2025 increased to

70% with an average loan size of £270k

(31 December 2024: 67% and £260k). The

weighted average interest coverage ratio for

Buy-to-Let originations remained high during

2025 at 200% (2024: 186%) supported by

reducing mortgage interest rates and

opportunities to increase rents.



OSB GROUP PLC Annual Report and Accounts 2025		39

Segments review continued OSB segment continued

Buy-to-Let/SME sub-segment continued

Commercial

Through its InterBay brand, the Group lends

to borrowers investing in commercial and

semi-commercial property, reported in the

Commercial total, and more complex Buy-to-

Let properties and portfolios, reported in the

Buy-to-Let total.

The gross loan book grew by 38% to

£1,866.1m in 2025 (31 December 2024:

£1,356.0m) supported by originations of

£701.0m, an increase of 57% from £446.8m in

2024. The Group continued to focus on high-

quality commercial and semi-commercial

business, launching a new range of products

in February with reduced rates and product

fees. In July, the Group further enhanced its

proposition with a new owner-occupied

commercial range to support transactions

where the security is predominantly used by

the borrower for its own business purpose.

The weighted average LTV of the commercial

book reduced to 71% and the average loan

size increased to £460k in 2025 (31 December

2024: 73% and £440k).

InterBay Asset Finance, which predominantly

targets UK SMEs and small corporates,

financing business-critical assets, continued

to grow in 2025, adding to its high-quality

portfolio. The gross carrying amount under

finance leases increased by 34% to £424.2m

as at 31 December 2025 (31 December 2024:

£316.9m) and originations grew by 33% to

£242.1m from £182.1m in the prior year.

Residential development

Heritable residential development business

provides development finance to small and

medium-sized residential property

developers. The preference is to fund house

builders who operate outside central London

and provide relatively affordable family

housing, as opposed to complex city centre

schemes where affordability and control of

construction costs can be more challenging.

New applications predominantly represent

repeat business from the team’s extensive

existing relationships. Heritable continue to

take a careful approach to approving

funding for new customers.

The residential development finance gross

loan book increased by 31% at the end of

December 2025 to £343.1m, with a further

£258.1m committed (31 December 2024:

£262.0m and £168.2m, respectively). Total

approved limits were £972.4m, exceeding

drawn and committed funds due to the

revolving nature of the facilities, where

construction is phased and loans are

redrawn as sales on the initially developed

properties occur (31 December 2024:

£623.3m).

At the end of December 2025, Heritable had

commitments to finance the development of

3,138 residential units, the majority of which

are houses located outside central London

and other major cities in England.

Funding lines

During the year, the Group maintained a

cautious risk approach focusing on servicing

existing customers. Total credit approved

limits as at the end of December 2025 were

£39.2m with total gross loans outstanding of

£15.0m (31 December 2024: £44.4m and

£19.7m, respectively).

1. Prior period interest income, total income and contribution to profit were restated due to a change in swap cost

allocation methodology.

2. Buy-to-Let/SME sub-segment average weighted LTVs include Kent Reliance and InterBay Buy-to-Let, semi-

commercial and commercial lending.



OSB GROUP PLC Annual Report and Accounts 2025		40

Segments review continued OSB segment continued

Residential sub-segment


Loans and advances to customers	31-Dec-2025	31-Dec-2024	Change
	£m	£m	%
First charge	1,967.1	2,181.2	(10)
Second charge ¹	–	102.0	(100)
Gross loans	1,967.1	2,283.2	(14)
Expected credit losses	(8.5)	(10.6)	(20)
Net loans	1,958.6	2,272.6	(14)

1. The second charge mortgage book was sold in September 2025.

First charge

First charge originations under the Kent

Reliance brand reduced to £118.4m in 2025

(2024: £255.9m) in line with the Group’s

strategic move to offer specialist Residential

mortgages under the Precise brand. The gross

loan book was £1,967.1m as at 31 December

2025, a decrease of 10% compared with

£2,181.2m as at 31 December 2024.

Net interest income in the Residential sub-

segment decreased by 12% to £66.7m (2024

restated¹: £76.0m) due to a decline in the net

loan book, the roll off of higher margin

mortgages and more costly spreads to

SONIA from new retail deposit funding. Other

income of £0.5m (2024: £0.6m expense)

related to gains from the Group’s hedging

activities and the impairment charge of

£0.5m (2024: £5.7m charge) was due to

modelled IFRS 9 stage migration. Overall,

contribution to profit from this sub-segment

decreased by 4% to £66.7 m (2024 restated¹:

£69.7m) due to lower net interest income in

the year.

The average book LTV increased marginally

from prior year to 49%², with only 1.9% of

loans with LTVs exceeding 90% (31 December

2024: 48% and 1.5%, respectively). The

average LTV of residential originations

increased to 69%² (2024: 66%) as a result of

more mortgages completing at LTVs

of 80% and above in the year.

1.Prior period interest income, total income

and contribution to profit were restated due to

a change in swap cost allocation methodology.

2.Residential sub-segment average weighted

LTVs include first and second charge lending.



OSB GROUP PLC Annual Report and Accounts 2025		41

Segments review continued

Charter Court

Financial

Services

(CCFS)

segment

The CCFS segment comprises four

sub-segments:

Buy-to-Let mortgages secured on residential

property held for investment purposes by both non-

professional and professional landlords, residential

mortgages to owner-occupiers secured against

residential properties including those unsupported

by the high street banks and short-term bridging

secured against residential property in both the

regulated and unregulated sectors.

The following tables present CCFS’ contribution to profit and loans and advances to customers.

The below contribution to profit tables are presented on an underlying basis in 2024, which is comparable with 2025 statutory

basis, as both exclude acquisition-related items.

Contribution to profit


	Buy-to-Let	Residential	Bridging	Second charge	Other ¹	Total
For the year ended 31 December 2025	£m	£m	£m	£m	£m	£m
Net interest income	155.4	90.2	22.7	1.6	(4.4)	265.5
Other expense	–	–	–	–	(0.4)	(0.4)
Total income	155.4	90.2	22.7	1.6	(4.8)	265.1
Impairment of financial assets	1.6	1.7	(0.1)	0.1	–	3.3
Contribution to profit	157.0	91.9	22.6	1.7	(4.8)	268.4


	Buy-to-Let	Residential	Bridging	Second charge	Other ¹	Total underlying	Acquisition -related items	Total statutory
For the year ended 31 December 2024	£m	£m	£m	£m	£m	£m	£m	£m
Net interest income	189.5	92.6	13.9	3.1	2.5	301.6	(24.2)	277.4
Loss on sale of financial instruments	–	–	–	–	(2.1)	(2.1)	–	(2.1)
Other income	–	–	–	–	5.2	5.2	1.2	6.4
Total income	189.5	92.6	13.9	3.1	5.6	304.7	(23.0)	281.7
Impairment of financial assets	7.8	1.3	0.9	(0.1)	–	9.9	(1.1)	8.8
Contribution to profit	197.3	93.9	14.8	3.0	5.6	314.6	(24.1)	290.5

1.Other relates to net interest income or loss from securitised acquired loan portfolios and liquid assets, fee income from third-party mortgage servicing and gains or

losses from the Group’s hedging activities.



OSB GROUP PLC Annual Report and Accounts 2025		42

Segments review continued CCFS segment continued

Loans and advances to customers


	Buy-to-Let	Residential	Bridging	Second charge¹	Other ²	Total
As at 31 December 2025	£m	£m	£m	£m	£m	£m
Gross loans and advances to customers	5,630.0	3,130.9	594.3	–	11.6	9,366.8
Expected credit losses	(15.8)	(2.8)	(0.5)	–	–	(19.1)
Net loans and advances to customers	5,614.2	3,128.1	593.8	–	11.6	9,347.7

Risk-weighted assets	2,386.0	1,417.1	346.2	–	4.2	4,153.5


	Buy-to-Let	Residential	Bridging	Second charge	Other ²	Total
As at 31 December 2024	£m	£m	£m	£m	£m	£m
Gross loans and advances to customers	6,367.3	3,005.7	364.5	63.8	12.9	9,814.2
Expected credit losses	(20.5)	(4.6)	(0.4)	(0.3)	–	(25.8)
Net loans and advances to customers	6,346.8	3,001.1	364.1	63.5	12.9	9,788.4

Risk-weighted assets	2,687.8	1,355.8	205.7	28.7	4.8	4,282.8

1. Second charge mortgage book was sold in September 2025.

2. Other relates to acquired loan portfolios.

Loans and advances to customers


Loans and advances to customers	31-Dec-2025	31-Dec-2024	Change
	£m	£m	%
Buy-to-Let	5,630.0	6,367.3	(12)
Residential	3,130.9	3,005.7	4
Bridging	594.3	364.5	63
Second charge ¹	–	63.8	(100)
Other²	11.6	12.9	(10)
Gross loans	9,366.8	9,814.2	(5)
Expected credit losses	(19.1)	(25.8)	(26)
Net loans	9,347.7	9,788.4	(5)

1. Second charge mortgage book was sold in September 2025.

2. Other relates to acquired loan portfolios.

CCFS’ net loan book reduced by 5% to £9,347.7m at the end of 2025 (31 December 2024:

£9,788.4m). Total CCFS segment originations increased by 6% to £1,577.7m from £1,491.4m in

the prior year with strong new business volumes in Residential and Bridging sub-segments.



OSB GROUP PLC Annual Report and Accounts 2025		43

Segments review continued CCFS segment continued

CCFS Buy-to-Let sub‑segment

The gross Buy-to-Let loan book decreased by

12% in the year to £5,630.0m from £6,367.3m

at the end of 2024 and originations

decreased to £196.7m (2024: £516.7m).

Throughout the year, the Group continued to

focus on lending to more specialist and

professional landlords serviced by OSB’s

Kent Reliance brand. In addition, Buy-to-Let

products under the Precise brand were

withdrawn towards the end of the year and

all new Buy-to-Let lending has been provided

by the Group’s new Rely brand.

The proportion of remortgages increased to

50% of completions under the Precise brand

from 46% in the prior year. Product transfers

increased to 54% of existing borrowers

choosing to switch to a new product within

three months of their initial rate mortgage

coming to an end (2024: 51%).

Five-year fixed rate products accounted for

45% of Precise completions, down from 63%

in 2024, as an increasing proportion of

borrowers elected to take shorter-term

mortgages in anticipation of falling interest

rates. Borrowing through a limited company

made up 66% of Buy-to-Let completions in

the year (2024: 69%).

The weighted average LTV of the loan book in

this sub-segment was unchanged from the

prior year at 67%. The new lending average

LTV was 74% with an average loan size of

£188k (2024: 73% and £190k, respectively).

The weighted average interest coverage ratio

for Buy-to-Let originations remained at 160%

in the year.

Net interest income in this sub-segment

decreased to £155.4m (2024: underlying¹

£189.5m) in the prior year, primarily due to a

reduction in the loan book as a result of the

strategic move to offer all new Buy-to-Let

mortgages through OSB’s brands of Kent

Reliance and Rely later in the year. It was

further impacted by more costly spreads to

SONIA from new retail deposit funding.

The impairment credit of £1.6m (2024:

underlying¹£7.8m credit) reflected improved

macroeconomic scenarios and a release of

post-model adjustments. Buy-to-Let sub-

segment made a contribution to profit of

£157.0 m, compared with underlying¹£197.3m

in the prior year primarily due to a reduction

in net interest income.

CCFS Residential sub-segment

The gross loan book in the CCFS’ Residential

sub-segment increased by 4% to £3,130.9m

at the end of 2025 (31 December 2024:

£3,005.7m) reflecting a 27% growth in

originations to £656.1m (2024: £514.6m). The

growth was largely due to the strategic

decision to discontinue offering new

residential mortgages under Kent Reliance

and to consolidate all new lending under the

Precise brand as well as regular, targeted,

criteria enhancements to the proposition that

were made throughout the year.

New and improved products were launched

in the year, including a new one-year and

three-year fixed rate products, maximum LTV

was expanded to 95%, zero fee mortgages

were introduced as well as other lending

criteria to support more borrowers.

The weighted average LTV for new

Residential lending was 64% and the average

loan size was £167k (31 December 2024: 63%

and £160k, respectively). The average book

LTV was 60% (2024: 59%)

Net interest income decreased to £90.2m

(2024: underlying¹ £92.6m), reflecting more

costly spreads to SONIA from new retail

deposit funding and the roll off of higher

margin mortgages partially offset by growth

in the net loan book.

The Residential sub-segment recorded an

impairment credit of £1.7m (2024: underlying¹

£1.3m credit) due to improved

macroeconomic scenarios and a release of

post-model adjustments. The Residential

sub-segment contribution to profit decreased

by 2% in the year to £91.9m (2024:

underlying¹ £93.9m).

CCFS Bridging sub‑segment

Short-term bridging originations grew by

58% to £724.9m (2024: £460.1m) as the

Group focused on building a pipeline of high-

quality, high-return business. The gross loan

book in this sub-segment grew by 63% to

£594.3m at the end of 2025 (31 December

2024: £364.5m).

In the year, the Group improved its bridging

proposition by expanding the availability of

automated valuations up to 75% LTV and

allowing them to be used for light

refurbishment. It also launched a new

product that allows to borrow based on the

future market value of a refurbished property

and a zero fee options through select

intermediary partners.

Net interest income in this sub-segment

increased to £22.7m compared with

underlying¹ £13.9m in the prior year as a

result of loan book growth. Impairment

charge of £0.1m was recognised for the year

(2024: underlying¹ £0.9m credit) and the

bridging sub-segment made a contribution

to profit of £22.6m, an increase of 53% from

the underlying¹ £14.8m in 2024.

1. Underlying basis in 2024 is comparable to 2025 statutory

basis, as both exclude acquisition-related items.



OSB GROUP PLC Annual Report and Accounts 2025		44

Risk review

Approach to Risk Management

Executive summary

OSB Group plc and its subsidiaries aim to

identify, monitor, manage and mitigate risks

inherent in day-to-day business activities, via

disciplined risk management and robust

governance.

The Group’s risk management capabilities

continue to evolve and be enhanced over

time to ensure that strategic and financial

objectives continue to be met within the

confines of Board approved risk appetite.

During 2025 the Group performed well in

delivering key risk objectives. Notable

activities included:

• The Group continuing to leverage its risk-

based analytical capabilities including

credit risk models, stress testing and

scenario analysis to assess areas of

potential future vulnerability. The outputs

of which informed the setting of risk

appetite and assessment of contingent

financial resources.

• Liquidity coverage ratios remained strong

across the Group, with funding

predominantly provided by retail deposits,

supplemented with wholesale funding,

with the Group fully repaying Term

Funding Scheme (TFSME) balances within

the year. Indexed Long-Term Repo (ILTR)

borrowing was also utilised. In July 2025,

the Group received its Domestic Liquidity

Subgroup (DoLSub) permission which

allows full fungibility of liquidity and

funding across the Group.

• During the period, the Group

strengthened further its financial

resilience, recovery and resolvability

capabilities in accordance with its

underlying risk management objectives

and regulatory expectations. An

enhanced reverse stress testing

Risk function priority areas for 2026

A heightened level of uncertainty remains around the UK macroeconomic outlook and

the operating environment for 2026 and beyond. The Group’s Enterprise Risk

Management Framework continues to underpin the Group’s management of existing

and emerging risks, whilst delivering on strategic and financial objectives. Key areas of

focus include:

• Ongoing oversight across planned credit profile enhancement initiatives. These

include further leveraging analytical capabilities, embedding enhanced contact

strategies and providing specialist and targeted support to customers to drive

improvements in the Group’s arrears profile and risk-based pricing, considering the

market outlook and the impact of Basel 3.1 rules.

• Continue to further embed the Group’s operational risk management framework,

with a focus on the careful management of data, IT, information security, change

and vendor risk as the Group progresses on its digital transformation journey.

• Continue to oversee the enhancement of the Group’s approach to monitoring

customer outcomes by integrating insights, data and customer feedback to

consistently deliver products and services that meet and exceed customer needs.

• Continue to refine the second lines financial crime approach and oversee the Group’s

use of technology for improved sophistication and automation of risk identification.

• Deliver ongoing enhancements to the Group’s stress testing procedures to ensure

the robustness of capital and liquidity positions including the embedding of the latest

iteration of IRB models within stress testing models, considering industry and PRA

feedback.

• Continue to support and provide oversight for maturing and embedding the Group’s

capabilities to ensure the ongoing operational resilience of the Group. This includes

delivery of refinements to critical processes and tolerances as the Group implements

planned IT transformation activities including further digitisation of core processes.

• Continue to provide second line oversight of lending and funding strategies driving

enhancements to analysis around key capital, credit and liquidity drivers.

• Maintain second line oversight and support delivery of planned climate risk

management enhancement initiatives, to ensure the Group meets its stated

ambitions and remains compliant with evolving regulation.

• Continue to evaluate and advance the risk reporting capabilities of the Group to

ensure the gathering, processing and reporting of risk data remains effective, meets

internal governance requirements and remains proportionately aligned to evolving

external practice.

framework was implemented to support

the Board assessing a range of potential

severe but plausible future risks.

• During the year an upgraded version of

the Group’s Operational Risk

Management system was implemented.

Incremental features will support an

improved user experience with regard to

documenting controls and recording

ongoing operational risk performance.

• The Group’s Transformation programme

continued to be delivered in a controlled

manner as indicated by the Group’s

operational risk profile remaining stable

and within risk appetite. Progress was also

made in simplifying the Group’s

Information Technology estate, whilst

further enhancing cyber risk management

capabilities which remains an ongoing key

area of focus for the Board.

• The Group continues to leverage its

internal ratings based (IRB) models to

actively monitor and manage its risk

profile, whilst capabilities continued to be

further integrated into the Group’s risk

and capital management disciplines.

The Group noted the Prudential

Regulation Authority (PRA) announcement

(DP1/25) which detailed a range of

possible policy changes to the treatment

of residential mortgage exposures under

the IRB approach. The aim being to

remove barriers for aspirant firms to gain

accreditation, which in turn should

improve the level of market competition

and the ability for firms to scale and grow.

During 2025 the Group met with the PRA

to discuss its application plans.



OSB GROUP PLC Annual Report and Accounts 2025		45

Risk review continued

Key risk performance indicators

Risk appetite is aligned to a select range of key performance indicators, which are used to assess performance against strategic, business, operational and regulatory objectives.

Actual performance against these indicators is continually assessed and reported.



Loan loss ratio	Liquidity coverage ratio	3+ months in arrears	Capital ratios




2025 performance The loan loss ratio was impacted by an increase in provision for accounts in arrears, changes in borrowers’ profiles as they transitioned through impairment stages, loan book growth, write-offs and other adjustments. These were partially offset by reductions in provision required post-updating macroeconomic scenarios, models and post-model adjustments.	2025 performance Liquidity coverage ratios for the Group and DoLSub remained strong, and were all significantly in excess of the regulatory minimum of 100% plus Individual Liquidity Guidance.	2025 performance The Group’s arrears levels remained elevated but stable, continuing to be impacted by the elevated cost of borrowing.	2025 performance The Group’s capital position remained strong. Profit generated in the year increased the CET1 ratio by 2.3%, which was more than offset by 1.1% for the 2025 dividend, 0.8% for the £100m share repurchase programme announced in 2025 and 0.8% for loan book growth. Other movements in the CET1 reduced the ratio by a further 0.1%.

CET1 ratio

Group

OSB

Total capital ratio

DoLSub

CCFS

n/a



OSB GROUP PLC Annual Report and Accounts 2025		46

Risk review continued

Enterprise Risk Management Framework

The Enterprise Risk Management Framework

(ERMF) sets out the principles and approach

with regard to the management of the

Group’s risk profile in order to successfully

fulfil its business strategy and objectives,

including compliance with all conduct and

prudential regulatory objectives.

The ERMF is the overarching framework that

enables the Board and senior management

to actively manage and optimise the risk

profile within the constraints of its risk

appetite. The ERMF also facilitates informed

risk-based decisions to be taken in a timely

manner, ensuring that the interests and

expectations of key stakeholders can be met.

The ERMF provides a structured mechanism

to align critical components of an effective

approach to risk management, linking

overarching risk principles to day-to-day risk

identification, assessment, mitigation

and monitoring activities.

The modular construct of the ERMF provides

an agile approach, keeping pace with the

evolving nature of the risk profile and

underlying drivers. The ERMF and its core

modular components are subject to periodic

review and approval by the Board and its

relevant Committees. The components of the

ERMF structure are as follows:

1Risk principles and culture

The Group has established a set of risk

management and oversight principles that

inform and guide all underlying risk

management and assessment activities.

These principles are informed by the

Group’s Purpose, Vision and Values.

2Risk strategy and appetite

The Group established a clear business vision

and strategy which is supported by an

articulated risk vision and underlying

principles. The Board is accountable for

ensuring that the Group’s ERMF is structured

against the strategic vision and is delivered

within agreed risk appetite thresholds.

3Risk assessment and control

The Group is committed to building a safe

and secure banking operation through the

implementation of an integrated and

effective approach to risk identification,

assessment and control.

4Risk analytics

The Group uses quantitative analysis and



Enterprise Risk Management Framework (ERMF)


Key components

Risk principles, culture, strategy and appetite	Risk assessment and control	Risk analytics and stress testing	Risk data, MI and governance

statistical modelling to help improve its

business decisions.

5Stress testing and scenario

development

Stress testing is an important risk

management tool, which is used to evaluate

the potential effects of a specific event and/


Principal risks

Financial risks		Non-financial risks
Credit risk Liquidity and funding risk	Market risk Solvency risk	Strategic and business risk Reputational risk	Operational risk Conduct risk	Financial Crime risk Regulatory risk

or movement in a set of variables to

understand the impact on the Group’s

financial and operating performance.

6Risk data and information

technology

The maintenance of high-quality risk

information, along with the Group’s data

enrichment and aggregation capabilities, are


Capabilities

Risk framework and policies	Risk data and IT	Risk analytics	Risk management information

central to the Risk function’s objectives

being achieved.

7Risk Management Framework’s

policies and procedures

Risk frameworks, policies and supporting

documentation outline the process by which

risk is effectively managed and governed

within the Group.

8Risk management information

and reporting

The Group has an established comprehensive

suite of risk Management Information (MI)

and reports covering all principal risk types.

9Risk governance and

function organisation

Risk governance refers to the processes and

structures established by the Board to ensure

that risks are assumed and managed within

the Board-approved risk appetite, with clear

delineation between risk-taking, oversight

and assurance responsibilities. The Group’s

risk governance is structured to adhere to the

‘three lines of defence’ model.

10Use and embedding

Dissemination of key framework components

across the Group to ensure that business

activities and decision-making are undertaken

in line with Board expectations.


Risk regulatory submissions

ICAAP	ILAAP	Recovery plan/Z-templates



OSB GROUP PLC Annual Report and Accounts 2025		47

Risk review continued

Group organisational structure

The Board has ultimate responsibility for the

oversight of the Group’s risk profile and risk

management framework and, where it deems

it appropriate, delegates its authority to

relevant Committees. The Board and its

Committees are provided with appropriate

and timely information relating to the nature

and level of the risks to which the Group is

exposed and the adequacy of risk controls.

The Internal Audit function provides

independent assurance to the Board and its

Committees as to the effectiveness of the

systems and controls and the level of

adherence to internal policies and regulatory

requirements. The Board also commissions

third-party subject matter expert reviews and

reports in relation to issues and areas

requiring deeper technical assessment

and guidance.

Risk appetite

As outlined within the Group’s Risk Appetite

Framework, the Group aligns its strategic

and business objectives with its risk appetite,

which defines the level of risk that the Group

is willing to accept. The risk appetite is a

critical mechanism through which the Board

and senior management are able to identify

adverse trends and respond to unexpected

developments in a timely and

considered manner.

The risk appetite is calibrated to reflect the

Group’s strategic objectives and business

operating plans, as well as external

economic, business and regulatory

constraints. In particular, the risk appetite is

calibrated to ensure that the Group

continues to deliver against its strategic

objectives and operates with sufficient

financial buffers, even when subjected to

extreme but plausible stress scenarios. The

objective of the Board’s risk appetite is to

ensure that the strategy and business

operating model are sufficiently resilient.

The Group’s risk appetite, specific to each of

the recognised financial and non-financial

principal risk types, is calibrated using

statistical analysis and stress testing (where

appropriate) to inform the process for setting

management triggers and limits against key

risk indicators. The calibration process is

designed to ensure that timely and

appropriate actions are taken to maintain

the risk profile within approved thresholds.

The Board and senior management actively

monitor actual performance against

approved management triggers and limits.

Currently, there are two regulated banking

entities within the Group. Risk appetite

metrics and thresholds are set at both

individual entity and Group levels where

appropriate.

The Group’s risk appetite is subject to a full

refresh annually across all principal risk

types, and an optional intra-year review

where any metrics can be assessed and

updated as appropriate. The intra-year

review is typically reserved for responding to

changes in regulation or the Group’s

strategy.



OSB GROUP PLC Annual Report and Accounts 2025		48

Risk review continued

Structure of the Group

Board of Directors

Board

Committees

Group Remuneration

and People Committee

Group Nomination

and Governance

Committee

Group Audit

Committee

Group Risk

Committee

Group Models and

Ratings Committee

Group Executive Committee

Management

Committees

Financial Crisis

Management

Committee

Group Executive

Disclosure Committee

Customer and

Product Committee

Group Assets and

Liabilities Committee

Group Credit

Committee

Executive Risk

Committee

Models and Ratings

Management

Committee


	First Line of Defence		Second Line of Defence	Third Line of Defence
Business and Control Functions	Ensures that risks are identified, measured, monitored and reported in line with policy in an effective manner.		Provides an independent review and challenge to the business and control functions to ensure that all aspects of the risk profile are managed in adherence to risk appetite and risk policies.	Provides independent assurance on the effectiveness of the ERMF, compliance with regulations, adherence to policies and effectiveness of controls.

	Key Brands Finance and HR Operations IT and Change	Commercial Sales and Marketing Legal and Regulation



			Risk and Compliance	Internal Audit

	Chief Executive Officer
Executives	Group Chief Financial Officer Group Chief Operating Officer Group Chief Information Officer Group Chief People Officer	Group Commercial Director Group Managing Director, Mortgages and Savings Group Chief Credit Officer Group General Counsel & Company Secretary	Group Chief Risk Officer	Group Chief Internal Auditor

	The Group Executive Risk Committee has a small number of other risk forums which report into it, however to simplify the above schematic only the Operational and Conduct Risk Management Committees have been included.

Credit Strategy



OSB GROUP PLC Annual Report and Accounts 2025		49

Principal risks and uncertainties


Key:
	Risk increased	Risk decreased	Risk broadly stable

T he Board carried out an assessment of the principal and

emerging risks and uncertainties, which may threaten the

Group’s operating model, strategic objectives, financial

performance and regulatory compliance commitments.

The outcome of that assessment is summarised in the heat map below,

with further details provided in each principal risk section.


1	Strategic and business risk	6	Solvency risk

2	Reputational risk	7	Operational risk

3	Credit risk	8	Conduct risk

4	Market risk	9	Regulatory risk

5	Liquidity and funding risk	10	Financial crime risk


1	Strategic and business risk

The risk to the Group’s earnings and profitability arising from its strategic decisions, change in business conditions, improper implementation of decisions or lack of responsiveness to industry and regulatory changes.		Risk appetite statement The Group does not intend to undertake strategic actions which could put at risk the Group’s vision of being a leading specialist lender in its chosen markets, supported by a strong and dependable savings franchise. The Group aims to also maintain a resilient and sustainable business operating model under normal and stressed market conditions. In particular, the business operating model should be able to sustain an extreme but plausible stress of a 1 in 20 severity without breaching its key business performance indicators.

1.1 Performance against targets

Performance against strategic and business targets does not meet stakeholder expectations. This has the potential to damage the Group’s franchise value and reputation.

Mitigation		Direction

Regular monitoring by the Board and the Group Executive Committee of business and financial performance against the strategic agenda and risk appetite. The financial plan is subject to regular reforecasts and assessed in the context of its impact on existing risk appetite. The Balanced Business Scorecard is the primary mechanism to support how the Board assesses management performance against key targets. Use of stress testing to flex core business planning assumptions to assess potential performance under stressed operating conditions.		The ongoing geopolitical and macroeconomic uncertainty and its potential impact on net interest income, affordability levels, house prices and expected credit losses continued to impact and present risk to the Group’s performance in 2025 and will endure into 2026.

1.2 Economic environment

The economic environment in the UK is an important factor impacting the strategic and business risk profile. A macroeconomic downturn may impact the credit quality of the Group’s existing loan portfolios and may influence future business strategy as the Group’s new business proposition becomes less attractive due to lower returns.

Mitigation		Direction

The Group’s business model as a secured lender helps limit potential credit risk losses and supports performance through the economic cycle. The Group continues to utilise and enhance its stress testing capabilities to assess and minimise potential areas of macroeconomic vulnerability.		Macroeconomic uncertainty will continue into 2026 posing an ongoing risk to the Group’s credit risk profile, including uncertainty around the path of interest rates, potential increased levels of unemployment and potential housing price pressures.



OSB GROUP PLC Annual Report and Accounts 2025		50

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


1.3 Competition risk

Competition in the lending and savings markets intensifies leading to increased pressure on business margins and volumes.

Mitigation		Direction

The Group continues to review and develop its strategy, products and services that meet the requirements of the markets in which it operates. The Group has a diversified suite of products and capabilities to utilise, together with significant financial resources, to support a response to changes in competition. The technological advancements being achieved through digital transformation will serve to further strengthen the Group’s market competitiveness.		Continued intensity of competition within both the retail deposit and lending sectors. Margin pressures remain a notable headwind.

2	Reputational risk

The potential risk of the Group’s reputation being affected due to factors such as unethical practices, adverse regulatory actions, customer or broker dissatisfaction and complaints or negative/adverse publicity. Reputational risk can arise from a variety of sources and is a second-order risk – the crystallisation of any principal risk can lead to a reputational risk impact.		Risk appetite statement The Group has a very low appetite for actively assuming reputational risk in the course of conducting its business activities and meeting the expectations of its key stakeholders. The Group is fully cognisant of the main drivers (trust, integrity, ethics, confidence and relationships) of reputational risk and it being a consequence of other risks materialising, some of which are outside of its immediate control. The Group strives to protect and enhance its reputation at all times through appropriate governance and proactive risk management.


2.1 Deterioration of reputation

Potential loss of trust and confidence that our stakeholders place in us as a responsible and fair provider of financial services.

Mitigation			Direction

Culture and commitment to treating customers fairly and being open and transparent in communication with key stakeholders. Established processes in place to proactively identify and manage potential sources of reputational risk. Review of relevant Management Information including for example: investor confidence, credit rating agency outlook, regulatory engagement, customer complaint volumes, Net Promoter Scores, third party supplier practice, press and social media trends and performance against Environmental Social Governance (ESG) Group targets. The Group has an embedded Reputational Risk Management Framework which is supported by the firm’s broader suite of frameworks, policies and procedures.			The Group’s stable performance against its financial targets throughout 2025 was well received by analysts and investors as reflected in the Group’s share price and credit rating agencies outlook. Some operational efficiency challenges were observed during ISA maturity season which temporarily impacted the risk profile. The Transformation Programme and the targeted customer offering and operational benefits are expected to further strengthen the Group’s reputation.



OSB GROUP PLC Annual Report and Accounts 2025		51

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


3	Credit risk

Potential for loss due to the failure of a counterparty to meet its contractual obligation to repay a debt in accordance with the agreed terms.		Risk appetite statement The Group seeks to maintain a high-quality lending portfolio that generates adequate returns, during both benign and stressed operating environments.

3.1 Individual borrower risk

Borrowers may encounter idiosyncratic problems in repaying their loans, for example loss of a job or execution problems with a development project. While in most cases of default the Group’s lending is secured, some borrowers may fail to maintain the value of the security which may result in a loss being incurred.

Mitigation		Direction

Across both OSB and CCFS, a robust underwriting assessment is undertaken to ensure that a customer has the ability and propensity to repay, and sufficient security is available to support the new loan requested. At CCFS, an automated scorecard approach is taken, whilst OSB utilises a bespoke manual underwriting approach, supplemented by bespoke application scorecards to inform the lending decision. Should there be problems with a loan, the Financial Support team works with customers who are unable to meet their loan service obligations to reach a satisfactory conclusion while adhering to the principle of delivering good customer outcomes. Our strategic focus on lending to professional landlords means that properties are likely to be well- managed, with income from a diversified portfolio mitigating the impact of rental voids or maintenance costs. Lending to owner-occupiers is subject to a detailed affordability assessment, including the borrower’s ability to continue payments if interest rates increase. Lending on commercial property is based more on security and is scrutinised by the Group’s independent Real Estate team as well as by external valuers. Development finance lending is extended only after a deep investigation of the borrower’s track record and stress testing the economics of the specific project.		The drivers of borrower default risk continued to be seen in 2025 and may continue into 2026 with elevated levels of inflation and interest rates impacting customer affordability levels which in turn may result in a higher level of customers defaulting on their loan obligations. The Group continues to closely monitor arrears levels and implement targeted initiatives, including leveraging analytical capabilities, embedding targeted contact strategies and providing specialist support to customers to drive performance improvements.


3.2 Macroeconomic downturn

A broad deterioration in the UK economy would adversely impact both the ability of borrowers to repay loans and the value of the Group’s security. Credit losses would impact the Group’s lending portfolios, as even if individual impacts were to be small, the aggregate impact on the Group could be significant.

Mitigation			Direction

The Group works within and monitors performance against portfolio limits on LTV, affordability, name, sector and geographic concentration that are approved by the Board. In addition, stress testing is performed to ensure that the Group maintains sufficient capital to absorb losses in an economic downturn and continues to meet its regulatory requirements.			The economic outlook and the ongoing geopolitical risk continues to look uncertain. Inflation and interest rates have fallen, driving lower impairment levels, and increasing residential and commercial collateral values.

3.3 Wholesale credit risk

The Group has wholesale exposures both through call accounts used for transactional and liquidity purposes and through derivative exposures used for hedging.

Mitigation			Direction

The Group transacts only with high-quality wholesale counterparties. Derivative exposures include collateral agreements to mitigate credit exposures.			The Group’s wholesale credit risk exposure remains limited to high-quality counterparties, overnight exposures to clearing banks and swap counterparties.



OSB GROUP PLC Annual Report and Accounts 2025		52

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


4	Market risk

Potential loss due to changes in market prices or values.		Risk appetite statement The Group actively manages market risk arising from structural interest rate and foreign exchange rate exposures. The Group does not take a significant interest rate position or a directional view on rates and limits its mismatched and basis risk exposures by dynamic hedging. The Board requirement is to maintain balance sheet and hedge positions sufficient to survive a range of severe but plausible stress scenarios for interest rate risk and basis risk. Historical data is used to calibrate the severity of the stress scenarios against the Group’s overall Risk Appetite.

4.1 Interest rate risk

The risk of loss from adverse movement in the overall level of interest rates. It arises from mismatches in the timing of repricing of assets and liabilities, both on and off-balance sheet. It includes the risks arising from imperfect hedging of exposures and the risk of customer behaviour driven by interest rates, e.g. early redemption.

Mitigation		Direction

The Group’s Treasury function actively hedges to match the timing of cash flows from assets and liabilities.		Interest rate risk in 2025 was influenced by the downward interest rate environment, inverted yield curve and the potential for changing customer behaviour. The macroeconomic outlook remains uncertain. A continued area of focus relates to the risks arising from movements in interest rates.

4.2 Basis risk

The risk of loss from an adverse divergence in interest rates. It arises where assets and liabilities reprice from different variable rate indices. These indices may be market, administered, other discretionary variable rates, or that received on call accounts with other banks.

Mitigation		Direction

Basis risk is mitigated through management of balance sheet composition and as such the basis risk impacts of changes in funding strategy (such as intercompany lending and easy access volumes) are considered when the plans are agreed.		Basis risk exposure increased in 2025 as the Group’s easy access retail funding levels increased resulting in a mismatch to the base rate and Sterling Overnight Index Average (SONIA) linked assets due to lags in passing on rate reductions to savers.


5	Liquidity and funding risk

The risk that the Group, although solvent, does not have sufficient financial resources to enable it to meet its obligations as they fall due.		Risk appetite statement The Group will maintain sufficient liquidity to meet its liabilities as they fall due under normal and stressed business conditions; this will be achieved by maintaining strong retail savings franchises, supported by high-quality liquid asset portfolios comprised of cash and readily monetisable assets, and through access to pre-arranged secured funding facilities. The Board requirement to maintain balance sheet resources sufficient to survive a range of severe but plausible stress scenarios is interpreted in terms of the liquidity coverage ratio and the Internal Liquidity Adequacy Assessment Process (ILAAP) stress scenarios.

5.1 Retail funding stress

As the Group is primarily funded by retail deposits, a retail run could put it in a position where it could not meet its financial obligations. Increased competition for retail savings driving up funding costs, adversely impacting retention levels and profitability.

Mitigation		Direction

The Group’s funding strategy is focused on a highly stable retail deposit franchise. The Group’s large number of depositors provides diversification, where a high proportion of balances are covered by the Financial Services Compensation Scheme (FSCS), largely mitigating the risk of a retail run. In addition, the Group performs in-depth liquidity stress testing and maintains a liquid asset portfolio sufficient to meet obligations under stress. The Group holds prudential liquidity buffers to manage funding requirements under normal and stressed conditions. The Group has diversified its retail channels by the use of deposit aggregators. The Group has pre-positioned mortgage collateral and securitised notes with the Bank of England, which allows it to consider alternative funding sources in addition to funding via retail savings deposits. The Group also has a mature Retail Mortgage-Backed Security (RMBS) programme.		The Group’s funding levels and mix remained strong throughout the year, however, competition in the retail deposit market remains high, resulting in an increase in the cost of future funding for the Group. Markets have also seen a trend in savings customers preferring easy access products over term products, due to the downward sloping yield curve, meaning headline rates for easy access are higher than term products. This results in a higher proportion of the book being withdrawable on demand. Liquidity buffers are held to account for this increased risk.



OSB GROUP PLC Annual Report and Accounts 2025		53

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


5.2 Wholesale funding stress

A market-wide stress could close securitisation markets or make issuance costs unattractive for the Group.

Mitigation			Direction

The Group continuously monitors wholesale funding markets and is experienced in taking proactive management actions where required. The Group completed a securitisation transaction in 2025 and has a range of wholesale funding options, including Bank of England facilities, for which collateral has been positioned.			The Group continues to liaise with the Bank of England and external ratings agencies as required and maintained investment grade ratings during 2025. Demand for OSB issuances remains high, with trades issued in 2025 performing well in primary and secondary markets.


6	Solvency risk

The potential inability of the Group to ensure that it maintains sufficient capital levels for its business strategy and risk profile under both the base and stress case financial forecasts.		Risk appetite statement The Group seeks to ensure that it retains a sufficient level and quality of capital to satisfy its minimum regulatory requirements to cover its prudential risks and support its growth objectives. The Group’s solvency risk appetite is constrained within the leverage ratio.

6.1 Deterioration of capital ratios

Key risks to solvency arise from balance sheet growth and unexpected losses which can result in the Group’s capital requirements increasing, capital resources being depleted, or changes in regulatory standards such that it no longer meets the capital requirements mandated by the PRA and Board risk appetite. The regulatory capital regime is subject to change and could lead to changes in the level and quality of capital that the Group needs to hold to meet regulatory requirements.

Mitigation		Direction

The Group operates from a strong capital position and has a consistent record of profitability. The Group actively monitors its capital requirements and resources against financial forecasts that account for the anticipated Basel 3.1 changes, and undertakes stress testing analysis to subject its solvency ratios to extreme but plausible scenarios. The Group holds prudent levels of capital buffers based on CRD IV requirements and expected balance sheet growth. The Group engages actively with regulators, industry bodies and advisers to keep abreast of potential changes and provides feedback through the consultation process.		Ongoing profitability means that the Group’s capital resources remain strong. Risks remain around adverse credit profile performance resulting from higher inflation and higher interest rates.



OSB GROUP PLC Annual Report and Accounts 2025		54

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


Key:
	Risk increased	Risk decreased	Risk broadly stable


7	Operational risk

The risk of loss or a negative impact on the Group resulting from inadequate or failed internal processes, people or systems, or from external events.		Risk appetite statement The Group has a limited appetite for operational risks that could threaten its ability to deliver critical services or result in a significantly negative impact on financial performance, or outcomes for customers, employees or other key stakeholders. The Group acknowledges that operational risk is inherent in its business activities and in the pursuit of strategic objectives. However, the Group aims to maintain a resilient and well-controlled operating environment that supports safe, sound, and fair outcomes for customers, while minimising avoidable losses and preserving regulatory and reputational integrity. Operational risks must be managed so that residual risk exposure remains acceptable. Where an operational risk may pose a residual risk of Medium- High or High to the business, an adequate plan(s) or approved risk acceptance must be in place. Residual risk exposure is assessed as medium or low.

Direction

The operational risks faced by the Group are proportionate to the Group’s size, nature, scope and the complexity of its products and services. The Group’s operational risk profile has remained stable over 2025 with continual enhancement and maturity of the management of operational risk. The level of operational risk may increase due to the volume of key deliverables related to the Group’s Transformation Programme that could result in operational challenges over the next 12-months.


7.1 Information security (including cyber risk)

The risks resulting from a failure to protect the Group’s systems and the data within them. This includes both internal and external threats.

			Risk appetite statement The Group views its data and IT architecture as an integral asset and enabler to achieving its purpose, vision and strategic objectives. The Group is fully aware of the dependencies between the security of its data and IT platforms and its core values. The Group is fully committed to protecting its core data and IT assets and ensuring that our customer and employee personal data is managed with appropriate security, as well as providing safe and secure platforms for the delivery of the Group’s products and services. To that end, the Group will ensure that all cyber security risks are subject to continuous monitoring and comprehensive and robust controls. Given the evolving nature of cyber security threats, the Group accepts that there may be periods where its controls need to be strengthened further to reflect the changing nature of the cyber threats. However, the gap between threats and controls will be minimised through appropriate prioritisation and investment.

Mitigation			Direction

The Group operates with a suite of preventative and detective controls to ensure services between the business and its customers operate securely with potential threats identified and mitigated as part of its IT risk and control assessment. This is underpinned by established frameworks, policies and tested procedures intended to ensure the effective response to a security breach. The Group’s IT and cyber risk management improvement activities continue, with the aim of enhancing protection against security threats. A series of tools has been deployed to identify and prevent network and system intrusions, supported by dedicated IT security expertise.			Cyber security threats continue to evolve, and the Group is continuously strengthening its resilience through ongoing enhancements to security controls and defences. Regular testing and assurance activities are supporting continuous improvement by identifying opportunities to further reinforce our technology environment. Management has implemented targeted evolution of key control areas, and progress within our technology Transformation Programme to further strengthen the overall security position.



OSB GROUP PLC Annual Report and Accounts 2025		55

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


7.2 Data quality

The risk of inaccurate and/or incomplete data (including data processed by vendors) for management information to support business decisions and/or meet the Group’s requirements, customer requirements or regulatory requirements.

			Risk appetite statement The Group views its data as a critical corporate asset and seeks to ensure that appropriate systems and controls are established to ensure that data risk is minimised to a level which does not result in the Group’s wider risk appetite objectives being placed at unacceptable level of threat. Where the Group becomes aware that its data-based systems and controls are misaligned to the underlying data risk threat, commensurate remedial actions should be implemented and the unmitigated risk subject to formal notification and acceptance.

Mitigation			Direction

The Group operates within a suite of preventative and detective controls to ensure data is accurate, protected and readily available with potential threats identified and mitigated as part of its data risk and control assessment. This is underpinned by established frameworks, policies and procedures along with dedicated resources to ensure the quality of data is maintained at an appropriate standard.			The Group continued to strengthen its governance and policy frameworks during 2025, with further progress planned in 2026. Key priorities include enhancing the enterprise-wide data quality framework and streamlining the approach in line with technology platform changes associated with the Transformation Programme.


7.3 Change management

The risk of ineffective design, execution or delivery of change or transformation initiatives (including programmes and projects) and not realising intended benefits and outcomes.

			Risk appetite statement The Group will ensure that strategic and portfolio change delivery is subject to the appropriate level of governance and oversight to enable effective delivery against the identified objectives and benefits as per plan and budget. The Group acknowledges that its wider risk profile may be impacted during certain phases of the strategic programmes such as transition from programme to business as usual (BAU); however any impact will be minimised through the implementation of robust and appropriate systems and controls throughout and following the conclusion of the programme.

Mitigation			Direction

The Group recognises that implementing change introduces risk; and governance is in place to ensure each stage of change management has an appropriate level of oversight. Established frameworks, policies and procedures are designed to manage change effectively and reduce the likelihood of disruption.			The Group continued to deliver an ambitious change agenda in 2025 largely focused on the Transformation Programme, which is designed to meet the future needs of customers, brokers and wider stakeholders while delivering operational efficiencies. The Group remains in a transition period, balancing delivery of the change roadmap while maintaining stability across legacy systems. Specialist risk expertise is effectively utilised to manage and monitor the change environment.



OSB GROUP PLC Annual Report and Accounts 2025		56

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


7.4 Business resilience (IT failure, Third Party, Operational Continuity)

The risk of disruption to the Group's ability to operate through and/or recover from disruptive/impactful continuity events (e.g., IT systems failure).

			Risk appetite statement The Group views IT as a critical enabler to achieving its purpose, vision and strategic objectives. The Group is fully committed to ensuring the adequacy, performance and resilience of the IT services and related assets that enable the delivery of the Group’s core products, important business services and critical internal functions. To that end, the Group will ensure that all technology risks are appropriately managed and maintained at acceptable levels as articulated within the supporting sub-level statements.

Mitigation			Direction

The Group continues to maintain existing IT infrastructure, to ensure it remains fit for purpose and supports the Group’s ongoing operating effectiveness. Investment continues to be made to improve core infrastructure, and simplify where possible, and has improved the management of technical change to strengthen resilience. The Group has identified its prioritised business services and the infrastructure that is required to support them. Tests are performed regularly in line with established frameworks, policies and procedures to validate the Group’s ability to recover from an incident. The Group has established multiple sites to ensure that, in the event of an operational incident, services can be maintained. As the Group migrates more business to cloud-based services and increases reliance on third parties, inherent internal and external third party risks have increased. The Group continues to mature its vendor and third party risk management and associated frameworks, policies and procedures.			Whilst progress continues to be made with strengthening and maturing the approach to business resilience, the risk remains as the Group continues to make progress across its Transformation Programme.


8	Conduct risk

The risk that the Group’s culture, organisation, behaviours and actions result in poor outcomes and detriment for customers and/or damage to consumer trust and integrity of the markets in which it operates.		Risk appetite statement The Group has minimal appetite to behave in a way which may result in poor customer outcomes and/or cause disruptions in the market segments in which it operates. The Group aims to operate its businesses with a culture and behaviours that promote good outcomes for customers with its actions aiming to avoid causing detriment or harm to its customers. The Group will treat its customers with respect, fairness and transparency. The Group will proactively look to identify where its products and services, throughout the whole product and customer lifecycle, could lead to poor outcomes or harm to its customers and will take appropriate action to mitigate and remedy, where required. Where customer harm occurs, the Group will ensure effective solutions are implemented to address the root cause and a good outcome is achieved.

8.1 Conduct risk

The risk that the Group fails to meet its expectations with respect to conduct risk.

Mitigation		Direction

The Group’s culture is clearly defined and monitored through its Purpose, Vision and Values-driven behaviours. The Group has an embedded Conduct Risk Management Framework which defines roles and responsibilities for conduct risk management, oversight and governance. The Framework principles directly link to the delivery of good customer outcomes and Consumer Duty expectations. Policies across the Group further embed expectations which ensure the Group behaves in a way which encourages customer-centricity and promotes good customer outcomes, including those focused on supporting customers in vulnerable circumstances and those experiencing financial difficulty. The Group does not tolerate any systematic failure to deliver good customer outcomes. On an isolated basis, incidents can result in customer harm due to human and/or operational failures. Where such incidents occur, they are thoroughly investigated, and the appropriate remedial actions are taken to address any customer harm and prevent recurrence.		The level of conduct risk that the Group is exposed to remains consistent and continues to be impacted by a number of external economic factors, such as continued cost-of-living pressures, as well as the Group’s changing customer facing technology platforms as it continues efforts with the Transformation Programme. During 2025, the Group continued to enhance its approach to monitoring conduct risk across its operations whilst implementing enhancements to customer journeys and enabling improved customer self-serve and engagement with us. The Group has continued to review and evolve its approach to supporting customers, particularly those that are vulnerable and experiencing financial difficulty, to ensure they continue to receive the level of tailored support needed to deliver good customer outcomes.



OSB GROUP PLC Annual Report and Accounts 2025		57

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


9	Regulatory risk

The risk of regulatory sanctions, material financial loss, or loss to reputation the Group may suffer, as a result of its failure to comply with regulations, rules, codes of conduct or guidance applicable to its operations, that are subject to authorisation and its regulatory permissions.		Risk appetite statement The Group views ongoing conformance with regulatory rules and standards across all the jurisdictions in which it operates as a critical facet of its risk culture. The Group has minimal appetite to assume regulatory risk, which could result in poor customer outcomes, customer detriment, regulatory sanctions, financial loss or damage to its reputation. The Group will proactively monitor for, and will not tolerate any systemic failure to comply with, applicable laws, regulations or codes of conduct relevant to its business. The Group acknowledges that regulatory rules and standards are subject to interpretation and subsequent translation into internal policies and procedures. The Group interprets requirements to ensure adherence with the intended purpose and spirit of the regulation whilst being cognisant of commercial considerations and good customer outcomes. To minimise regulatory risk, the Group proactively engages with its regulators in a transparent manner, participates in industry forums and seeks external advice to validate its interpretations where appropriate. The Group is committed to maintaining high levels of regulatory compliance across all aspects of its business. The Group maintains robust risk management systems and controls to enable adherence to, and monitoring of, conformance to regulatory requirements and industry standards. The Group will respond in an appropriate manner to any changes in the regulatory environment. The Group is committed to embedding a robust compliance culture throughout the organisation with all employees having the responsibility of understanding and upholding regulatory obligations.


9.1 Prudential regulatory changes

The Group continues to see a high volume of key compliance regulatory changes that impact its business activities. These include incoming Basel 3.1 capital requirements and increased Resolvability Assessment Framework best practice.

Mitigation			Direction

The Group has an effective horizon scanning process to identify regulatory change. All significant regulatory initiatives are managed by structured programmes overseen by the Project Management team and sponsored at Executive level. The Group has proactively sought external expert opinions to support interpretation of the requirements and validation of its response, where required.			The Group continued to have a high level of interaction with the Bank of England and Prudential Regulation Authority and continues to identify and respond effectively to all regulatory changes and engagements.

9.2 Conduct regulatory changes

The current regulatory change agenda is focused on supporting growth and helping customers navigate their financial circumstances. Amendments to regulatory requirements are expected to evolve in response to the political, economic and technological environment.

Mitigation			Direction

The Group has a clearly defined horizon scanning process to detect new regulatory developments and track implementation to meet evolving expectations, including those that are conduct related. The Group continuously improves its approach to monitoring customer outcomes by combining insights, data and customer feedback to enable the delivery of products and services that meet and exceed customer’s needs.			The Group will continue to manage the volume of regulatory change, ensure continued compliance with Consumer Duty and support customers during our internal Transformation Programme as customer journeys become more digital.



OSB GROUP PLC Annual Report and Accounts 2025		58

Principal risks and uncertainties continued


Key:
	Risk increased	Risk decreased	Risk broadly stable


10	Financial crime risk

The risk of financial or reputational loss resulting from inadequate systems and controls to mitigate the risks from financial crime.		Risk appetite statement To minimise financial crime risk, the Group will design and maintain robust systems and controls to identify, assess, manage and report any activity (internal or external in nature) which exposes the Group to financial crime risk in the form of money laundering, human trafficking, terrorist financing, sanctions breaches, bribery, corruption, proliferation financing and fraud. The Group recognises the need to continuously review its systems and controls to ensure that they are aligned to the nature and scale of financial crime risk it is exposed to on a current and forward-looking basis.

10.1 Financial crime risk

The risk of financial or reputational loss resulting from a failure to implement systems and controls to manage the risk from money laundering, terrorist financing, sanctions, bribery, corruption, proliferation financing and cyber crime.

Mitigation		Direction

The Group operates in a low-risk environment providing relatively simple products to UK domiciled customers serviced through UK registered bank accounts. The Group has an established screening programme that is deployed at the point of origination and on a regular basis throughout the customer lifecycle. Where applicable, enhanced due diligence is applied to ensure that any increase in risk is appropriately managed and any activity remains within risk appetite. The Group has a horizon scanning programme that identifies changes to money laundering regulations and any other financial crime-related legislation to ensure that we comply with all regulatory obligations. The Group screens its customers on a regular basis against sanctions listings acting swiftly to react to any updates released in relation to the financial sanctions regime. Given the Group’s customer target market, it has negligible exposure to any of the affected jurisdictions and no exposure to any specific individual or entity contained within revised sanctions listings.		The external financial crime environment remains dynamic. The Group has established a mature and comprehensive control framework, supported by a dedicated Financial Crime function, and continues to strengthen these arrangements in response to emerging risks.


10.2 Fraud risk

The risk of financial loss resulting from fraudulent action by a person either internal or external.

Mitigation			Direction

The Group continues to invest in a range of systems and controls that are deployed across its product range to detect and prevent exposure to fraud throughout the customer lifecycle. At the point of origination, all new applications are subject to a range of controls to identify and mitigate the risk of fraud. Customer behavioural and transactional activity is closely monitored to identify potential suspicious behaviours or trends that may be indicative of fraud. All controls are supported by documented fraud- related policies and procedures that are managed by experienced employees in a dedicated Financial Crime function. The Group has robust procedures in place to support the detection and prevention of internal fraud deploying duty segregation and approval processes where appropriate. The Group continually monitors its detection capability with periodic reviews of the rules and parameters within its systems and control framework to ensure that these remain fit for purpose and aligned to mitigate any emerging risks.			The Group continues to observe a low level of actual fraud losses, but remains cognisant of the heightened external fraud environment in which it operates and, in particular, the rise in the number of customers falling victim to elaborate and sophisticated scams. Whilst the Group’s product functionality restricts the level of direct exposure to these types of events, the Group continues to look at options where it can educate and support its customers and help prevent them from becoming victims of the growing threat.



OSB GROUP PLC Annual Report and Accounts 2025		59

Principal risks and uncertainties continued

Emerging risks

The Group proactively identifies emerging risks which may have an impact on its ongoing

strategy and operations through approaches such as horizon scanning and environment

monitoring (regulatory and non-regulatory), stress testing and analytics, risk assessments,

regulatory engagement and industry collaboration. The Group considers its top emerging risks

to be:


Political and macroeconomic uncertainty
Description			Mitigation

The Group’s lending activity is predominantly focused in the UK (with a legacy book of mortgages in the Channel Islands) and, as such, will be impacted by any risks emerging from changes in the UK’s macroeconomic environment which itself is influenced by increasingly volatile geopolitical tensions and uncertainty. High inflation and changing interest rates pose risks to the Group’s loan portfolio performance.			The Group has mature and robust monitoring processes and through various stress testing activities (i.e. ad hoc, risk appetite and ICAAP) understands how the Group performs over a variety of macroeconomic stress scenarios and has developed a suite of early warning indicators, which are closely monitored to identify changes in the economic environment. The Board and management review detailed portfolio reports to identify any changes in the Group’s risk profile.


Artificial Intelligence
Description			Mitigation

Artificial Intelligence (AI), including generative AI remains an emerging risk given how rapidly it is advancing and is being utilised more widely across the financial services industry. The Group remains in the early stages of its journey in adopting the use of AI across the organisation. The Group will continue to embrace this new technology, but in a controlled manner applying robust risk management arrangements to ensure risks continue to be identified, monitored and mitigated. Potential future risks including (i) external threats including cyber criminals use of AI technology, market competition dynamics changing based on the varying levels of success firms have in leveraging this technology to drive enhancements in business performance. Potential use of AI by external fraudsters (ii) internal risks relating to uncontrolled or inappropriate use of AI capabilities across the Group. The Bank of England (BoE) also stresses the importance of robust data and model risk management as banks adopt more predictive technologies.			The Group has established a responsible AI policy and continues to mature and refine its AI Governance framework, which control the use, deployment and oversight of AI technology across the Group. Internal subject matter experts are in place and the Group will liaise with external third-party advisers as required. Close monitoring of developments in AI technology is undertaken by the Group’s IT function, where a suite of planned initiatives is underway to enable the Group to benefit from the use of AI technology, whilst mitigating any future risks which may occur.


Climate change
Description			Mitigation

Regulatory expectations and industry best practices continue to evolve and further work is required to enhance the Group’s approach to managing climate risk. Key climate change risks include: • Physical risks which relate to specific weather events, such as storms and flooding, or to longer- term shifts in the climate, such as rising sea levels. These risks could include adverse movements in the value of certain properties. • Transitional risks may arise from the adjustment towards a low-carbon economy, such as tightening energy efficiency standards for domestic and commercial buildings. These risks could include a potential adverse movement in the value of properties requiring substantial updates to meet future energy performance requirements. T			The Group’s Climate Risk Management Framework provides guidance and necessary guardrails for the continuing embedment and advancement of the Group’s climate risk management capabilities. Scenario stress testing and outputs form part of the Internal Capital Adequacy Assessment Process (ICAAP) and risk appetite limit setting. Physical Risk is assessed on a decade-by-decade prediction, from current year to 2100, on the likelihood of flood, subsidence and coastal erosion. The current Energy Performance Certificate (EPC) of each property is considered to allow for an assessment of transitional risk due to policy change. The Group complies with the UK Companies Act 2006 disclosing the Group’s approach in managing climate-related financial risks and follows best practices from recommendations set out by Task Force on Climate-related Financial Disclosures (TCFD). The full report can be found on page 95.


Regulatory change
Description			Mitigation

The Group remains subject to high levels of regulatory oversight and an extensive and broad- ranging regulatory change agenda, including meeting the requirements of Basel 3.1 regulation. The Group is therefore required to respond to prudential and conduct-related regulatory changes, fulfilling information requests and taking part in thematic reviews, as required.			The Group has established horizon scanning capabilities, coupled with dedicated prudential and conduct regulatory experts in place to ensure the Group manages future regulatory changes effectively. The Group also has strong relationships with regulatory bodies and, through membership of UK Finance, inputs into upcoming regulatory consultations.



OSB GROUP PLC Annual Report and Accounts 2025		60

Risk profile performance review

Cr edit ri sk

Bank of England base rates reduced during

2025 as inflation eased and economic

conditions stabilised. Unemployment rose

modestly compared with 2024 but remained

low by historical standards. Falling inflation

in 2025 supported a recovery in real

household incomes following the prolonged

cost-of-living pressures experienced in 2024.

Lower interest rates and improving

affordability provided some support to the

mortgage and property markets.

The Group’s prudent risk appetite and

disciplined approach to credit risk

management supported stable credit profile

performance during the year.

The Group’s focus on returns and pricing

discipline delivered originations of £4.7bn in

2025, an increase of 19% compared with

£4.0bn in the prior year. In line with the

Group’s diversification strategy, originations

were particularly strong in the higher-

yielding sub-segments of commercial,

bridging, asset finance and residential

development.

The Group actively manages three key credit

risk pillars including i) the customer’s

propensity to repay, (ii) the customer or

tenant’s ability to maintain payments and

(iii) the underlying collateral or security

provided to support lending and its ability to

absorb adverse movements in values,

providing loss protection should a repayment

default event occur.

The credit score profile of new lending

remained broadly stable throughout the year

but improved compared to 2024 reflecting

the focus on ensuring that onboarded

customers had strong ability and propensity

to make payments in the future.

Buy-to-Let interest coverage ratios for new

lending improved compared to 2024 and

remained strong at 200% for OSB and 160%

for CCFS (2024: 186% and 160%,

respectively), demonstrating a healthy

surplus in rental income versus the required

monthly repayment amount.

Strong origination and customer retention

resulted in 3.2% growth in the net loan book

to £25.9bn (31 December 2024: £25.1bn).

Credit scoring metrics for existing loan

balances remained robust. Modest increases in

future probability of default and affordability

scores observed as more customers migrated

into arrears and customers’ credit profiles

continued to be impacted by the increased

costs of living and borrowing.

The Group remained a fully secured lender

with prudent lending policies and criteria

coupled with property value appreciation in

2025. Weighted average book LTV increased

to 67% for OSB (2024: 64%) and was

unchanged for CCFS at 64%. The weighted

average book LTV for the Group remained

prudent at 66% (2024: 64%).

Arrears as at 31 December 2025 were

unchanged from the prior year at 1.7%.

Loan affordability challenges when borrowers

refinance onto higher prevailing interest rates

remained the main driver of arrears in the year.

The OSB entity includes a number of closed

acquired residential mortgage portfolios,

which have a higher risk profile versus

organically originated lending. These

portfolios were a material contributor to the

segment level arrears. As at 31 December

2025, the acquired portfolios equated to

1.4% of the OSB entity level net loans and

advances to customers, whilst contributing

10.9% of total arrears. The arrears ratio of

the acquired segment reduced to 13.6% as

at 31 December 2025 versus 19.5% in the

prior year.

Segment level arrears ratios


		31 December 2025	31 December 2024
Group	Sub segment	1.7%	1.7%
OSB	Total	1.8%	1.8%
	Organic	1.6%	1.5%
	Acquired	13.6%	19.5%
CCFS	Total (Post securitisation)	1.5%	1.5%
	Total (Pre- securitisation)	n/a	1.3%

In line with modelled expectations, the Group

observed a stabilisation of arrears trends.

A suite of initiatives is progressing to drive

further improvements to arrears trends in the

near term, with oversight being provided by

the Board.

The timelines for repossessing and selling

properties continued to be impacted by

ongoing delays in the court hearing process.

The Group actively monitors performance

against a set of internal risk appetite and

early warning indicators together with wider

benchmarked external data provided by

third parties, including UK Finance. During

2025 the Group’s arrears performance

operated inside of forecasted estimates, and

prudent IFRS 9 provision coverage levels

continued to be held to cover for forecasted

future losses.

During 2025, the Group reported a

significant decline in the volume of

forbearance measures requested by

customers facing financial difficulties. A total

of 2,519 forbearance requests were approved

during the year, marking a reduction from

3,013 requests in the previous year. As of

31 December 2025, the outstanding balance

of forbearance measures granted amounted

to £264.9m, representing a reduction from

£348.2m as of 31 December 2024.

The most common solutions provided were

interest rate reduction, switch to interest only

and payment deferral. The largest provision

of forbearance was to residential first charge

mortgage holders.

Expected credit losses (ECL)

Balance sheet expected credit losses

decreased to £123.6m as at 31 December

2025 from £126.9m in the prior year. The

impairment charge of £13.0m represented a

loan loss ratio of 5bps (2024: £11.7m credit,

(4)bps favourable loan loss ratio,

respectively).

Key drivers of the impairment charge were:

a) Macroeconomic scenarios and valuation

methodology – the Group continued to

receive regular macroeconomic scenario

updates from its advisers, which were

reviewed and discussed by management

and the Board, along with the probability

weightings applied to each scenario.

The macroeconomic scenarios utilised

within the IFRS 9 provisioning process as

at 31 December 2025 forecast a

downgrade within its Gross Domestic

Product outlook as the United Kingdom

economy slowed, driven in part by

geopolitical uncertainty and global trade

pressures. The revised macroeconomic

scenarios are more conservative on

unemployment rates whilst house price

performance is marginally favourable,

however, the growth remains subdued.

The probability weighting assigned to

each scenario remained unchanged from

31 December 2024. However, the Group

adopted a more severe downside scenario

to ensure provisions remain prudent and

adequately capture potential tail risks

under stressed, yet plausible, economic

conditions.



OSB GROUP PLC Annual Report and Accounts 2025		61

Risk profile performance review continued

The Group regularly updates the

collateral values of properties which act

as security against the loans extended to

customers. In 2025, the Group observed

an improvement in property values that

outperformed forecast expectations.

The aggregated impact of updated

forward-looking macroeconomic

scenarios, coupled with observed

movements in collateral values accounted

for a £2.4m impairment release in the

year.

b) Model enhancements and post model

adjustments (PMAs) – calibrations to the

IFRS 9 models to ensure forecasted

estimates continued to align to recently

observed performance, which include

refreshed PMAs to account for risks not

fully captured within the framework,

resulted in an impairment release of

£13.3m.

Observed improvement in arrears from the

30 June 2025 reported position and a

reduced risk at the point of reversion, is

reflected in revised borrowed default

expectations, which largely contributed to

the modelled provision release.

The risk arising from observed elongated

sale times within the possession process,

and the risk associated with the

heightened cost of borrowing as interest

rates have remained elevated,

transitioned into the model framework

and was removed as a PMA.

The Group continued to recognise the less

material physical risks relating to climate

change and cladding. With the addition of

two new PMAs for the risk to the time to

sale as a result of the Renters Rights Bill,

and the risk associated with potential

losses within Development Finance under

a severe economic downturn.

c) Arrears flow – The Group’s arrears remain

stable from the 31 December 2024

reported position, with the increase in

impairments of £11.8m broadly aligned

with the previous reported period (31

December 2024: £10.8m). Whilst the

expectations of future default risk have

decreased.

d) Stage migration – An impairment release

of £6.2m related to changes in the credit

profile of borrowers as they transitioned

through modelled IFRS 9 impairment

stages with higher observed closures as

losses crystallised through the write-off

process.

e) New lending – The Group’s Stage 1

impairment balance increased by £3.9m

as a result of new lending in the period.

f) Individually assessed provisions and other

– The Group’s specialist Real Estate

Management and Financial Support

teams maintained watch lists of loans

where objective evidence of impairment

existed over a given exposure. For these

specific loans, a detailed assessment of

the collateral and circumstances of the

arrears was completed and, where

required, an individual impairment

provision was raised based on this

updated information.

The Group raised a number of additional

individual provisions against a small

number of counterparties which resulted

in an impairment charge of £2.9m.

In addition to the above, the income

statement included a charge of £16.3m

related to write offs and other

adjustments.


	Gross carrying amount	Expected credit losses	Coverage ratio
As at 31 December 2025	£m	£m	%
Stage 1	21,149.6	18.3	0.09%
Stage 2	3,821.3	28.3	0.74%
Stage 3 and purchased or originated credit- impaired (POCI)	1,061.7	77.0	7.25%
Total	26,032.6	123.6	0.47%


	Gross carrying amount	Expected credit losses	Coverage ratio
As at 31 December 2024	£m	£m	%
Stage 1	19,877.1	13.7	0.07%
Stage 2	4,352.9	39.3	0.90%
Stage 3 and POCI	1,010.3	73.9	7.31%
Total	25,240.3	126.9	0.50%



OSB GROUP PLC Annual Report and Accounts 2025		62

Risk profile performance review continued

Macroeconomic scenarios

The measurement of ECL under the IFRS 9

approach is complex and requires a high

level of judgement. The approach includes

the estimation of probability of default (PD),

loss-given default (LGD) and likely exposure

at default (EAD). An assessment of the

maximum contractual period over which the

Group is exposed to the credit risk of the

asset is also undertaken.

IFRS 9 requires firms to calculate ECL

provisions simulating the effect of a range of

possible economic outcomes, calculated on a

probability-weighted basis. This requires

firms to formulate forward-looking

macroeconomic forecasts and incorporate

them into their ECL calculations.

i. How macroeconomic variables

and scenarios are selected

As part of the IFRS 9 modelling process, the

relationship between macroeconomic drivers

and arrears, default rates and collateral

values is established. The Group adopted an

approach that utilises four macroeconomic

scenarios. These scenarios are provided by

an industry-leading economics advisory firm,

that advises management and the Board.

A base case forecast is provided, together

with a plausible upside scenario. Two

downside scenarios are also provided

(downside and a severe downside).

ii. How macroeconomic scenarios are

utilised within ECL calculations

Probability of default estimates are either

scaled up or down based on the

macroeconomic scenarios utilised.

Loss given default estimates are principally

impacted by property price forecasts, which

inform the loss estimates should an account

be possessed and sold.

Exposure at default estimates are not

impacted by the macroeconomic scenarios

utilised.

Each of the above components are then

directly utilised within the ECL calculation

process.

iii. Macroeconomic scenario

governance

The Group has a robust governance process

to oversee macroeconomic scenarios and

probability weightings used within ECL

calculations.

On a periodic basis, the Group’s Finance

function and economic adviser provide the

Group Risk and Audit Committees with an

overview of recent economic performance,

together with updated base, upside and two

downside scenarios. The Finance function

conducts a review of the scenarios

comparing them to other economic

forecasts, which results in a proposed course

of action which, once approved, is

implemented.

Forecast macroeconomic variables over a five-year period


			Year end	Year end	Year end	Year end	Year end
Scenario	Weighting	(%) Economic measure	2025	2026	2027	2028	2029
		GDP	1.4	1.0	1.4	1.5	1.5
		Unemployment	5.1	5.0	4.7	4.4	4.3
		House price growth	2.2	2.3	3.4	4.8	5.4
		CPI	3.2	2.5	2.5	2.1	2.2
Base case	40	Bank Base Rate	3.8	3.5	3.5	3.5	3.5
		GDP	1.4	3.4	2.8	2.2	1.7
		Unemployment	5.1	4.3	3.7	3.6	3.6
		House price growth	2.2	4.5	5.9	7.6	6.0
		CPI	3.2	3.7	3.1	2.5	2.2
Upside	30	Bank Base Rate	3.8	4.8	4.4	3.7	3.5
		GDP	1.4	(2.7)	0.1	1.0	1.4
		Unemployment	5.1	6.7	6.9	6.9	6.6
		House price growth	2.2	(6.3)	(1.7)	0.3	5.7
		CPI	3.2	0.9	1.5	1.9	1.9
Downside	20	Bank Base Rate	3.8	2.4	1.8	1.8	1.8
		GDP	1.4	(6.9)	(1.8)	0.2	1.1
		Unemployment	5.1	8.0	8.5	7.9	7.6
		House price growth	2.2	(14.5)	(8.3)	(7.9)	6.9
		CPI	3.2	(0.8)	0.4	1.6	1.8
Severe downside	10	Bank Base Rate	3.8	1.0	0.5	0.5	0.5

Note: GDP, CPI, and HPI are all measured on an annual change basis. Bank Base Rate and Unemployment metrics are end-

of-year forecasted positions.



OSB GROUP PLC Annual Report and Accounts 2025		63

Risk profile performance review continued

iv. Changes made during 2025

Throughout 2025, the scenario suite was

monitored and updated as UK political and

geopolitical developments occurred.

The Group’s Risk and Audit Committees

focused on assessing whether specific risks

had been captured within externally provided

forward-looking forecasts. Of particular

focus were the risks relating to the cost of

borrowing, unemployment, inflation, interest

rates, and changes in house prices. The

Group undertook detailed analysis to assess

whether specific sub-cohort risks were

adequately accounted for by the Group’s

IFRS 9 models, which identified a small

number of areas requiring PMAs to be made.

During the year the cost of borrowing PMA

and the time to sale PMA transitioned into the

models. New PMAs were added to account

for the extended time to sale resulting from

the Renter’s Rights Bill, and including the risk

associated with losses within Development

Finance under a severe economic downturn.

Furthermore, models were calibrated to the

latest observed credit performance whilst

ensuring unemployment rates were

adequately accounted for.

The Board reflected on the ongoing

appropriateness of probabilities attached to

the suite of IFRS 9 scenarios as the

macroeconomic outlook evolved throughout

the year. Although the scenarios remain

symmetrical, with upside and downside

outcomes carrying equal weightings, the

Group adopted a more severe downside

scenario to ensure provisions remain prudent

and adequately capture potential tail risks

under stressed but plausible economic

conditions.

Forbearance

Where a borrower experiences financial

difficulty which impacts their ability to

service their financial commitments under the

loan agreement, forbearance may be used to

achieve an outcome that is mutually

beneficial for both the borrower and the

Group.

Borrowers who are experiencing financial

difficulties, either pre-arrears or in arrears,

enter a consultative process to ascertain the

underlying reasons and to establish the best

course of action to enable the borrower to

develop credible repayment plans to see

them through the period of financial stress.

The specific tools available to assist

customers vary by product and the

customers’ circumstances. The various

options considered for customers are as

follows:

• temporary switch to interest only: a

temporary account change to assist

customers through periods of financial

difficulty where the contractual monthly

payment is reduced to the amount of

interest owed in the month for the

duration of the account change. Any

arrears existing at the commencement of

the arrangement are retained;

• interest rate reduction: the Group may, in

certain circumstances, where the

borrower meets the required eligibility

criteria, transfer the mortgage to a lower

contractual rate. Where this is a formal

contractual change, the borrower will be

requested to obtain independent financial

advice as part of the process;

• loan-term extension: a permanent

account change for customers in financial

distress where the overall term of the

mortgage is extended, resulting in a lower

contractual monthly payment;

• payment holiday: a temporary account

change to assist customers through

periods of financial difficulty where

capital and interest accruals during the

payment holiday period are repaid from

the end of the payment holiday over the

remaining term. Any arrears existing at

the commencement of the arrangement

are retained;

• voluntary-assisted sale: a period of time is

given to allow borrowers to sell the

property and arrears accrue based on the

contractual monthly payment;

• reduced monthly payments: a temporary

arrangement for customers in financial

distress. For example, a short-term

arrangement to pay less than the

contractual monthly payment. Arrears

continue to accrue based on

the contractual monthly payment;

• capitalisation of interest: arrears are

added to the loan balance and are repaid

over the remaining term of the facility or

at maturity for interest only products.

A new payment is calculated, which will

be higher than the previous payment;

• full or partial debt forgiveness: where

appropriate, the Group will consider

writing off part of the debt. This may

occur where the borrower has an agreed

sale and there is a shortfall in the amount

required to redeem the Group’s charge, in

which case repayment of the shortfall

may be agreed over a period of time,

subject to an affordability assessment; or

where possession has been taken by the

Group, and on the subsequent sale there

has been a shortfall loss;

• arrangement to pay: where an

arrangement is made with the borrower

to repay an amount above the

contractual monthly payment, which will

repay arrears over a period of time;

• promise to pay: where an arrangement is

made with the borrower to defer payment

or pay a lump sum at a later date; and

• bridging loans which are more than 30

days past their maturity date: Repayment

is rescheduled to receive a balloon or

bullet payment at the end of the term

extension, where the institution can duly

demonstrate future cash-flow availability.

The Group aims to proactively identify and

manage forborne accounts, utilising external

credit reference bureau information to

analyse probability of default and customer

indebtedness trends over time, feeding pre-

arrears watchlist reports. Watchlist cases are

in turn carefully monitored and managed as

appropriate.



OSB GROUP PLC Annual Report and Accounts 2025		64

Risk profile performance review continued

Fair value of collateral

methodology

The Group ensures that security valuations

are reviewed on an ongoing basis for

accuracy and appropriateness. Commercial

properties are subject to quarterly indexing

using Commercial Real Estate data.

Residential properties are indexed at least

quarterly, using House Price Index data.

Solvency risk

The Group maintains an appropriate level

and quality of capital to support its

prudential requirements with sufficient

contingency to withstand a severe but

plausible stress scenario. The solvency risk

appetite is based on a stacking approach,

whereby the various capital requirements

(Pillar 1, Pillar 2A, CRD IV buffers, Board

and management buffers) are incrementally

aggregated as a percentage of risk-

weighted assets.

The Bank of England has notified the Group

that its preferred resolution strategy for the

Group has been updated from a Bail-In firm

to Transfer firm effective from 1 January

2026. The Group’s MREL requirement is now

equal to its minimum capital requirements,

defined as the sum of Pillar 1 and Pillar 2A

capital requirements, as set by the PRA.

Solvency risk is a function of balance sheet

growth, profitability, access to capital

markets and regulatory changes. The Group

actively monitors all key drivers of solvency

risk and takes prompt action to maintain

its solvency ratios at acceptable levels.

The Board and management also assess

solvency when reviewing the Group’s

business plans and inorganic growth

opportunities. The Group’s CET1 and total

capital ratios reduced as forecasted to 15.8%

and 19.1%, respectively as at 31 December

2025 (31 December 2024: 16.3% and 19.7%,

respectively) remaining significantly above

risk appetite. The Group’s leverage ratio was

7.4% as at 31 December 2025 (31 December

2024: 7.7%).

Liquidity and funding risk

The Group has a prudent approach to

liquidity management through maintaining

sufficient liquidity resources to cover cash

flow imbalances and fluctuations in funding,

under both normal and stressed conditions,

arising from market-wide and bank-specific

events. DoLSub permission was granted in

July 2025 enabling the Group to manage the

OSB and CCFS banks as one combined

entity. The DoLSub liquidity risk appetites

have been calibrated to ensure that both

Banks always operate above the minimum

prudential requirements with sufficient

contingency for unexpected stresses, whilst

actively minimising the risk of holding

excessive liquidity, which would adversely

impact the financial efficiency of the

business model.

The Group continues to attract new retail

savers and has high retention levels with

existing customers. In addition, the Group is

able to access a wide range of wholesale

funding options, including securitisation

issuances and the use of retained notes from

both Banks as collateral for Bank of England

facilities, and repurchase agreements with

third parties.

In 2025, the Group maintained its liquidity

and funding profile within the confines of its

risk appetites as set out in the Group’s ILAAP.

Retail funding rates decreased throughout

the year due to reductions in the Bank of

England base rate, however savings rates

have not fully decreased in line with base

rate, putting pressure on cost of funds.

Rates on the variable books have been

actively managed to ensure a stable

deposit base at an attractive cost of funds.

Swap rate decreases in 2025 also led to the

Group repaying a large proportion of the

variation margin collateral on the Group’s

interest rate swaps received during rate

increases in 2023. The Group managed

internal buffers to ensure that sufficient

funds were held at the BoE to meet any swap

margin calls as rates reduced.

The Group and DoLSub risk appetites are

based on internal stress tests that cover a

range of scenarios and time periods and

therefore are a more severe measure of

resilience to a liquidity event than the

standalone liquidity coverage ratio (LCR). As

at 31 December 2025, the DoLSub had a

liquidity coverage ratio of 197%, and the

Group LCR was 203% (2024: 217%), all

significantly above regulatory requirements.

Market risk

The Group is exposed to adverse movements

in interest rates, foreign exchange rates and

counterparty exposures. The Group accepts

interest rate risk and basis risk as a

consequence of structural mismatches

between fixed rate mortgage lending, sight

and fixed-term savings and the maintenance

of a portfolio of high-quality liquid assets.

Interest rate exposure is mitigated on a

continuous basis via asset and liability

management, the Group’s structural hedge

and the use of financial derivatives, within

limits set by the Group Asset Liability

Committee (ALCO) and approved by the

Board. The Group’s balance sheet is

predominantly UK Sterling denominated. The

Group has some minor foreign exchange risk

from funding its OSBI subsidiary. This is

minimised by pre-funding a number of

months in advance and regularly monitoring

GBP/INR rates. Wholesale counterparty risk

is measured on a daily basis and constrained

by counterparty risk limits. Economic Value

measures of duration risk and the earnings

measures of both duration risk and basis risk

remained well within risk appetite in 2025.

Operational risk

The operational risk management framework

describes how the Group should manage the

diversity and scale of operational risks it

faces, enabling the Group to understand its

exposures and make informed management

decisions as a result. It has been designed to

provide a robust approach to the

identification, measurement and mitigation

of operational risks. The Group’s operational

processes, systems and controls are

designed to minimise disruption to

customers, damage to the Group’s

reputation and any detrimental impact on

financial performance. Where risks continue

to exist, there are established processes to

provide the appropriate levels of governance

and oversight, together with an alignment to

the level of risk appetite stated by the Board.



OSB GROUP PLC Annual Report and Accounts 2025		65

Risk profile performance review continued

A strong culture of transparency and

escalation has been cultivated throughout

the Group, providing a risk management

model across the three lines of defence that

has clear responsibilities, is well embedded

and consistently applied. In addition, a

community of Risk Champions exists

representing each business area, together

with dedicated first line risk and control

teams in key areas of the business. Both the

dedicated first line risk and control teams

and the Risk Champions follow the

operational risk identification and

assessment processes that are established

across the Group for a consistent approach.

The current operational risk profile is diverse

in nature with the operating environment

constantly evolving through transformation

activities and the changing external

landscape. The main drivers of operational

risk are:

• complexity, pace and volume of change,

particularly within the strategic

Transformation Programme;

• IT and operational resilience and the

continued increase in the sophistication of

technology and cyber crime threats;

• progression in data strategies;

• regulatory environment and the volume of

changes impacting the industry; and

• increase in reliance on a variety of third

party suppliers.

Despite these ongoing challenges, the Group

continues to maintain a robust control

environment with a stable operational risk

position in comparison to levels in the

previous year.

The Group continues to make progress on

the strategic Transformation Programme,

which will benefit operational risk

management in the longer term. However, it

is recognised that significant change can

heighten operational strains in the short to

medium term although any potential issues

will be carefully managed through robust

governance and oversight.

Regulatory and compliance risk

The Group is committed to the highest

standards of regulatory compliance and

aims to minimise breaches, financial costs

and reputational damage associated with

non-compliance.

The Group has an established Compliance

function which actively identifies, assesses

and monitors adherence with current

regulation and the impact of emerging

regulation.

In order to minimise regulatory risk, the

Group maintains a proactive relationship

with key regulators and engages with

industry bodies such as UK Finance and

seeks external expert advice. The Group

continues to strengthen its relationship with

regulators as observed in 2025 through

improved supervisory engagement outcomes.

The Group also assesses the impact of

forthcoming regulation on itself and the

markets in which it operates and undertakes

robust assurance assessments from within

the Risk and Compliance functions.

Conduct risk

The Group considers its culture and

behaviour in ensuring delivery of good

outcomes for customers and in maintaining

the integrity of the market sub-segments in

which it operates. This is a fundamental part

of its strategy and a key driver to sustainable

profitability and growth. The Group does not

tolerate any systemic failure to deliver good

customer outcomes.

The Group has mechanisms across the three

lines of defence that ensure good customer

outcomes are achieved but also where there

are foreseeable or crystallised risks to

outcomes, that these are identified. On an

isolated basis, incidents can result in

customer harm due to human or operational

failures. Where such incidents occur, they

are thoroughly investigated, and the

appropriate remedial actions are taken to

address any customer harm and to prevent

recurrence.

The continuous development and

enhancement of customer outcomes

monitoring has demonstrated steady

performance against conduct risk measures.

The Group considers effective conduct risk

management to be a product of the positive

behaviour of all employees, influenced by a

customer-centric culture throughout the

organisation and therefore continues to

promote a strong sense of awareness and

accountability.

Financial crime risk

The Group provides relatively simple

products to UK-domiciled customers serviced

through UK-registered bank accounts. The

Group has an established screening

programme that is deployed at the point of

origination and on a regular basis

throughout the customer lifecycle. The

Group continues to invest in a range of

systems and controls that are deployed

across its product range in order to detect

and prevent the exposure to fraud and

financial crime through the customer

lifecycle. All new-to-business applications are

subject to a range of controls to identify and

mitigate financial crime. Customer activity is

monitored in order to detect suspicious

activity or behaviour that may be indicative

of fraud or other financial crime-related risks.

The Group’s core markets remained stable

during 2025, with all activity operating within

risk appetite. Systems and controls

functioned as intended, and no material

financial crime incidents were identified or

reported.

Strategic and business risk

The Board has clearly articulated the Group’s

strategic vision and business objectives

supported by performance targets and made

good progress against these objectives in

2025. The Group does not intend to undertake

any medium- to long-term strategic actions,

which would put the Group’s strategic or

financial objectives at risk.

To continue to deliver against its strategic

objectives and business plan, the Group

adopts a sustainable business model based on

a focused approach to core niche market sub-

segments where its experience and capabilities

give it a clear competitive advantage.

The Group remains focused on delivering

against its core strategic and financial

objectives, against a highly competitive and

uncertain backdrop.

Reputational risk

Reputational risk can arise from a variety of

sources and is a second-order risk. The

crystallisation of another principal risk can

lead to a reputational risk impact. The Group

monitors reputational risk through a variety

of channels. The 2025 risk profile improved

compared to 2024 as reflected in

performance against risk appetite; owing to

investors confidence in the Group’s financial

performance as reflected in the share price,

as well as analysts and credit rating agency

reviews. Improved supervisory engagement

outcomes and customer performance

measures also contributed.



OSB GROUP PLC Annual Report and Accounts 2025		66

Viability statement

This statement is made to comply with

P rovision 31 of the 2024 UK Corporate

Governance Code which requires the

Board to assess the viability of the Group

over a stated time horizon.

The Group’s long-term direction is informed

by business and strategic plans which are set

on an annual basis and are reviewed and

refreshed quarterly. The operating and

financial plans consider, among other

matters, the Board’s risk appetite, the

macroeconomic outlook, market opportunity,

the competitive landscape, and sensitivity of

the financial plans to volumes, margin

pressures and any changes in capital

requirements.

In making the assessment, the Board has

considered all principal and emerging risks,

including climate risk where the risk is likely

to emerge outside of the viability assessment

horizon. The impacts of climate risk have

been assessed as part of the Internal Capital

Adequacy Assessment Process (ICAAP),

which concluded that at present the

associated financial risks are not material for

the Group.

The Group prepares financial forecasts over

a five-year time horizon, with external

performance guidance typically being

provided over a one- to two-year period, as

forecast uncertainty increases in the outer

years of the financial plan. Key events which

will impact the Group’s financial position

such as the introduction of Basel 3.1 and the

impact of the peak stress point of

macroeconomic forecasts all fall within a

three-year time horizon. Post consideration

of these factors, the Board considers a

viability assessment horizon of three years to

remain appropriate.

The Banks within the Group are authorised

by the PRA and regulated by the Financial

Conduct Authority and the PRA. The Group

has a robust set of policies, procedures and

systems to undertake a comprehensive

assessment of all the principal risks and

uncertainties to which it is exposed, on a

current and forward-looking basis.

The Group identifies, assesses, manages and

monitors its risk profile based on the

disciplines outlined within the Group

Enterprise Risk Management Framework, in

particular through leveraging its risk appetite

framework (as described in the Risk review).

Potential changes in the aggregated risk

profile are assessed across the business-

planning horizon by subjecting the operating

and financial plans to severe but plausible

macroeconomic and idiosyncratic stress

scenarios.

The viability of the Group is assessed at both

the Group and the underlying regulated

Bank levels, through leveraging the risk

management frameworks and stress testing

capabilities of both regulated banks.

Stress testing is an integral risk management

discipline, used to assess the financial and

operational resilience of the Group. The

Group has developed bespoke stress testing

capabilities to assess the impact of extreme

but plausible scenarios in the context of its

principal risks impacting the primary

strategic, financial and regulatory

objectives. Stress test scenarios are

identified in the context of the Group’s

operating model, identified risks, and the

business and economic outlook. The Group

actively engages external experts to inform

the process by which it develops business

and economic stress scenarios.

A broad range of stress scenarios are

analysed considering the potential impacts

to changes in House Price Index,

unemployment, inflation and interest rates

over a range of severities. Stresses are

applied to lending volumes, capital

requirements, liquidity and funding mix,

interest margins and credit and operational

losses. Stress testing also supports key

regulatory submissions such as the ICAAP,

ILAAP and the Group Recovery and

Restructuring Plan. ICAAP stress testing

assesses capital resources and requirements

over a five-year period.

The Group has identified a broad suite of

credible management actions, which can be

implemented to manage and mitigate the

impact of stress scenarios. These

management actions are assessed under a

range of scenarios varying in severity and

duration. Management actions are evaluated

based on speed of implementation, second

order consequences and dependency on

market conditions and counterparties.

Management actions are used to inform

capital, liquidity and recovery planning

under stress conditions.

In addition, the Group identifies a range of

catastrophic scenarios, which could result in

the failure of its current business model.

Business model failure scenarios (Reverse

Stress Tests or RSTs) are primarily used to

inform the Board of the outer limits of the

Group’s risk profile. RSTs play an important

role in helping the Board and Executives to

assess the available recovery options to

revive a failing business model.

The Group has established a comprehensive

operational resilience framework to actively

assess the vulnerabilities and recoverability

of its critical services. The Group also

conducts regular business continuity and

disaster recovery exercises.

The ongoing monitoring of all principal risks

and uncertainties that could impact the

operating and financial plan, together with

the use of stress testing to ensure that the

Group could survive a severe but plausible

stress, enables the Board to assess the

viability of the business model over a three-

year period.

The Group has strong capital and funding

profiles with a view to maintaining continued

financial resilience. However, the Group

remains fully cognisant of the uncertain

macroeconomic environment and ensures

that stress testing activities consider a range

of potential scenarios.



OSB GROUP PLC Annual Report and Accounts 2025		67

Viability statement continued

The Board has also considered the potential

implications of the current macroeconomic

uncertainty in its assessment of the financial

and operational viability of the Group and

has a reasonable belief that the Group

retains adequate levels of financial resources

(capital and liquidity) and operational

contingency.

In line with prior years, in the viability

assessment process the Board considered the

latest macroeconomic forward-looking

scenarios utilised for business planning and

the Group’s IFRS 9 calculations which

consider macroeconomic risks such as rising

levels of unemployment, inflation, interest

rate movements and changes in house

prices. Utilising analysis that identifies

scenarios which would result in the Group

becoming unviable, the Board considered the

plausibility of these scenarios materialising.

Forecasts and capital stress tests considered

the impact of Basel 3.1 implementation.

The potential impact of the macroeconomic

environment on the Group’s operations is

subject to continuous monitoring through the

Group’s management committees, capital

and liquidity, operational resilience and

business continuity planning working groups,

with appropriate escalation to the Board and

supervisory authorities.

The Group’s current financial forecasts, risk

profile characteristics and stress test analysis

support the Directors’ assessment that they

have a reasonable expectation that the

Group will be able to operate effectively and

meet its liabilities as they fall due over the

viability time horizon.



OSB GROUP PLC Annual Report and Accounts 2025		68

Sustainability report

Doing the right thing for

our customers, colleagues,

communities and the planet.


69	Introduction
70	ESG Strategic Pillars




Just Transition
We are committed to environmental stewardship, supporting the transition to a low-carbon economy, and achieving Net Zero across our value chain by 2050^1.

71	Transition plan, targets and performance
77	Environmental Management
78	Greenhouse gas (GHG) emissions
79	Greenhouse gas (GHG) emissions table




People
We are committed to having a positive human and social impact on the lives of the customers, colleagues and communities we work with.

81	Supporting our customers
84	Supporting our colleagues
89	Supporting our communities




Stewardship
We are committed to operating responsibly, ethically and transparently, delivering sustainable value to all our stakeholders.

91	ESG Governance
93	Ethical policies and practices





For further information see supporting ESG disclosures on our website.

Climate Transition Plan 2024
Financed emissions – intermediate target – Basis of Preparation
Scope 1, 2 and 3 Basis of Reporting
Modern Slavery Act Statement
Gender Pay Gap Report
Community Impact Report

1.Ambition includes Scope 1 and 2 emissions, relevant Scope 3 categories including category 15 – investments.



OSB GROUP PLC Annual Report and Accounts 2025		69

Sustainability report continued Introduction



Just Transition		People

	45.5%		61%
	EPC rating of C or better 2024: 42.8%		of UK colleagues engaged in community activities 2024: 60%

	57%		over £376k
	reduction in direct emissions (Scope 1 and 2) 2024: 41% reduction		total benefit to charities and community organisations 2024: over £394k

	98%		9th
	of electricity from renewable sources (UK) 2024: 100%		consecutive year OSB India confirmed as a Great Place to Work



Stewardship		Greenhouse gas emissions

	36%		39.78
	of women in senior management 2024: 36%		Scope 1 2024: 101.83 tCO2e

	44th		4.49
	of top 100 large companies in Best Companies Survey 2024: 45th		Scope 2 (market-based) 2024: zero tCO2e

	7,385		283,021
	volunteering hours undertaken 2024: 7,038		Scope 3 Financed emissions 2024: 294,137 tCO2e

We are committed to helping our

customers, colleagues and communities to

prosper as we advance our sustainability

agenda – reducing our environmental

footprint, strengthening our social impact

and driving long-term value creation.

In a year defined by strategic focus and

progress on transforming for our customers

and intermediary partners, and becoming a

skills-based organisation, with investment in

each of our colleagues, we embraced

sustainability and the future fitness of our

organisation. Not as an ancillary agenda but

as a strategic focus. As a specialist lending

and retail savings bank, we recognise that

our long-term resilience and relevance

depend on our capacity to integrate

environmental, social and governance (ESG)

considerations into our business model.

In 2025, the Group progressed on three

strategic ESG pillars: Just Transition, People

and Stewardship - each underpinned by

commitments and aligned with the UN

Sustainable Development Goals. We hold

ourselves accountable for our operational

footprint and reducing the broader impact of

our lending activities, including the

decarbonisation of the UK housing stock we

finance.

Our ambition is two-fold. First, to reduce

direct emissions across Scope 1 and 2 by

2030 and to addressing Scope 3 financed

emissions, recognising the nature of climate-

risk and transition-risk exposure in a lending

business. Second, to embed social value:

ensuring our colleagues are empowered and

invested in, our customers treated fairly and

with integrity, and that our communities

benefit from our activities.

In the following pages we present our

progress and the areas where further

acceleration is required. We continue to

refine our materiality assessments to

prioritise the matters that really matter –

aligning with our Purpose: to help our

customers, colleagues and communities

prosper. At the same time, we maintain a

close eye on emerging risks: whether they be

rising energy costs, shifting regulatory

landscapes, or evolving consumer

expectations around responsible finance.

Looking ahead, we commit to delivering

sustainable outcomes by continuing to

support our customers, by equipping our

colleagues with the skills for tomorrow, and

by reinforcing governance frameworks that

ensures accountability across the

organisation. This journey is not linear, and

we cannot succeed in isolation – partnership,

industry collaboration and government

policy-alignment remain central.

1.Defined as Scope 1 and Scope 2 emissions calculated

using Market-based methodology.



OSB GROUP PLC Annual Report and Accounts 2025		70

Sustainability report continued ESG Strategic Pillars

Our ESG Commitments guide our approach to sustainable

business and delivering value for our stakeholders.

The topics that matter most are embodied in our strategic pillars and commitments. We continue to use the

United Nations Sustainable Development Goals (SDGs) as an important reference point for our activities and impact^1.

Customers

We place existing and future

customers’ needs at the centre of

what we do. We work hard to

ensure that our decisions and

products support the prosperity

of all customers including those

who are or may be vulnerable.

We provide thought leadership,

education, awareness and

products and services that

respond to customers needs,

including their transition to a

low-carbon economy.

Colleagues

We continuously evolve our

culture to ensure colleagues

remain engaged, equipped and

empowered to deliver our

Purpose and Vision. Our learning

and skills culture attracts,

retains, and develops the best

talent by investing in every

colleague’s skills and capability,

enabling all to develop and

maximise their ambition and

potential. In doing so, we

embrace the opportunity of a

diverse and inclusive community

of colleagues.

Communities

We will support our local

communities and drive positive

social and economic change

through strategic collaboration

programmes, partnerships and

volunteering initiatives. To further

this goal, we will create products

and propositions within our

lending and savings activities to

benefit our customers and the

wider community.

Net Zero

We will align our ambitions and

climate transition plan to those

of the Paris Accord on climate

change with the ambition of

achieving carbon Net Zero

across our operational emissions

by 2030 and our financed

emissions by 2050.

Supply chain

We will work with partners

who share our commitment to

increasingly sustainable and

responsible business practices,

encouraging and supporting

them where needed.

1. The Sustainable Development Goals (SDGs) are a set of 17 non-legally binding global goals established by the UN for countries and governments. Mapping was based on UN Global Compact – Blueprint for Business Leadership on the SDGs. References

included are indicative only and OSB Group make no representation, warranty or assurance of any kind, express or implied, or takes no responsibility or liability as to whether the areas of focus further the objective or achieves the purpose of the SDGs.



OSB GROUP PLC Annual Report and Accounts 2025		71

Sustainability report continued Strategic Pillar – Just Transition

Climate Transition Plan

The Group published its inaugural Climate

Transition Plan (the ‘Plan’) in 2024 and in

2025 set about its implementation against a

challenging external backdrop of continued

uncertainty on government policy and

support for housing decarbonisation and

increased criticism and scepticism of Net

Zero initiatives.

In October 2025 the United Nations Finance

Initiative – Net Zero Banking Alliance, of

which OSB Group had been a member since

2023, ceased its operations as a member-led

initiative, following the exit of number of

large financial institutions. We remain

committed to embedding climate change

considerations and management across our

business, to ensure we remain resilient to the

impacts and mitigate, where possible, our

impact, through direct action and support

for our customers.

During the year we recalculated our 2022

financed emissions¹ baseline due to data

quality improvements since it was set. The

result of this is that we are restating

performance against the revised baseline for

the years 2023 and 2024. Details can be

found on page 75.

Our Climate Transition Plan prioritises areas

where we believe over time, and with the

right support, tangible value can be delivered

to stakeholders. The five pillars of action

outlined in the Plan (see across) represent a

responsible and proportionate strategy,

focusing on supporting customers and real

economy decarbonisation, footprint

reduction and climate risk management. Our

strategy recognises the scale and complexity

of the challenge, and our dependence on

external stakeholders such as customers,

technology and government.

We previously reported our intention to release an updated version of the Plan in 2027. Following government and regulator consultations in

2025 and the release of the International Financial Reporting Standards Foundation transition plans guidance, we will review the timeline in

early 2026 to ensure our disclosures continue to reflect best practice and remain relevant and useful to report users.

Since the Plan’s launch, we have made progress in advancing a number of the priority actions (see page 74) that contribute towards our

emissions reduction targets for direct operations (see page 76) and financed emissions (see page 75). We continue to monitor progress through

our Climate Transition Dashboard which includes a range of metrics and performance against our key targets. Performance against our

emissions reduction targets and against risk appetite are reported regularly through governance committees, for more information see page 92.

Our

objectives

We have an ambition to reduce

the carbon intensity of our

mortgage lending by 25% by

2030 from a 2022 baseline

We plan to achieve Net Zero

emissions in Scope 1 and

Scope 2 by 2030 ²

We plan to reduce our

financed emissions to

Net Zero by 2050

Our pillars

for action

Thought

leadership,

education and

awareness

Through research we

provide thought

leadership, aiming to

start a conversation

towards creating a fair

sector for all, offering

education and raising

awareness of the

issues faced in

creating a sustainable

sector.

Connecting our

customers

Seeking ways to

connect customers to

the information and

services they want

and need, creating a

positive environment

for change.

Transition-

friendly products

and services

Our approach to

transition products

and services places

priority on delivering

on our customers’

needs, aligned to

increasing energy

efficiency and

reducing emissions

from UK housing.

Greening our

offices and

branches

We accept

responsibility for

ensuring our buildings

deliver on our Net Zero

ambition and

recognise that we can

achieve this earlier

than the emissions

we finance.

Continuing to

embed climate

thinking

Further embedding

climate thinking into

our management

processes, ensuring

we have expertise

where it is needed to

manage risk and

deliver on

opportunities.

1. Financed emissions are the greenhouse gas (GHG) emissions that the Group is indirectly responsible for through the money it lends,

2. Scope 2 calculated using Market-based methodology.



OSB GROUP PLC Annual Report and Accounts 2025		72

Sustainability report continued Strategic Pillar – Just Transition continued

Climate Risks and opportunities

The Group’s lending is to individuals and

small and medium enterprises in the UK,

where the specific climate risks and

opportunities are assessed. The Group

provides lending in the UK primarily against

residential and commercial properties, with

low exposure to non-property collateral

backed funding lines or asset finance lending

which is typically secured against hard

assets, and therefore does not have

significant credit exposure to carbon-related

assets. The Group’s operational sites in both

the UK and India (OSBI) are exposed to

physical and transition risk. Currently, the

Group does not deem it necessary to

describe risks and opportunities by

geography.

The Group's assessment of climate risks and

opportunities aligns with the wider ESG

materiality processes, with a focus on the

Group’s business model, its value chain and

existing risk practices. Both quantitative

(where data is available) and qualitative

assessments are performed to determine the

degree of impact on the Group's business

strategy and financial planning. Identified

risks and opportunities, and their relationship

to principal risks types, are outlined in the

below table (including risks that may arise

from opportunities as part of the Transition

Plan). For a high-level view of the Group's

principal risks, and their relationship to

climate-related financial risks, please see

page 100.

We continue to progress the management of

risks and developing areas of opportunity

with respect to products and services,

supply/value chain mitigation activities and

operations. The Group’s current strategy and

simple business model mean that risks and

opportunities relating to investment in

research and development, acquisitions and

access to capital are deemed non-material

and therefore were not areas of focus¹.

The Group's financial planning process

considers the Group’s Internal Capital

Adequacy Assessment Process (ICAAP) which

includes the climate sensitivity assessment

factored over a short-term time horizon. The

ICAAP (including Estimated Credit Loss

calculations) utilises the Bank of England's

Climate Biennial Exploratory Scenario (CBES)

as a basis for stress testing. The Group's ESG

strategy and climate targets are driven by

the UK Climate Change Committee (CCC)'s

Balanced Net Zero Pathway (BNZP).

Time periods considered for the identification

and assessment of risks and opportunities

are defined as short term 0-five years,

medium term five-ten years and long term

greater than ten years. The short-term time

horizon aligns to the Group’s planning and

ICAAP stress testing assessment periods.

The long-term time horizon has been utilised

within scenario analysis to assess climate

risks which may occur over a longer

timeframe. The medium-term horizon

therefore relates to risks and opportunities

which are inside our long-term assessment

horizon, but sit outside of our short-term

assessment period.

Metrics and targets related to the ICAAP and

the Group’s Climate Risk Appetite all

consider historic periods and trend analysis

for comparison.


Climate Related Risks
Topic	Related Principal Risk (if applicable)	Time Horizon	Financial Impact*	Metric(s)	Target(s)
Managing climate-related financial risks related to: Changes in precipitation pattern and extreme variability in weather patterns, rising mean temperatures and rising sea levels that will impact the Group's primary lending (Physical Risk)²	Credit Risk	Long–term	Low³	page 98	N/A⁴
Managing climate-related financial risks related to: Policy and legal mandates that will impact the Group's existing lending, products and services (Transition Risk)	Credit Risk	Short–term	Low³	page 99	page 75
Increased concern or negative feedback from the Group's stakeholders based on direct emissions and supply chain emissions as well as failure to meet the Group's emissions reduction targets (Transition Risk)	Reputational Risk	Long–term	N/A⁴	page 75	N/A⁴
The Group's operations in the UK and OSBI impacted by an increased number or severity of extreme weather events leading to increased operational cost of recovery (Physical Risk)	Operational Risk	Long–term	N/A⁴	N/A⁴	N/A⁴

1. Notwithstanding the importance of risks and opportunity categories outlined within TCFD Implementation Guidance (Table A1.1 and Table 1.2), not all categories are relevant to OSBG's business model and therefore our approach is to provide

information on those determined relevant to the Group. We acknowledge that the above topics overlap with TCFD recommendations, such as: Policy and Legal; Reputation; Resource Efficiency; Energy Source and Products and Services.

2. For details of post model adjustment (PMA) relating to climate change on the Group’s financial statements, please see page 198.

3. High – The risk carries a significant financial risk to the Group. Low – The risk has little to no financial risk to the Group and can be addressed incrementally through existing financial processes (e.g. ICAAP process).

4. No financial risk associated/No metrics or targets for related topic.

*Financial impact presented is associated with the Group’s financial Principle Risk Types outlined in page 100 and does not represent an independent assessment of each topic.



OSB GROUP PLC Annual Report and Accounts 2025		73

Sustainability report continued Strategic Pillar – Just Transition continued


Climate Related Opportunities
Topic	Related Principal Risk (if applicable)	Time Horizon	Financial Impact*	Metric(s)	Target(s)	2025 Impact
Direct operations
Removal of gas boilers from our offices and buildings	Operational Risk	Short-term	Low⁴	page 79	page 75	18 tCO2e¹
Rationalisation of corporate real estate				page 79	page 75	110 tCO2e¹
Replacement of fluorinated gases with lower Global Warming Potential (GWP) alternatives				page 79	page 75	N/A
Continue to purchase electricity from renewable sources				page 79	page 75	259.5 tCO2e²
Increased energy efficiency through colleague engagement and property management				page 79	N/A³	42,729kWh⁴
Transition-friendly products and services
Existing products – providing products and services that contribute greater energy efficiency and/or decarbonisation	Compliance Risk	Short-term	Low⁵	page 74	N/A³	page 74
New product development – providing products and services that contribute to greater energy efficiency and/or decarbonisation	Compliance Risk	Short-term	Low⁵	N/A³		page 74
Connecting our customers
Providing accurate, reliable and actionable information to support retrofit decision making and action	Operational Risk	Short-term	Low⁵	page 74
Improving data access and quality to support the product strategy and customer journey	Operational Risk	Short-term
Connecting customers to the retrofit supply chain	Operational Risk	Short-term
Thought leadership, education and awareness
Landlord Leaders Community – focused on creating a fairer and more sustainable Private Rented Sector	Reputational Risk	Short-term	Low⁵	page 74
Thought leadership – commissioned research to inform the work of the Landlord Leaders Community	Reputational Risk	Short-term	Low⁵	page 74

1.Calculated using total emissions from 2024 and subtracting any emissions from 2025 to calculate the potential emission saving impact.

2.Calculated using total Scope 2 Purchased Electricity Location-based methodology emissions for 2025 minus the amount of emissions from non-renewable sources.

3.No targets were set for 2025.

4.Reduction calculations based on the Group’s Energy Savings Opportunity Scheme Action Plan submission to the Environment Agency.

5.High – The action carries a significant cost or financial benefit to the Group. Low – The action delivers little to no cost reduction or revenue benefit and can be addressed incrementally through existing financial processes such as budget setting.



OSB GROUP PLC Annual Report and Accounts 2025		74

Sustainability report continued Strategic Pillar – Just Transition continued

Progress towards our Pillars of

Action and climate-related

opportunities.

Thought leadership, education

and awareness

In 2023, we launched the Landlord Leaders

Community - a membership network uniting

individuals and organisations committed to

creating a fairer and more sustainable Private

Rental Sector (PRS). This initiative serves as a

platform for collaboration, enabling

stakeholders to share insights, exchange ideas

and drive positive change. The community

continued to grow in 2025 reaching 53

members. In August the website saw 1,000

users access its content for the first time.

Each year, the Community captures fresh

insights through its Landlord Leaders

questionnaire. In 2025, 800 UK landlords

were surveyed. The survey explores the

challenges landlords face and the

importance of relationships within the PRS

value chain. Questions about the potential

changes to the Minimum Energy Efficiency

Standards (MEES) for the PRS were included.

These insights shape the priorities for future

content, ensuring the Community continues

to deliver value.

In response, the Group and community

members shared education articles and

useful practical guides on topics such as: the

cost of increasing your Energy Performance

Certificate rating to C; Change to EPCs:

what landlords need to know now and

Everything you thought you knew about

Energy Performance Certificates for

commercial buildings… but did not!

The findings of this year’s survey showed

that landlords are investing in their portfolios

ahead of EPC regulation (70% had done so),

but that only 28% are doing so through new

borrowing. This aligns with our strategy to

support customers in other ways beyond

access to additional finance.

Through this initiative, OSB Group reaffirms

its commitment to supporting a sustainable

PRS, contributing to a resilient and inclusive

housing market for all. Our teams continue to

participate in Broker events, contributing

expertise to discussions at the front of

brokers’ minds.

The Group actively participates in UK

Finance working groups including its

Sustainability Committee, where MEES, EPC

reform and Transition Planning were key

topics in 2025.

Connecting our customers

In 2025, the Group funded a customer

Energy Performance Certificate (EPC) pilot

programme working with a third-party

property data specialist. Several Buy-to-Let

customers had the opportunity to find out

more about the energy efficiency of their

properties through assessments. We were

seeking to understand what data and insight

landlords found most useful, beyond what is

available within the existing standard EPC,

given its limitations, and where, as a specialist

lender we can support and add value.

Using a third party tool, we analysed 10,000

Buy-to-Let properties, synthesising property-

specific energy-efficiency data sets and

optimised action plans, showing cost-

effective routes to achieving an EPC rating of

C. We offered participating landlords access

to the reports and insights specific to their

portfolios. Larger landlords fed back that

they were aware of pending regulations and

had plans in place to manage their portfolios.

We are working with medium and smaller

landlords to determine the use cases for the

data and insight we have made available

to them.

Providing customers with transition-

friendly products

We continued to offer products to support

energy efficiency in property refurbishments

for our Buy-to-Let customers under the

Precise brand, however, uptake remains

limited with just 32 applications in 2025.

Through our InterBay brand, we offer a

commercial product with reduced rates for

properties with an EPC rating of C or higher,

with completions totalling £287.2m in the

year.

Within the Group’s transformation

programme, lending platforms have been

designed to allow greater flexibility in

energy-efficiency specific products.

We recognise the importance of providing

customers with supportive financing options

for energy-efficiency and retrofit works in

order to deliver progress towards our

2030 interim target. We expect that as

landlords respond to increased requirements

under the Minimum Energy Efficiency

Standards, there will be increased interest in

funding for retrofit works.

Greening our offices and branches

We continued to make strides towards

reducing our direct operational emissions. A

further gas boiler replacement at one of our

main offices with a new heat pump reduced

emissions by an expected 25.6 tCO2e versus

2024. At the end of 2025 only one of our

offices (within the Group’s operational

control) uses natural gas; the remainder and

KRBS branches are now heated and powered

by 100% renewable electricity.

The Group continues to prioritise the

purchase of renewable electricity from

Renewable Energy Guarantees of Origin

(REGO)-backed tariffs, ensuring minimal

Market-based emissions are reported under

Scope 2 – Purchased Electricity. We are also

pleased that we have reduced the total

amount of electricity we are using despite

moving to electric sources of heating (see

page 80). This demonstrates improved

efficiency and conscientious resource use

managed by our Property Services team and

supported by colleague behaviours.

Continue to embed climate thinking

Our management of Climate Risk continues

to evolve through alignment between our

climate strategy and governmental and

regulatory commitments. The Group

prioritises current and upcoming government

and regulatory policies (e.g. Minimum Energy

Efficiency Regulations for Private Rented

Sectors) to fulfil a high degree of climate risk

management preparedness and

consequently educating customers on

policies that may impact them.

Climate Risk integration across all viable

Principal Risk types remains a focus and in

2025 the Climate Risk Appetite evolved to

ensure alignment with our Net Zero trajectory

and upcoming compliance with regulatory

policies. Internally, the Group strengthened

the learning and development on Climate

Risk and developed mandatory e-learning

training to be distributed to related business

areas. The purpose of this is to ensure the

three lines of defence have increased

knowledge on climate risk identification,

assessment and monitoring.

For further details relating to the Group’s

enhancements on risk management

processes and complying with regulatory

commitments (i.e. Prudential Regulation

Authority), please see Task Force on Climate-

related Financial Disclosures (TCFD) page

95. The Climate Transition Working Group

met three times in 2025, overseeing progress

and planning. A Climate Transition

Dashboard was also developed to track

progress against our targets, key

performance indicators and priority actions.



OSB GROUP PLC Annual Report and Accounts 2025		75

Sustainability report continued Strategic Pillar – Just Transition continued

Emissions reduction targets

Our 2030 interim emissions reduction targets

were set in 2023 in compliance with our

commitment to the Net Zero Banking Alliance

(NZBA) and its target setting guidance.

Despite the disbanding of the NZBA as a

membership organisation, we intend to

continue to use its target setting guidance as

a measure of robustness and credibility in

emissions target setting. We continue to

consider the SBTi Financial Institution Net

Zero Standard as an alternative target

setting methodology.

Approximately 91% (2024: 96%) of our total

emissions come from financed emissions,

arising from our lending activities. Reducing

these emissions is important but challenging,

and therefore, a key focus of our climate

strategy.

While our direct emissions are smaller, they

remain critical to achieving our ambitious

2030 net zero target for Scope 1 and Scope 2

emissions.

Our targets

Financed emissions – Reduce the

emissions intensity (kgCO2e/m²) of our

mortgage lending by 25% by 2030 from

a 2022 baseline.

Direct operations – Reduce Scope 1 and

Scope 2¹ emissions to net zero by 2030 from

a 2022 baseline.

Renewable electricity – Source 100% of

electricity from renewable sources where

OSB Group have operational control.

For further information on our targets, see

Financed Emissions Intermediate Targets –

Basis of Preparation.

Both emissions reduction targets use 2022 as

a baseline from which reduction trajectories

were calculated and progress is reported.

Progress against the baseline and, in

subsequent years since, is reported to

demonstrate transparency and performance

over time.

Reducing the emissions from

our mortgage lending –

financed emissions

In 2025 we reviewed the ongoing suitability

of the financed emissions target. We looked

at the scenario that underpins the target, the

methodology, and the data used to calculate

the baseline and report performance. The

review has resulted in the Group restating

baseline financed emissions for 2022 which

are 301,331.30 tCO2e. The previous baseline

contained erroneous data taken from the

EPC public register that overstated property

level emissions. This was identified and

corrected for 2023’s reporting onwards. By

restating the baseline we provide a more

accurate representation of emissions and

progress.

97% of the Group’s 2025 lending was

secured against residential, Buy-to-Let,

semi-commercial and commercial properties

(2024: 97%). Our financed emissions (see

page 80) are calculated using the

Partnership for Carbon Accounting

Financials (PCAF) methodology, and we

track progress through emissions intensity

per square metre (kgCO2e/m²).

In 2025, we saw a 6% reduction in financed

emissions (tCO2e) and a 1.50% increase in

emissions intensity (kgCO2e/m²) compared

to the restated 2022 baseline,

(2024:-0.45%). The increase in emissions

intensity is a result of the sale of the second

charge mortgage book during the year that

had a favourable emissions intensity.

1. Scope 2 emissions are calculated using Market-based methodology.

Estimates of financed emissions continue to

rely on external data sources, primarily

Energy Performance Certificates (EPCs),

which assess and estimate the emissions of

properties. In 2025, 85% of properties (2024:

83%) were matched to a valid EPC, while 15%

(2024: 16%) were either modelled or

estimated using postcode or national

averages. The remaining properties,

representing 1%, were assigned a D rating.

The Group are reliant on a number of

external dependencies for progress, including

energy grid decarbonisation, pace of

retrofitting, heat pump roll out, government

policy, education and cost. More information

can be found in the Climate Transition Plan.

During 2025, the Government consulted on

increases to the Minimum Energy Efficiency

Standards required for Privately Rented

Homes. Setting the intention that by 2030 all

properties will need a minimum EPC rating of

C to be legally let, this supports the

decarbonisation of the Group’s lending, but

increases cost pressure on landlords. We

expect to see increased progress towards our

financed emissions target when landlords

begin the process of upgrading their

properties in response. In 2025 96.2% of

properties had a potential EPC of C or

better.

There are inherent limitations in using EPCs

for calculating financed emissions. These

include delays in updating external data

sources, age of certificates, which may be up

to ten years old, and that the majority of

EPCs do not prioritise carbon-neutral

technologies over fossil fuel-based

alternatives. The updated Standard

Assessment Procedure used to calculate

EPCs addresses a number of these issues,

but it will take time for new EPCs to reflect

this in our financed emissions reporting.

Financed emissions intensity

1.50% vs 2022

2025: 25.08 kgCO2 e/m ²

2024: 24.60 kgCO2 e/m ²

2022: 24.71 kgCO 2 e/m² (Baseline)

PCAF data quality score

3.15

2024: 3.15

Scale is 1–5 with 1 being the highest quality



OSB GROUP PLC Annual Report and Accounts 2025		76

Sustainability report continued Strategic Pillar – Just Transition continued



	Operational emissions Scope 1 and Scope 2 (Market‑based) tCO2 e

Greening our offices and branches

– direct operational emissions

We continue to take strides in reducing our

Scope 1 and 2 emissions. Operational

emissions in 2025 have reduced by 57%

compared to 2024 and reduced 71% from our

2022 baseline.

Actions taken in 2025 include the installation

of a new air source heat pump at one of our

Chatham offices, as well as the disposal of

three offices no longer in use as a result of

consolidation programmes. This means all

but one of our offices and branches are

heated and powered by electric

heating solutions.

Our operational emissions are significantly

smaller than other parts of our total inventory,

but as we have control over them, we will

continue to seek reductions in this area.

In 2025, we strived to improve efficiency

across our UK portfolio resulting in a

reduction of energy consumption of 28%

(purchased electricity and natural gas)

compared to 2024. These reductions were

realised through activities such as reducing

the boiler flow temperature at one of our

office buildings. Additionally, the Group has

worked to rationalise our UK property

portfolio, reducing energy usage to minimal

before disposing of one office building and

ending the lease agreement of another two

office buildings early.

Engagement

The Group continued to collaborate with

organisations and initiatives to advance our

climate goals, enhance knowledge and

benefit from shared insights. We contributed

to activities through UK Finance such as

government consultations and via our

membership of the Sustainability Committee.

Organisations we belong to and associations

that support our climate work include:

• UN Environment Finance Initiative –

Net Zero Banking Alliance (Participant)

• Science-Based Targets Initiative

(Committed)

• United Nations Global Compact

(Signatory)

• UK Finance Sustainability

Committee (Participant)

Raising awareness and developing climate

competence among our colleagues is a vital

part of embedding climate thinking

throughout the business. In 2025, this was

supported by our Environmental Employee

Engagement Networks in the UK and India

continuing to drive engagement through

articles, events and knowledge sharing and

volunteering.

The Group’s new learning platform

Cornerstone offers colleagues on demand

access to a rich menu of awareness raising

and capacity building learning on the

environment and climate change. Our

bespoke climate change training module is

also available on the platform. The

mandatory learning pathway for new

colleagues includes a module on the

environment and what colleagues can do.

Operational emissions

71%

reduction

vs 2022

2025: 44.27 tCO2e

2022: 153.87 tCO 2 e

2023: 171.44 tCO2 e



OSB GROUP PLC Annual Report and Accounts 2025		77

Sustainability report continued Strategic Pillar – Just Transition continued

Environmental and

energy management

The Group’s established and comprehensive

environmental policies enable our continued

compliance with the relevant environmental

obligations and the mitigation of negative

impacts on the environment. Our

Environmental Management System (EMS), is

ISO 14001:2015 certified and covers 100% of

our occupied UK corporate real estate,

including the KRBS branch network.

Following the submission of the Group’s first

Energy Action Plan as part of the Energy

Saving Opportunity Scheme’s (ESOS)

legislation, the Group has completed 80% of

actions. These measures have the potential

to save an estimated 42,729kWh.

Transitioning to Net Zero emissions will not

result in consistent year-on-year reductions.

Some actions require time before their full

benefits are realised. For example, in

February 2025, we completed the

replacement of one of the last of our natural

gas-fuelled boilers with a significantly more

efficient air source heat pump. The energy

savings from this initiative can be seen

throughout 2025 and will continue into 2026,

The expected annual saving is approximately

140,193 kWh.

Electricity and gas

In 2025, the Group reduced its natural gas

consumption by 277,638kWh (20%)

compared to 2024. This reduction is due to

the following actions:

• Full year of energy savings have been

realised from actions taken in 2024.

• Air source heat pump replaced a natural

gas powered boiler at one of our offices.

• Closure of three office buildings and one

KRBS branch which moved location.

We maintain our commitment to purchasing

100% renewable electricity. In 2025 Scope 2

emissions using the Market-based

methodology increased slightly to

4.49tCO2e. Emissions from purchased

electricity reported using the Location-based

methodology were 263.98 tCO2e (2024:

386.91 tCO2e).

We will continue to seek greater energy

efficiency through enhanced energy

management and by replacing outdated

equipment with more energy-efficient

alternatives. Future energy savings are

expected to be smaller incremental gains.

Both absolute and intensity metrics (tCO2e

per m², per FTE and per £ million turnover)

are used to track and report progress against

our 2030 targets providing insight into how

efficient the Group’s emissions footprint is

relative to revenue, number of colleagues

and the footprint of properties financed. (see

page 80).

Water

Water is used responsibly with 4,731m³ used

in 2025 (2024: 7,051m³). This has reduced

due to fewer properties within our

operational portfolio. Water use is for

hygiene and drinking purposes only. All water

used is potable.

Waste

In the UK, the Group manages waste

contracts at certain locations, ensuring that

waste is diverted from landfill in accordance

with the waste hierarchy and legislation.

Non-recyclable materials are sent to an

energy-from-waste facility.

The UK’s Simple Recycling legislation was

introduced in 2025. To ensure compliance,

Water (m³)

the Group installed new recycling and food

waste stations across our offices and branch

locations. An education programme was

launched to guide colleagues through these

changes. In 2025, we generated 212 tonnes

of total waste (2024: 259 tonnes).

Our operational processes do not generate

hazardous waste or pollutants beyond those

typically found in an office environment. All

hazardous waste, such as batteries and

electrical equipment, is stored and disposed

of in accordance with UK regulations.

Waste (tonnes)

Electricity (MWh)

Gas (MWh)


	Renewables		Non-renewables

Consumption data is based on

estimates taken from invoices



OSB GROUP PLC Annual Report and Accounts 2025		78

Sustainability report continued Strategic Pillar – Just Transition continued

Carbon mitigation

To offset emissions directly associated with

our business operations in 2025, the Group

purchased and retired 3,700 tonnes of

carbon credits. These credits were selected

based on the principles outlined in our

offsetting strategy, which adopts a

structured, proportionate, and adaptable

approach to carbon offsetting, following the

Oxford Principles for Net Zero-Aligned

Carbon Offsetting. All offsetting projects are

verified and certified under reputable

standards such as the Gold Standard or

Verified Carbon Standard. The projects

supported are a combination of avoidance,

reduction and removal efforts. The use of

carbon credits does not contribute towards

the Group’s emissions reduction targets.

Nature

This year, the Group has undertaken work to

assess our dependencies on nature and our

potential exposure to nature-related impacts.

We conducted an initial assessment using

the Taskforce on Nature-Related Financial

Disclosures (TNFD)’s Leap approach to

develop our understanding of nature-related

risks across our operations and value chain.

We used the ENCORE tool to map material

impacts and dependencies of our direct

operations and downstream value chain. This

has helped to identify nature-related

indicators (such as water supply, soil

stability, ecosystem condition and pollution)

and how they could impact our risk exposure.

We assessed these indicators over direct

operations as well as our wider value chain.

We recognise that the Group has only

started on the journey to understanding our

nature-related risks, and acknowledge

further work is needed both internally as well

as across the wider industry in

understanding nature-related loss within

financial services.

Greenhouse gas emissions

The Group follows the Greenhouse Gas

Protocol: A Corporate Accounting and

Reporting Standard for all greenhouse gas

(GHG) accounting across Scopes 1, 2 and 3.

By obtaining a comprehensive view of our

GHG emission inventory we can have greater

control over emissions.

We have reported on all emissions sources in

accordance with The Companies Act 2006

(Strategic Report and Directors’ Report)

Regulations 2013 and the Companies

(Directors’ Report) and Limited Liability

Partnerships (Energy and Carbon Report)

Regulations 2018 – also known as

Streamlined Energy and Carbon Reporting.

As part of these regulations, we provide

annual reports on greenhouse gas emissions

from Scope 1 and 2, covering electricity, gas

and transport. All emissions are reported in

tonnes of carbon dioxide equivalent (tCO2e).

The Group’s 2025 Greenhouse Gas

emissions basis for reporting are publicly

available on our corporate website: https://

www.osb.co.uk/sustainability

Additional Scope 3 emissions

Given the complexity of Scope 3 emissions

(categories 1-14) we are working with external

consultants to improve our calculation

methodologies.

We have introduced a new supply chain

assessment software, Hellios, to gain deeper

insights into our supply chain. The software

provides insights into a number of our

suppliers’ Environmental and Sustainability

positioning through the use of detailed

questionnaires. Topics of the questionnaire

include environmental policy, climate

reporting and carbon reduction plans. This is

consistent with our ongoing commitment to

improving the transparency of our supply

chain and in supporting our partners on their

climate journey.

We initially prioritised the top four tiers of

vendors for assessment via Hellios. We have

completed questionnaires for 52% of 2024

vendor spend. 96% of completed

questionnaires were rated Green aligning to

expectations.

This year, the Group changed the third party

engaged to calculate Scope 3 category 1 and

2 emissions. The new process continues to

use the Group’s spend-based data, as an

input to a custom built tool for calculating

GHG emissions. The tool uses emissions

factors from reputable public sources,

primarily the Department for Environment,

Food & Rural Affairs (DEFRA)/BEIS. As a result

of changing emission factors, categories 1

and 2 emissions have increased by 137%

compared to last year. This is due to the

difference in methodology used. The change

in third-party consultant was to improve the

depth of our understanding of supplier spend

and the associated emissions data. This will

better position us to identify opportunities

and begin working toward emissions

reductions in the future.

Deloitte LLP provided independent limited

assurance over the following metrics and

ESG information for the year ending

31 December 2025 ¹:

Greenhouse gas (GHG) emissions

• Total direct (Scope 1) emissions – tCO2e

• Total indirect (Scope 2) emissions –

market-based – tCO2e

• Total indirect (Scope 2) emissions –

location-based – tCO2e

GHG intensity

• Scope 1 and 2 metric tonnes of CO2e per

full-time employee (FTE)

• Scope 1 and 2 metric tonnes of CO2e per

£m turnover

TCFD

• The description of activities undertaken to

meet the recommendations of the Task

Force on Climate-related Financial

Disclosures (TCFD)

Deloitte’s assurance statement can be found

on page 258.

Interface-NRM (an ISO 14064-1 accredited

verification and certification body) verified to

a limited level of assurance:

Greenhouse gas (GHG) emissions

• Scope 3 Categories 1, 2, 3, 5, 6, 7, 8 and

In accordance with ISO 14064-1:2018

requirements. The third party verification was

conducted in compliance with ISO

14064-3:2019 standard.

1.Under the International Standard on Assurance

Engagements 3000 (Revised) Assurance Engagements

other than Audits or Reviews of Historical Financial

Information (ISAE 3000 (Revised)) and the International

Standard on Assurance Engagements 3410 Assurance

Engagements on Greenhouse Gas Statements

(ISAE 3410).



OSB GROUP PLC Annual Report and Accounts 2025		79

Sustainability report continued Greenhouse gas (GHG) emissions


Direct and indirect GHG emissions (Scopes 1, 2 and 3)	Further description	Specific fuels where applicable	2023	2024	2025
Amounts in metric tonnes CO 2 equivalent Scope 1
Stationary combustion	Combustion of fuel on-site	On-site: natural gas, diesel for generators	157.10	86.86	35.90
Fugitive emissions	Fugitive emissions	Leaks and other irregular releases of gases or vapours from a pressurised containment: air- conditioning units	14.34	14.97	3.88
Total Scope 1 direct emissions			171.44	101.83	39.78


Scope 2
Purchased electricity
Total Scope 2 location-based		Electricity – location-based	396.95	386.91	263.98
Total Scope 2 market-based		Electricity – market-based	1.39	–	4.49
Total Scope 1 and 2 direct emissions	Combustion of fuel on-site, fugitive emissions, electricity –Market-based		172.83	101.83	44.27


Scope 3
Purchased goods and services	Products and services purchased			8,582.04	17,952.86
Capital goods	Fixed assets, plant, property and equipment			2,651.86	8,722.95
Business travel	Unknown vehicle fuel, rail, bus, taxi, hotel stays	Unknown vehicle fuel	256.67	466.43	222.25
Employee commuting	Rail, bus, taxi, hotel stays, home working	Unknown vehicle fuel	2,021.06	2,139.71	974.97
Fuel and energy-related activities (not included in Scope 1 or 2)	Well-to-tank (WTT) emissions for fuel use, upstream emissions for non-renewable electricity generation, transmission and distribution losses in the electricity network		155.95	141.69	107.93
Water	Water use		1.27	1.08	0.91
Waste	Waste from operations		5.95	1.67	1.00
Leased assets	Combustion of fuel on-site, fugitive emissions, electricity – Market-based		55.95	50.38	51.04
Total indirect Scope 3 emissions (Category 1, 2, 3, 5, 6, 7 and 8)		Unknown vehicle fuel, water, waste, home working, energy-related activities	2,496.85	14,034.86	28,033.91
Total operational emissions (Location-based)			2,841.12	14,552.80	28,117.96



OSB GROUP PLC Annual Report and Accounts 2025		80

Sustainability report continued Greenhouse gas (GHG) emissions continued


Direct and indirect GHG emissions (Scopes 1, 2 and 3)	Further description	Specific fuels where applicable	2023	2024	2025
Total operational emissions (market-based)
Total indirect Scope 3 – financed emissions (Category 15)	Category 15 Investments (financed emissions). Calculated by multiplying an attribution factor (outstanding amount of loan divided by the property value at origination) by the emissions associated with the property taken from EPC.	Gas and electricity for heating, hot water and lighting only	314,413.00	294,137.00	283,021.00
Total GHG emissions (Location- based)	All measured emissions for the year		317,479.24	308,659.80	311,358.67

GHG intensity


GHG intensity ratio	Description	Specific fuels where applicable
Full Time Equivalent (FTE) employees (UK)	Full-time equivalent (FTE) is a unit of measurement equal to one full-time employee		1,427	1,530	1,431
Annual turnover	£million		658.00	667.00	668.0
Scope 1 and Scope 2 Location- based	Metric tonnes of CO 2 equivalent per full time equivalent		0.40	0.32	0.21
Scope 1 and Scope 2 Location- based	Metric tonnes of CO 2 equivalent per £million total income		0.86	0.73	0.45
Scope 3 financed emissions – physical emissions intensity	Kgs of CO2 equivalent per square metre*		24.9	24.6	25.1

Energy consumption


Energy usage kWh
Electricity		1,916,950.94	1,868,449.85	1,491,494.90
Gas		860,512.00	473,877.66	196,239.63
Total kWh	Electricity; natural gas	2,777,462.94	2,342,327.51	1,687,734.53

N/M = not measured

1.2024 was the first year of reporting Scope 3 category 1 and 2 emissions.

*Financed emissions physical intensity ratio is calculated by multiplying the total estimated attributable financed emissions in tCO2e for 2024 ( 283,021.00) by 1,000 to give kgC02e (283,021.000 kgCO2e). This is divided by the total floor area in m² of

the properties taken from the Energy Performance Certificate (11,282,975.4 m²). Estimated absolute financed emissions were 430,274.4 tCO2e for 2024. Financed emissions estimates are for the mortgage portfolio as the largest asset class. It does not

cover non-modelled book or securitised loans.



OSB GROUP PLC Annual Report and Accounts 2025		81

Sustainability report continued Strategic Pillar – People

Customers

We place existing and future customers needs at the centre of what we do.

We work hard to ensure that we support the prosperity of all customers.

Placing the customer at

the heart of our business.

We work hard so that all of our customers

feel supported and want to remain our

customers. To support this we have a

dedicated Customer and Consumer Duty

Team whose purpose it is to help us

understand our customers’ changing needs.

This team plays a pivotal role in refining our

Customer Strategy and ensuring that every

interaction with our customers is thoughtfully

designed and continuously improved.

Through their work, we:

• listen actively to feedback, and make sure

that we take action to improve their

experience of banking with us;

• communicate clearly and effectively, so

our customers always understand what

we offer and how we support them;

• map customer journeys, to identify

opportunities for improvement and

consistently deliver better experiences:

and

• design inclusive products that are easy to

use, especially for customers with

vulnerabilities, ensuring no-one is left

behind. See case study on page 83

To us this is about building trust, deepening

relationships and making it easier for our

intermediary partners and customers to

thrive.

To achieve our vision we offer a

comprehensive range of competitive

propositions, strive for exceptional customer

service, and provide the necessary support to

customers who may face financial

difficulties. Through our specialist brands we

focus on continuous investment in customer-

focused solutions that deliver the outcomes

that are good for our customers and we are

positioned to meet the unique needs of our

borrowers and savers.

Working with intermediaries, we help bridge

the gap in housing demand across the UK,

providing funding for first-time homebuyers,

affordable housing developments, Buy-to-Let

investments and commercial properties.

Through our inclusive lending products, and

expertise as specialists, we are able to help

customers who may not be able to access

high street lenders. Their circumstances may

include:

• customers that have more complex

income structures from being self-

employed;

• customers that have an adverse credit

history that may have been caused by

past financial difficulties or defaults; and

• first-time buyers are helped with higher

loan to value products and participation

in government support schemes.



OSB GROUP PLC Annual Report and Accounts 2025		82

Sustainability report continued Strategic Pillar – People continued

Customers continued

Knowing our customers’ needs

Our colleagues actively participated in both

physical and virtual events with brokers

throughout 2025. The understanding we gain

from these interactions allows us to

continuously refine our customer

propositions, with our efforts recognised in

our broker Net Promoter Score (NPS) of +55

for OSB and +59 for CCFS (2024: OSB +57

and CCFS +52). Our dedicated Client

Management Team provides customers with

specialised services. In recognition of our

commitment to service excellence, the Group

won, among many other industry awards,

the Mortgage Strategy Award for Best

Specialist Lender, Best Buy-to-Let Lender

and Best Short Term Lender.

To deepen our understanding of our

customers and the factors that shape their

needs, we have undertaken extensive

research to provide rich insights into their

experiences, expectations and challenges.

This work brings together quantitative

analysis, qualitative feedback, and

behavioural insights, enabling us to build a

more complete picture of the customers we

serve. By investing in this level of

understanding, we are better positioned to

design products, services and support

models that meet real needs and deliver more

meaningful outcomes for customers.

Supporting vulnerable customers

We are committed to supporting customers

that are in vulnerable circumstances by

providing additional support for them. We

have highly trained Financial Support Teams,

who provide tailored assistance to those

facing financial difficulties. As a Mortgage

Charter signatory we ensure the right

support is available for customers who are

up-to-date with payments but concerned

about their financial situation. In 2025, we

enhanced our initiatives, focusing on

developing a proactive, personalised

approach, simplifying the customer

experience, and signposting to trusted

charitable partners for additional support.

We recognise that vulnerable customer

disclosure rates remain low, particularly

among our mortgage customers, who

engage with us through brokers. As part of

the development of our new lending

platform, we have collaborated closely with

our broker community and our in-house

vulnerable customer specialists to redesign

the disclosure journey. This work has focused

on making conversations about vulnerability

feel more intuitive, natural, and seamlessly

embedded within the customer experience.

By creating an environment where customers

feel better supported to share their

circumstances, we can ensure we identify

needs earlier and ultimately provide a more

tailored and responsible service.

Transforming our customer

experience

The Group is on a transformation journey to

significantly improve and simplify our

systems to support a consolidated business

that contributes greater efficiency and

enables growth.

In Lending, the goal is to transform the

lending experience for brokers, borrowers

and colleagues, underpinned by a new

flexible platform fit for the future that was

launched in November. Automation has

reduced the time from application to offer for

brokers and customers to as little as two

hours.

In Savings, new journeys deliver a step-

change in both the customer and colleague

experience, while driving efficiency and

speed to market. The new savings platform

enables a fully digital customer onboarding

and real-time payments for instant deposits

and withdrawals. It delivers an enhanced

experience for our savers and self-service

options to access and manage accounts

anytime, anywhere.

We continue to support customers through

their channel of choice including through

online and telephone services.

We have specifically reviewed the journeys

that matter most to our customers, including

the critical experience of reaching the end of

a fixed-rate period for both mortgage and

savings products. By mapping these journeys

end-to-end, we identified opportunities to

make the process clearer, more timely, and

easier to navigate. As part of this work, we

also reviewed and rigorously tested the

communications customers receive at key

points to ensure they are as clear, accessible

and supportive as possible. These

improvements are designed to help

customers make more informed decisions

with confidence and achieve better

outcomes.

For our savers in our Kent Reliance brand, we

are also able to serve them through the six

branches located throughout Kent.

Our savings products maintained strong

retention rates, with 89% of customers with

maturing fixed rate bonds and ISAs at Kent

Reliance and 85% at Charter Savings Bank

choosing to re-deposit with the same brand

(2024: 90% and 85% respectively).

The following policies are in place to ensure

we treat customers fairly and support good

customer outcomes.



OSB GROUP PLC Annual Report and Accounts 2025		83

Sustainability report continued Strategic Pillar – People continued

Customers continued

The Group Arrears Management and

Forbearance policy emphasises equitable

treatment of customers experiencing

financial challenges, actively engaging

individuals exhibiting indicators of possible

distress. Arrears rates are monitored on a

monthly basis by the Group Credit

Committee, ensuring senior management is

informed. Tailored assistance is provided to

customers dealing with financial pressure.

The Group Complaint Handling policy is

designed to meet regulatory standards while

prioritising a customer-focused approach.

Thorough and unbiased investigations of

complaints are conducted and facilitated by

trained colleagues. Processes are accessible

to all customers, including those in vulnerable

situations. Management information is

provided to Committees and the Board,

aiding informed decision-making.

The Group Lending policy defines

responsible lending guidelines consistent with

our credit risk appetite and established

criteria. Assurance processes serve as a

secondary line of defence, providing

independent oversight across first line

assurance. Control measures, such as

system parameters and underwriting

procedures are in place. Our approach to

affordability considers recent fluctuations in

the cost of borrowing, thereby ensuring a

current evaluation of a customer’s

creditworthiness.

The Group Customer Vulnerability policy

establishes standards and the methodology

for recognising and assisting vulnerable

customers, ensuring equitable outcomes

across the Group. The Vulnerable Customer

Working Group conducts regular evaluations

to provide a comprehensive assessment of

the state of Vulnerable Customer service

across the organisation. Our strategy aims to

support colleagues to recognise challenges

and obstacles faced by these customers,

while providing appropriate tailored support

and effective solutions.



	How we supported a vulnerable customer when they needed us.

	A residential mortgage customer experienced a significant change in circumstances following a series of life events in which they faced a change in employment status, a bereavement of a close family member and also domestic, economic and financial abuse.

	The customer also had a diagnosis of Attention Deficit Hyper-activity Disorder, had difficulty with concentration and poor attention to detail. The customer reached out to our Financial Support Team prior to going into arrears, realising that they were facing financial difficulty. Our Team of specialist colleagues made the necessary referrals to Stepchange (a debt advice charity) so that the customer was able to access hardship funds to assist with their food and energy costs. The customer was also able to access state support for mortgage interest payments.		Our team arranged a Payment Holiday and put in place an adaptation to our standard communications so we now text before calling them so that they are aware of the call. We adapted our email communication to allow the customer extra time to respond to requests. This customer was able to deal with one agent in our specialist team who helped guide the customer through this most difficult time over several calls that included the completion of a detailed income and expenditure statement to assess affordability. The customer has been able to secure new employment and is keeping up the payment arrangements that we put in place. The customer is very appreciative of our specialist team’s support which allowed them to keep their home.



OSB GROUP PLC Annual Report and Accounts 2025		84

Sustainability report continued Strategic Pillar – People continued

Colleagues

The skills, expertise and commitment of our colleagues have always been

fundamental to the achievement of the Group’s strategic goals.

In 2025, we continued to invest in

learning and skills, development and

engagement to ensure that the Group

provides a compelling and attractive

employee proposition both for our

existing colleagues and for candidates

considering joining the Group.

Retention and progression

We have a genuine desire to retain,

support and develop our colleagues.

During 2025, 125 UK colleagues were

promoted to a more senior grade along with

261 colleagues within OSB India.

We actively promote internal and career

development opportunities for existing

colleagues. In 2025, 33% of UK vacancies

and 7% OSB India vacancies were filled by

way of internal appointments.

At 9.4%, the 2025 UK regretted attrition rate

was higher than the 2024 rate of 7.0%

reflecting external trends. The OSB India

regretted attrition rate was lower than 2024

at 10.2% (2024:12%).

UK non-regretted attrition reduced

significantly to 7.2% from 12% in 2024. OSB

India non-regretted attrition reduced from

16% reported in 2024 to 15.3%.

Recruitment

Our Talent Acquisition teams provide

bespoke support in attracting high quality,

diverse candidates for vacant positions and,

through robust and inclusive interview and

selection processes, assist in making strong

recruitment decisions.

During 2025, our teams filled 630 vacancies,

resulting in the Group welcoming 173 new

colleagues in the UK and 353 in India.

There were 2,4891 Group colleagues at the

end of 2025 (2024: 2,498).

Remuneration and benefits

We believe in rewarding our colleagues

fairly and transparently, enabling them

to share in the success of the business.

Details of the Group’s remuneration policies

can be found in the Remuneration Report on

pages 141 to 168.

As an accredited Living Wage employer, we

ensured that all UK employees and regularly

contracted third-party staff earned more

than the published Real Living Wage rates

and we continued to encourage our

colleagues to hold shares in the Group,

through our Sharesave Scheme, which is

offered annually to all UK colleagues. 344

colleagues joined the sharesave scheme in

2025 with a total of over 746 colleagues

participating in the current year and previous

years’ schemes.

Engagement and culture

Our 2025 Best Companies survey was

undertaken in January, immediately after

the 2024 Group-wide redundancy

programme. Despite this, we retained an

overall ‘2 star’ rating, with Best Companies

defining this as an outstanding level of

employee engagement. Colleagues within

OSB India participated in a separate survey,

run by the Great Place to Work Institute and

following which OSB India were officially

certified as a ‘Great Place to Work’ for the

ninth consecutive year. We continued to see

strong feedback through Glassdoor, with the

UK score at the end of 2025 sitting at 3.7

(2024: 4.1) and the OSB India score slightly

higher at 4.1 (2024: 4.2). These scores relate

to reviews submitted by current and former

colleagues, reflecting the positive culture that

exists throughout our teams.

The Group’s Workforce Advisory Forum

(OurVoice) continued to meet regularly in

2025, including colleague representatives

from all geographical locations, including

OSB India. The aim of the forum is to further

enhance the level of engagement that the

Group Executive Committee and the Board

have with the wider workforce. To achieve

this, in addition to colleague representatives,

the forum is attended by rotating Non-

Executive Directors and Group Executive

Committee members to ensure that they can

hear directly from the colleagues and share

feedback on important matters.

Sally Jones-Evans (Non-Executive Director) is

the appointed Board People Champion to

represent colleague perspectives at Board level.

Best Companies Employee

Engagement Score

2 star

2024: 2 star

Employee promotions

across UK and India

386

1. Total number of employees under contract on 31/12/2025



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Recognition and awards

We’re keen to encourage colleagues to

achieve their career aspirations, whether

that’s growing in role, internal moves or

gaining fresh insights and perspectives in

other industries.

Some of our colleagues stay with us for the

long-term, demonstrating our commitment to

a culture of engagement and continuous

growth and development.

In 2025, the Group recognised the significant

tenure of around 110 UK colleagues who

reached a five, ten, fifteen or twenty year

milestone of employment through our Long

Service Award programme. In OSB India, over

190 (18%) colleagues have five or more years’

service.

Our Galaxy Award Scheme recognises and

rewards excellent behaviours linked directly

to each of our Values, with individual winners

and runners-up for each category. In 2025

over 274 nominations were submitted by

colleagues.

Learning and Skills

Transforming how we learn and grow in

our careers is a critical part of our People

Strategy.

In 2025, learning continued to play a pivotal

role in supporting our transformation

strategy – equipping colleagues with the

skills, mindset and confidence to deliver for

customers in a fast-evolving financial

landscape. Progress was made in the way we

deliver, manage and promote learning across

the organisation. Initiatives delivered in 2025

include:

• Improved mandatory learning relevance

through enhanced content and targeting.

Mandatory learning focuses on key topics

such as colleague conduct (including

diversity, equity and inclusion, the

environment, energy use and climate

change), consumer duty and customer

vulnerability, cyber security and data

privacy, financial crime including anti-

corruption and fraud, whistleblowing, risk

and compliance, modern slavery, health

and safety and anti-money laundering.

• Introduced learning to support a new

approach to goal setting, performance

and reward, with 1,495 colleagues taking

part ensuring colleagues understand new

outcome-led expectations.

• Launched a new Learning Management

System, with Cornerstone providing

enhanced content and more intuitive

experience for colleagues.

• Delivered a summer campaign on critical

skills, aligning learning with business

priorities and future capability needs with

a 27% uplift to over 657 colleagues

engaged in agile, data or tech journeys.

• Introduced new Future Fit leadership

learning framework with 498 leaders

taking part in the launch. We are investing

significantly in coaching skills as a key

capability for transformation.

• Senior Executives participated in Agile

Value Stream model learning ahead of a

six month ‘Leading with AI’ and Insight

programme for our SLT in partnership with

Cambridge Spark and Cambridge Judge

Business School.

• Expanded our learning content portfolio

with new partnerships, increasing access

to high-quality learning across technical,

leadership, and behavioural areas –

enabling all colleagues to explore learning

that is more relevant to their roles and

aspirations.

• Continued our partnership with WDI

Consulting to deliver the Group’s Women

in Leadership initiative, supporting female

managers and senior leaders with their

individual progression pathways. In

addition, 35 female future leaders

continued a Women in Leadership

Apprenticeship Scheme, launched in

partnership with Raise the Bar.

As a committed member of the Financial

Services Skills Commission (FSSC), we’re

focusing on how we understand, develop and

mobilise skills so that we gain a clear,

dynamic view of the capabilities we have

today and the capabilities we will need

tomorrow. This aligns precisely with the FSSC

maturity model, which identifies skills

visibility, proficiency and portability as

critical enablers of sustainable workforce

transformation.

From a colleague perspective, this gives

clarity, confidence and mobility. Colleagues

understand what ‘good’ looks like, can see

how their skills transfer across roles and

functions, and are better equipped to

navigate non-linear careers. This supports

attraction, retention and engagement in a

highly competitive skills market.

From an organisational perspective, being

skills-led enables more informed strategic

decisions like workforce planning, targeted

investment in critical and future skills, faster

redeployment and reduced dependency on

external hiring, and stronger resilience to

regulatory and market change.

This is a progressive maturity journey where

we are establishing strong foundations with

our job family architecture going live at the

start of 2026, making skills visible and usable

for colleagues, and embedding skills into

learning, career pathways and decision-

making over time.

The early outcomes of our investment in

future-fit learning and skills is 2025 include:

• Engagement with learning has grown

steadily for the Group throughout the

year, with strong uptake of new

leadership, performance and critical skills

programmes – recording over 93,700

hours (13,386 days). 48,026 hours were

delivered in the UK and 45,692 hours in

India.

• Feedback from Learning at Work Week

highlighted greater confidence in

navigating new systems and increased

awareness of learning opportunities.

In 2026, we will continue to build on these

foundations by rolling out dedicated weekly

slots of ‘time to learn’ to all colleagues,

embedding learning analytics, expanding our

Future Skills offering through Job Families

with Communities of Practice to foster a

culture of learning, and integrating learning

more deeply into the colleague experience

and career paths – ensuring that

development remains at the heart of how we

grow and deliver value.



OSB GROUP PLC Annual Report and Accounts 2025		86

Sustainability report continued Strategic Pillar – People continued

Colleagues continued

Diversity, equity and inclusion

We recognise the benefits that diversity

brings to the business, and we actively

promote and encourage a culture and

environment that values and celebrates

our differences.

In 2025, we continued our journey to become

a truly diverse and inclusive organisation

that is committed to providing equal

opportunities through the recruitment,

training and development for all colleagues.

For Board and Executive gender and

ethnicity disclosures see table across.

Gender

Our published 2025 Gender Pay Gap Report

is available on the Group’s website

(www.osb.co.uk) and shows that OSB

Group’s mean gender pay gap as at the

snapshot date of 5 April 2025 was 34.0%

(2024: 35.5%). Whilst it is pleasing to see

continued progress, we are committed to

reducing these gaps further. The gaps relate

to the fact that we have more men than

women in senior roles and more female

colleagues undertaking clerical roles.

We recognise the need to improve our gender

balance and have remained focused on our

published commitment as a signatory of HM

Treasury’s Women in Finance Charter (WIFC)

for 40% of senior management positions

within the UK undertaken by female

colleagues by the end of 2026. As detailed

within our 2025 WIFC Submission, the

majority of senior vacancies that emerged in

2025 related to specialist technical positions

sitting within our IT and Transformation

functions. Candidate pools for these were

predominantly male, presenting a challenge in

identifying a significant volume of female

candidates. Around a third of senior roles

closed in 2025 were filled by female external

candidates, resulting in an end of 2025

position of 35.7%, slightly below the 36.1%

reported at the end of 2024.

Ethnicity

The Group applied a continued focus in the

year to enhancing ethnicity diversity,

particularly in respect of the senior

management population. The proportion of

senior managers identifying as non-white

increased to 16.8% at the end of the year

(2024: 15%). In line with the Parker Review

applicable to all FTSE 350 companies, we

remained focused on increasing ethnic

diversity amongst the Executive Committee

and those one level beneath who report into

Executive Committee members. Our target is

to achieve 14% by the end of 2027 from a

2024 position of 11%. Our 2025 figure of

15.4% demonstrates the progress that has

been made.


Gender split¹	Female (#)	(Female %)	Male (#)	Male (%)
Number of Directors of subsidiaries	0	–%	17	100%
Number of senior managers (not Directors) ²	93	37%	158	63%
All other colleagues	1,111	50%	1,110	50%
Regional split
UK
New joiners – UK	72	42%	101	58%
OSB India
New joiners – India	140	40%	213	60%


Ethnicity split	Non-white (#)	Non-white (%)	White (#)	White (%)
Board	1	11%	8	89%
Executive Committee and direct reports	8	16%	42	84%

1.Includes all UK and OSB India colleagues. Senior managers are colleagues within the Grade A to E population.

2.The gender and ethnicity data is based on colleagues under contract at 31 December 2025.



OSB GROUP PLC Annual Report and Accounts 2025		87

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Colleagues continued

DE&I Initiatives

DE&I initiatives increased across the Group,

including employee communication and

events enhancing awareness and celebrating

our differences. These were often aligned

with the dates of national events such as

Pride, Black History Month, National Inclusion

Week and International Women’s Day, with

related activities being coordinated by the

internal ‘Our Diversity Network’ made up of

passionate volunteers.

Over 1400 colleagues (61.5%) participated in

our annual Group-wide internal Inclusivity

Survey. Whilst our UK survey score reduced

by around 1% compared to 2024, the OSB

India scores increased by around 4% with the

results providing insight as to where

additional focus can be applied to further

enhance inclusivity throughout the Group.

Diversity Data

We continue to focus on capturing diversity

data from our UK and OSB India colleagues.

At the end of 2025 colleagues had submitted

almost 68% of requested data spanning 14

separate categories with OSB India

colleagues having submitted around 73% of

requested data.

Board Diversity

The Group achieved all required targets in

respect of Board diversity¹ (see page 86) for

further details).

OSB India

OSB India, which is a wholly owned

subsidiary of the Group, is based in

Bangalore and Hyderabad, and at the end of

2025 had 1,031 (2024:949) employees. OSB

India supports the Group across various

functions including Support Services,

Operations, IT, E-Labs and Finance.

In compliance with the Modern Slavery Act,

OSB India does not support excessive

overtime and all colleagues in India are

encouraged to work in accordance with local

legislation. Employees are based in our

modern Bangalore and Hyderabad offices

and are provided with a range of benefits

which include 22 days of annual leave, 12

days’ sick leave and cafeteria services.

Key People Policies

The Group has a sexual harassment policy to

support a secure and respectful working

environment. The policy applies to all

employees and contracted staff in the UK

connected to the Group. Additionally, it

complements the OSB India Prevention of

Sexual Harassment policy, which addresses

obligations in India. The policy articulates a

clear definition of sexual harassment,

describes the reporting mechanisms, and

specifies the potential disciplinary actions for

any violations.

The Group is committed to fostering equal

employment opportunities and creating a

supportive and inclusive workplace,

irrespective of gender identity. In alignment

with the Gender Recognition Act 2004 and

the Equality Act 2010, the Group has

implemented a policy focused on trans

inclusion and gender identity, which

safeguards the rights and dignity of

transgender and non-binary individuals. The

policy is relevant to all employees and

contracted staff and outlines the procedures

for reporting incidents and shares the

possible disciplinary measures that may be

imposed for any infractions.

Our Health and Safety policy outlines our

approach to identifying and meeting legal

obligations, identifying and managing risks

and creating a safe environment for

colleagues, customers and other

stakeholders. The Group retains access to

competent advisors.

The health and safety management system

ensures risks are assessed across the Group

on an annual basis and processes are in

place to monitor compliance with internal

policies, procedures and controls. Training is

provided to colleagues who perform in the

roles of fire marshals, first-aiders and mental

health first-aiders.

Training is provided for all colleagues. We

routinely evaluate our controls to verify their

effectiveness. An accountable Executive is

responsible for the Health and Safety policy,

which undergoes an annual review prior to

Operational Risk Management Committee

approval. Management information is

provided to Committees and the Board.

In 2025, there were zero lost-time incidents

(2024: 1) The total injury rate was 4.77

(2024: 8.54).

1. For the CEO and the CFO, gender and ethnicity data is collated within the Group’s HR System, in a manner consistent with all UK employees. Both Board members who confirmed their ethnically diverse status have self-reported this to the Group

HR Director within responses required by the Parker Review (FTSE 350 Ethnic Diversity Submission for 2025).



OSB GROUP PLC Annual Report and Accounts 2025		88

Sustainability report – Our culture

Together we prosp er

At OSB Group we are working hard to create a positive,

collaborative and supportive environment.

To help our customers, colleagues and communities prosper.

By that we mean more than just helping them to be more financially well off. We want them to flourish, thrive

and succeed in their personal and professional goals.

To be recognised as the UK’s number one choice of specialist bank, through our

commitment to exceptional service, strong relationships and competitive propositions.

By working Stronger together, Taking ownership,

Aiming high and Respecting others, we will more

powerfully achieve our own goals, as well as those

of our stakeholders.

But we are not just focused on lending and savings

(though that is what we do and what we are great

at); we are a business that cares about leaving things

better than we found them. We are passionate about

Stewardship, which encourages us to give back to our

communities, supporting those who are vulnerable or

less fortunate, embracing diversity and finding new

ways to protect our environment.

It does not matter where we are working from: a

branch, on the road, in the office or from home.

It does not even matter that we are not all in the

same country. We are clear about what we want to

achieve, we know how we want to achieve it and we

are absolutely determined to build upon the

foundations we have created so our customers,

shareholders, communities and colleagues can

prosper.

Our Values are the principles that support our Purpose.

Stronger

together

We collaborate to

create a culture in

which we all share

goals and values.

We aim to build

trust, respect and

openness across

the Group.

Take ownership

We take

ownership of what

needs to be done

as well as our

personal and

professional

development,

helping to achieve

the collective

goals of the

business.

Aim high

We set the bar

high for ourselves

and our

customers.They

are the ones who

know when we are

going above and

beyond and

remember the

promises we keep.

Respect others

We treat others

fairly and

communicate in a

way that respects

an inclusive and

diverse culture,

listening to all

voices and

ensuring opinions

are offered and

heard.

Stewardship

We act with

conscience and

take social,

environmental and

ethical factors into

consideration

when making

decisions.

We will achieve our goals by

working Stronger together,

Taking ownership, Aiming high

and Respecting others...



OSB GROUP PLC Annual Report and Accounts 2025		89

Sustainability report continued Strategic Pillar – People continued

Communities

At our core, we believe that everyone

deserves the chance to thrive, regardless

of their circumstances.

We believe that as a business, we have a clear duty to help build a fairer society

by sharing our skills and resources.

Our team’s passion for making a difference

has been truly inspiring. Throughout 2025,

they actively supported numerous

community organisations, creating a lasting

positive impact and helping to build stronger,

more equitable communities wherever they

live and work.

We've supported our local and national

communities in a variety of ways: through

our colleagues' volunteering efforts, by

raising funds for charity, and by providing

small grants to causes our colleagues care

deeply about.

Our approach to social impact is

straightforward: we make informed decisions

that improve the lives of our customers, our

people, and the communities we serve.

By building strong partnerships, we're able

to combine financial support, business

expertise, and our collective voice to create

meaningful change.

Our purpose to help our customers,

colleagues, and communities prosper is the

driving force behind our commitment to

wellbeing, the environment, education and

the arts. This commitment is built on our core

belief in connection and collaboration, which

improves the lives of those who use our

products, work with us, and support our

vision of becoming the UK's leading

specialist bank.

Depaul UK benefitted by:

£34,126

Demelza benefitted by:

£68,701

Total benefit to all charities/

organisations:

over £376k

2024: over £394k

Making an impact

Our goal is to do more than just improve

financial wellbeing; we want to empower

people to flourish and achieve their full

potential. We recognise that contributing to

our communities isn't a secondary concern;

it's a fundamental part of our business.

To achieve this, we focus on both people and

the planet. By understanding the unique

needs of different communities, we work

closely with local and national charities and

organisations. This allows us to allocate our

resources effectively, extending our reach

and ensuring our partnerships are mutually

beneficial and truly make a difference.



Summiting Snowdon: a Commitment to Stewardship

In a powerful demonstration of our core Stewardship Value, 21 colleagues from our Wolverhampton offices stepped outside their comfort zone to support and uplift the communities we serve. Their challenge, a guided hike up Snowdon (Yr Wyddfa), Wales' most iconic peak, not only pushed them physically but created a lasting impact for a vital community partner.
In September, the team took on the demanding climb, supported by expert mountain leaders from our partner, Pen Y Bryn Outdoor Learning. The route covered over eight miles, taking approximately seven hours to complete. Despite the rigour of the ascent, morale was high, with a few brave colleagues even taking a quick, refreshing, and undoubtedly chilly dip in a lake on the descent. With the Group providing a full match on all donations, we successfully raised an outstanding £2,120. These funds are now actively supporting Pen Y Bryn's community- focused programmes, which provide		crucial access to the physical and mental health benefits of time spent in nature. The fundraising will support key initiatives, including the Mum's Gone Climbing project. This initiative offers weekly climbing sessions, fostering a culture of inclusion and diversity by providing mothers of all experience levels with a couple of hours each week to meet others, discuss topics like motherhood and mental wellbeing and climb together. Furthermore, the funds will enable the expansion of the Women's Adventure Club and support a new programme of winter activities with Cyfle, which assists care leavers under 25.

“Guided up Snowdon, we had smiles,

great chats and kind weather. Fantastic

memories were made networking with

our colleagues whilst aiding those less

fortunate to enjoy similar activities.”

Richard Wilson,

Group Chief Credit Officer



OSB GROUP PLC Annual Report and Accounts 2025		90

Sustainability report continued Strategic Pillar – People continued

Communities continued

We continuously measure and learn from the

outcomes of our work, ensuring our actions

have a lasting, positive effect. By pooling our

collective strengths across the Group, we can

achieve our shared goals more effectively.

Overall community contribution

In 2025, through a combination of our Good

Causes Fund, fundraising and match-

funding, and donations in kind (such as

office equipment), we were able to support a

wide range of charities and community

organisations with a combined total of over

£376k (2024: over £394k).

Our community partners

Working with our charity and community

partners is central to our social impact

strategy. By collaborating with these vital

organisations, we can address local needs

far beyond our usual business activities.

Depaul UK: We support Depaul UK’s essential

work with young people who are experiencing,

or are at risk of, homelessness. Our help goes

Total volunteer hours:

7,385

5% increase on 2024

Donation to good causes:

£84,194

30% increase on 2024

Colleague fundraising

& matching:

£124,593

beyond financial aid; we also share our skills,

offering coaching for Board members,

energy efficiency advice, and HR support to

help young people find employment and a

home of their own.

Demelza Children’s Hospice: We have

proudly partnered with Demelza since 2017

to offer the Demelza Children's Savings

Account. This initiative helps young people

develop valuable financial habits by

encouraging them to save, even small

amounts. We also match a portion of the

total annual average balances in these

accounts to support the hospice's critical

services for children and their families. This is

in addition to the valuable volunteering and

fundraising we provide.

Sponsorship and support

Our partnerships provide charities and

organisations with more than just financial

donations; we also share our skills and

expertise. We encourage our partners to

support one another, helping them to

increase their reach and the impact of their

message. We do this by working together

and amplifying our collective efforts through

our separate channels.

Donations in kind

We provide financial support, business skills,

training and a volunteering programme.

Whenever possible, we also donate office

equipment that is no longer needed to local

organisations that can put it to good use.

Volunteering

We're committed to being better neighbours.

We believe we can achieve this not just by

donating money, but also by donating our

time, skills and expertise. To show this

commitment, all our UK colleague are entitled

to 14 hours of paid volunteering time each

year and are actively encouraged to use

their full allocation to give something back to

our communities.

Community organisations

supported:

140

Good Causes Fund

Our Good Causes Fund provides financial

support for projects and causes that are

important to our colleagues. All UK

colleagues can apply on behalf of a

registered charity, school, club, community

group, animal sanctuary or voluntary

organisation.

Grants of up to £500 are available to help

local charities and organisations make a

real difference.

Community organisations

supported:

169

Match-funding

Every year, our people take part in a variety

of fundraising events to raise money for

organisations that help the sick and

disadvantaged. We strongly encourage

individuals and teams to find fun and

inclusive ways to raise money. We know that

every penny makes a difference, which is

why we are proud to offer match-funding for

all our UK colleagues.

Community organisations

supported:



OSB GROUP PLC Annual Report and Accounts 2025		91

Sustainability report continued Strategic Pillar – Stewardship

ESG Governance

At OSB Group, we embrace our role as responsible stewards, underlining

our commitment to conducting operations ethically, transparently

and sustainably, while delivering lasting value to our stakeholde rs.

ESG Management

The Board-approved Environmental, social,

governance (ESG) Strategy, annual

materiality assessment and ESG Operating

Framework are the key tools deployed by the

Group for identifying, measuring, managing

and reporting ESG risks while enabling the

identification and pursuit of opportunities

where the Group can create positive impact

for our stakeholders.

We continue to evolve our understanding of

the impacts ESG-related topics have on the

Group and the impact our business has on

society and the environment. In 2025, we

considered financial materiality and impact

materiality within our assessment of risk and

opportunity, the outputs of which are shared

annually with the Board and Executive

Committee for consideration in strategic

planning¹. The current ESG Strategy

described in this report remains relevant and

reflective of those topics important to the

Group’s ongoing success and the needs and

expectations of our stakeholders.

Our ESG Operating Framework works along

the three lines of defence model. First-line

reporting, risk management and

coordination of strategic opportunities is

executed by business functions, supported

by the Employee Engagement Networks

(EENs) and the Climate Transition Working

Group (that meets periodically). Governance

and oversight is provided by the ESG Forum

(that meets monthly, chaired by the Group

Head of Sustainability and reports to the

Group Executive Risk Committee for risk

matters and Group Executive Committee for

strategic matters. In late 2025, the Group’s

Climate Risk Management Framework was

updated requiring climate-related

management information to be presented to

the Group Executive Risk Committee going

forward. The Group’s Internal Audit function

continues to strengthen the Group’s ability to

create, protect, and sustain value by

providing the Board and management with

independent, risk-based and objective

assurance. For further information (see page

136).

The diagram on the following page shows the

governance mechanisms that are in place to

manage and oversee ESG matters across the

Group, how often these committees and

forums meet and the matters considered.

Kal Atwal (Non-Executive Director) maintains

responsibility for championing ESG matters

on behalf of the Board, with Sally Jones-

Evans (Non-Executive Director) designated as

People Champion representing the views of

colleagues within Board discussion and

decision making.

All Committee and Board papers continue to

include a mandatory consideration of impact

on our ESG strategic commitments (including

climate), allowing Directors to consider risks

and opportunities within decision making.

Climate change and ESG matters are

considerations within the Group’s strategy

for which the Board assumes responsibility.

Additional papers of specific ESG matters are

submitted to the Group Executive Committee

or Group Executive Risk Committee, where

approvals or escalations are required.

In addition to its direct oversight, the Board

delegates responsibility for the Group’s

climate-related risk appetite, risk monitoring,

provisioning and capital and liquidity

management to the ESG Forum, Group

Executive Risk Committee and Group Risk

Committee. The climate risk principles are

detailed in the Group’s Climate Risk

Management Framework and outlines the

setting of climate risk appetite limits as a key

tool to ensure that the risk profile continues

to be managed to an acceptable level. The

inclusion of climate risk assessment is part of

the annual Internal Capital Adequacy

Assessment Process (ICAAP) and ensures the

Group continues to hold sufficient capital to

address climate specific risks. Risk

monitoring (including topics related to risk

appetite) and management information are

presented to the ESG Forum on a quarterly

basis. The Group Risk Committee is the

Board committee that oversees and provides

advice to the Board on climate risk appetite

setting, exposures and metrics on a quarterly

basis including any related risk escalations

such as regulatory compliance (for further

details on risk management, (see TCFD page

101).

1. The 2025 materiality assessment will be presented to the Executive Committee and Board in 2026 due to the more extensive process conducted.



OSB GROUP PLC Annual Report and Accounts 2025		92

Sustainability report continued Strategic Pillar – Stewardship continued

ESG Governance

continued

To ensure accountability and monitor

progress, the Group links ESG performance

to executive and senior management

compensation through the Performance

Share Plan, for further details see page 155.

Progress against targets linked to

remuneration is reported to the ESG Forum,

Group Executive Committee and the Board

on a monthly basis.

In 2025, the Group continued its

commitment to sustainable business, making

its second submission as a signatory of

United Nations Global Compact. We

continue to embed the ten principles of the

UN Global Compact within our business

operations though the ESG Operating

Framework’s principles and commitments.

To promote and encourage a culture of

sustainability, the Group’s Employee

Engagement Networks (EENs) promote

awareness, encourage participation, and

foster collaboration on sustainability

initiatives across the organisation. Our

Diversity, Our Planet, and Our Community

networks are colleague-led and work in areas

of interest or concern for members. OurVoice

is the Group’s colleague consultation forum

and is there to support meaningful, regular

dialogue between colleagues, senior leaders

and the Board. In 2025 the EENs were given

additional time to dedicate to these activities,

recognising the importance of colleague-led

sustainability.



Board Of Directors


Group People and Remuneration Committee	Group Audit Committee	Group Risk Committee
Incentives and Remuneration	Assurance / Verification / Audit	Risk Appetite / Provision / Capital and Liquidity Management


Group Executive Committee (CEO)

	Group Executive Risk Committee

	Group ESG Forum
	Group ESG Forum

	Climate Transition Working Group	Employee Engagement Networks
	Transition Plan development and implementation


	Annually	Monthly	Quarterly	Periodically

ESG-related Topics


Climate-related Topics



OSB GROUP PLC Annual Report and Accounts 2025		93

Sustainability report continued Strategic Pillar – Stewardship continued

Ethical practices

Our approach to stewardship and

responsible business practices is

described below.

Working with our suppliers

Modern Slavery Statement

and Vendor Code of Ethics

The Group published a new statement

reiterating our endorsement of the UN

Declaration of Human Rights and support for

the UN Guiding Principles of Business and

Human Rights. The Group adheres to the

International Labour Organisation

Fundamental Conventions and does not

tolerate child labour or forced labour. The

Group also respects freedom of association

and the rights of colleagues to be

represented by trade unions or works

councils.

The UK Vendor Code of Conduct and Ethics

(VCCE) is provided at the initiation of any

new partnership and is reviewed annually.

OSB India maintains a Vendor Code of

Conduct that is subject to external

verification by qualified legal professionals in

India. The VCCE sets out our requirements

and expectations of suppliers including

compliance with all anti-slavery and human

trafficking laws, statutes and regulations.

Expectations include proportionate

management of climate and

environmental risk.

To mitigate the most significant risks of

modern slavery within our supply chain,

Indian operations, and employment

practices, our Vendor Management team

conducts evaluations of essential controls.

Breach reporting protocols are in place and

there were no reportable incidents in 2025.

In 2025, the Group invested in a third party

risk management tool called Hellios to

support supply chain due diligence. Hellios

provides an ESG score based on supplier

responses to an extensive questionnaire, the

results of which will be analysed by an ESG

specialist. In the future, findings will support

relationship owners to manage their ongoing

supplier engagement and the development of

supply chain programmes. Hellios includes

questions across ESG topics including

modern slavery risk identification and

management. Survey responses have been

used to inform management of modern

slavery risk and management processes

within the supply chain. At the end of 2025,

52% of supplier spend (2024) was covered by

the questionnaire.

Group Vendor Management

and Outsourcing policy

The policy establishes the requirements for

effectively managing and overseeing third

party relationships and complying with

regulatory standards. The policy establishes

a framework for the identification and

onboarding of new third party providers and

the oversight and performance monitoring

during the life of a contract.

The policy continues to emphasise ESG

matters, and consideration of such matters

through the key lifecycle stages including

ESG questions within selection criteria during

onboarding due diligence, a confirmed

commitment to OSB Vendor Code of

Conduct and Ethics (or equivalent), in

defining contract requirements and during

periodic reviews.

We monitor third party compliance with our

standards to meet our obligations

to stakeholders.

Operating responsibly

Group Whistleblowing policy

The policy aims to promote a workplace

where all colleagues and concerned

individuals feel empowered to report any

serious misconduct promptly. Whistleblowing

cases are treated with fairness and

consistency, with a focus on protecting the

whistleblower’s identity.

The Group treats any concern raised under

the Policy seriously and does not tolerate any

victimisation or detrimental treatment of

whistleblowers and takes disciplinary action

against any colleague who victimises another

colleague because they have made a

Reportable Concern.

The policy covers all Group colleagues,

former colleagues, Non-Executive Directors,

temporary workers, work placements,

secondees, volunteers, agency workers,

contractors, agents, appointed

representatives and suppliers working for the

Group.

The Group Audit Committee has, as a

standing agenda item, Whistleblowing

Reports, where updates are noted and an

Annual Whistleblowing Report is delivered to

the Board. A Non-Executive Director has been

appointed as the whistleblowing champion.

Conflicts of Interest policy

The policy is focused on identifying and

managing conflicts, and commits to

preventing them whenever possible. It is

incorporated into the mandatory financial

crime training for all colleagues and into the

Vendor Management and Outsourcing

policy, ensuring an integrated approach. The

Group Compliance function supervises the

conflicts of interest register, which is

evaluated quarterly by the Group Conduct

Risk Management Committee and annually

by the Group Nomination and Governance

Committee for Executives and Directors.

Group Data Retention policy

The policy and underlying procedures set out

measures to protect the personal data of our

customers, colleagues and third parties and

ensure adherence to the UK General Data

Protection Regulation (GDPR) and the Data

Protection Act 2018. We view effective

privacy practices as vital to our corporate

governance and accountability framework.

The Group Data Protection Officer provides

reports to both the Group Executive

Committee and the Board.

Cyber security

The Group’s cyber resilience programme is

founded on recognised frameworks for cyber

risk and controls, including those from the

National Institute of Standards and

Technology, the Microsoft Cloud Security

benchmark, and the Centre for Internet

Security. Oversight is provided across the

conventional three lines of defence, with

reporting structures established for

governance committees and the Group

Board. The framework not only facilitates

effective reporting but also continuous

improvement to our cyber security posture

and in addressing potential vulnerabilities.

The cyber programme aims to deliver robust

counter-measures, effective monitoring, and

a responsive approach to incidents in the

face of both existing and evolving threats.

The Group conducts regular security testing

and engages independent reviews from

specialised CBEST-accredited third parties to

evaluate the effectiveness of its operational

and technical capabilities in cyber resilience,

which are necessary for regulated financial

services organisations.



OSB GROUP PLC Annual Report and Accounts 2025		94

Sustainability report continued Strategic Pillar – Stewardship continued

Ethical practices continued

Group Financial Crime policy

The policies concerning Sanctions, Anti-

Money Laundering, Anti-Bribery and Fraud

have been integrated into a unified Group

Financial Crime policy through ongoing

improvement initiatives. The policy is a vital

component of our Group Financial Crime

Risk Management Framework and is

reviewed and approved annually by the

Group Audit Committee.

The Group’s approach to financial crime is to

ensure compliance with legal standards and

the implementation of effective systems and

controls to reduce the risk of the Group and

its products being used for the furtherance of

financial crime; the approach promotes a

zero-tolerance policy towards financial

crime, while also recognising the inherent

risks associated with business activities. The

Group’s strategy on Anti-Money Laundering

and Counter Terrorist Financing articulates

the roles and responsibilities of key

responsibility holders and all colleagues. It

establishes a strict zero-tolerance stance

towards any violations of Anti-Money

Laundering or Counter Terrorist Financing

laws. The Anti-Bribery and Corruption

stance reflects our commitment to

conducting business ethically and with

honesty, and a zero-tolerance policy. This

policy applies to colleagues, contractors, and

third party service providers to uphold ethical

practices in accordance with local laws in

all jurisdictions where we operate.

All colleagues participate in mandatory

Financial Crime awareness training on an

annual basis to foster a culture of vigilance

and responsibility. A specialised Group

Financial Crime Team investigates any

suspected financial crime-related incidents

and initiates recovery actions

when necessary. Multiple committees are

engaged in monitoring and evaluation to

ensure effective oversight and response.

Senior management conducts regular

reviews of key risk and performance

indicators. This process generates

management information that enhances

visibility into our exposure to financial crime,

to enable informed decision-making and

effective risk management strategies.

Tax

OSB Group recognises that its tax

contributions make an important social and

economic impact, benefitting the

communities we operate in by delivering

valuable public services and building

infrastructure that allows communities to

thrive. The Group is proud to make a

significant UK tax contribution each year.

During the 2025 period our contribution was

£142.9m (2024: £188.9m). The Group believes

it is important to pay the right amount of tax,

in the right place, at the right time. All of the

Group’s subsidiaries (including those

incorporated in Guernsey and Jersey) are

tax resident in the UK, with the exception of

OSB India Private Limited which is tax

resident in India and pays all appropriate

taxes in India. We do not use tax havens for

tax avoidance purposes.

The Group is open and honest in all dealings with tax authorities in both the UK and India. In

the UK we have signed up to the Banking Code of Conduct and always follow the spirit and

the letter of tax law. Our strategy can be found at https://www.osb.co.uk/sustainability.


	2025		2024
Taxes paid	£m	£m	£m	£m
Corporation tax	67.4		109.6
Bank surcharge	4.5		8.9
Irrecoverable VAT	23.6		23.3
Employer’s NIC	12.9		11.8
Other	2.1		1.8
Total taxes paid		110.5		155.4


	2025		2024
Taxes collected	£m	£m	£m	£m
Income tax	25.0		25.6
Employee’s NIC	4.0		4.3
VAT	3.4		3.6
Total taxes paid		32.4		33.5
Total tax contributions		142.9		188.9



OSB GROUP PLC Annual Report and Accounts 2025		95

Task Force on Climate-related Financial Disclosures

Listing Rule UKLR 16.3.23 requires

that the Group provides climate-related

financial disclosures consistent with

the recommendations set out by the

Task Force on Climate-related Financial

Disclosures (TCFD).

The Board confirms that it has disclosed sufficient information to comply

with TCFD and Companies Act 2006 requirements as amended by the

Companies (Strategic Report) (Climate-related Financial Disclosure)

Regulations 2022. The Group will continue to enhance these disclosures

over time in line with regulatory expectations and emerging best practice.

The Board is conscious that regulatory

expectations and industry best practices

continue to evolve and further work is

required to enhance our climate risk

operating model.

The disclosures below were drafted to be

consistent with TCFD recommendations

aligned to the UK legislation on The

Companies (Strategic Report) (Climate-

related Financial Disclosure) Regulations

2022 – and provide transparent reporting to

assist our stakeholders in understanding the

impact of climate change on the Group. The

current assessment indicates a low climate

risk impact to the business, however we

remain cognisant that climate risks may

evolve over time.

In the table overleaf, we make reference to

the progress made against each of the TCFD

pillars, cross referencing the Sustainability

Report, during 2025 and where relevant

ongoing considerations for 2026 and beyond.

The following pages in the TCFD report cover

the Group’s Risk Management approach to

climate risk and provides quantitative

analysis (e.g. geographical and asset quality

related to EPC) on the Group’s lending

portfolio and scenario analysis outcome.



OSB GROUP PLC Annual Report and Accounts 2025		96

Task Force on Climate-related Financial Disclosures continued


TCFD Ref	TCFD Recommendation	Disclosure Location	Looking Ahead
GOVERNANCE
1a	Describe the Board’s oversight of climate- related risks and opportunities.	Sustainability Report: ESG Governance page 91	• Ongoing enhancement to ensure effective oversight of climate-related risks and opportunities • Ongoing monitoring and assessment of performance targets aligned to the Group’s Climate Risk Strategy • Ongoing review of the Group’s climate risk appetite in accordance with the Group’s Risk Appetite framework • Educate and create awareness via workshops, internal training and external gatherings to support the Group’s Climate Transition Plan and to improve internal expertise
1b	Describe management’s role in assessing and managing climate-related risks and opportunities.	Sustainability Report: ESG Governance pages 91 - 92	• Consider further embedding of climate-related risks within the Group’s other sub-risk management frameworks, where required • Continue to monitor and manage performance against emissions reduction targets for financed (mortgages) and direct emissions
STRATEGY
2a	Describe the climate-related risks and opportunities the organisation has identified over the short, medium and long term.	TCFD Report: Strategy 2a page 98 Sustainability Report: Strategic Pillar – Just Transition pages 72 - 73	• Continue to seek opportunities relating to climate-friendly products, whilst being cognisant of any governmental changes and any conduct risks • Consider climate financial risks within the Group’s planning processes subject to governmental and regulatory changes (e.g. MEES – Minimum Energy Efficiency Standard) • Enhance analytical approaches to assess climate change in conjunction with the Group’s Principal Risk types
2b	Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy and financial planning.	Sustainability Report: Strategic Pillar – Just Transition pages 72 - 73 TCFD Report: Embedding scenario analysis page 98	• Increase awareness via internal and external market research to ensure impacts are appropriately assessed in line with the Group’s business, strategy and financial planning • Monitor and manage Scope 3 financed emissions against agreed targets • Ensure the Group’s climate risk underwriting criteria complies with evolving governmental and regulatory standards • Ensure impacts related to changes in governmental and regulatory standards are considered as part of the Group’s business, strategy and financial planning • The Group remains optimistic in identifying new product opportunities resulting from the impacts delivered by the transformation programme



OSB GROUP PLC Annual Report and Accounts 2025		97

Task Force on Climate-related Financial Disclosures continued


TCFD Ref	TCFD Recommendation	Disclosure Location	Looking Ahead
STRATEGY (continued)
2c	Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.	TCFD Report: Portfolio profiling and scenario analysis insights page 98 - 100	• Continue to monitor standards relating to climate scenarios ensuring scenario selection is fit for purpose
RISK MANAGEMENT
3a	Describe the organisation’s processes for identifying and assessing climate-related risks.	TCFD Report: Climate-related Risk Management page 100 - 101	• Support brokers/borrowers in educating and provide awareness of energy efficiency and their carbon footprint • Continue to produce climate risk management information with trend analysis and alignment to the Group’s scenario analysis selection • Consider enhancements to the ESG Materiality assessment
3b	Describe the organisation’s processes for managing climate-related risks.	TCFD Report: Processes for managing climate-related risks page 101	• Monitor the EPC profile and related risk indicators that will support the Group in managing its climate-related risks • Identify enhancements to internal training that would support the Group in managing climate-related risks
3c	Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management.	TCFD Report: Processes for identifying and assessing climate-related risks page 101	• Continue to enhance the overall risk management to ensure climate-related risks are integrated into the Group’s Principal Risks
METRICS & TARGETS
4a	Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.	Sustainability Report: Strategic Pillar – Just Transition page 72 - 73 TCFD Report: Metrics and Targets page 102	• Continue to utilise metrics and targets to support thought leadership and internal discussions via committees and working groups • Review the metrics and targets of physical and transitional risk to support and manage the Group’s climate risk profile and risk appetite thresholds • Consider carbon pricing to support the implementation of the Transition Plan
4b	Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.	Sustainability Report: Greenhouse gas emissions page 79 - 80	• Assess the risks and opportunities associated with Scope 1, 2 and 3 emissions and manage accordingly • Track performance against the agreed Climate Transition Plan, taking management actions if required • Seek enhancements on metrics and targets as risk management and transition planning matures
4c	Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets.	Sustainability Report: ESG Governance page 91 - 92	• Continue to utilise quantitative indicators based on the Group’s risks and opportunities to assess performance against targets



OSB GROUP PLC Annual Report and Accounts 2025		98

Task Force on Climate-related Financial Disclosures continued

Portfolio profiling and scenario

analysis insights (TCFD

recommendations: Strategy 2a,

2c and Metrics and targets 4a)

OSB Group plc is a leading mortgage lender

predominantly in the professional Buy-to-Let

and specialist Residential market sub-

segments secured against residential

property. The Group also provides loans to

limited companies and individuals secured

against commercial and semi-commercial

properties, residential development

financing, funding lines to non-bank finance

companies and asset finance lending.

At present the Group has identified the

physical risks as a result of extreme weather

conditions which could reduce the value of

properties as well as the ability of borrowers

to afford or refinance their mortgages, as the

most material physical climate risks to be

assessed and managed. The Group has also

identified the transitional risks relating to

changes in regulatory policy resulting in

material levels of investment being required

to ensure minimum EPC requirements are

met. This spend, for example, may be

required to ensure Buy-to-Let properties are

eligible to let, loan to value levels are not

adversely impacted, void periods and

defaults do not materialise which would

result in loan losses and higher capital

requirements. As such, the Group considers

the above risks as the most material and

therefore focuses on their assessment,

monitoring and management.

The climate risks relating to the Group’s

operational premises are considered less

material than the physical and transitional

risks to the properties which underpin the

Group’s loan portfolios.

Overview

The Group profiles the mortgage portfolio

through both Physical and Transitional Risk

measures, completing a full comparative

analysis on an annual basis.

Physical risks

Exposure to flood, subsidence and coastal

erosion are considered in the physical

risk profiling.

Properties are geolocated within a one-metre

accuracy for the purpose of physical peril

impact considerations. This resolution is

essential because flood and subsidence risk

factors can vary considerably between

neighbouring properties.

The Group’s physical risk profile remained

broadly stable during 2025, when compared

to 2024.

Sensitivity analysis completed using

Representative Concentration Pathway¹

(RCP) scenarios on increases in global

temperatures by 2100 shown in the above

table. Utilising the RCP scenarios ensures the

Group’s approach aligns with domestic

requirements such as UK-related climate

stress test models (CBES) and also physical

models such as the UKCP18. In summary, the

RCP is widely used globally and using these

scenarios provides a common language

within the financial market.

The sensitivity analysis compares the least

severe scenario (RCP 2.6) to the most severe

(RCP 8.5).


Scenario	Change in temperature (°C) by 2100
RCP 2.6	1.6 (0.9–2.3)
RCP 4.5	2.4 (1.7–3.2)
RCP 6.0	2.8 (2.0–3.7)
RCP 8.5	4.3 (3.2–5.4)

Note: figures within the brackets above detail the range in

1. Based on the Intergovernmental Panel for Climate

Change (IPCC) fifth assessment report (AR5) in 2014.

temperatures. Single figures outside the brackets indicate

the averages.

Flood risk

At a Group level, our flood analysis shows

that the exposure to the probability of flood

over the next decade increases by 0.04%

(2024: 0.04%) from the best-case scenario to

the worst-case scenario, only 0.48% (2024:

0.44%) of the Group’s portfolio is in an area

with a flood risk currently greater than 20%.

Regional mapping analysis (see diagram to

the right) shows the proportion of the

Group’s mortgage portfolio by property that

is exposed to a flood probability greater than

20% within each UK region. The highest

regional concentration is to the South East,

representing 20.4% of properties in the

region.

Only 0.9% of properties (218 properties) in

this region are exposed to a flood risk

currently greater than 20%. Northern Ireland

has the highest proportion of properties with

a flood probability of greater than 20%,

however this amounts to only one property in

the Group’s portfolio.

Subsidence

Sensitivity analysis for subsidence indicates

the increase from best-case to worst-case

increase is 0.05% (2024: 0.05%), with the

portfolio risk of subsidence being less than

0.5% (2024: less than 0.5%).

Coastal erosion

For coastal erosion, across the Group 92.4%

(2024: 92.6%) of the portfolio is more than

1,000 metres from the coastline. Of the

properties within 1,000 metres, only 0.08% of

properties on the portfolio (100 properties)

are in areas likely to experience coastal

erosion (2024: 0.09%, 110 properties).

Analysis outcome

The physical impact of climate change on

our real estate portfolio across the UK is

expected to be limited.

% of properties with a flood probability

>20% in the region


		1.8%
		0.9%
		0.6%
		0.5%
		0.4%
		0.3%
		0.2%
		0.1%



OSB GROUP PLC Annual Report and Accounts 2025		99

Task Force on Climate-related Financial Disclosures continued

Transitional risks

Exposure by Energy Performance Certificate

(EPC) rating is considered in the Transition

Risk profiling.

For transitional risk, EPC ratings are based

on a Standard Assessment Procedure

calculation which uses a government

methodology to determine the energy

performance of properties by considering

factors such as construction materials,

heating systems, insulation and air leakage.

The Group observed marginal improvements

in EPC ratings for existing stock assessed in

both 2025 and 2024. In addition,

enhancements in the climate data processes

improved insight into the transitional

risk profile.

At a Group level, c.45.5% of properties

(2024: 42.8%) have an EPC rating of C or

better, c.43.2% (2024: 44.7%) have an EPC

rating of D, c.10.0% (2024: 11.1%) an EPC

rating of E and c.1.2% (2024: 1.3%) have an

EPC rating of F or G. Of the properties with

an EPC rating of D or worse, c.93.0% (2024:

92.7%) have the potential to reach at least

an EPC rating of C as shown in the following

page.

Adverse movements in the EPC rating

distribution of the Group’s loan portfolios

and any potential change in government

policy have the potential to result in larger

future financial impact for the Group. The

Group actively monitors and assesses the

possible financial risks associated with the

EPC rating distribution of the Group’s loan

portfolios and horizon scans for any changes

in regulatory or governmental policy.

Embedding scenario analysis

The Group’s ICAAP approach includes the

financial impact of climate-related risks on

flood, subsidence, coastal erosion and

minimum EPC ratings. As part of the stress

testing, the Group’s ICAAP considers a range

of scenarios aligned to the Prudential

Regulation Authority’s (PRA’s) Climate

Biennal Exploratory Scenario (CBES) (where

the 2050 global temperature range is from

1.8ºC to a 3.3ºC) within the five-year

financial planning and the 2025 outputs

indicated that the Group has a low risk to

climate change, and its strategy and

business model performs resiliently across a

number of climate scenarios.

97% of the Group’s total lending is related to

carbon-related assets (i.e. mortgages)

excluding Development Finance, Funding

Lines and Asset Finance portfolios and

contributes to the Group’s total emissions

(indirect emissions, Scope 3 Category 15 –

Financed Emissions). Details of the Group’s

strategic approach in transitioning into a

low-carbon economy consistent with a 2ºC

or lower climate scenario is outlined in the

Group’s Climate Transition Plan and refer to

the Sustainability Report – Just Transition

page 71.

Governmental policies are key drivers

impacting the Group’s risk strategy and risk

decisions to address climate-related risks

and opportunities. The current UK

governmental outlook remains uncertain for

the mortgage market and how the changes

will impact the Minimum Energy Efficiency

Standard (MEES) Regulations which the

Group’s current lending policies comply with.

Therefore, risk monitoring and analysis are

established to monitor the EPC distribution of

our lending portfolio aligned to the Group’s

Financed Emissions reduction targets

(aligned to a 2ºC or lower climate scenario).

The Group’s climate risk management covers

a wide range of risk analysis including;

climate risk appetite monitoring, conducting

scenarios and assumptions for the Group’s

ICAAP assessment and other ad hoc data

analysis in order to support the Group in

assessing climate-related financial impacts.

The Group’s current risk appetite, IFRS 9 and

ICAAP outputs on climate risk assessments

have all indicated that the Group is currently

exposed to a low climate-related financial

risk, using the materiality assessment scale

which supports other financial disclosures

within the Group’s Annual Report and

Accounts.

Looking ahead

The Group will continue to ensure climate risk

assessments (e.g. ICAAP output or risk-

related analysis) support the Group’s

management of the climate risk profile.



OSB GROUP PLC Annual Report and Accounts 2025		100

Task Force on Climate-related Financial Disclosures continued



	2025 Group EPC Distribution – Current vs Potential	2024 Group EPC Distribution – Current vs Potential


2025 current proportion of EPC D to G which have a EPC Potential of C or above; D: 95.6% , E: 85.1% , F: 65.4%, G: 55.2%		2024 current proportion of EPC D to G which have a EPC Potential of C or above; D: 95.6% , E: 84.8% , F: 63.3%, G: 55.9%


	Current
	Potential


	Current
	Potential

Potential climate-related impacts on Group’s principal risks (financial risks):

Following from the Strategy section of the Group’s TCFD(2a), the below outlines the time horizon and potential risk associated with each principal risk type.


Principal risk type	Climate risk type	Description	Time Horizon	Potential Risk
Credit risk	Physical	Extreme weather events (such as heatwaves, floods, wildfires and storms) that can lead to physical damage to the value of assets or collateral held	Long-term	Low
Credit risk	Transition	Arise from the process of adjustment towards a low-carbon-economy which could impact the value of the assets and lead to stranded assets	Short-term	Low
Market risk	Transition	Adverse movements impacted by climate change impacting customer behaviour	Short-term	Low
Liquidity and funding	Physical	Adverse movements impacted by climate change impacting foreign exchange volatility. Transition risk currently sits outside of the planning horizon	Short-term	Low
Solvency	Physical and transition	Climate-related risks which would require the Group to hold additional capital	Short-term	Low



OSB GROUP PLC Annual Report and Accounts 2025		101

Task Force on Climate-related Financial Disclosures continued

Climate-related Risk Management

Processes for identifying and assessing

climate-related risks

The Group prioritises risk identification and

assessment of climate change based on

legislative requirements, such as the

Strategic Report (UK Companies Act) and

also PRA's Supervisory Statement 3/19. In

addition, the Group have in place horizon

scanning to monitor emerging regulatory or

legislative changes that can impact the

Group.

In 2025, to prepare for upcoming

legislations, Climate Risk is identified in the

Group's Enterprise Risk Register under the

Business and Strategy principal risk type.

However, the Group’s risk function is

responsible in assessing climate risks against

all principal risks such as traditional banking

risk types including credit, market and

operational risk (as shown in previous page)

where applicable, and adopts the three lines

of defence model to provide clear allocation

of responsibilities.

Climate risk is a key consideration in the

Group’s wider assessment of ESG risks and

opportunities which uses the outputs of

scenario analysis to support the materiality

of ESG risks and opportunities, which further

informs the ESG strategy. Within the Group’s

ESG materiality assessment, climate-related

topics are identified and the degree of

importance to stakeholder groups are

assessed. Collectively, the Group considers a

wide range of global issues, industry, and

sector-specific considerations (i.e. regulatory

and disclosure requirements) to ensure

consistency on the Group’s values and risk

culture (e.g. risk classifications) are reflected

in the ESG Operating Framework and

Climate Risk Management Framework.

The Climate Risk Management Framework

articulates how the Group identifies,

assesses, monitors and manages climate

risks to which it is exposed and is reviewed on

an annual basis, approved directly by the

Chief Risk Officer (CRO).

In 2025, the Group included climate change

as part of a reverse stress testing process to

support the assessment of risks and impacts

across all Principal Risks.

Credit Risk is the largest risk which the Group

would be adversely impacted by future

climate change and the Group utilises

scenario analysis to inform the potential

impact, size and scope on the Group's

loan portfolios (covering physical and

transition risk).

The Group’s Market and Liquidity risk

assessment considers climate-related risks

for both IRRBB (Interest Rate Risk in the

Banking Book), and ILAAP (Internal Liquidity

Adequacy Assessment Process) processes,

where the physical risk to the funding of its

OSB India subsidiary is considered through

factoring the monsoon season in India into

the UK Sterling and Indian Rupee FX rates.

For non-financial principal risk types, the

Group has implemented an ESG indicator

within the Group’s Operational Risk

Management System as an added feature

for the Group’s Risk and Control Self-

Assessments (RCSA) and to support internal

controls framework.

The Group's climate-related risk appetite is

aligned to the Group's ESG targets and

therefore monitors reputational risk and

compliance risk (non-financial).

Processes for managing climate-

related risks

The Group’s lending policies (for current

regulations) and climate risk appetite

statements/limits are in place as a control to

monitor and manage transitional climate-

related risks. Flood, subsidence, and coastal

erosion risks (physical) are in part mitigated

by independent property valuation, which

forms part of the underwriting process.

The climate risk appetite statements and

limits remain in place helping to inform the

Group’s ESG strategy and facilitate

monitoring of the Group’s climate risk profile

in respect to reputational risk and

compliance risk. This is monitored on a

quarterly basis and reviewed on an annual

basis via governance channels (including a

Non-Executive Director’s workshop to keep

the Board informed and aware of the

Group's approach to climate risk

management). Monitoring and reporting of

relevant climate risk appetite and climate risk

profiles (such as EPC profile and new

originations/existing lending stock) are

presented to related committees on a

quarterly basis (e.g. ESG Committee).

Since 2024, individual climate-related risk

trainings were conducted to relevant

business areas to educate colleagues on

areas where climate change would impact

their day-to-day activities. In 2025, the

Group designed mandatory e-learning for

specific key business areas to ensure

collective training is rolled out to comply with

current/upcoming regulatory requirements

(e.g. SS3/19 and SS5/25). The e-learning is

due to launch in January 2026.

Processes for prioritising climate-related risks

are based on legislative and regulatory

requirements (materiality and determination)

which builds from the foundation of our

credit risk processes relating to climate

change.

Credit risk processes are well established for

climate risk due to the nature of physical and

transition risk impacting the Group's lending

book. Following the outputs for the ICAAP,

the impact of physical risks to the Group is

considered low. Therefore, transition risk

becomes the Group's key material focus as a

result of emerging policy changes that may

occur in the future.

The Group has a number of methodologies

and arrangements in place to support the

materiality of climate-related risks:

ESG Materiality Assessment – Provides an

assessment and a range of topics (supported

by international/regulatory standards) where

prioritisation may take place for risks relating

to environmental matters.

The Group's Operational Resilience

arrangements – Risk assessed by

estimating the likelihood and impact on

Important Business Services, locations and/or

business-specific threats, this includes events

caused by extreme weather.

Climate data drivers – Utilising quarterly

monitoring of climate-related risks on the

Group's loan book to identify areas of

vulnerability that may be impacted by future

policy or regulation changes.

UKCP18 – Providing locations of assets

impacted by adverse weather conditions that

could physically damage or devalue the

Group's assets



OSB GROUP PLC Annual Report and Accounts 2025		102

Task Force on Climate-related Financial Disclosures continued

Metric and targets

4a) Metrics used to assess climate-related risks and opportunities:

In 2025, the Group evolved in creating a Transition dashboard which included a suite of metrics and targets to support discussions and assess the current progression relating to the Group’s

emission targets. Metrics and targets include: historical trend analysis relating to emission targets, climate risk appetite, climate risk profiling based on current/historic loan portfolio and metrics

related to transitional finance.

The Group continues to track its performance/progress through discussions via channels such as the Climate Transition Working Group, ESG Forum and Energy Management meeting.

Disclosures of progression related to emissions reduction targets will continue to be outlined within the Group’s Climate Transition Plan. For further details, please refer to the Climate Transition

Plan and updates under the Sustainability Report – Just Transition section page 71.

The metrics related to physical and transition risks previously mentioned are considered as part of the Group’s risks and opportunities (please refer to the Sustainability report – Just Transition

page 72 - 73). A description of metrics used are outlined in the below table where quantitative metrics are applicable:


Climate Related Risks
Topic	Metric Description
Managing climate-related financial risks related to: Changes in precipitation pattern and extreme variability in weather patterns, rising mean temperatures and rising sea levels that will impact the Group's primary lending (Physical risk)	The Group considers risk exposures based on climate risk perils which includes flood, subsidence and coastal erosion. The risk exposures are modelled which will include data considerations such as: winter precipitation, shrink / swell clay risk, summer precipitation, erosion sensitivity and height above sea level.
Managing climate-related financial risks related to: Policy and legal mandates that will impact the Group's existing products and services (Transition Risk)	The transitional risk metrics are based on the loan portfolio’s EPC distribution and GHG emissions calculated using the GHG Protocol Corporate Standard.
Increased concern or negative feedback from the Group's stakeholders based on direct emissions and supply chain emissions as well as failure to meet the Group's emissions reduction targets (Transition Risk)	The metrics are based on the Group's Climate Risk Appetite which monitors the Buy-To- Let and Semi-/Commercial properties with an EPC of D-G.
Direct Operations
Removal of gas from our office buildings and branches	Our target is to reduce Scope 1 and 2 (Market-Based) emissions to Net Zero by 2030. We monitor electricity and natural gas use (kWh) and F-gas releases as the sources of those emissions.
Rationalisation of corporate real estate
Replacement of fluorinated gases with lower Global Warming Potential (GWP) alternatives	Scope 1 – Emissions resulting from F-gas releases.
Continue to purchase electricity from renewable sources	Our target is to purchase 100% of electricity from renewable sources, supported by REGO certificates.
Increase energy efficiency through colleague engagement and property management	We monitor total energy use (kWh) and report an intensity metric of per full-time equivalent employee to assess efficiency.
Transition-Friendly Products and Services
Existing products – providing products and services that contribute to greater energy efficiency and or decarbonisation	We monitor the total value of completed originations for the Group's Refurb-Buy-to-Let product.



OSB GROUP PLC Annual Report and Accounts 2025		103

Non-financial and sustainability information statement

The requirements of sections 414CA and 414CB of the Companies Act 2006 relating to non-financial reporting are referenced

in the table below and cross referenced to relevant sections within the Annual Report to better understand the impact and

stakeholder outcomes across a range of policies and guidance.


Reporting requirement	Policies, guidance and standards	Further information to understand impact and outcomes
Environmental	Environmental policy	See page 77
	TCFD – Climate-related disclosures	See pages 95 - 102
	Energy policy	See page 77
	ESG Operating Framework	See page 91
Employees	Group D,E & I policy	See page 87
	Trans Inclusion and Gender Identity policy	See page 87
	Sexual Harassment policy	See page 87
	Group Health and Safety policy	See page 87
Social Matters	Group Data Retention policy	See page 93
	Tax	See page 94
	Lending policy	See page 83
	Group Complaint Handling policy	See page 83
	Group Customer Vulnerability policy	See page 83
	Group Arrears Management and Forbearance policy	See page 83
	Consumer Duty	See page 81
Human Rights	Modern Slavery Statement and Vendor Code of Ethics	See page 93
Human Rights	Group Vendor Management and Outsourcing policy	See page 93
Anti-Bribery and Corruption	Group Whistleblowing policy	See page 93
	Group Financial Crime policy	See page 94
	Conflicts of Interest policy	See page 93
	Group Operational Resilience policy	See page 173
	Artificial Intelligence Responsible Use policy	See page 59
	Cyber Security	See page 93


Reporting requirement	Further information to understand impact and outcomes
Description of the business model and strategy	See pages 16 - 23
Policy embedding, due diligence and outcomes	See pages 68 - 102
Description of the principal risks and impact of business activity	See pages 49 - 59
Description of the non-financial key performance indicators	See page 3
Climate-related financial disclosures
Governance arrangements in relation to assessing and managing climate-related risks and opportunities	See pages 91 - 92
Risk management processes for identifying, assessing and managing climate-related risks	See pages 101 - 102
Climate-related risks and opportunities	See pages 72 - 73 and 98
Potential impacts on the business model and strategy	See pages 90 and 100
Targets used to manage climate-related risks and opportunities and performance against those targets	See pages 75 and 91 - 92
Key performance indicators used to assess progress against targets	See pages 72 - 73 and 102



OSB GROUP PLC Annual Report and Accounts 2025		104

Corporate

Governance

Report


105	Board of Directors
107	Group Executive Committee
109	Corporate Governance Report
124	Group Nomination and Governance Committee Report
131	Group Audit Committee Report
138	Group Risk Committee Report
140	Other Committees
141	Group Remuneration and People Committee Report
146	Directors’ Remuneration Report
169	Directors’ Report: other information
174	Statement of Directors’ Responsibilities



OSB GROUP PLC Annual Report and Accounts 2025		105

Our Board of Directors

David Weymouth

Chair of the Board

Andy Golding

Chief Executive Officer

Victoria Hyde

Chief Financial Officer

Gareth Hoskin

Senior Independent Director

Appointed¹

28 February 2020

Appointed²

2 May 2019

Appointed

22 July 2024

Appointed

1 April 2025

Skills, experience and qualifications

David has over 40 years’ experience across

many sectors in financial services including

serving as Global Chief Information Officer for

Barclays Bank plc, Chief Operations Officer

and Chief Risk Officer for RSA Insurance Group

PLC. David has served as a Non-Executive

Director on a number of Boards in the UK and

US, including Chair of Fidelity Investments,

Chair of Mizuho International PLC and Senior

Independent Director and Chair of Risk

Committee at Royal London Mutual Insurance

Society. David has a wealth of experience in

operations, technology, risk management and

Board level leadership.

Current external appointments

David is Chair of Pension Insurance

Corporation PLC and Pension Insurance

Corporate Group Limited, and Chair of the

Board Risk Committee at Marsh Limited.

Skills, experience and qualifications

Prior to his appointment as Chief Executive

Officer of the Group, Andy was Chief Executive

of Saffron Building Society for five years, and

held senior positions at National Westminster

Bank plc, John Charcol Limited and Bradford &

Bingley plc. Andy served as a Non-Executive

Director for the Building Societies Trust Limited,

Kreditech Holding SSL GmbH and

Northamptonshire Healthcare NHS Foundation

Trust. He served as a member of the Building

Societies Association’s Council and the

Financial Conduct Authority’s Smaller Business

Practitioner Panel. Andy is a highly regarded

leader with a deep understanding of banking

and over 30 years’ experience in financial

services.

Current external appointments

Andy is a Non-Executive Director of Pepper

Advantage Limited and Mudeford Ferry Limited.

Skills, experience and qualifications

Prior to joining OSB Group in September 2022,

Victoria worked at Barclays for 21 years, most

recently as Finance Director of the Consumer,

Cards and Payments segment. Victoria is a

qualified Chartered Management Accountant

and has over 25 years’ experience in finance.

She has supported retail, corporate and

investment banking business lines across a

range of finance roles including product

control, treasury finance, costs and business

planning and analysis.

Current external appointments

None held.

Skills, experience and qualifications

Gareth has considerable financial services

experience gained during his extensive

executive career at Legal & General plc,

as a Director and Chief Executive of the

international division. Prior to this, Gareth

was a chartered accountant at

PricewaterhouseCoopers LLP. Gareth was

previously Chair of Acromas Insurance

Company Limited and Vice Chair and Senior

Independent Director of Leeds Building Society.

Gareth was appointed to the position of Senior

Independent Director on 1 October 2025.

Current external appointments

Gareth is Senior Independent Director and

Chair of the Audit Committee of Saga plc.


Committee membership:

	Committee Chair	Group Nomination and Governance Committee	Group Remuneration and People Committee	Group Risk Committee


		Group Models and Ratings Committee	Group Audit Committee

2. Andy Golding was appointed to the Board of

OneSavings Bank plc on 30 December 2011 and this

date is used to calculate his tenure.

1. David Weymouth was appointed to the Board of

OneSavings Bank plc on 1 September 2017 and this

date is used to calculate his tenure.



OSB GROUP PLC Annual Report and Accounts 2025		106

Our Board of Directors continued

Kal Atwal

Independent Non-Executive

Director and ESG Champion

Henry Daubeney

Independent Non-Executive Director

and Whistleblowing Champion

Noël Harwerth

Independent Non-Executive

Director

Sally Jones-Evans

Independent Non-Executive

Director and People Champion

Simon Walker

Independent Non-Executive

Director

Appointed

7 February 2023

Appointed

1 July 2024

Appointed¹

28 February 2020

Appointed

1 April 2025

Appointed

4 January 2022

Skills, experience

and qualifications

Kal has significant experience as a

Non-Executive Director across FTSE

100, FTSE 250 and mutual

businesses and was previously a

Non-Executive Director of Admiral

Financial Services Limited and WH

Smith PLC, where she was also

Chair of the ESG Committee. She

was Managing Director of BGL

Group and Founding Managing

Director of comparethemarket.com,

a division of BGL. As Group Director

of BGL Limited, Kal was responsible

for brand-led businesses, group

strategy and corporate

communications. Kal is an

experienced strategy leader with

international experience in start-up,

scale-up, fintech and

digital businesses.

Current external appointments

Kal is a Non-Executive Director of

Royal London Mutual Insurance

Society Limited, Whitbread Plc and

Chair of FunkyPigeon.com Limited,

a subsidiary of Card Factory plc.

Skills, experience

and qualifications

Henry brings over 38 years’ of

experience in the financial services

sector, having spent his career with

PricewaterhouseCoopers LLP as a

senior audit bank partner and

Global Head of Corporate Reporting

Services – IFRS and Sustainability

Reporting. He has served on the

IFRS Advisory Council and

Corporate Reporting Group of the

Global Public Policy Committee

(GPPC), where he was also Co-

Chair of the GPPC Bank Working

Group. Henry has extensive

expertise in financial and regulatory

reporting in the UK and US with a

strong background in internal

controls, governance and

compliance. He is a Fellow of the

Institute of Chartered Accountants.

Current external appointments

Henry is a Non-Executive Director of

ClearToken CCP Limited,

ClearToken Depository Limited,

ClearToken Holdings Limited, and

ClearToken UK Holdings Limited.

Skills, experience

and qualifications

Noël has served as a Non-Executive

Director for leading organisations

including Sirius Minerals plc,

Standard Life Aberdeen plc, RSA

Insurance Group plc, GE Capital

Bank Limited, Sumitomo Mitsui

Banking Corporation Europe Limited,

The London Metal Exchange,

Standard Life Assurance Limited and

Scotiabank Europe Limited. Noël

spent 15 years with Citicorp, latterly

serving as the Chief Operating Officer

of Citibank International plc. Noël

offers extensive expertise in global

banking and regulatory

environments, combined with

experience in the public sector

(government bodies), providing

valuable perspective to the Board.

Current external appointments

Noël is a Non-Executive Director of

CAB Payment Holdings plc and

Crown Agents Bank Limited.

Skills, experience

and qualifications

Sally has significant financial

experience gained through her

extensive executive career at Lloyds

Banking Group where she held a

wide range of roles leading

customer-facing parts of the

business. She also has a proven track

record as an experienced Board and

Committee Chair. Previously, Sally

was Chair of the Principality Building

Society and was also formerly a Non-

Executive Director at Delio Wealth

Limited. Sally is a Fellow of the

Chartered Institute of Bankers.

Current external appointments

Sally is a Non-Executive Director

and Chair of the Audit and Risk

Committees of Hafren Dyfrdwy Ltd

(part of Severn Trent Group Plc),

Chair of the Trustee Board of Oasis

Cardiff and Trustee of the charity,

Care for the Family.

Skills, experience

and qualifications

Simon has considerable experience

in financial services and mortgages,

SME lending, risk management and

regulation within the banking

sector. Simon joined KPMG in 1980

and was made a partner of the firm

in 1992, going on to lead the firm’s

National Building Societies and

Mortgage Practice and

subsequently became banking

partner in Financial Risk

Management. Simon graduated in

Law from University College London

and is a qualified chartered

accountant. Simon was previously a

Non-Executive Director of H & T

Group plc, IWP (Holdings) Limited

and Leeds Theatre Trust Limited.

Current external appointments

Simon is a Non-Executive Director of

the Bank of London Group Limited

and The Bureau of Investigative

Journalism.

1. Noël Harwerth was appointed to the

Board of Charter Court Financial

Services Limited on 27 June 2017 and this

date is used to calculate her tenure.



OSB GROUP PLC Annual Report and Accounts 2025		107

Our Group Executive Committee Meet our strong leadership responsible for delivering the Group’s strategy

Debra Bailey

Group Chief

Information Officer

Matthew Baillie

Group Chief

Operating Officer

Jens Bech

Group Commercial Director

Jason Elphick

Group General Counsel

and Company Secretary

Jon Hall

Group Managing Director,

Mortgages and Savings

Experience and qualifications

Debra joined the Group in January

2025 and was appointed as Group

Chief Information Officer in April

2025. She brings a breadth of

experience in strategic, technology,

transformational, operational and

change roles in sizeable, regulated

organisations across financial

services, telecommunications,

logistics and the public sector. The

majority of her career has been in

financial services, at Woolwich,

Barclays and Nationwide Building

Society where she held senior

management responsibilities. In her

last role she was Chief Information

Officer and a member of the

Executive Committee at Royal Mail

responsible for IT strategy, operations

and change, architecture and

security.

Experience and qualifications

Matthew joined the Group in late

2022 as Group Chief

Transformation Officer, leading the

Group’s strategic change agenda.

In September 2025, he was

appointed Group Chief Operating

Officer and became a member of

the Executive Committee. He has

over 15 years of financial services

experience, specialising in strategy,

transformation and performance

improvement at scale. Prior to

joining the Group, Matthew spent

his career at Lloyds Banking Group

where he held senior leadership

positions across product, digital,

strategy and change. His final role

there was Chief of Staff to the

Group Chief Executive Officer,

where he supported enterprise-wide

strategic delivery.

Experience and qualifications

Jens joined the Group in March 2012

and has held two executive roles

during a period of significant growth

and transformation for the Group,

initially as Chief Risk Officer and,

more recently, as Group Commercial

Director. In his current role, he

oversees Heritable Development

Finance, InterBay Asset Finance and

the Group’s capital markets and

wholesale funding activities; he is an

executive director of several

subsidiary boards and a regular

attendee at Board meetings. He has

played a key role in several strategic

transactions, including the

combination with Charter Court

Financial Services in 2019. Prior to

OSB Group, Jens was Chief Risk

Officer at the Asset Protection

Agency, an arm’s-length body of HM

Treasury. Earlier, he spent nearly a

decade at Oliver Wyman advising

financial institutions and regulators

globally, including leading the firm’s

support to Iceland during the

financial crisis. After more than 14

years with the Group, Jens will step

down from his executive role on 31

March 2026, having agreed this with

the Board, and will remain with the

Group for a period to support an

orderly transition.

Experience and qualifications

Jason joined the Group in June

2016. He has over 30 years of legal

private practice and in-house

financial services experience.

Jason’s private practice experience

was primarily in Australia with King

& Wood Mallesons and in New York

with Sidley Austin LLP. He has been

admitted to practice in Australia,

New York, England and Wales.

Jason’s previous in-house financial

services experience includes serving

as Director and Head of Bank Legal

at Santander UK Group. He also

held various roles at National

Australia Bank Limited, including

General Counsel Capital and

Funding, Head of Governance,

Company Secretary and General

Counsel Product, Regulation

and Resolution.

Experience and qualifications

Jon joined the Group in November

2021. Jon has significant experience

within the financial services sector

and joined the Group from Aspinall

Financial Services, a pre-

authorisation bank start-up, having

previously led Masthaven Bank from

2016 to early 2021 as their Chief

Commercial Officer and Deputy

Chief Executive. Jon started his

career with PricewaterhouseCoopers

LLP, before joining Aviva plc and

subsequently became Chief

Executive of Saffron Building

Society. Jon is a Fellow of the

Institute of Chartered Accountants

in England and Wales.



OSB GROUP PLC Annual Report and Accounts 2025		108

Our Group Executive Committee continued




Orlagh Hunt Chief People Officer	Hasan Kazmi Group Chief Risk Officer	Lisa Odendaal Group Chief Internal Auditor	Richard Wilson Group Chief Credit Officer

Experience and qualifications Orlagh joined OSB Group in September 2024. Orlagh has over 25 years’ executive experience spanning retail, FMCG and financial services. She has a breadth of experience in driving change, colleague engagement and capability building. She is a Member of the Chartered Institute of Personnel and Development. Prior to joining the Group, Orlagh was the Chief People Officer at Yorkshire Building Society and brings a wealth of experience having previously worked as Head of HR for AXA Sunlife and as Group HR Director for both Royal & Sun Alliance and Allied Irish Bank.	Experience and qualifications Hasan joined the Group in September 2015 as Chief Risk Officer. He became Group Chief Risk Officer in 2021. Hasan has 30 years of risk and regulatory experience having worked at several financial institutions, including Barclays Capital, Royal Bank of Canada and Standard Chartered Bank. He was a Senior Director at Deloitte LLP within the risk and regulatory practice with responsibility for leading the firm’s enterprise risk, capital, liquidity, recovery and resolution practice. Hasan graduated from the London School of Economics with a MSc in Systems Design and Analysis and a BSc in Management.	Experience and qualifications Lisa joined the Group in April 2016 from Grant Thornton, where she led outsourced internal audit functions for a variety of financial institutions, including investment banks, retail banks, and asset managers. Her career spans audit and operational roles at PricewaterhouseCoopers LLP, Morgan Stanley, HSBC, and Man Group plc, with experience gained in the UK, UAE and Switzerland. A Chartered Internal Auditor, Lisa has worked on risk management, regulatory compliance, and governance frameworks across multiple jurisdictions, supporting businesses in adapting to evolving regulatory and market demands.	Experience and qualifications Richard joined the Group in 2013. Prior to joining the Group, Richard was responsible for credit and collections strategy for Morgan Stanley’s origination businesses in the UK, Russia and Italy. Between 1988 and 2006, Richard held various roles at the Yorkshire Building Society.



OSB GROUP PLC Annual Report and Accounts 2025		109

Corporate Governance Report



	Dear Shareholder,
	Welcome to our 2025 Corporate Governance Report for the year ended 31 December 2025.

We remain committed to upholding the

highest standards of governance. We have

applied and complied with the principles and

provisions of the Financial Reporting

Council’s 2024 UK Corporate Governance

Code (the ‘Code’). The Board has complied

with the requirements of the Code, its legal

and regulatory obligations, and has

successfully discharged its responsibilities to

ensure the good governance of the Group.

A statement disclosing compliance with the

Code can be found on page 110, and

disclosures on how the Company engages

with its stakeholders, can be found on pages

120-123. The Corporate Governance Report,

as set out on pages 104–174 of this Annual

Report, forms part of the Directors’ Report

and should be read as if fully incorporated

herein.

Engagement with stakeholders

Throughout 2025, the Board remained firmly

committed to enhancing shareholder value by

delivering strong, sustainable results aligned

with those presented at the Group’s Investor

Day. Board oversight continues to play a

critical role in aligning the interests of

shareholders and other stakeholders,

supporting our ambition to become the

number one specialist bank in the UK.

This report outlines how the Board and its

Committees operate to ensure disciplined risk

management while delivering long-term

value. We have overseen significant progress

in our transformation journey, aimed at

building the bank of the future, optimising

operations for a digital-first environment and

embedding a customer-centric approach

across the business.

I have personally enjoyed meeting many

shareholders during the year. These meetings

provide valuable insights into investor

priorities and areas of focus, and I encourage

all shareholders to take advantage of future

opportunities for dialogue. Our Board

Champions played an important role in

strengthening the Board’s connection with

key stakeholder groups. Through focused

engagement and regular reporting back to

the Board, they provided valuable insight into

stakeholder priorities and emerging issues.

The Chair of the Remuneration and People

Committee engaged directly with

shareholders throughout the year to discuss

the proposed new remuneration policy,

ensuring their feedback and expectations

were fully considered in its development.

Group Chief Executive Officer

On 20 February 2026, I was delighted to be

able to announce the appointment of Enrique

Alvarez Labiano. Enrique will, subject to

regulatory approval, join as Chief Executive

Officer of the Group later in the year from

Santander UK and brings with him a strong

track record in retail and business banking,

together with excellent leadership experience

I am personally very excited about Enrique’s

vision for the Group and, together with the

Board, look forward to working with him to

ensure the next stage of development of the

Group.

Other Board changes

and composition

Creating long-term shareholder value

requires a future-fit workforce, supported by

a strong remuneration philosophy. The Group

Remuneration and People Committee

continues to ensure alignment between

individual contribution, strategic objectives,

and stakeholder outcomes.

During the year, we leveraged the diverse

skills, experience, and strengths of our Board

members to implement several committee

changes designed to enhance governance

and oversight. We were pleased to welcome

Gareth Hoskin and Sally Jones-Evans to the

Board, further strengthening our breadth of

expertise. Following a thorough appointment

process, we look forward to welcoming Robin

Bulloch as an Independent Non‑Executive

Director with effect from 1 April 2026.



OSB GROUP PLC Annual Report and Accounts 2025		110

Corporate Governance Report continued

I will reach the end of my nine‑year tenure as

Chair of the Board this summer. In light of

the CEO transition during the year, the

Board invited me to serve for an additional

year to ensure stability and continuity of

leadership. I am pleased to support the

organisation through this period, and I

intend to step down from the Board by

September 2027.

Looking ahead

Our focus remains on increasing shareholder

value by building on the strengths that have

delivered success to date. We will continue to

transform the way we operate, drive growth

and diversification, and advance our

ambition to become the UK’s leading

specialist bank. I am delighted to invite all

shareholders to further engage with us at our

AGM on 7 May 2026.

David Weymouth

Chair of the Board

4 March 2026

UK Corporate Governance Code – statement of compliance

Our Corporate Governance Report reflects the requirements of the 2024 Financial Reporting Council’s (FRC) UK Corporate Governance Code

(the ‘Code’). Throughout 2025, the Board confirms that the Group has complied with the provisions and applied the principles of the Code in

force as at 31 December 2025. To view how we comply with the Code, please see below:


Section	Code principles	How we complied with the Code (page)
Board leadership and Company purpose	A) An effective and entrepreneurial balanced Board with a role to promote the long-term sustainable success of the Group and generate value for shareholders and contributing to wider society	111–123
	B) Purpose, values, and strategy aligned to culture	113
	C) Board decision outcomes in the context of the Company’s strategy and objectives	114–115
	D) Stakeholder engagement	119–123
	E) Workforce policies and practices	93–94
Division of responsibilities	F) Leadership of Board and Board operations	113
	G) Board composition, Board roles, division of responsibilities and independence	111–112, 117
	H) Directors’ responsibilities and time commitment	116
	I) Board support, information and advice	116
Composition, succession and evaluation	J) Board appointments and succession plans for Board and senior management and diversity	124–128
	K) Board skills, experience, knowledge and tenure	105–106, 112
	L) Annual Board performance review	118
Audit, risk and internal control	M) Effectiveness and independence of external auditor and internal audit	135–137
	N) Fair, balanced and understandable assessment of the Group’s position and prospects	135
	O) Effectiveness of Risk Management and Internal Control Framework	134
Remuneration	P) Remuneration policy and alignment to Group’s purpose, strategy, values and promote long- term sustainable success	141–168
	Q) Procedure for developing policy on Executive and senior management remuneration	146–168
	R) Authorisation of 2025 remuneration performance outcomes	144

A copy of the Code can be found on the FRC’s website.



OSB GROUP PLC Annual Report and Accounts 2025		111

Corporate Governance Report continued

Our governance

fosters accountability

and responsibility

The Group’s governance arrangements

facilitate clear information flows and

independent insights from INEDs. Governance

oversight occurs at Board and Board

Committee meetings, strategy days and one-

to-one meetings with senior management

including the CEO and CFO.

The Board is supported in its work by its

Committees, all of which play an essential

role in overseeing certain business on the

Board’s behalf, allowing the Board to focus

on the strategic priorities and business

performance.

Board Membership,

Composition and Diversity

As at 31 December 2025, the Board

comprised the Chair of the Board

(independent on appointment), six INEDs

and two Executive Directors. All of the INEDs,

including the Chair of the Board, are

independent in character and judgement,

and free from relationships or circumstances

which may affect, or could appear to affect,

the relevant individual’s judgement.The

independence of the INEDs is continuously

monitored by the Board, including a formal

annual review.

The Board is diversely constituted with a

broad range of skills and experience that

promote constructive debate and informed

decision-making. The Board meets the FCA’s

diversity requirements and further numerical

data can be found on page 128.

OSB GROUP PLC Board

Chair of the Board

Executive Directors

Independent Non-Executive Directors (INED)

David Weymouth

Chair of the Board

Andy Golding

Chief Executive

Officer (CEO)

Victoria Hyde

Chief Financial

Officer (CFO)

Gareth Hoskin

Senior Independent

Director (SID)

Kal Atwal

Henry Daubeney

Noël Harwerth

Sally Jones-Evans

Simon Walker


Board Committees

Group Nomination and Governance Committee	Group Audit Committee	Group Risk Committee	Group Remuneration and People Committee

Read more on page 124	Read more on page 131	Read more on page 138	Read more on page 141

9 Directors	66.7% Independent (excluding Chair of the Board)	44% Female Directors	1 Director from ethnically diverse backgrounds
Board changes in 2025
1 April 2025 Sally Jones-Evans and Gareth Hoskin appointed as INEDs.	8 May 2025 Rajan Kapoor and Sarah Hedger step down as INED.	9 May 2025 Sally Jones-Evans appointed Chair of Remuneration and People Committee. Henry Daubeney appointed Chair of Audit Committee.	1 October 2025 Gareth Hoskin appointed as SID.



OSB GROUP PLC Annual Report and Accounts 2025		112

Corporate Governance Report continued

Board and Committee meeting

composition and attendance¹

The table below shows each Director’s Board

and Committee meeting attendance during

the year, in accordance to their membership.

Directors who are unable to attend meetings

receive the papers in advance and are given

an opportunity to provide any comments to

the relevant Committee Chair in advance.

The key Board focus areas and outcomes can

be found on pages 114 - 115.

In addition to formal meetings, the Board held

two strategy days, several ad hoc meetings,

workshops and training sessions. Directors

also contributed to discussions outside of the

meeting calendar.

During 2025, the Board and Group Executive

Committee conducted the majority of their

meetings across Kent and London sites.

Gareth Hoskin and Sally Jones‑Evans joined

the Board on 1 April 2025, and the

subsequent changes to Committee

membership (following the departures of

Sarah Hedger and Rajan Kapoor in May

2025) are reflected in the attendance table

below.

From 1 October 2025, Gareth Hoskin became

SID, succeeding Noël Harwerth as she nears

the end of her nine‑year tenure.

Board Tenure

All Directors stand for annual re-election in

line with Provision 18 of the UK Corporate

Governance Code 2024 and the Company’s

Articles of Association (the ‘Articles’). Re-

appointment is recommended only where the

Director remains effective, committed and

independent, following a formal evaluation.

The length of service for each Board member,

in years, as at 31 December 2025, is set out in

the tenure chart on this page. At the end of

2025, the average term of Directors was

4.68 years.


As at 31 December 2025	Board	Group Audit Committee	Group Remuneration and People Committee	Group Nomination and Governance Committee	Group Risk Committee
Current Directors
David Weymouth (Chair of the Board)	10/10	n/a	6/6	8/8	n/a
Kal Atwal³	10/10	n/a	6/6	n/a	1/2
Henry Daubeney	10/10	7/7	n/a	n/a	9/9
Andy Golding	10/10	n/a	n/a	n/a	n/a
Noël Harwerth ³	9/10	6/7	6/6	8/8	9/9
Victoria Hyde ³	9/10	n/a	n/a	n/a	n/a
Gareth Hoskin ^2,3	8/8	4/4	4/4	6/6	5/7
Sally Jones-Evans ²	8/8	n/a	4/4	6/6	3/3
Simon Walker	10/10	7/7	n/a	n/a	9/9

Former Directors
Rajan Kapoor²	4/4	3/3	2/2	n/a	3/3
Sarah Hedger ²	4/4	3/3	2/2	2/2	n/a

Executive and Independent

Non-Executive Directors as at

31 December 2025

Independent Non-Executive

Director tenure as at

31 December 2025

Executive Directors

Independent Non-Executive

Directors

0–3 Years

4–6 Years

7–9 Years

1. The Group Chief Risk Officer and other Group Executives are invited to attend as appropriate.

2. Gareth Hoskin and Sally Jones-Evans were appointed on 1 April 2025. Rajan Kapoor and Sarah Hedger resigned as Directors of the Group on 8 May 2025.

3. Due to prior commitments, Kal Atwal was unable to attend one Group Remuneration and People Committee meeting and one Group Risk Committee meeting; Noël Harwerth was unable to attend one Board meeting and one Group Audit Committee

meeting; Victoria Hyde was unable to attend one Board meeting due to a scheduling conflict with a US Roadshow; and Gareth Hoskin missed two Group Risk Committee meetings during the year. Comments/questions were provided by all Directors in

advance to the Chair of the Board or Committee Chair.



OSB GROUP PLC Annual Report and Accounts 2025		113

Corporate Governance Report continued

The Role of the Board

The Board is responsible for promoting the

long-term sustainable success of the Group

as a whole, generating value for shareholders

and contributing to wider society. It sets the

Group strategy, including raising and

allocation of capital.

Fundamental to the Board’s role is

maintaining high standards of corporate

governance, in particular those set out in the

Code as well as other guidance provided by

the Prudential Regulation Authority (PRA),

Financial Conduct Authority (FCA) and other

industry regulators.

Matters reserved for the sole decision-making

power of the Board are set out in the Board

schedule of matters reserved. Those matters

include material decisions relating to:

• Strategic plan, management and culture

• Structure, capital and liquidity and special

situations

• Risk appetite and oversight of risk

management and internal controls

• Financial reporting and controls

• Remuneration and performance

management programmes

• Board member appointments

• Material contracts and agreements

• Stakeholder outcomes and engagement

• ESG Strategy and Operating Framework

Responsibility for the day-to-day running of

the Group has been delegated to the CEO

supported by the Group Executive Committee

to make operational decisions and execute

the Board’s agreed strategy. The Articles

permit the Board to delegate its authority to

any Director or Committee as required.

The Board determines the business strategy

and associated risk appetite performance

which is monitored against set criteria and

reported to shareholders, as appropriate. The

Board maintains a robust system of internal

systems and controls, which provide

assurance of effective and efficient

operations, internal financial controls and

compliance with all applicable laws and

regulations. It ensures senior management

maintains effective risk control and oversight

of processes across the Group to enable the

delivery of strategy and business

performance within the approved risk

appetite and risk control framework.

Fundamentally, the Board is the primary

decision-making body for the Company and

therefore addresses all matters of

significance in relation to strategic, risk,

financial, key person, regulatory or

reputational, implications.

Monitoring and embedding culture

As well as driving business strategy,

the Board has primary responsibility for

establishing the Company’s purpose and

values, ensuring alignment with the

Company’s culture. Every Board member

is expected to act with integrity, lead by

example and promote the Company’s

desired culture.

Details of the outcomes relating to our

Colleagues can be found in the Sustainability

Report on pages 84-87.

Data relating to the Board and Executive

Management diversity and inclusion

outcomes are included in the tables within the

Group Nomination and Governance

Committee Report on page 128.



	How the Board monitors culture

	The Board actively monitors the Company’s culture through formal and informal mechanisms including:
	• regular reports and presentations from the Chief People Officer on cultural indicators and colleague experience; • engagement surveys providing insight into colleague sentiment and cultural alignment; • OurVoice Forum where colleagues express their views and feedback directly to executive management, members of the Board and the People Champion; • Ask Andy platform enabling direct engagement and visibility of colleague concerns and behaviours; • monitoring progress against the ‘Fit for the Future’ colleague development priority through assessing the skills and capabilities framework, appropriate training initiatives and alignment of individual performance objectives with strategic priorities and values; and • assessing cultural reinforcement through performance management and reward mechanisms.



	How the Board ensures the desired culture is embedded

	The Board oversees the embedding of culture throughout the Group by:
	• setting clear expectations around conduct and seeking assurance that these are consistently applied; • overseeing workforce policies and practices to ensure they reinforce and support the desired culture; • reflecting the Group’s purpose and values in strategy development and decision making; • challenging management to demonstrate how the Group’s values are embedded through leadership development, training, recognition and performance management processes; and • reviewing succession planning, talent pipelines and capability development so that emerging leaders reflect the values and behaviours expected across the Group.



	Promoting a diverse and inclusive culture

	The Board promotes a culture of diversity and inclusion across the Group through:
	• recruitment and succession planning processes which are aligned with the Group’s diversity objectives; • reviewing insights from diversity training and awareness initiatives delivered to colleagues and leaders; and • monitoring workforce data and engagement survey results to identify opportunities for further enhancement.



OSB GROUP PLC Annual Report and Accounts 2025		114

Corporate Governance Report continued

Key Board focus areas and outcomes during 2025

The Board provides clear strategic leadership, ensuring that culture, risk appetite and long-term objectives are fully aligned. Through its robust corporate governance, the Board sets the Group’s

strategy for maintaining a sustainable and profitable business, underpinned by a robust risk management framework. The Board regularly receives and reviews reports on matters such as strategy,

market competition and performance across each business area. The Board also receives updates on investor relations, legal, governance and regulatory matters, together with updates on the work of its

Committees. A non-exhaustive list of other significant matters overseen by the Board during the year is set out below.


Key area of focus	Board role (approval/consideration)	Outcomes
Strategy	• Approved the 2025 Strategic and Financial Plan and four priorities being Return on Equity, Transformation, Data and People. • As part of the Board strategy days, considered reports on the external competitor environment, M&A activity, market trends, customer and Transformation strategy, Savings and Lending strategies, the evolution of the data strategy and use of it. • Agreed the governance principles for the Transformation programme, receiving regular updates on progress against key milestones (i.e. progress on the Savings platform introduced last year), resources, costs and mitigation of potential risks.	Clear strategic priorities established for 2025, aligning financial and operational objectives. Strengthened oversight of Transformation initiatives, ensuring delivery of platform enhancements and risk controls. Improved governance and resource planning to support sustainable growth and operational resilience.
Financial	• Approved the share repurchase programme of 14 March 2025 of £100m. • Approved payment of interim dividends and recommended a final dividend to shareholders. • Approved an Offering Memorandum in respect of £150m of Additional Tier One (AT1) securities with an annual coupon rate of 7.750%. • Reviewed the updated retention assumptions, revised CCFS Conditional Prepayment Rate (CPR) curves, the impact of Minimum Requirement for Own Funds and Eligible Liabilities (MREL) issuance, as well as the deferred implementation date of Basel 3.1. • Received regular updates from the CFO, including key financial highlights. • Approved the Annual Report and Accounts and Interim Results.	Delivered value for shareholders through £100m share buyback and dividend distributions, improving returns and confidence. Strengthened capital base through AT1 issuance, enabling continued investment in products and services. Ensured compliance and robust capital planning through reviews of MREL, Basel 3.1, and liquidity/capital adequacy processes. Maintained transparency and trust through regular financial performance reporting.
Risk management and control and regulatory matters	• Approved Group risk appetite statements and framework. • Regular updates on progress toward compliance with Provision 29 of the UK Corporate Governance Code 2024, including internal control effectiveness, milestone achievements, action plans and enhancements to risk identification and monitoring. • Reviewed, challenged and approved the Internal Liquidity Adequacy Assessment Process (ILAAP), Internal Capital Adequacy Assessment Process (ICAAP) and AT1 payments. • Completed a reverse stress testing exercise. • Received regular updates on recovery and resolution. • Oversaw the Group’s principal risks and related controls including Credit Risk, Cyber Risk and Transformation Risk ensuring they remained within risk appetite.	Clear risk parameters aligned with strategy and regulatory standards. Regular updates on Provision 29 resulted in strengthened internal controls, improved risk management and a clear roadmap for compliance. Robust liquidity and capital adequacy confirmed through ILAAP and ICAAP. Strengthened preparedness via reverse stress testing and recovery planning, protecting stakeholders in severe stress scenarios.
Customers	• Approved the Consumer Duty and Attestation Report.	The Board’s oversight of Consumer Duty implementation ensured the Group maintained good outcomes for customers.



OSB GROUP PLC Annual Report and Accounts 2025		115

Corporate Governance Report continued


Key area of focus	Board role (approval/consideration)	Outcomes
People and Culture	• Considered Board and Executive succession planning. • Considered and approved the Remuneration Philosophy and Policy, being presented for shareholder approval. • Discussed and received several updates on culture. • Approved the Technology Target Operating Model. • Board members attended OurVoice meetings. Further details can be found in the Sustainability Report on page 84.	The Board ensured leadership continuity through a clear succession pipeline, approved a remuneration framework that ties pay to defined performance and risk measures, advanced cultural initiatives to foster a high-performance environment and strengthen managerial capability, and endorsed a technology roadmap that achieved cloud migration, automated key processes and reduced processing times, enhancing resilience and operational efficiency. The Board’s participation at OurVoice meetings provided first- hand insight into Colleagues’ views, concerns and priorities, supporting more informed Board discussions and enhancing the Board’s understanding of colleague expectations.
Governance	• Approved the appointments of Gareth Hoskin and Sally Jones-Evans as INEDs. • Approved the Group’s Corporate Governance Framework. • Reviewed Persons Discharging Managerial Responsibilities (PDMR) designation under UK Market Abuse Regime (MAR) and approved a change to the classification of PDMRs within the Group. • Received regular updates of Board Committee activity from respective Committee Chairs. • Approved the Group Disclosure and Inside Information Policy and Securities Dealing Procedure.	Strengthened independence and expertise through new INED appointments. The refreshed Corporate Governance Framework supports accountability and decision-making for the Group and its subsidiaries and enhances Board assurance. Maintained UK MAR compliance through updated PDMR classifications and approved disclosure and dealing policies.

In considering the above the Board aims to consider the views of all impacted stakeholders whilst acting in the best interests of the Company and members as a whole, as set out in the section 172 statement.



OSB GROUP PLC Annual Report and Accounts 2025		116

Corporate Governance Report continued

Stakeholder engagement

The Board prioritises regular, open dialogue

with stakeholders. During the year the Board

members attended two OurVoice sessions

with colleagues, focusing on transformation,

change, reward, learning and development.

The Board and its Committees received

updates on ESG and sustainability and

maintained transparent engagement with the

regulators, especially the FCA and PRA. The

Group Nomination and Governance

Committee also oversaw diversity, equity and

inclusion (DE&I) in succession planning and

talent development at all levels. Further

details are included in the Sustainability

Report on page 84.

Director Time Commitments

and External Appointments

In line with the Code, the Board ensures that

all Directors have sufficient time to discharge

their responsibilities effectively and that

external appointments do not compromise

their ability to serve the Company. The Group

Nomination and Governance Committee

reviews Directors’ time commitments and

external roles annually and whenever

changes occur. As part of this review, the

Committee considers:

• the number of directorships held by each

Director within the Capital Requirements

Directive (CRD) IV limits, which restrict

Directors to one executive directorship with

two non-executive directorships, or four

non-executive directorships; and

• the contractual time commitment required

for each external appointment.

The Committee also assesses compliance with

relevant investor guidelines on overboarding

and regulatory expectations. Following its

review, the Committee confirmed that all

Directors’ external commitments, included

within their biographies on pages 105-106,

were appropriate, within CRD IV limits, and

did not impair their ability to serve the

Company effectively. The Board is satisfied

that all Directors devote adequate time to the

Company’s business and that their external

appointments remain consistent with

regulatory requirements and governance best

practice.

Board resources

Induction, training and development

Overall responsibility for ensuring all Directors

receive suitable training so they can

effectively discharge their duties sits with the

Chair of the Board, who is supported by the

Company Secretary. On joining the Board all

new Directors receive a tailored induction

programme which aims to provide them with

the relevant information required to allow

them to actively contribute to the successful

running of the Group.

As senior managers, by virtue of the Senior

Managers Certification Regime, all Directors

are required to maintain skills, knowledge and

a certain level of expertise to meet the

demands of their positions of ‘significant

influence’ within the Group.

Directors are required to complete a self-

certification that they have undertaken

sufficient training during the year to maintain

their skills, knowledge and expertise and to

make a declaration as to their fitness and

propriety as part of the annual assessment

process. The Company Secretary supports

the Directors in identifying relevant internal

and external courses to ensure all Directors

are up to date with key regulatory changes,

their responsibilities as senior managers and

other matters impacting the business.

Throughout the year, the Chair of the Board

holds regular conversations with each INED to

gain an understanding of their perspective on

the business and to review their individual

performance and development needs. The

SID is responsible for the evaluation of the

performance and development needs of the

Chair of the Board.

Further details are available in the Group

Nomination and Governance Committee

Chair’s Report.

Conflicts of Interest

The Company’s Articles set out the policy for

dealing with Directors’ conflicts of interest

and these are in line with the Companies Act.

The Articles permit the Board to authorise

conflicts and potential conflicts, as long as

the potentially conflicted Director is not

counted in the quorum and does not vote on

the resolution to authorise the conflict. These

are recorded in the Register of Directors’

Interests by the Company Secretary which is

approved on an annual basis by the Board.

All Directors are required to notify the Board

of any changes to their interests throughout

the year.

Directors complete an annual confirmation as

part of the fitness and propriety assessment,

in which they are requested to declare any

external interests and potential conflicts.

They are also required to declare their

interests in the business to be discussed at

each Board and Board Committee meeting.

The interests of new Directors are considered

during the recruitment process and

authorised, if appropriate, by the Board at

the time of their appointment. The Group

Nomination and Governance Committee

reviews conflicts of interest relating to

Directors at least annually; periodic reviews

are also undertaken as required. The Group

operates a Conflicts of Interest Policy, which

includes a procedure for identifying potential

conflicts of interest within the Group.

Executive Directors are not normally expected

to hold significant external directorships.

During the year, Andy Golding was

appointed to the board of Pepper Advantage

Limited and Mudeford Ferry Limited. These

appointments were reviewed and approved

by the Chair of the Board, with consideration

given to potential conflicts of interest and

time commitments.

Any future proposals for Executive Directors

to hold external directorships will be subject

to prior discussion with the Chair of the Board

and disclosed to the Company Secretary for

governance review.

No Director had a material interest in any

contract of significance in relation to the

Group’s business at any time during the year

or at the date of this report.



OSB GROUP PLC Annual Report and Accounts 2025		117

Corporate Governance Report continued

Division of responsibilities

There is a clear division of responsibilities, which has been agreed by the Board and set out in writing, between the leadership of the Board, the executive responsible being the CEO, and the

oversight role of the INEDs. These responsibilities, together with those of the SID, the Company Secretary and the Board Champions are set out in the table below. The Board considers that the division

of responsibilities is clear and effective, ensuring strong checks and balances and compliance with section 2 of the Code.



Chair of the Board (David Weymouth)
• Leads the Board and ensures its effectiveness; • promotes a culture of openness and debate; • ensures the Board receive accurate, timely and clear information; • ensures appropriate balance of skills, experience and development; • creates conditions for overall Board and individual Director effectiveness, inside and outside the boardroom; and • oversees composition, succession planning and performance evaluation.
Chief Executive Officer (Andy Golding)
• Responsible for the day-to-day management of the Group; • implementing strategy as agreed with the Board; • leads the Group Executive Committee; • accountable for operational and financial performance; • channels expertise, energy and enthusiasm; • builds individual capabilities within the team; • develops and encourages talent within the business; • identifies commercial and business opportunities for the Group, building strengths in key areas; and • liaises with regulatory authorities where appropriate. An experienced Group Executive Committee, comprising specialists in finance, banking, risk, operations, internal audit, legal and IT matters, support Andy in carrying out his executive responsibilities. The biographies for the Group Executive Committee are set out on pages 107 - 108.
Chief Financial Officer (Victoria Hyde)
• Leads the Group’s financial strategy, capital planning and financial performance management; • provides strategic financial insight to the Board and Executive Committee; • leads the Finance function; and • oversees the management of the Group’s financial operations.
Senior Independent Director (SID) (Gareth Hoskin)
• Provides support to the Chair of the Board as a sounding board; • acts as an intermediary for other Directors and shareholders if needed; and • leads the annual appraisal on the performance of the Chair of the Board.



Independent Non-Executive Directors (INEDs)
• Provide independent challenge and strategic guidance; • scrutinise management performance and hold them to account if necessary; • contribute to governance, risk oversight and succession planning; and • devote sufficient time to their roles (c.30-35 days; SID 36 days; Chair of the Board 60 days). The Board recognises all the NEDs as Independent and in accordance with Provision 10 of the UK Code, there are no circumstances in which their independence is impaired. The Chair of the Board has confirmed with each INED that they have sufficient time to devote to their duties.
General Counsel and Company Secretary (Jason Elphick)
• Acts as principal governance advisor to the Board; • ensures the Board has the policies, processes, information, time and resources it needs in order to function effectively and efficiently; • ensures compliance with statutory and regulatory requirements; • supports indication and development of Directors; • ensures all Directors have access to the advice of the Company Secretary; and • develops an annual Board Engagement Programme to facilitate regular touch points between the Board and the wider business.
ESG Champion (Kal Atwal)
• Ensures stakeholder voices are heard in decision-making; and • promotes focus on long-term sustainability and risk.
People Champion (Sally Evans-Jones)
• Appointed to the role from 9 May 2025; • provides a designated NED route for workforce engagement alongside OurVoice advisory panel (the Board’s chosen approach to comply with Provision 5 of the UK Code on workforce engagement); and • represents colleague perspectives at Board level.
Whistleblowing Champion (Henry Daubeney)
• Appointed to the role from 9 May 2025; and • oversees the integrity, independence and effectiveness of the Group’s whistleblowing procedures and arrangements.



OSB GROUP PLC Annual Report and Accounts 2025		118

Corporate Governance Report continued

Board and Committee

Performance Review

To ensure that the Board and its Committees

remain effective, an annual performance

review is undertaken, which includes an

assessment of the performance of individual

Directors. In accordance with the UK

Corporate Governance Code, this review is

externally facilitated at least once every three

years, providing an independent assessment

of the Board’s effectiveness.

The Chair of the Board leads the Board in

considering and responding to the outcomes

of the annual performance review, with the

support of the Group Nomination and

Governance Committee. Following which, the

Board approves an action plan to address

any areas identified for improvement, and the

Group Nomination and Governance

Committee oversees progress against those

actions. An update on the findings from the

2024 performance review is set out below.

Progress against the

2024 effectiveness review findings

The Board and its Committees reviewed the

progress made, and further actions required,

against the areas of improvement identified in

the 2024 Board evaluation. Progress against

these actions is summarised below:

• The Board continued to strengthen its

strategic focus, with agendas now shaped

through regular Chair/CEO/Company

Secretary planning sessions, and strategy

days structured to support forward-

looking discussion and long-term

planning.

• Updates on external environment are now

a standing feature of Board agendas,

supported by external presenters such as

economists, brokers and analysts, helping

ensure the Board maintains strong

situational awareness during a period of

ongoing market change.

• The Group Nomination and Governance

Committee received enhanced updates on

executive succession planning, and the

Board’s skills mix has been further

strengthened through the appointment of

two new INEDs, ensuring continued

alignment with the Group’s long-term

strategy.

• To improve the quality of Board debate,

agenda design and papers have been

refined, including the introduction of the

Forward Look Plan into all Board packs.

Work is also underway to explore the use

of AI to streamline and improve the clarity

of Board materials.

• Additional professional time outside formal

meetings has been embedded into the

annual calendar, including Board and

ExCo lunches, Board dinners, and NED-

only sessions, with a broader programme

planned for 2026.

• Site visits have been expanded, including

an INED visit to the Wolverhampton office

and selected Board meetings held at

locations outside London, helping

strengthen the Board’s understanding of

operational activity across the Group.

The scope of the 2025 Board evaluation was

determined by the Committee following its

review of the 2024 findings. The 2025

performance review provided the Board with

the opportunity to assess the effectiveness of

the Board as a whole, as well as the

performance of each of its Committees. The

review comprised of questionnaires issued to

all Board members, the Company Secretary,

and other relevant senior stakeholders

associated with each of the Board’s principal

Committees. The questionnaires covered

general areas of effectiveness, including the

Board’s decision-making process and

oversight of stakeholders.

The results of the 2025 performance review

will be presented to the Board for discussion

at its meeting in April 2026 and will inform the

action plan to be implemented during 2026.

Further detail on the process, outcomes and

actions identified will be included in the

Annual Report and Accounts 2026.

In addition, the Chair of the Board conducted

individual Director assessments, during which

each Director was invited to reflect on their

performance, relationships with fellow Board

members, and any areas for development.

These reflections were discussed privately,

and as Chair of the Board, The Chair of the

Board was satisfied with the performance of

all Directors. Gareth Hoskin, as SID, also led

an assessment of the performance of the

Chair of the Board, seeking feedback from

each Director, which was subsequently

discussed at a meeting held without the Chair

of the Board present.

Stakeholder Engagement

In accordance with the Companies Act 2006

(the Act), this statement sets out how the

Directors have had regard to the matters set

out in section 172(1) of the Act when

performing their duty to promote the success

of the Company for the benefit of its

shareholders as a whole and to have

regard to:

a) the likely consequences of any decision

in the long-term;

b) the interests of the Company’s employees;

c) the need to foster the Company’s business

relationships with suppliers, customers and

others;

d) the impact of the Company’s operations

on the community and the environment;

e) the desirability of the Company

maintaining a reputation for high

standards of business conduct; and

f) the need to act fairly as between members

of the Company.

The Board is committed to maintaining

effective engagement and active dialogue

with its stakeholders. In this section, we

summarise how we have engaged with our

key stakeholders during the year and how

the Directors have had regard to the

matters set out above.

Full details can be found on pages 119 – 123.

We leverage the work of our Board

Champions to ensure that employees,

customers and ESG are prioritised as part of

boardroom debate. We continue to focus on

transparency with our regulators in relation

to our strategy and risk management. The

Board continues to maintain an open and

transparent dialogue with stakeholders. With

the support of the Investor Relations team,

Group Executives and certain Board members

undertake roadshows for investors and

analysts, so they have a clear understanding

of our business proposition and prospects.



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Corporate Governance Report continued



	Which stakeholders were considered? The Board has identified the below as our key stakeholders, essential for ensuring the continued success of the Group.

	Colleagues Our success is driven by the talented individuals we employ


	Customers We are committed to delivering the best service to customers, delivering good customer outcomes and building strong and long-term relationships


	Intermediaries We use brokers’ insights to better serve our customers, engage with investors and rating agencies


	Investors and rating agencies We engage in straightforward and open dialogue


	Regulators and policy-makers We continue to foster open and transparent dialogue with regulators and participate in driving policy change


	Suppliers Support us in providing high standards of service to our customers


	Communities and Society The needs of communities and society are incorporated into strategic considerations



	How the Board Champions engaged with Stakeholders during the year To amplify stakeholder voices the Board has appointed three Board Champions, as listed below. These Champions embed stakeholder perspectives into decision-making, reinforcing the Board’s commitment to sustainable success.		Whistleblowing Champion – Henry Daubeney • reviewed whistleblowing activity, themes and outcomes; • oversaw the annual review of the Group’s Whistleblowing Policy and associated procedures; • monitored whistleblowing trends and volumes for assurance over the effectiveness of the Group’s speak- up culture; and • oversight of whistleblowing complaints when raised and throughout ongoing investigations. People Champion – Sally Jones-Evans • met with the Chief People Officer and HR leadership team to discuss culture, colleague engagement and sentiment; and • attended all OurVoice meetings where colleagues discussed amongst other topics: Transformation, morale, reward, performance and training.

	ESG Board Champion – Kal Atwal • met quarterly with the Group Head of Sustainability to discuss progress against ESG priorities, ongoing challenges and emerging risks; • reviewed the ESG Operating Framework to ensure continued effectiveness and alignment with regulatory and stakeholder expectations; • attended an ESG Forum meeting to contribute to discussions on material ESG matters and support Board oversight; and • reviewed ESG-related meeting materials and disclosures.



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Corporate Governance Report continued

Section 172 statement:

Helping our stakeholders prosper: considering our stakeholders in key business decisions is fundamental to our ability to deliver the Group’s strategy in

line with our long-term values and operating the business in a sustainable way. Balancing the needs and expectations of our key stakeholders is

essential to achieving our purpose of helping our customers, colleagues and communities prosper.


Stakeholder	Board engagement and outcomes	section 172(1) Companies Act
Customers	Board engagement: • Maintained oversight of customer outcomes primarily through structured management information, customer insight and independent assurance, enabling Directors to understand customer experience across the lifecycle. This included regular reporting on customer satisfaction, complaints trends, retention rates and service performance. • Participated in targeted deep dives and workshops focused on customer profiles, service standards and the Group’s approach to supporting vulnerable customers. These sessions enabled the Board to assess whether the Group continued to deliver good customer outcomes, customer risks were being appropriately identified and mitigated and whether customer considerations were fully embedded within strategic decision-making. • Approved the decision-making framework for the launch of the new Buy-To-Let (BTL) lending platform. Directors attended dedicated Transformation workshops and tested the enhanced borrower journey. This direct exposure enabled the Board to challenge management on design choices, operational readiness and the anticipated impact on intermediaries and customers. • Undertook the annual review and approval of the Consumer Duty Attestation and considered whether the Group continued to deliver good customer outcomes consistent with regulatory expectations and strategy. This assessment was informed by case studies evidencing good customer outcomes, updates from the Customer and Product Committee, customer dashboards and scrutiny of pricing mechanisms from the customers’ perspective. Outcomes following the Board’s engagement with Customers: • The new BTL lending platform enables more consistent, data-driven decision making, supporting improved risk management and more efficient service delivery for borrowers and brokers. Board oversight of the platform’s design and implementation helped ensure that customer needs were integral to the solution. • Governance arrangements for identifying, escalating and addressing potential customer harm were further strengthened, reflecting Board challenge and oversight. • The quality, relevance and consistency of customer metrics presented to the Board and its Committees have been enhanced. This has provided deeper, more actionable insight into customer experience and satisfaction, enabling more informed challenge, earlier identification of emerging risks and better alignment between strategy and customer outcomes. • The Board continued to monitor customer related data migrations and the broader programme to mature the Group’s IT and data estate. This oversight supported progress towards more reliable data, reduced operational risk and improved customer service continuity. • Continued to simplify the scope of the Group’s brands, ensuring the underlying brands have distinct propositions tailored to customer needs reducing complexity and improving understanding.	section 172(1)c See also: • Chair of the Board’s statement • CEO’s statement • Segments review • Sustainability Report



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Corporate Governance Report continued


Stakeholder	Board engagement and outcomes	section 172(1) Companies Act
Environment and sustainability	Board engagement: • The Board approved the ESG Strategy and Operating Framework, establishing clear governance for monitoring material ESG matters aligned with the Group’s Purpose, Vision, Values and stakeholder expectations. • The Board has embedded an environmentally responsible culture and ensured the business is prepared to manage climate-related risks and opportunities, supporting long-term resilience and sustainable value creation. • Kal Atwal, our ESG Champion, facilitates deeper Board engagement on environment and sustainability by bringing emerging sustainability matters and stakeholder expectations to the Board’s attention. Outcomes following the Board’s engagement on the environment and sustainability: • During the year, the Board oversaw delivery of key ESG actions, including: progress toward the Group’s net-zero target, achieving a 57% reduction in operational emissions through energy efficiency measures and green procurement, integration of climate-related risk assessments into ICAAP and ILAAP processes, aligned with Task Force on Climate-related Financial Disclosures (TCFD) recommendations, and publication of ESG metrics and climate risk reporting in line with evolving regulatory requirements and stakeholder expectations.	section 172(1)d See also: • Chair of the Board’s statement • Sustainability Report • Social matters • TCFD matters • Chair of the Board’s Report on Corporate Governance
Colleagues	Board engagement: • The views of colleagues are considered as part of strategic decisions. Board members continue to attend the Workforce Advisory Forum (OurVoice), which is one of the methods used to engage with the employees. Sally Jones-Evans, our People Champion, is responsible for representing the workforce at Board and Committee level, and as a member of OurVoice, she engages directly with colleague representatives to gain insights into culture, concerns and initiatives. • Members of the Board attended OurVoice sessions covering topics such as colleague morale, Transformation and upskilling. Employees are also able to engage directly with the CEO through the ‘Ask Andy’ online portal. • The Group Nomination and Governance Committee oversees the Group’s talent management initiatives and senior management succession planning. • The Board and Group Audit Committee receive anonymised data on concerns raised through the Group’s whistleblowing processes. Henry Daubeney, our Whistleblowing Champion, provides the Board with independent assurance over the whistleblowing processes. Outcomes following the Board’s engagement with People and Culture: • Insights from OurVoice and Ask Andy provided the Board with additional points of reflection when determining metrics around strategic performance and Executive Director remuneration, culture and governance. • During 2025, the Board and its Committees received regular updates on matters impacting employees from senior management and the Group’s HR function that help to determine overall remuneration policy, terms and conditions. • The Board also approved the Group DE&I Policy, with a continued focus on improving diversity and inclusion in financial services. • Recognising the importance of the employee voice in shaping a positive and inclusive workplace, the 2025 Employee Engagement Plan was launched to strengthen two-way communication, support wellbeing and to ensure colleagues are informed and involved in shaping the future of the business.	section 172(1)b See also: • Chair of the Board’s statement • Our culture • ESG overview • Chair of the Board’s Report on Corporate Governance



OSB GROUP PLC Annual Report and Accounts 2025		122

Corporate Governance Report continued


Stakeholder	Board engagement and outcomes	section 172(1) Companies Act
Investors and Rating agencies	Board engagement: • The Board ensures that all shareholders have equal access to information through regulatory announcements, general meetings and publications on our website. • The Board receives regular updates from the Investor Relations function, which includes investor feedback, analysts’ recommendations and market views. The Board also receives investor feedback from the Group’s brokers and financial advisers. • Engaged with shareholders in relation to the Remuneration Policy to be approved by shareholders at the 2026 AGM. • The Board had due regard for shareholders and customers, when considering the £1.25bn deconsolidated securitisation transaction. Outcomes following the Board’s engagement with shareholders: • Approved a £100m share repurchase programme supporting sustainable value creation for shareholders. • Recommended the payment of a final dividend to shareholders and approved an interim dividend.	section 172(1)a, f See also: • Chair of the Board’s statement • Relationship with stakeholders • CEO’s statement • Risk review • Financial review • Chair of the Board’s Report on Corporate Governance
Suppliers	Board engagement: • The Board does not interact directly with the Group’s suppliers; however, during the year the Board maintained oversight of key supplier relationships, including engagement between the Group Audit Committee and the external auditor. The Board also considered the risks associated with suppliers and the framework for assurance and oversight of key supplier relationships and customer impacts. Board outcomes following engagement with suppliers: • Continued engagement with suppliers to understand their aspirations and approach towards ESG and to ensure they are aligned with the Group’s ESG strategy. • Engagement with key suppliers as part of the Group’s Recovery Plan.	section 172(1)c See also: • Chair of the Board’s statement • ESG overview • Risk review • Chair of the Board’s Report on Corporate Governance
Intermediaries	Board engagement: • Although the Board’s engagement with intermediaries is indirect, Directors receive updates on intermediary-related matters at Board meetings. Broker and borrower satisfaction scores are monitored, along with service level performance and complaints. • The Board received broker feedback at two strategy days held during the year. • The Board considered how new product launches affected intermediaries and was kept informed of proposals and actions designed to improve broker experience and strengthen engagement with the Group and its customers. Board outcomes following engagement with Intermediaries: • Broker engagement extended beyond our propositions and enabled us to continuously enhance the service we provide. Our business development managers work closely with intermediaries to discuss cases and help to obtain swift and reliable decisions.	section 172(1)c See also: • Chair of the Board’s statement • CEO’s statement • Segment review • Chair of the Board’s Report on Corporate Governance



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Corporate Governance Report continued


Stakeholder	Board engagement and outcomes	section 172(1) Companies Act
Regulators and Policy makers	Board engagement: • The Board and Executives maintain an open and transparent dialogue with the PRA and FCA. Engagement typically takes the form of regular and ad hoc meetings attended by both members of the Board and executive management, as well as subject matter experts. • Board members and executive management work with the PRA and FCA to agree the regulatory agenda and the PRA are invited to present their periodic summary on an annual basis. • In line with our regular obligations and commitment to maintaining a resilient business model, the Board undertook regular stress testing exercises during the year. • Board members and executive management actively engaged with regulators throughout the year on the implementation of the Domestic Liquidity Sub-Group (DoLSub) framework, resulting in regulatory approval for the Group’s DoLSub structure and enhanced governance and liquidity management arrangements. • The Board and its Committees receive regular updates on broader regulatory developments and compliance considerations. Board outcomes following engagement with regulators: • The Board received updates on macroeconomic, legal and regulatory developments and their impact on the Group’s capital and liquidity position. • Stress testing provided valuable insights into the capital and liquidity adequacy and helped inform strategic decisions, risk appetite and forward planning.	section 172(1)e See also: • Chair of the Board’s statement • CEO’s statement • Governance matters • Chair of the Board’s Report on Corporate Governance



OSB GROUP PLC Annual Report and Accounts 2025		124

Group Nomination and Governance Committee Report



	Dear Shareholder,
	On behalf of the Committee, I am pleased to present the Group Nomination and Governance Committee Report for the year to 31 December 2025.

In addition to the members of the Committee,

the CEO has a standing invitation to all

Committee meetings, along with the General

Counsel and Company Secretary and the

Chief People Officer, unless the Committee

Chair informs any of them that they should

not attend a particular meeting or

discussion.

Committee responsibilities

Under its Terms of Reference, the Committee

is responsible for leading the process of

appointing new Board members. It also

provides oversight and guidance to the

Board on all Corporate Governance matters

relating to the Company and its subsidiaries,

except those handled by other Board

Committees. The full Terms of Reference can

be found on the Group’s website at

www.osb.co.uk.

Approximate allocation

of Committee time in 2025

Effectiveness of the Committee

The Committee’s performance was assessed

as part of the annual review of Board

Effectiveness. As noted in the Board and

Committee effectiveness section of the

Chair’s report on Corporate Governance,

the Committee was rated well and it was

concluded that it continued to perform

effectively.

As part of its commitment to keep its

effectiveness under review, in April 2025 the

Committee considered and revised its Terms

of Reference which were subsequently

approved by the Board.

Members of the Committee

(as at 31 December 2025¹)

• David Weymouth

(Committee Chair)

• Noël Harwerth

• Gareth Hoskin

• Sally Jones-Evans

Time allocation

In 2025, the Committee held eight scheduled

meetings. For further details of attendance

during the year, see the Board and

Committee meeting attendance table on

page 112 of the Chair’s report on Corporate

Governance.

In addition, the Committee held one ad-hoc

meeting which focused on succession

planning related to the CEO.

Throughout the year, the Committee ensured

that sufficient meeting time was given to

enable consistent review and monitoring of

all topics.

Skills and Diversity

Board composition and succession planning

Senior Management and Succession Planning

Board Effectiveness

Corporate Governance (incl. conflicts of interest)

1. Sarah Hedger retired from the Board and Committee

on 8 May 2025 and Gareth Hoskin and Sally Jones-

Evans joined the Committee on 1 April 2025.



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Group Nomination and Governance Committee Report continued

Key activities in the year

In 2025, the Committee focused on the

following areas:

Board composition and

succession planning

The Committee is responsible for ensuring

that succession planning for Board members

and senior executives is sufficiently robust

and diverse to support the Group’s strategic

objectives and serve the best interests of

stakeholders.

Supported by the Chief People Officer

(CPO), the Committee has maintained a

strong focus on succession planning for

senior leadership roles. This includes the

review of emergency succession plans for

Executive Committee members, underpinned

by tailored development programmes for

high-performing individuals. Promoting

diversity in its broadest sense across senior

roles remains a key priority.

As part of this process, succession plans are

maintained for the Board, CEO, CFO, and

other senior management positions. These

plans consider both internal and external

candidates and are informed by a

comprehensive skills, experience and

diversity matrix. This matrix maps each

Director’s attributes against those most

relevant to the Board, taking into account the

Group’s strategic direction and target

operating model. In addition to tracking the

Board’s collective strengths, the matrix is

used to identify gaps in capability and

inform future appointments.

While all appointments are made on merit

and against objective criteria, the Committee

is committed to promoting diversity to

complement and strengthen the overall skills,

knowledge, and experience of the Board and

its Committees. All appointments are made in

accordance with applicable legal and

regulatory requirements.

In 2025, a significant proportion of the

Committee’s time was devoted to search and

selection processes and the implementation

of our succession plans due to:

• Sarah Hedger, Chair of the Group

Remuneration and People Committee,

retiring as noted in last year’s Annual

Report and Accounts, and her succession

by Sally Jones-Evans;

• the forthcoming retirement of Noël

Harwerth (SID), whose total tenure will

have reached nine years later in 2026,

inclusive of her appointment to CCFSL

before it formed part of the Group. Noël

was succeeded as SID by Gareth Hoskin;

and

• the announcement of the intention of

Andy Golding, CEO, to step down by no

later than 31 December 2026.

Appointment process –

Non-Executive Directors

Sapphire Partners and Per Ardua, external

search consultants, with whom the Company

and individual Directors have no other

relationship, were engaged to assist with the

search and selection process to identify two

new INEDs with the relevant skills and

experience who could serve as the Group

Remuneration and People Committee Chair

and SID.

For each appointment, the Committee

agreed the personal attributes including

cultural fit, and ability to lead and manage

change which were desirable for the role,

together with the skills and experience

needed. A long list of potential candidates

was created in line with our Group Diversity

and Inclusion Policy and considered by the

Committee as a whole before a shortlist was

drawn up with candidates invited to interview

with me and other Board members. During

both processes, the Board was regularly

informed of the progress. Following detailed

feedback from these interviews, the

Committees then selected which individuals

should progress to interviews with other

Board members.

Following this process, the Committee

recommended the appointment of (i) Gareth

Hoskin as an INED and SID to replace Noël

Harwerth and (ii) Sally Jones-Evans as an

INED, to succeed Sarah Hedger as the Group

Remuneration and People Committee Chair.

Gareth Hoskin and Sally Jones-Evans joined

the Board on 1 April 2025.

Gareth Hoskin has extensive financial

experience and Sally Jones-Evans has

significant financial experience gained from

her executive career, as well as a proven

track record as an experienced Board and

Committee Chair.

Executive Committee changes

In addition to Board level appointments, the

Committee oversaw and approved changes

to Executive Committee membership in 2025

including the appointment of Matthew Baillie

as Group Chief Operating Officer, following

the retirement of Clive Kornitzer. Matthew

previously served as Group Chief

Transformation Officer, and his promotion

reflects the strength and effectiveness of the

Group’s succession planning processes,

which are actively overseen by the

Committee. The Committee views this

internal appointment as a testament to the

Group’s commitment to developing

leadership talent through robust succession

planning and stretching personal

development programmes, ensuring

continuity and alignment with the

Company’s strategic priorities.

On behalf of the Board, I would like to extend

a warm welcome to all those who joined us

during the year. We are pleased to benefit

from the fresh perspectives and expertise

they bring. I would also like to thank those

who have stepped down for their valuable

contributions.

In 2026, the Committee will oversee the

search for my successor. This process is

being led by Gareth Hoskin as the SID.



OSB GROUP PLC Annual Report and Accounts 2025		126

Group Nomination and Governance Committee Report continued

Board skills matrix

To ensure an appropriate balance of skills is maintained, the knowledge and experience of

Board members are regularly reviewed. A well-balanced Board is essential to fostering

constructive and open debate in the Boardroom and supporting effective decision-making.

Throughout the year, the matrix has been a key tool in informing succession planning activity,

helping to monitor the Board’s collective strengths and identify areas for enhancement.

In addition to tracking individual and collective capabilities, the matrix also supports the

Committee’s focus on diversity and tenure — two areas of particular importance to the Board.

This structured approach ensures that succession planning is aligned with the Group’s

strategic direction and governance priorities.

Our current Board members each bring a broad range of individual skills, knowledge and

experience. A summary of the skills of our Directors is shown below:


Skills	Depth of experience
Consumer and retail markets	Good
Corporate governance	Strong
Corporate transactions and projects	Good
Corporate sustainability and community engagement	Low
Digital, data and technology	Good
Financial acumen	Good
Leadership	Strong
Other financial services	Strong
People and culture	Low
Regulatory and public policy	Good
Retail and commercial banking	Strong
Risk management	Strong
Strategy	Strong

Individual Director biographies, including details of their skills and experience, are set out on

pages 105 - 106.

The Committee remains mindful of governance requirements, including those relating to Board

tenure, but recognises the need to occasionally balance these with the practical realities of

leadership continuity. The Committee notes that I will reach nine years of service within the

next 12 months and has initiated the process to identify a successor. This process is being led

by Gareth Hoskin in his capacity as Senior Independent Director (SID), with oversight from the

Committee. While succession planning is underway, and noting CEO transition will occur in

2026, the Board has asked that I remain in role as Chairman for up to one additional year to

ensure orderly succession. This request was made with careful consideration of governance

best practice and the long-term interests of the Company and its stakeholders.



OSB GROUP PLC Annual Report and Accounts 2025		127

Group Nomination and Governance Committee Report continued

Director induction, training and

development

Following appointment to the Board, Gareth

Hoskin and Sally Jones-Evans both received

a tailored induction plan to ensure they

would be able to effectively perform their

roles on the Board and its Committees, whilst

also obtaining a deeper understanding of the

Group’s business model and structure, risk

profile and governance arrangements. The

induction process at OSB Group is typically

completed within six months of the new

Director being appointed and is facilitated

through a variety of means including

document reviews, tailored meetings, site

visits and training sessions with senior

managers of the Group.

The induction typically comprises:

• Meetings with all Directors, the Group

Executive Committee and other senior

management across the organisation.

• Meetings with other key stakeholders

including the external auditors,

remuneration consultants and external

advisors (as appropriate).

• Information on the corporate strategy,

and financial position.

• Details of Board and Board Committee

procedures and Directors’ responsibilities.

• Details of the investor relations

programme.

• An induction pack containing key

corporate documents and information

relating to the Group covering aspects

such as the role of a Director, Terms of

Reference for the Board Committees,

recent papers and minutes, details of

financial performance, risk management

and internal controls, key policies and

governance.

• Site visits.

The Committee also has responsibility for the

Board’s training and professional

development needs. Directors receive training

and presentations during the course of the

year to keep their knowledge current and

enhance their experience. In 2025,

workshops were delivered on:

• Board workshops on business

transformation (regular series throughout

2025)

• Credit Risk Appetite

• Reverse Stress Testing and PSM collection

capabilities

• Consumer Duty

• ICAAP

• ILAAP

In addition, all Board members undertake

their own training.

Diversity

Appointments to the Board and its

Committees, as with other roles across the

Group, are made on merit, based on the

balance of skills and experience offered by

prospective candidates. The Committee’s

priority is always to appoint the candidate

with the most appropriate skills and

experience for the role.

The Board has adopted a set of

commitments, outlined in the Group’s

Diversity, Equity & Inclusion (DE&I) Policy

(approved in February 2025 and available at

www.osb.co.uk), aimed at addressing

behavioural, gender and ethnic bias. These

commitments ensure that appointments are

made on merit and against objective criteria,

while promoting diversity in gender, social

and ethnic backgrounds, cognitive and

personal strengths. The Board’s compliance

with the FCA Listing Rule requirements

reflects its commitment to achieving a

diverse and inclusive Board and workforce.

These commitments are monitored by the

Committee in collaboration with the Group

Remuneration and People Committee, that

oversees diversity across the wider

workforce. Both Committees continue to

champion the ambition of ensuring that the

Board and workforce reflect the communities

in which the Group operates.

To support this, the Group invites colleagues

to voluntarily complete a diversity

questionnaire during onboarding, selecting

gender and ethnicity classifications aligned

with the Office for National Statistics. Data

on senior management gender and ethnicity

is sourced from this onboarding data, while

Board-level data is collected through a

voluntary year-end questionnaire. Further

details on how the Company has met the

FCA Listing Rule targets for Board diversity

can be found on page 128.

As at 31 December 2025, we are pleased to

report the following:

• 44% female representation on the Board

(2024: 44%).

• One senior Board position is held by a

female.

• One member of the Board is from an

ethnically diverse background.

• 36.0% of the Executive Management was

female (2024: 36%).

• 35.7% of our senior management across

the Group were female (comprising of the

Group Executive Committee and their

direct reports) (2024: 36%).

The Group subscribes to the Women in

Finance Charter and is focused on achieving

the current target of 40% senior roles

undertaken by females by the end of 2026.

Our diversity metrics have met the Parker

Review and FTSE Women Leaders Review

with one Director from an ethnically diverse

background and 44% female representation

on the Board.

Since the year-end, we announced the

appointment of Robin Bulloch who will be

joining the Board as an INED with effect from

1 April 2026. Following this appointment we

will continue to meet the Parker Review and

FTSE Women Leaders Review guidelines with

40% female representation on the Board and

one Director from an ethnically diverse

background.

The tables on page 128 set out the required

information as at 31 December 2025.



OSB GROUP PLC Annual Report and Accounts 2025		128

Group Nomination and Governance Committee Report continued

Diversity Initiatives in 2025

As the appointed DE&I Champion, Orlagh Hunt plays a key role in promoting initiatives that

support the Group’s inclusive culture. These include our commitment to supporting colleagues

with disabilities, raising awareness of mental health in the workplace and delivering

unconscious bias training. The Group’s Employee Engagement Network, Our Diversity, is made

up of volunteers from across the organisation who are passionate about progressing the DE&I

agenda, aligned with our ‘Respect Others’ value. The DE&I calendar for 2025 enabled the

network to host a wide range of activities aimed at raising awareness and providing resources

to support meaningful conversations around gender, ethnicity, faith and religion, disability,

sexual orientation, identity, socio-economic background and health and wellbeing. The Our

Diversity network reports to the ESG Forum, which in turn provides regular updates to the

Committee, the Group Remuneration and People Committee and the Board on all matters

relating to DE&I. This structure ensures that DE&I remains a strategic priority and is embedded

across all levels of the organisation.

Further details relating to DE&I are set out on page 86 - 87.

Table for reporting on gender representation


	Number of Board members		Percentage of the Board		Number of senior positions on the Board (CEO, CFO, SID and Chair of the Board)		Number in Executive Management		Percentage of Executive Management¹
	2025	2024	2025	2024	2025	2024	2025	2024	2025	2024
Men	5	5	56%	56%	3	2	7	7	64%	64%
Women	4	4	44%	44%	1	2	4	4	36%	36%
Other	0	0	–%	–%	0	0	0	0	–%	–%
Not specified/ prefer not to say	0	0	–%	–%	0	0	0	0	–%	–%

1.In accordance with the requirements of the FCA Listing Rules and for the purposes of this table only ‘Executive

Management’ comprises the Group Executive Committee, which includes the Company Secretary.

Table for reporting on ethnic background


	Number of Board members	Percentage of the Board	Number of senior positions on the Board (CEO, CFO, SID and Chair of the Board)	Number in Executive Management	Percentage of Executive Management
White British or other White (including minority-white groups)	8	89%	4	10	91%
Mixed/Multiple Ethnic Groups	–	–%	–	–	–%
Asian/Asian British	1	12%	–	1	9%
Black/African/Caribbean/Black British	–	–%	–	–	–%
Other ethnic group, including Arab	–	–%	–	–	–%
Not specified/prefer not to say	–	–%	–	–	–%

1.In accordance with the requirements of the FCA Listing Rules and for the purposes of this table only ‘Executive

Management’ comprises the Group Executive Committee, which includes the Company Secretary.

Performance against FCA diversity targets


Target	Outcome	Position (as at Wednesday 31 December 2025)
At least 40% of Board Directors are female	Exceeded	Four of nine Board members are female
At least one senior Board position is held by a female ¹	Met	The position of the CFO is held by a female
At least one Director is from a minority ethnic background	Met	One Board member is from a minority ethnic background

1.Senior positions are the Chair of the Board, SID, CEO and CFO.



OSB GROUP PLC Annual Report and Accounts 2025		129

Group Nomination and Governance Committee Report continued

Board performance review

In accordance with the UK Corporate

Governance Code and the FRC Guidance on

Board Effectiveness, the Committee Chair,

supported by the Committee, leads an

annual review of the performance of the

Board, its Committees and individual

Directors, with an externally facilitated

review undertaken every three years. The

2025 review was conducted internally by the

Company Secretary, supported by the

Governance team, and reflected feedback

and actions arising from the externally

facilitated review undertaken in 2024. Details

of the review are set out on page 118.

Independence and reappointment

The Committee conducts an annual review of

the independence of each INED, taking into

account their independence of character and

judgement, as well as any relationships or

circumstances that might affect their

impartiality. Following this review, the Board is

satisfied that all INEDs continue to be

independent. In considering recommendations

for reappointment, the Committee also

assesses the time commitment required of each

Director and whether their continued service is

in the best interests of the Company. This

includes a review of each Director’s individual

contribution to the Board and its Committees,

alongside the overall balance of skills,

experience, knowledge and diversity across the

Board.

The Committee has reviewed the

performance of each INED and concluded

that all continue to demonstrate a strong

commitment to their roles on the Board and

its Committees. Each Director effectively

discharges their responsibilities and provides

valuable insight and leadership, contributing

meaningfully to the Company’s strategic

direction and governance. Their ongoing

engagement supports the long-term success

of the Company and delivers value for all

stakeholders.

Following its annual review, the Committee

recommended to the Board that all serving

Directors be proposed for election or re-

election at the 2025 Annual General Meeting.

This recommendation reflects the

Committee’s confidence in the Directors’

continued effectiveness, commitment, and

contribution to the Company’s leadership

and governance.

Annual review of Directors interests

and conflicts of interest

The Committee is responsible for overseeing

potential conflicts of interest and reviewing

proposed external appointments of Directors,

including their associated time commitments.

During the year and up to the date of

signing, no conflicts of interest were

identified, and no external appointments

were declined on the basis of a potential

conflict or concerns regarding time

commitment.

This oversight forms part of the Committee’s

broader responsibility to ensure that

Directors are able to dedicate sufficient time

to their roles and act in the best interests of

the Company and its stakeholders.

Board Committee composition

reviews and appointments

Following recent Board changes, the

Committee reviewed the composition of each

of the Board Committees, reflecting on the

skills and experience of individual Board

members, regulatory requirements and the

need to ensure a spread of workload across

the Board. Following this, it was proposed

that the Group Risk Committee membership

be expanded to include Sally Jones-Evans

(with effect from 1 September 2025) and Kal

Atwal (with effect from 1 October 2025).

Governance Simplification

In November 2024, the Board approved

proposals to align governance arrangements

across the Board and Senior Management

Functions of the Company, OneSavings Bank

plc (OSB), and Charter Court Financial

Services Limited (CCFSL), subject to

regulatory review. These proposals were

further considered by the Committee in

January 2025 and subsequently approved

by the Board. The changes included:

• common Board composition and Chair

across the Company, OSB and CCFSL;

• common compositions and Chairs of the

Audit and Risk Committees for each

entity;

• harmonised Senior Management Function

(SMF) responsibilities across the

Company, OSB and CCFSL; and

• fully concurrent board meetings of the

Company, OSB and CCFSL, replacing the

previously separate scheduled board

meetings of CCFSL annually.

These changes reflect a strategic focus, led

by the General Counsel and Company

Secretary to simplify and streamline

governance across the Group, enhancing

efficiency and consistency in oversight and

decision-making.

Key areas of focus for the

coming year

A key area of focus for the Committee in the

coming year will be the ongoing search

process for my successor, led by the SID.

This process is being conducted with careful

consideration of the Board’s current and

future needs.

The Committee will also continue to monitor

the skills, experience and diversity of Board

members to ensure the Board remains well-

positioned to support the Company’s

strategic objectives and drive sustainable

performance.

Additional information

The Committee has unrestricted access to

Executive Management and external advisors

to help discharge its duties. It is satisfied that

in 2025 it received sufficient, reliable and

timely information to perform its

responsibilities effectively.

The Committee Chair reports on matters

dealt with at each Committee meeting to the

subsequent Board meeting.

The Board reviewed and approved this report

on 4 March 2026.

David Weymouth

Chair of the Group Nomination and

Governance Committee

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		130

Group Nomination and Governance Committee Report continued

Case Study: Appointment of a Group Chief Executive Officer

Following the announcement of Andy

Golding’s intention to step down as Group

Chief Executive Officer during 2026, the

Committee, supported by the Chief People

Officer, oversaw a comprehensive and

rigorous search process to identify and

recommend his successor. The search

process was structured, transparent and

aligned to the Group’s long-term strategy.

Defining the role requirements

The Committee began by reviewing the CEO

role profile to reflect the changing external

environment, evolving regulatory

expectations, cultural leadership needs and

the Group’s strategic priorities for the next

planning period. Consultation across the

Board, key functional leads and external

advisers ensured that the competencies and

behaviours for the next CEO were clearly

defined and forward looking.

Engagement of an Independent

Search Firm

Having confirmed that there were no internal

candidates with the breadth and depth of

experience required for the role, the

Committee initiated an external search.

Following a competitive tender process,

Marlin Hawke was appointed to conduct the

search. They were instructed to develop a

diverse and high-quality candidate list

reflecting the experience, leadership

capability and personal attributes required

to lead the Group through its next phase of

strategic transformation. Marlin Hawke is a

signatory to the Voluntary Code of Conduct

for Executive Search Firms and has no other

connection with the Group or any individual

Directors beyond the provision of executive

search services.

Assessment and shortlisting

Marlin Hawke developed an extensive and

diverse longlist of candidates, from which the

Committee agreed an initial shortlist

representing a broad mix of backgrounds,

characteristics and professional experience.

Reflecting the scale and complexity of the

Group’s ongoing transformation programme,

particular emphasis was placed on

candidates’ strategic, operational and

transformational leadership credentials.

Candidates then undertook a structured

multi-stage evaluation process, including

comprehensive interviews with Committee

and Board members supported by the Chief

People Officer and Group General Counsel

and Company Secretary, strategic scenario-

based discussions, and culture and values

assessments. This process enabled a holistic

and merit-based assessment of each

candidate’s suitability and readiness.

Following several interview rounds, the

process resulted in a final shortlist of

candidates invited to meet the Board and

present their strategic vision for the Group.

Final Evaluation and Recommendation

Throughout the search, the Committee

applied merit based and objective

assessment criteria, considering a broad

range of factors including diversity across

gender, socio economic and ethnic

background, leadership style, cultural

alignment, individual strengths and each

candidate’s ability to support the Group’s

long-term strategy.

In discussions with the Committee and the

Board, all candidates spoke about their

commitment to nurturing a purpose driven,

people centred culture. They emphasised the

importance of empowering colleagues,

supporting diversity at all levels and

maintaining a strong ethical framework as

the Group continues its transformation.

They also reinforced their view that long-term

success is achieved through engaged

colleagues, trusted customer relationships

and responsible decision-making.

Following the completion of the process

described above, the Committee

recommended the appointment of Enrique

Alvarez Labiano as the next Group Chief

Executive Officer to to the Board (subject to

regulatory approval). Enrique Alvarez

Labiano will join the Group from Santander,

where he held senior executive roles with

responsibility across retail and commercial

banking, digital transformation and strategic

delivery within a highly regulated

international environment. The Committee

was particularly impressed by his strong

track record of delivering sustainable growth,

leading complex transformation programmes

and building high-performing, customer-

focused organisations.

Throughout the assessment process, Enrique

Alvarez Labiano demonstrated a clear

alignment with the Group’s purpose and

strategic ambitions. He articulated a

compelling vision for the next phase of the

Group’s development, centred on disciplined

execution, technological innovation, risk

management excellence and the continued

strengthening of the Group’s culture and

stakeholder relationships. The Board believes

that his breadth of financial services

experience, strategic clarity and values-

driven leadership will position the Group well

to deliver long-term value for shareholders,

customers, colleagues and wider

stakeholders. The Board endorsed the

recommendation and the appointment was

announced in accordance with disclosure

requirements. At the time of writing, a start

date has not yet been agreed.

To support a smooth transition, a detailed

induction plan has been developed covering

regulatory engagement, shareholder

meetings, Group operations and business

model, culture and people strategy and risk

management framework. The Committee will

monitor the transition once Enrique joins.



OSB GROUP PLC Annual Report and Accounts 2025		131

Group Audit Committee Report



	Dear Shareholder,
	On behalf of the Committee, I am pleased to present my first report as Chair of the Group Audit Committee Report for the year to 31 December 2025.

I would like to begin by thanking Rajan

Kapoor for his leadership and stewardship

of the Committee over recent years and for

ensuring a smooth transition and also to

extend the Committee’s thanks to Sarah

Hedger who retired as a Director and

member of the Committee in May 2025.

I welcome Gareth Hoskin who joined the

Committee on 1 April 2025. I would like to

thank my fellow Committee members for

their diligence and constructive challenge

throughout the year, and management for

their continued openness and

professionalism in supporting the

Committee’s work.

All members of the Committee are INEDs who

have significant senior management and

Board-level experience in the banking and

financial services sectors. Henry Daubeney,

Gareth Hoskin and Simon Walker are all

chartered accountants. As such, the

Committee has an appropriate balance of

skills and competence relevant to the sector

in which the Group operates.

Standing invitations to Committee meetings

are extended to the Chair of the Board,

Executive Directors, the Group Chief Risk

Officer, the Group Chief Internal Auditor

(GCIA) and the external audit partner, all of

whom attend meetings as a matter of

practice. Other non-members may be invited

to attend all or part of any meeting, as and

when appropriate.

Effectiveness of the Committee

As part of the internally facilitated Board

effectiveness review carried out during the

year, the Committee’s performance was

assessed, and it was concluded that the

Committee continues to perform effectively.

As part of its commitment to keep its

effectiveness under review, in April 2025 the

Committee considered and revised its Terms

of Reference and the revised terms were

approved by the Board.

A review of the qualifications and experience

of each member of the Committee is also

undertaken on a periodic basis as part of the

Board and Committee succession planning

process. Details of the skills and experience

of Committee members can be found in their

biographies on pages 105 - 106.

Committee’ responsibilities:

Under its Terms of Reference, the Committee

is accountable for monitoring the

effectiveness of the systems of internal

control and external financial reporting

processes across the Group. The full Terms of

Reference can be found on the Group’s

website at: www.osb.co.uk

Members of the Committee

(as at 31 December 2025)¹

• Henry Daubeney

(Committee Chair)

• Noël Harwerth

• Gareth Hoskin ²

• Simon Walker

1. Rajan Kapoor and Sarah Hedger retired from the Board and the Committee on 8 May 2025.

2. Gareth Hoskin joined the Committee on 1 April 2025.



OSB GROUP PLC Annual Report and Accounts 2025		132

Group Audit Committee Report continued

Time allocation

In 2025, the Committee held seven scheduled

meetings and two ad-hoc meetings. For

further detail of attendance during the year,

see the Board and Committee meeting

attendance table on page 112 of the

Corporate Governance Report.

Throughout the year, the Committee ensured

that sufficient meeting time was given to

enable consistent review and monitoring of

all topics.

Activities in the year

In 2025, the Committee focused on the

following areas:

Financial and non-financial reporting

The Committee reviewed, and recommended

for Board approval, the Annual Report and

Accounts, the interim results, quarterly

trading updates and analysts’ presentations.

The Group’s Pillar 3 regulatory disclosures,

for publication on the Group’s website,

www.osb.co.uk, were also approved.

As part of its review, the Committee assessed

management’s application of principal

Approximate allocation

of Committee time in 2025

accounting policies, significant accounting

judgements and compliance with relevant

disclosure requirements.

The Committee received an update from

management on the Group’s ongoing

assessment of the impact of IFRS 18, which

will be effective for accounting periods

beginning on or after 1 January 2027. The

Committee noted that, while significant

progress has been made in mapping existing

income statement and cash flow line items to

the proposed IFRS 18 categories, certain

areas remain under consideration pending

further clarity from industry practice and

sector-wide interpretations.

The Committee reviewed and challenged

Financial and Non-Financial Reporting

Significant Accounting Policies

and Judgements

Compliance and Governance

External Audit

Internal Audit, including Internal

Controls and Risk Management

Other

management’s assumptions in relation to

provisions and contingent liabilities, including

updates on the Group’s retrospective review

of forbearance measures and associated

outcomes for certain customer cohorts. The

Committee also received an update on the

potential impact of litigation involving

financial firms which provide motor vehicle

finance where the credit is brokered by an

intermediary. It was agreed with

management that, based on the information

available, no provision or contingent liability

was required in relation to motor finance

commissions.

The Committee noted the sale of a small

second charge mortgage portfolio and the

issuance of the CMF 2025-1 securitisation

and was satisfied that the accounting

treatments and disclosures were appropriate.

Significant areas of judgement

and estimates

In its assessment, the Committee received

reports from management and provided

challenge in relation to each area of

significant judgement and management’s

recommended approach. Views were sought

from the external auditor on the accounting

treatment and judgements underpinning the

financial statements.

The Committee evaluated management’s

significant accounting judgements and

estimates. They ensured consistent

application of accounting policies in relation

to the interim and full-year results of the

Group.

The Committee, in conjunction with the

Group Risk Committee, challenged

management on the calculation of expected

credit losses (ECL) in accordance with IFRS 9.

The Committee focused on model

enhancements and analysis, with

management judgements applied on

historical data trends to factor in the impact

of the macroeconomic outlook, including

inflation and interest rate movements, House

Price Index, unemployment rates, post-model

adjustments, as well as longer-term climate

factors.

In addition, the Committee challenged

management on the key assumptions and

estimates supporting effective interest rate

(EIR) accounting and its assumptions on

tangible assets, intangible assets and

investment in subsidiaries.

The Committee held a deep-dive session on

hedging and hedge accounting to enhance

its understanding of the Group’s approach to

managing interest rate risk and the

associated accounting treatments under

IFRS 9. The session enabled the Committee to

challenge and confirm that the Group’s

hedge accounting practices appropriately

reflect its underlying risk management

strategy and that related accounting

disclosures in the financial statements are

transparent and compliant with IFRS

requirements.

Details of the significant areas of judgement

and estimates can be found overleaf.



OSB GROUP PLC Annual Report and Accounts 2025		133

Group Audit Committee Report continued


Significant issues considered	How these were addressed by the Committee
Loan book expected credit losses (ECL)	The Committee, in conjunction with the Group Risk Committee, received reports from management and challenged the approach to provisioning for loan book ECLs. The Committee provided oversight of the IFRS 9 framework, including the Group’s enhancements to models and application of post model adjustments for the continued elevated levels of interest rate. The Committee challenged management’s updated Probability of Default (PD) assumptions in light of rising arrears and concluded they remain reasonable and supportable, with the resulting ECL appropriately reflecting current credit conditions. The Committee consulted the Group’s economic advisers who provided their view and insight into macroeconomic scenarios. The Committee focused on management’s proposals on the probabilities attached to the economic scenarios and approved the final weightings utilised within the Group’s impairment calculations. The Group continued to utilise four scenarios; an upside, base case and two downside scenarios. The Group undertakes regular industry benchmarking of the economic scenarios, weightings and the resulting overall coverage. These benchmarks, in addition to insight from the Group’s economic advisers, support management in the selection and weighting of economic scenarios. The Committee reviewed the key assumptions and judgements to ensure that these appropriately reflect the economic environment. The Group has ensured that the identification of Significant Increases in Credit Risk (SICR) remains robust, in addition to making post-model adjustments for model limitations.
Effective interest rate (EIR) accounting	The calculation of EIR for newly originated loans involves judgement, particularly in estimating customer prepayment behaviour, switching activity and expected early redemption charges, including for products with significant fee income. The Committee reviewed and challenged management’s assessment of recent prepayment patterns in both fixed and reversion periods and considered whether observed trends were temporary or more structural. The Committee noted differing behaviour between two‑year and five‑year fixed cohorts, particularly where future five‑year reversions will occur in rate environments for which there is limited historical evidence. Sensitivities on expected asset lives and time spent on reversion rates were reviewed, with particular focus on portfolios most exposed to changes in these assumptions. Having considered the evidence and management’s proposed disclosures, the Committee was satisfied that the judgements applied were reasonable. Further details of the above significant areas of judgement and estimation can be found in note 2 to the financial statements.



OSB GROUP PLC Annual Report and Accounts 2025		134

Group Audit Committee Report continued

Compliance and governance

The Committee noted the updated Code and

reporting requirements for 2025 and the

Committee received updates from

management on the proposed governance

and approach to meet the new Provision 29

requirement in preparation for reporting in

2026 year-end and subsequent years.

The Committee received a briefing on the

PRA’s final Basel 3.1 rules, focusing on the

expected impact on risk-weighted assets,

capital ratios and Pillar 3 disclosures from

1 January 2027. The Committee reviewed

management’s readiness assessment and

implementation roadmap, including planned

model updates, data enhancements and the

governance structure for regulatory capital

reporting.

Updates were also received on

management’s enhancements to the Group’s

fraud risk framework and controls in

response to the new failure to prevent fraud

offence under the Economic Crime and

Corporate Transparency Act 2023.

The Committee oversaw whistleblowing

arrangements and reviewed reports on

investigations, actions taken and resulting

control improvements.

The Committee confirms that it has complied

with the FRC’s Audit Committees and the

External Audit: Minimum Standard throughout

the year, in line with the expectations of the UK

Corporate Governance Code. The

Committee’s work described in this report

demonstrates how those requirements have

been met, including oversight of significant

financial reporting matters and key

judgements; the effectiveness, independence

and quality of the external audit (including

appointment and reappointment); internal

controls and risk management; fraud and

whistleblowing arrangements; and the

management of non-audit services and

auditor relationships. Through these activities,

the Committee has maintained effective

governance of the external audit and related

assurance processes.

Viability and going concern

The current position of the Group, along with

principal and emerging risks, was reviewed

by the Committee. They also assessed the

prospects of the Group before

recommending the Group’s long-term

viability statement for approval by the

Board. Upon review a recommendation was

made to the Board, that the going concern

basis should be adopted in preparing the

annual and interim financial statements.

Further details are set out on pages 66–67

and 172–173.

Systems of internal control

and risk management

The Committee reviewed and approved the

Compliance Assurance Plan and received

regular reports from the Group’s Compliance

function.

Throughout the year, the Committee

received results from assurance activity

undertaken by Internal Audit and

Compliance which helped inform the

effectiveness of the Group’s system of

internal controls and risk management.

The Committee also received a report on the

effectiveness of the Group’s risk

management and internal control systems

which was based on a self-assessment

process completed by senior managers and

Executives and recommended by the CEO.

Reporting on the effectiveness of the risk

management and internal control systems

will evolve in 2026 to meet the new

requirements per Provision 29 of the Code.

The Committee received an update on the

effectiveness of the Group’s financial crime

systems and controls and noted that no

material weaknesses were identified during

the period. An annual report was provided

from the Money Laundering Reporting

Officer for the two banks.

The Committee received regular updates

from management on progress in

remediating IT control deficiencies relating to

legacy systems. Work continues in line with

the agreed plan. The Committee is satisfied

that any related risks were mitigated to a

sufficient level. The Committee also reviewed

the implications of these remediation

activities for the external audit strategy,

including management’s and the auditor’s

expectation that successful completion of

remediation will support a greater level of

controls reliance for the 2026 audit.

An independent review noted that the

Modernisation Assurance Framework had

been implemented as designed and operated

effectively and many good practices were

observed. An annual report was provided

from the Money Laundering Reporting

Officer for the two banks.

Reports were received and reviewed

from management on key controls over the

accuracy and completeness of the financial

statements, the status of the substantiation

of balance sheet and profit and loss account,

general ledger accounts at the reporting

date and judgements made in the calculation

of regulatory capital disclosures including

the interpretation of regulatory requirements

and the supporting external professional

advice. In addition, the Committee requested

and reviewed reports from management on

the Group’s Finance function which focused

on enhancements to processes, systems and

people capability. This enhancement

programme aims to strengthen the control

environment, improve the speed and quality

of reporting and enhance analytical insight

across the Group. The Committee noted the

progress achieved during the year, including

automation of key processes and

improvements to reporting timeliness.

The Committee received an update on the

Group’s ongoing legal entity rationalisation

programme, under which a further four

entities have now been been closed. The

Committee noted that this simplification

supports stronger financial control, improved

governance and reduced administrative

burden across the Group.

The systems of internal control and risk

management have been in place throughout

the year under review and up to the date of

approval of the Annual Report and Accounts.

The Committee reviewed and approved a

number of policies following their annual

update, including data protection, Pillar III

and loan impairment provisioning.

Taxation

The Committee received an update on the

Group’s tax position and discussed matters

such as the relationship with HMRC and tax

compliance status.

During the year, the Group underwent its

first Business Risk Review (BRR) with His

Majesty's Revenue & Customs (HMRC) under

the updated BRR+ framework. The

Committee received an update on the

process and outcome of the review, noting

HMRC’s observations and recommendations.

The review confirmed that the Group

maintains a constructive and transparent

relationship with HMRC, with an appropriate

level of tax risk management and governance

in place.

The Committee also reviewed and approved

the formulation of a more granular and

sophisticated approach to the Group’s

transfer pricing, strengthening assurance

over the Bank’s management of transfer

pricing risks and compliance, and ensuring

that intragroup arrangements remain

aligned with the Group’s operating model

and current OECD and HMRC requirements.



OSB GROUP PLC Annual Report and Accounts 2025		135

Group Audit Committee Report continued

As part of this review, independent

benchmarking analyses were conducted,

which confirmed that the Group’s pricing

remains within an acceptable arm’s-length

range and complies with applicable

regulatory and disclosure expectations.

The Committee approved the Group’s UK tax

strategy, which is available on our website,

www.osb.co.uk.

Alternative performance measures

The Committee provided oversight and

challenge in relation to the use of alternative

performance measures (APMs) in the interim

financial statements and Annual Report and

Accounts to ensure that these were applied

consistently and remained relevant.

As APMs are important measures of how the

Group performed, the Committee asked the

external auditor to provide assurance on

their computation since it was considered

that they could perform the work efficiently

and economically. The Committee was

satisfied that this assignment did not affect

their independence as external auditor. The

independent assurance statement can be

found on pages 256-257.

Fair, balanced and understandable

The Committee considered, on behalf of the

Board, whether the 2025 Annual Report and

Accounts taken as a whole are fair, balanced

and understandable.

Regulatory and governance reporting

requirements were considered, as well as the

going concern and longer-term viability

statements and reports from management

on significant accounting judgements

and estimates.

Following its review, the Committee

recommended to the Board and the Board

confirmed that the 2025 Annual Report and

Accounts taken as a whole are fair, balanced

and understandable, and accurately reflect

the information necessary for shareholders

and stakeholders to assess the Group’s

position and performance, business model

and strategy in line with section 172

requirements as outlined on pages 9 and

119-123. The Committee was also satisfied

that the non-financial information within the

Annual Report and Accounts is consistent

with the financial statements and with the

use of APMs and associated disclosures.

Whistleblowing

The Committee Chair has overall

responsibility for whistleblowing

arrangements with oversight from the Board

and acts as the Group’s Whistleblowing

Champion.

The Committee is responsible for monitoring

the Group’s Whistleblowing Policy and

arrangements. Where concerns have been

raised, an investigation is undertaken and

a report presented, setting out the actions

taken, lessons learnt and changes made as

a result.

Training and periodic updates are provided

to all employees who are encouraged to use

the multiple channels available to raise any

concerns they may have. Training is also

provided to ensure compliance with relevant

regulations.

External auditor

The Committee oversees the Group’s

relationship with its external auditor,

including assessing the auditor’s

independence, monitoring audit quality and

performance, as well as recommending the

auditor’s appointment to the Board.

Assessment of the external auditor’s

effectiveness

The Committee assesses the effectiveness

of the external audit function annually,

informed by feedback gathered through

anonymous questionnaires completed by

Audit Committee members, the external

auditor and key members of management

who engage with the external audit team.

The assessment focused on the effectiveness

of the lead partner and audit team, the audit

approach, audit quality and execution, the

role of management in the audit process,

and the quality of communication, reporting

and support to the Committee. It also

considered the independence, professional

scepticism and objectivity demonstrated by

the external auditor.

As part of the assessment, the auditor was

asked to outline the key risks to audit quality

and how these were mitigated, as well as to

report on any findings from internal and

external inspections of their audit work.

Overall, the assessment concluded that the

external audit process remained effective

and objective, with some minor areas for

improvement suggested.The results further

confirmed that the external auditor had

delivered the agreed audit plan and the

management letter was based on a good

understanding of the business.

Assessment of the external auditor’s

independence and objectivity

The Committee reviews the independence

and objectivity of the external auditor each

year, taking into account compliance with

relevant ethical standards, conflicts of

interest, tenure, the nature of any non-audit

services provided and confirmations given by

the external auditor as to its continued

independence.

Following this review, the Committee is

satisfied that the external auditor’s

independence, objectivity and

effectiveness have been maintained.

The Committee also holds regular private

sessions with the external auditor which

facilitates open dialogue on sensitive audit

matters without management present and

supports greater independence,

transparency and audit quality.

External auditor appointment

and tenure

The Group’s external audit contract was put

out for tender for the 2019 financial year and

the next external audit tender is expected to

be in 2028 for the financial year 2029. Ben

Jackson assumed the role of the statutory

auditor in 2024 and attends all meetings

of the Committee.

The Committee confirms that the Group has

complied with the Statutory Audit Services

for Large Companies Market Investigation

(Mandatory Use of Competitive Tender

Processes and Audit Committee

Responsibilities) Order 2014, which requires

FTSE 350 companies to put their statutory

audit services out to tender no less frequently

than every ten years. There are no restrictive

contractual provisions or third parties limiting

the Company’s choice of auditor and a

resolution to re-appoint Deloitte as external

auditor will be presented at the 2026 AGM.



OSB GROUP PLC Annual Report and Accounts 2025		136

Group Audit Committee Report continued

External audit plan and reports

Upon reviewing the plan for the 2025 audit,

the Committee was satisfied that

appropriate audit effort was being directed

at all significant areas. The external auditor

attended all meetings of the Committee and

presented detailed reports on their half-year

review and the year-end audit. This included

their view on accounting judgements made

by management, compliance with IFRS and

observations on controls. The Committee also

received helpful benchmark data from the

external auditor during the year.

Non-audit services

The Committee reviewed and approved the

policy governing the use of the external

auditor for non-audit services, which is

designed to ensure that any provision of non-

audit services to the Group by the external

auditor does not impact its independence

and objectivity.

The Committee closely monitors and receives

regular reports on non-audit services.

The Group maintains active relationships

with several other large firms and any

decision to appoint the external auditor for

non-audit services is taken in the context of

its understanding of the Group, which can

place it in a better position than other firms

to undertake the work, and includes an

assessment of the cost-effectiveness and

practicality of using an alternative firm.

The EU statutory audit market reform

legislation adopted in the UK applies a cap

on permissible non-audit services of 70% of

the preceding three-year average of audit

fees for UK incorporated Public Interest

Entities (PIEs).

The Revised Ethical Standard 2024 issued by

the FRC contains a list of permitted non-

audit services, distinguishing between those

which fall under the cap, including extended

assurance work, and those not subject to the

cap, being services required by a competent

authority or regulator by law.

The Committee maintained a cap for non-

audit services in 2025 of 50% of audit

services. The Committee pre-approved a

number of non-audit services including in

respect of proposed AT1 and Senior Holdco

debt issuances, compliance tools in India,

interim profit verifications, the half-year

review, assurance review of APMs in the

Annual Report and Accounts, ESG

assurance, and reporting on the Inline

Extensible Business Reporting Language

(iXBRL) tagging of financial statements. The

Committee also agreed mandates for the

CFO and Committee Chair to approve

additional permitted engagements, subject

to agreed thresholds.

The fees paid to the external auditor in

respect of non-audit services during 2025

totalled £734k, representing 16% of the 2025

Group audit fee of £4,463k (2024: £794k,

representing 19% of the 2024 Group audit

fee of £4,121k). All non-audit services

provided by the external auditor were

assurance-related in nature and consistent

with the role of the external auditor. No

advisory or consulting services were

provided.

Audit-related assurance services include the

interim review and profit verifications for

regulatory purposes. Other assurance

services in 2025 include an assurance review

of APMs, iXBRL and ESG disclosures and

certain ESG metrics and external AT1

issuance (2024: APMs, iXBRL and ESG

disclosures and certain ESG metrics). Other

non-audit services primarily comprise work

related to reporting accountant work (2024:

reporting accountant work and the Euro

Medium-Term Note comfort letter).

Internal Audit

Mandate and Independence

The Committee is responsible for approving

the mandate of Group Internal Audit (GIA),

the annual Internal Audit Plan and ensuring

that the function has adequate resources

and unrestricted access to information to

perform its duties effectively and in

accordance with the relevant professional

standards.

In September 2025, the Committee approved

the GIA Charter which formally establishes

the function’s mandate. The Charter defines

GIA’s purpose, authority and responsibilities

and is available on our website at

www.osb.co.uk.

As the third line of defence, GIA strengthens

the Group’s ability to create, protect and

sustain value by providing the Board and

management with independent, risk-based

and objective assurance, advice, insight and

foresight. The function supports the Group in

achieving its objectives through a systematic

and disciplined approach to evaluating and

improving the effectiveness of governance,

risk management and internal control

processes.

The Committee holds private sessions with

the Group Chief Internal Auditor (GCIA) and

ensures that GIA has appropriate standing

within the organisation and operates free

from management influence or other

restrictions that could impair its

independence or objectivity.

Resourcing and Capability

GIA is resourced with an experienced in-

house team representing diverse

backgrounds, skills and experiences to

ensure a breadth of perspective. The team is

supported by co-sourced specialist firms that

provide expert technical input on specific

audits where additional expertise is required.

Recruitment, learning and development

activities are focused on maintaining and

enhancing the capabilities required to

support the Group effectively through its

ongoing transformation and to respond to

emerging risks and regulatory expectations.

Effectiveness and Quality Assurance

Each year, the Committee assesses the

effectiveness of GIA. In 2025, this assessment

was supported by an independent survey

completed by Committee members, the

Group Executive Committee and the external

auditor. Respondents confirmed that GIA

continues to operate with independence and

objectivity, supported by a capable team

with appropriate resources and expertise.

The survey highlighted the strength of the

function’s leadership, its constructive

engagement with management, the value of

its transformation assurance, and its

continued contribution to enhancing the

Group’s governance, risk management and

control environment.

In accordance with the Chartered Institute of

Internal Auditors’ Code of Practice, the

Committee annually considers the

independence and objectivity of the GCIA,

particularly as the tenure of the role has

exceeded seven years.



OSB GROUP PLC Annual Report and Accounts 2025		137

Group Audit Committee Report continued

In February 2026, the Committee reviewed

the GCIA’s performance with reference to

professional scepticism; ethical conduct;

compliance with applicable regulations, and

overall leadership effectiveness.

The Committee concluded that the GCIA

remains independent and that the function’s

objectivity, quality, experience and expertise

remain appropriate for the business. The

GCIA’s continued adherence to professional

standards is evidenced through regular

internal quality assurance reporting, and

progress updates on the Continuous

Improvement Plan, which incorporates GIA’s

strategic initiatives aligned to the Group’s

priorities.

However, after ten years in role, Lisa

Odendaal, Group Chief Internal Auditor, will

commence a planned transition during 2026,

in line with good governance practice to

preserve the independence of the Internal

Audit Function. Lisa will continue to lead

Internal Audit, including delivery of the 2026

audit plan, while a successor is appointed

and an orderly handover is completed.

GIA’s continued adherence to professional

standards is evidenced through regular

internal quality assurance reporting, and

progress updates on the Continuous

Improvement Plan, which incorporates GIA’s

strategic initiatives aligned to the Group’s

priorities.

Audit Plan and Reporting

The Committee oversaw the execution of the

2025 Audit Plan approved in November 2024

and received regular progress reports from

the GCIA covering audit outcomes, key

findings, emerging themes, and the status of

management action plans. The Plan is

dynamic and updated, subject to Committee

approval, at least quarterly, to ensure

assurance coverage remains focused on the

Group’s most significant risks.

All individual internal audit reports are shared

with the Committee, the Group Executive

Committee and the external auditor. Material

management actions are tracked, validated

upon completion and reported to the

Committee.

The Committee approved the 2026 Audit Plan,

which is underpinned by an assessment of the

Group’s key and emerging risks. Looking

ahead, GIA will continue to evolve its use of

data analytics, automation and continuous

auditing techniques to enhance assurance

coverage and provide timely insights into

emerging risks across the Group.

Priorities for 2026

The priorities for the Committee for 2026

have been identified as being:

• To continue to challenge the accounting

judgements and estimates, as presented

by management, and engage with the

external auditor on their opinion of

the assumptions.

• Consider Provision 29 of the updated

Code coming into effect on 1 January

2026, where applicable to the Group and

relevant to the Committee’s activities,

including consideration of management’s

proposals for identifying material controls,

ahead of implementation and reporting in

subsequent years.

• Ensuring that the Group’s financial

reporting complies with all legislative

requirements and accounting standards

including review of draft IFRS 18

disclosures and comparatives.

• Monitor management’s readiness for

Basel 3.1 implementation and ensure

robust governance around model changes

and capital calculations.

• Oversight and review of the execution of

the 2026 Internal Audit Plan.

• Ensure the effective transfer of Lisa

Odendaal’s responsibilities to her

successor.

Additional information

The Committee has unrestricted access to

Executive Management and external advisors

to help discharge its duties. It is satisfied that

in 2025 it received sufficient, reliable and

timely information to perform its

responsibilities effectively.

The Committee Chair reports on matters

dealt with at each Committee meeting to the

subsequent Board meeting.

The Board reviewed and approved this report

on 4 March 2026.

Henry Daubeney

Chair of the Group Audit Committee

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		138

Group Risk Committee Report



	Dear Shareholder,
	On behalf of the Committee, I am pleased to present the Group Risk Committee Report for the year to 31 December 2025.

In addition to the members of the Committee,

the Chair of the Board has a standing

invitation to all Committee meetings, along

with the CEO, CFO, Group CRO, Group

Chief Credit Officer and Money Laundering

Reporting Officer (MLRO).

Effectiveness of the Committee

As part of the internally facilitated Board

evaluation carried out during the year, the

Committee’s performance was assessed and

it was concluded that the Committee

continues to perform effectively. The results

of the performance review and the

subsequent action plan are due to be further

considered by the Board in April 2026. More

information on the progress against actions

from last year’s review, this year’s evaluation

process and areas for improvement identified

can be found on page 118.

Enhancements have been made to the

quality of management information

presented to the Committee and to reduce

overlapping information with other

committees. This has allowed the Committee

to focus on the key issues and benchmark

the Group’s performance with that of

its peers.

Committee responsibilities

Under its Terms of Reference, the purpose of

the Committee is to provide oversight, advice

and recommendations to the Board on

current risk exposures and future risk

Members of the Committee

(as at 31 December 2025¹)

• Simon Walker (Committee Chair)

• Henry Daubeney

• Gareth Hoskin

• Noël Harwerth

• Kal Atwal

• Sally Jones-Evans

strategy and to assist the Board to promote

a culture that emphasises and demonstrates

the benefits of a risk-based approach to

internal control and management of the

Group. The full Terms of Reference can be

found on the Group’s web site at:

www.osb.co.uk.

Throughout the year, the Committee ensured

that sufficient meeting time was given to

enable consistent review and monitoring of

all material risks.

Approximate allocation

of Committee time in 2025

Risk appetite

Cyber and Transformation risk

Credit risk

Market and liquidity risk

Solvency risk, stress testing and ICAAP

Operational risk and Enterprise Risk

Management Framework

Conduct, regulatory and financial crime risks

Other

1. Rajan Kapoor retired from the Board and Committee on 8 May 2025. Gareth Hoskin joined

the Committee on 1 April 2025, Sally Jones-Evans joined the Committee on 1 September

2025 and Kal Atwal joined the Committee on 1 October 2025.



OSB GROUP PLC Annual Report and Accounts 2025		139

Group Risk Committee Report continued

Time allocation

In 2025, the Committee held nine scheduled

meetings. For further detail of attendance

during the year, see the Board and

Committee meeting attendance table on page

112 of the Corporate Governance Report.

In addition, one ad-hoc meeting was held to

consider the reverse stress testing of several

potential scenarios, their potential impact and

the mitigation in place. This is an invaluable

exercise which challenges the Committee to

carefully consider each scenario and test the

controls that are in place to manage and

mitigate potential future risks, and identify

areas for improvement. It also enables the

Committee to challenge management on any

other related matter which could impact

the Group.

Committee members also attended

additional workshops during the year which

focused on the Group’s wider stress testing

scenarios and approaches, risk appetite,

ILAAP and ICAAP.

Key activities in the year

In 2025, the Committee focused on the

following areas:

Credit Risk

The Committee recognises the elevated risk of

customers defaulting on their loan obligations

as a result of higher interest rates, cost-of-

living pressures and a slowing housing market.

The Committee monitored the performance of

the Group’s loan book on both aggregated

and asset class sub-segment bases by

reviewing the key indicators of credit quality,

security coverage, affordability and borrower

risk profiles. The Committee also assessed

forward-looking credit risk indicators in the

form of customer arrears, bureau data on

customer credit scores, mover alerts and

indebtedness, business and economic early

warning indicators (EWIs) and climate

change.

At the request of the Committee, additional

metrics have been produced to control wider

credit-related risks and EWIs have been

developed for higher-risk cohorts. The

Committee undertook its annual review of

the lending policy applying across most of

the Group (excluding InterBay and Heritable)

and recommended changes to reflect its

recommendations in respect of the Group

Risk Appetite.

Risk appetite

The Committee reviewed and recalibrated

the Group’s risk appetite to reflect the

economic outlook, regulatory developments

and strategic priorities, ensuring risk appetite

remained aligned to the Group’s Business

Plan and identifying where adjustments may

be required. Committee members attended

two deep dive workshops covering financial

and non-financial risks which enabled more

targeted challenge and oversight. The

Committee recommended risk appetite

amendments across principal and emerging

risks including solvency, credit, liquidity and

funding, market, operational,

transformation, conduct, climate and

reputational risks.

The Committee monitored performance

against appetite at both Group and solo-

bank levels. Adjustments to the Domestic

Liquidity Sub-group (DoLSub) risk appetite

limit were approved to ensure continued

resilience in liquidity risk management.

Internal Ratings-Based (IRB)

Programme

The Committee oversees the performance

and regulatory compliance of the Group’s

IRB rating systems through regular updates

from management and the Group Models

and Ratings sub-committee.

Market risk and liquidity risk

The Committee reviewed the Assets and

Liabilities Committee (ALCO) regular

assessments of the UK macroeconomic

environment and potential impacts on the

Group’s asset and liquidity profiles.

The Committee received updates throughout

the year on liquidity metrics, stress test

outcomes, and funding strategy, ensuring

that any emerging risks or structural funding

issues are identified and addressed promptly.

The Committee reviewed the updates to

market and liquidity risks in the ILAAP as well

as updates relating to the Resolvability

Assessment Framework and the Group’s

response to the volatile macroeconomic

environment.

The Committee also reviewed and

recommended the market and liquidity

risk appetite to the Board for approval and

monitored to see that liquidity risk remained

within the Board-approved risk appetite

limits. The Committee oversaw the Group’s

liquidity management plans during the year

in order to ensure that liquidity positions

remained appropriate against the uncertain

economic backdrop coupled with elevated

levels of inflation and interest rates in the UK.

Solvency risk, stress testing and ICAAP

The Committee reviewed the ICAAP,

assessing how the Group would maintain

adequate capital under plausible but severe

stress and challenging management on the

appropriateness of the Pillar 2B stress

scenarios. Committee members also

attended separate workshops on stress

testing and the ICAAP, providing further

opportunity to scrutinise and challenge

management’s approach. Throughout the

year, the Committee reviewed and

challenged the Group Capital Plan and

monitored total capital and CET1 forecasts to

ensure capital risks were well understood and

managed within appetite. The Committee

recommended the solvency risk appetite to

the Board and approved the Group Recovery

and Restructuring Plan, confirming that the

Group’s recovery options remained credible

and capable of supporting financial

resilience in stressed conditions.

Operational risk

Oversight of the Group’s operational risk

profile is a standing agenda item with regular

reports (on at least a quarterly basis) being

provided by senior management. The

Committee reviewed risk incident reports and

assessed management’s response and

remedial action proposed. The reports also

covered key risk indicators (KRIs), which can

be quantitative or qualitative and provide

insights regarding changes in the Group’s

operational risk profile. The Committee also

reviewed and recommended the operational

risk appetite to the Board for approval.

The Committee provided oversight and

guidance in relation to the programme of

activities focused on enhancing the Group’s

systems and procedures for the assessment

of operational risks and controls as well as

the management of operational risk events.

Conduct, regulatory and

financial crime risks

The Committee received reports covering

conduct, regulatory and financial crime KRIs

on a quantitative and qualitative basis,

which provided insight into changes in the

Group’s conduct, regulatory and financial

crime risk profiles. The Committee also

reviewed the conduct, regulatory and

financial crime risk appetites before

recommending them for approval by the

Board.

The Committee is regularly updated on the

topics discussed at Board and executive

regulatory engagement meetings.

The Committee reviewed the ‘Dear CEO’ letter

from the FCA which set out the FCA’s

engagement strategy for Retail Banks in 2025.

The Committee identified the matters relevant

to its overall remit particularly the support of

vulnerable customers and operational

resilience, financial crime and fraud.



OSB GROUP PLC Annual Report and Accounts 2025		140

Group Risk Committee Report continued

The Committee reviewed and challenged

management on conduct and customer

outcome metrics and their alignment with

regulatory expectations and the Group’s

commitment to achieve good outcomes for

customers.

The Committee also received updates on the

potential impact of litigation involving

financial firms which provide motor vehicle

finance where the credit is brokered by an

intermediary which was resolved through a

Supreme Court judgment.

The Committee also assessed the potential

impact of the Renters Rights Bill which will

afford tenants in the private rental sector

additional protections.

Cyber, Information Technology and

Transformation Risk

The Committee continues to provide active

oversight of the Group’s cyber risk profile.

During the period, the Committee considered

an assessment of the Group’s own

countermeasures and preparedness in the

light of updated guidance from the National

Cyber Security Centre and noted where

opportunities existed to revisit and revalidate

existing capabilities.

The Committee received regular updates on

cyber threats, vulnerability management,

data quality and transformation risks.

The Committee maintained oversight of key

transformation risks through regular reports

from the Chief Information Officer and the

Risk function. The Committee continued to

oversee the risk management framework

supporting major programme change

initiatives.

Strategic projects

The Committee has also continued to

progress its oversight responsibilities over

some key strategic programmes of the

Group including Transformation, IRB Project,

Consumer Duty and UK General Data

Protection Regulation.

Enterprise Risk Management

Framework (ERMF)

The Committee reviewed the ERMF in line

with its annual review cycle to ensure it

remains fit for purpose in the context of the

Group’s strategic objectives, business model,

risk profile and industry practice.

The Committee considered and

recommended to the Board the top ten

Enterprise risks to the business.

Priorities for 2026

The priorities for the Committee for 2026

have been identified as being:

• Credit risk

• Cyber risk

• Transformation risk

• Conduct, regulatory and financial

crime risks

• Market risk and liquidity risk including

the ILAAP

• Operational Risk

• Solvency Risk, the ICAAP and Recovery

and Restructuring Plan

• Continued representation at Committee

meetings from first line colleagues to

articulate the risk impacts on business

performance

Additional information

The Committee has unrestricted access to

Executive Management and external advisors

to help discharge its duties. It is satisfied that

in 2025 it received sufficient, reliable and

timely information to perform its responsibilities

effectively.

The Committee Chair reports on matters

dealt with at each Committee meeting to

the subsequent Board meeting.

The Board reviewed and approved this report

on 4 March 2026.

Simon Walker

Chair of the Group Risk Committee

4 March 2026



	Other Committees Group Models and Ratings Committee The Group Models and Ratings Committee is a sub-committee of the Group Risk Committee and met six times during the year including one ad-hoc meeting. The primary purpose of the Committee is to act as the Designated Committee for the purposes of material aspects of the rating and estimation processes (as articulated in Article 189 of the EU Capital Requirements Regulation) and provide assurance of the Company’s models and rating systems and as such, the Committee has delegation from the Group Risk Committee to authorise implementation of and changes to material models. The Committee ensures effective governance of all IRB-related and other relevant models. The Committee is well positioned to provide oversight and approval of relevant supervisory submissions relating to the IRB approval process. It also monitors and oversees the Group’s model risk profile in line with the Group’s risk appetite thresholds and regulatory objectives. The Committee is chaired by the Group Risk Committee Chair, Simon Walker and Henry Daubeney and Victoria Hyde are members of the Committee.



OSB GROUP PLC Annual Report and Accounts 2025		141

Group Remuneration and People Committee Report Annual Statement by the Chair of the Group Remuneration and People Committee



	Dear Shareholder,
	On behalf of the Committee, I am pleased to present my first Group Remuneration and People Committee Report, (the ‘Report’) since being appointed as Committee Chair in 2025.

The report comprises three key parts:

• This introductory statement, which

explains the key decisions made by the

Committee during, and in respect of,

2025.

• The Directors’ Remuneration Policy (the

‘Policy’), which includes details of our

proposed changes to the Policy this year

which we are bringing forward to be

presented to shareholders for approval at

this year’s AGM.

• The Annual Report on Remuneration for

2025. This details the relevant

performance and remuneration outcomes

for the year, with all of the relevant

governance steps. This is subject to the

usual advisory vote at the AGM.

As part of our succession planning for the

CEO, along with changing market practice

and revised regulatory requirements for

remuneration in UK Banks, the Committee

reviewed the Policy this year. We are

proposing a new Policy to be presented to

shareholders for approval at the 2026 AGM.

We have undertaken meaningful consultation

with key shareholders and proxy agencies

and would like to thank them for their

feedback, to date, on the new proposals. We

are also delighted that we have been able to

announce that we have found an excellent

new CEO in Enrique Alvarez Labiano and we

have set out how the new Policy will be

Members of the Committee

(as at 31 December 2025¹)

• Sally Jones-Evans

(Committee Chair)

• Kal Atwal

• Noël Harwerth

• Gareth Hoskin*

• David Weymouth

implemented for 2026 accordingly.

Committee responsibilities

The principal purpose of the Committee, as

approved by the Board, is to advise and

make recommendations on the over-arching

principles and parameters of remuneration

and people-related polices across the Group.

The Committee is required to ensure policies

are aligned with the business strategy and

objectives, risk appetite, values, culture (to

deliver good customer outcomes) and long-

term interests of the Company and its

subsidiaries, recognising the interests of all

stakeholders and considering applicable

laws, regulations and principles of good

practice. The full Terms of Reference can be

found on the Group’s website at

www.osb.co.uk.

Effectiveness of the Committee

As part of the internally facilitated Board

evaluation carried out during the year, the

Committee’s performance was assessed and

it was concluded that the Committee

continues to perform effectively. The results

of the evaluation and the subsequent action

plan are due to be further considered by the

Board in April 2026. More information on the

progress against actions from last year’s

review, this year’s evaluation process and

areas for improvement identified can be

found in the Group Nomination and

Governance Committee Chair’s report.

Approximate allocation

of Committee time in 2025

Remuneration policy and related

Performance related-pay

People related

Market, regulatory and investor updates

Governance

1. Sarah Hedger and Rajan Kapoor retired from the Board

and Committee on 8 May 2025. Gareth Hoskin and

Sally Jones-Evans joined the Committee as members

on 1 April 2025. Sally Jones-Evans was appointed

Committee Chair on 9 May 2025.



OSB GROUP PLC Annual Report and Accounts 2025		142

Group Remuneration and People Committee Report continued Annual Statement by the Chair of the Group Remuneration and People Committee continued

Time allocation

The Committee met six times during 2025 as

well as one ad-hoc meeting.

For further details of attendance during the

year, see the Board and Committee

meeting attendance table on page 112 of

the Corporate Governance Report.

2026 Directors Remuneration

Policy (the ‘Policy’) and

shareholder consultation

Following the announced CEO succession

and the regulatory and market changes to

Executive Director Remuneration, we have

reviewed our Policy a year earlier than our

three-year review cycle.

Evolving market practices

and regulatory changes

2025 has been a dynamic year in the

evolution of UK remuneration policies both in

the banking sector and wider market. Many

other Banks sought shareholder approval for

new policies at their 2025 AGMs, as did

several Building Societies, with whom we

compete for talent. As anticipated, many

Banks ‘rebalanced’ their executive directors

remuneration construct, often but not

always, by the removal of role-based

allowances, increases to salary and in all

cases with significant increases to variable

pay. The result was that their fixed pay

potential decreased (in most cases) whilst

total target and maximum remuneration

potential increased significantly in all cases.

The much lower leverage in our incentive

plans means that our total target and

maximum position are now significantly

below the broader FTSE 250, as well as

specifically our banking peers, noting that

we are now very much the biggest bank

amongst the specialist lenders.

Importantly for OSB, following the

announcement of the intended retirement of

Andy Golding, our CEO, having a Policy

which enables us to be able to recruit a

successor has been at the forefront of our

thinking.

The new policy has been designed to ensure

that we could attract and retain the right

successor and achieve appropriate market

competitiveness for both of our Executive

Director roles, as well as alignment against

the broader FTSE 250, in particular our

banking peers.

We also want to ensure that our incentive

arrangements support the business strategy

and continues to align interests with our

shareholders. We believe that the

combination of annual bonus and

performance shares is still the right incentive

mix, balancing annual strategic incentives

and longer term growth.

In relation to the appointment of our new

CEO, we undertook a robust and

comprehensive search process, facilitated by

a global executive search firm. This

demonstrated to us that all credible

candidates required an overall package as

proposed (or higher) given their existing

remuneration levels, which has clearly

demonstrated to us the need to have this

level of remuneration package for our CEO.

The regulations which apply to banking firms

have recently been revised by the PRA and

FCA, in order to foster the competitiveness of

the UK banking industry. We welcome the

changes and are making consequential

amendments to the structure of our awards

where required. However, we are conscious

that in certain areas, the regulations now fall

below UK best practice and so we are

planning to go above the regulatory

minimum requirements in a number of areas

as outlined in our new Directors

Remuneration Policy. This is specifically in

relation to deferrals and vesting timelines as

we believe that deferral continues to be an

important aspect of the Executive Director

package.

Consideration of shareholder views

As part of our review, we undertook a

detailed and meaningful consultation with

our key shareholders and proxy agencies

ahead of the May 2026 AGM to obtain views

regarding the revised Policy.

Shareholders were generally supportive of

the proposed changes to the Policy.

Feedback centred on increasing the

minimum shareholding requirement for CEO

and CFO, clarity of target setting, ensuring

suitably stretching targets to reflect higher

variable pay opportunities and ensuring

clarity on how much annual bonus will be

issued as shares. We also had some useful

feedback regarding the mix of performance

measures for our Performance Share Plan

(PSP), with support to increase the weighting

of Return of Tangible Equity (RoTE) and Total

Shareholder Return (TSR), and the removal of

Earnings Per Share (EPS). We have taken this

into account when determining the operation

of the Policy and its disclosure going

forwards.

We thank shareholders and the proxy

agencies for engaging with this process.

Summary of Policy Changes

Full details of the new Policy can be found

on pages 146-152 but we have

summarised the key changes and their

application in 2026 as follows:

Fixed Remuneration

Salary – The current CEO and CFO will

receive a salary increase of 3% in line with

the wider workforce average. For the CFO,

were it not for the increases to the variable

pay opportunity, we would have been

considering a significant increase to her

salary to reflect her growth in skills/

experience and proven track record since

becoming the CFO. The salary for the new

CEO is £944,000 (which is set at materially

the same level as the current CEO).

Pension / Benefits – These remain standard

for Executive Directors.



OSB GROUP PLC Annual Report and Accounts 2025		143

Group Remuneration and People Committee Report continued Annual Statement by the Chair of the Group Remuneration and People Committee continued

New Remuneration Policy and 2026 application

Executive Director Bonus Scheme

(Annual Bonus)

The maximum opportunity under this annual

bonus scheme is being increased to 200% of

salary from 135%. This will reflect changing

market practices, alignment to market and to

allow the appointment of an appropriate

CEO successor. To acknowledge the growth

in role of our CFO, this will apply to both our

CEO successor and CFO. This change will

not be applied to the departing CEO, whose

bonus opportunity will remain at 110% of

salary (against the previous policy maximum

of 135%).

Despite the regulatory minima being nil,

bonus deferral continues to be an important

aspect of the Policy, and therefore no less

than 30% of any bonus earned will be

deferred into shares and will be held for three

years.This level of deferral will apply in 2026.

The 2026 Scorecard will be based on 60% on

financial measures and 40% on non-financial

measures. The non-financial element will

include a 10% weighting for individual

performance. We continue to ensure that the

relevant performance targets are

appropriately stretching, noting we have a

strong track record of doing this. Further

details on the measures for 2026 can be

found on page 154.


	Salary



		(+3%)
(+3%)


New CEO
Current CEO
CFO

3% increase applied in line with average for

UK workforce.


	Executive Director Bonus Scheme

	Max opportunity	2026 Award New CEO/CFO
	200% of salary	200%

	30% of any bonus earned will be deferred into shares and held for three years.


Category	Measure	Weighting
Financial 60%	PBT	22.50%
	RoTE	22.50%
	Cost Delivery	12.00%
	Net Loan Book Growth	3.00%
Non-Financial 40%	Customer	5.00%
	Quality	5.00%
	Transformation	10.00%
	Data	5.00%
	People	5.00%
	Personal	10.00%

Full details are set out on page 154

Performance Share Plan

(Long Term Incentive Plan, ‘LTIP’)

The maximum opportunity under the PSP is

being increased to 300% of salary from

135%. This change will not be applied to the

departing CEO, whose grant level will remain

at 110% (against the previous policy

maximum of 135%).

75% of the award will vest after three years

and 25% will vest in year four. This is more

onerous than typical FTSE practice where

100% of LTIP awards normally vest after

three years. We will also follow the

expectations set out in the UK Corporate

Governance Code such that both tranches

will be held to year five from the date of

award.

For 2026 awards, we will continue to

ensure that 75% of the PSP is subject to

financial performance conditions with

25% based on non-financial performance

conditions. We will be simplifying our

financial measures to remove the EPS

performance measure, whilst increasing

the relevant weightings of relative TSR

and RoTE. We continue to ensure that the

relevant performance targets are

appropriately stretching, taking into

account the business plan, external

operating environment and market

expectations. Full details on the 2026

measures can be found on pages 155-156.

Minimum shareholding requirement

The minimum shareholding requirement is

being increased to 300% of salary (from

250% for the CEO and 200% for the CFO).

This change will not apply to the

departing CEO.


	Performance Share Plan

	Max opportunity	2026 Award New CEO/ CFO
	300%	300%

	75% will vest after three years and and 25% will vest in year four.


	Category	Measure	Weighting
	Financial 75%	Average RoTE	37.50%
	Financial 75%	Relative TSR	37.50%
	Non-Financial 25%	Risk	15.00%
	Non-Financial 25%	ESG	10.00%

Full details are set out on page 155-156


	Pension/benefits

	Pension:	Benefits:
	8%	Standard benefits provided to both Executive Directors
	of salary


	Shareholding requirement

	Increasing to 300% of salary from 2026



OSB GROUP PLC Annual Report and Accounts 2025		144

Group Remuneration and People Committee Report continued Annual Statement by the Chair of the Group Remuneration and People Committee continued

Overview of 2025 performance and incentive outcomes

Executive Directors Bonus Scheme

(Annual Bonus)

The targets for the annual bonus scheme

were set at the start of the year. In

challenging market conditions, the Group

delivered strong performance across the

Balanced Business Scorecard (the

‘Scorecard’), with performance exceeding

target for the Financial metrics and good

progress made against our other key

strategic objectives, which are reflected in

our non-financial metrics.

The bonus payout under the Scorecard is

65.76%, for the CEO and CFO. The

Scorecard represents 90% of the total bonus

outcome and the remaining 10% is based on

achieving stretching personal objectives.

Performance against personal objectives was

considered by the Board and Committee to be

very strong this year. This resulted in a payout

of 8% out of 10% for both the CEO and CFO.

As an underpin, the Committee also

considered whether the Scorecard’s

formulaic outcome reflected the Group’s risk

appetite and profile and considered current

and potential future risks.

Total payouts, combining the outcomes from

the Scorecard and personal objectives, under

the 2025 Executive Directors’ Bonus Scheme

are therefore 67.18% of maximum

opportunity for the CEO and CFO.

The bonus is paid half in cash and half in

shares, with the shares held for three years.

The targets were assessed by the Committee

following the end of the financial year,

liaising as necessary with the Group Audit

Committee and Group Risk Committee

Chairs. Full details of the performance

conditions and bonus payments are provided

on pages 159-160 of this report.


Executive Director Bonus Scheme

Max Opportunity	2025 Award – CEO/CFO	2025 Result
135% of salary	110%	67.18%

Deferral of 50% of value earned into shares for at least three years, aligning payout with shareholders’ interests over the longer term

2025 Award – Scorecard (90% of total)	% weighting	Result
Financial	65%	39.25%
Non-Financial	35%	26.51%
Total	100%	65.76%
Individual:
CEO	10%	8.00%
CFO	10%	8.00%

Performance assessment details are set out on pages 159-160


	Salary


CEO
CFO


		(+0%)
(+0%)

No increase to salary was applied to 2025 salary for

CEO and CFO

Performance Share Plan (LTIP)

The 2023 Awards under the PSP were set by

the Committee, based on performance over

the three-year period which ended on 31

December 2025. Performance was based

35% on EPS growth; 35% on TSR versus

companies in the FTSE 250 Index (excluding

Investment Trusts); and 15% each on Return

on Equity (RoE) and an assessment of the

Group’s overall risk performance.

Performance against the EPS target range was

below the threshold and therefore 0% of this

element was earned. The Group’s TSR placed

the Group above the upper quartile of the FTSE

250 peer group and therefore 100% of this

element was earned. The average RoE over the

performance period was at threshold resulting

in 25% of this element being earned.

The Committee undertook a qualitative

assessment of the Group’s risk performance

over the period using an overall assessment

prepared by the Group CRO and endorsed

by the Chair of the Group Risk Committee.

The Committee concluded that 80% of this

element had been achieved.

As a result, 50.75% of the maximum PSP

Awards have been earned. This is

considerably higher than last year’s award,

reflecting the progress we have made in a

challenging market environment over the

performance period, yet still delivering very

positive returns for our shareholders, as

evidenced by the share price.

The targets were assessed by the Committee

following the end of the 2025 financial year,

liaising as necessary with the Group Audit

Committee and Group Risk Committee

Chairs. Full details of the PSP assessment are

included on page 161.

These PSP Awards will vest in line with the

regulatory rules with a holding period in place

post-vesting to ensure there is at least five

years between the date of grant and release.

Malus and clawback provisions apply.

The Committee is comfortable there has been

an appropriate link between reward,

performance and the broader stakeholder

experience, including the experience of

customers, over the three-year performance

period and therefore discretion was not used

to adjust the incentive outcome under either

plan. In line with the Code, the Remuneration

Policy operated as intended during the year

under review.


Performance Share Plan

Max Opportunity	2023-2025 Award – CEO / CFO	2025 Result
135% of Salary	110%	50.75%

Payable in shares, three-year performance period, with vesting 75% in March 2026 and 25% in March 2027

2023 - 2025 Award – Measures	% weighting	Result
Relative TSR	35%	35.00%
EPS	35%	–%
RoE	15%	3.75%
Non-financial – Risk	15%	12.00%
Total	100%	50.75%

Performance assessment details are set out on page 161


	Pension/benefits

	Pension:	Benefits:
	8%	Standard benefits provided to both Executive Directors
	of salary


	Shareholding requirement

	Executive Directors are required to build up and maintain a shareholding worth at least 250% of salary for the CEO and 200% of salary for the CFO.
	CEO meets the shareholding requirement, CFO is newly appointed and her shareholding is increasing over time. See page 167 for details on CEO and CFO shareholdings



OSB GROUP PLC Annual Report and Accounts 2025		145

Group Remuneration and People Committee Report continued Annual Statement by the Chair of the Group Remuneration and People Committee continued

Additional remuneration for New CEO

In order to secure Enrique Alvarez Labiano,

we will be introducing a time bound

‘expatriate allowance’. Enrique had a similar

arrangement at his previous employer which

was used to fund housing and schooling in

the UK.

The proposal presents a very significant

reduction to the value of the equivalent

allowance at his former employer and was

previously not time bound. We have agreed

that this allowance here will terminate five

years after appointment and therefore will

provide an even bigger reduction in fixed pay

in due course, compared to his previous role.

We will also be required to buyout forfeited

deferred awards from his former employer,

where we will be looking to mirror the

previous structure. Details of this will be

disclosed in due course.

Other key activities in 2025

Chair of the Board and INED fees

The fees for the Chair of the Board and INEDs

were reviewed by the Committee for the

Chair of the Board and by the Board (minus

the INEDs) for the INEDs, and in line with

Executive Directors no increases were applied

to INED fees in 2025.

Pay and Performance arrangements

across the Group

In 2025, we also reviewed our approach to

wider workforce pay and performance

arrangements across the Group, in particular

on how to better promote a performance-

based culture aligned to the success of the

Group through greater discretion and

differentiation. Our revised approach,

aligned to best market practice, was

launched in late 2025 for implementation for

2026 pay review and bonus outturns.

Consideration of employee

policies and views

As the People Champion, I am the INED

responsible for representing the workforce on

the Board, I regularly meet with employees,

individually and through forums such as

OurVoice, to understand their views,

including those on remuneration, and report

these views to the Board. During 2025 views

the revised approach to workforce pay and

performance arrangements were based on

colleague, line manager and leadership

feedback. Further details on the activities of

OurVoice can be found on pages 84 and 171.

Concluding remarks

Our proposed new Policy provides a clear

and performance-driven approach to

remuneration, which supports our intent to

align strongly with investor interests in

shareholder performance and the long term

strategic health of our organisation, whilst

sustaining the achievement of our corporate

strategy. All whilst managing risk

appropriately. We believe that the new

proposal recognises shareholder feedback,

whilst supporting our ambition on CEO

succession.

I hope that you will provide support for the

proposed Policy, and for the Annual Report

on Remuneration, at our AGM and we

continue to thank shareholders for your

ongoing and continued support.

I would like to formally record my thanks to

my fellow Committee members, members of

senior management and our advisers, Korn

Ferry, for their support during 2025.

The Board reviewed and approved this report

on 4 March 2026.

Sally Jones-Evans

Chair of the Group Remuneration

and People Committee

1. Key performance indicators (see pages 25-27).

4 March 2026

The link between pay and the Group’s

performance, strategy, culture and

ESG commitments

Financial

Quality

Strategy

and Culture

Purpose

ESG

Sustainable

financial

growth

through

attractive

margins and

exceptional

returns.

Strong

governance

and quality

of the

business

underpins our

operations

Tailored

individual

objectives in

line with our

strategic

priorities

and values

Helping our

customers

prosper in line

with

our Purpose

To support

our Purpose

to help our

customers,

colleagues

and

communities

prosper


	Executive Director Bonus Scheme FY26 ¹ 200% of salary opportunity

	Financial (60%)			Non Financial ( 40%)

	• PBT (22.5%) • RoTE (22.5%) • Cost Delivery (12.0%) • Net loan book growth (3%)			• Satisfaction (5%) • Risk, Quality & Control (5%) • Transformation (10%) • Data (5%) • People (5%) • Personal (10%)

	The Scorecard is marked out of 100%. Total bonus is calculated by calculating Scorecard performance based on the relevant percentage each represents of their total bonus opportunity.


Performance Share Plan FY26 300% of salary opportunity

Financial (75%)	Risk (Non-financial) (15%)	ESG (10%)

• ROTE (37.5%) • TRS (37.5%)	• Non-financial/Risk (15%)	• ESG (10%)



OSB GROUP PLC Annual Report and Accounts 2025		146

Directors’ Remuneration Report The Remuneration Policy for Executive Directors



	Following the recent announcement of our CEO succession, the regulatory and market changes to Executive Director Remuneration as well as our own growth and future ambition, we have reviewed our Policy a year earlier than our three-year review cycle.

This section describes the Remuneration Policy (the Policy) for Executive Directors. The current

Remuneration policy was approved at the AGM on 9 May 2024 and formally came into effect

from that date. It was intended that this Policy would last for three years, however as detailed

in the Chair’s statement on pages 141-143, we have reviewed our Executive Director

Remuneration policy and have brought this forward a year. This is following the announced

CEO succession and the regulatory and market changes to Executive Director Remuneration.

It is intended that this new Policy will apply for three years from the date of approval. The

Committee will consider annually how the Policy is operated to ensure it remains aligned with

business strategy and regulatory requirements.

In determining the new Policy, the Committee has taken consideration of OSB’s strategic

priorities, FTSE market practices, the new regulatory guidance in relation to remuneration that

came into effect from October 2025 and our requirement to attract and retain talent to deliver

our strategic objectives. The views of our shareholders on matters of remuneration are

important to us and we have taken into account feedback in determining our proposals,

through meaningful consultation with key shareholders and proxy agencies.

The Committee is satisfied that any conflicts of interests have been mitigated in the

preparation of this policy.

Summary of Key Policy Changes

This table below sets out a summary of the key changes for the new 2026 Remuneration Policy, from that which was approved and set out in the 2024 Annual Report and Accounts.


Element	Summary of changes
Executive Director Bonus Scheme (Annual Bonus)	We are increasing the maximum bonus opportunity from 135% to 200% of salary. Despite the new regulatory minima being nil, we believe that deferral continues to be an important part of our annual bonus awards. The policy therefore requires that a minimum of 30% of any bonus earned will be deferred into shares which will be released over three years. This replaced the current approach of 50% deferral held of three years.
Performance Share Plan (LTIP)	We are increasing the maximum PSP award opportunity from 135% to 300% of salary. 75% of the award will vest after three years from the anniversary of the date of award and 25% will vest after year four. We note that this is more onerous than typical FTSE practice where 100% of LTIP awards normally vest after three years. We will also follow the expectations set out in the UK Corporate Governance Code such that both tranches will be held to year five from the date of award.
Minimum Shareholding requirement	This is increasing to 300% of salary for the CEO and CFO, from the existing requirements of 250% of salary for the CEO and 200% of salary for the CFO. The new policy will apply to new hires and the existing CFO. This change will not apply to our current CEO, Andy Golding. We will continue to apply a two year post-termination requirement in line with the current policy.



OSB GROUP PLC Annual Report and Accounts 2025		147

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued


Element	Purpose and link to strategy	Operation and performance conditions	Maximum
Salary	To reward Executive Directors for their role and duties required. Recognises an individual’s experience, responsibility and performance. Alignment with workforce policies Executive Directors salary increases are normally in line with or lower than the average of the workforce.	Paid monthly Base salaries are usually reviewed annually, with any changes usually effective from 1 April. Typically, no performance conditions apply to the payment of salary. However, when setting salaries, account is taken of an individual’s specific role, duties, experience and contribution to the Company. As part of the salary review process, the Committee takes account of individual and corporate performance, increases provided to the wider workforce and the external market for UK listed companies both in the financial services sector and across all sectors.	Increases will generally be broadly in line with or below the average of the UK workforce (as a percentage of salary). Higher increases may be awarded in exceptional circumstances such as, but not limited to, a material increase in the scope of the role, following the appointment of a new Executive Director (which could also include internal promotions), to bring a below- market package in line with the market over time or in response to market factors, or higher than typical individual performance.
Benefits	To provide market competitive benefits to ensure the wellbeing of employees. Alignment with workforce policies Benefits are structured generally in line with the wider workforce and are market competitive.	The Company currently provides: • car allowance • life assurance • income protection • private medical insurance • expatriate allowance • other benefits as appropriate for the role	There is no maximum cap on benefits, as the cost of benefits may vary according to the external market
Pension	To provide a contribution to retirement planning Alignment with workforce policies Pension contribution rates for Executive Directors are the same as for most of the workforce.	Executive Directors may participate in a defined contribution plan or, if they are in excess of the HMRC annual or lifetime allowances for contributions, may elect to receive cash in lieu of all or some of such benefit	In line with the rate received by the majority of the workforce, which is currently 8% of salary



OSB GROUP PLC Annual Report and Accounts 2025		148

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued


Element	Purpose and link to strategy	Operation and performance conditions	Maximum
Executive Director Bonus Scheme (Annual Bonus)	To incentivise and reward individuals for the achievement of pre- defined, Committee- approved, annual financial, operational and individual objectives which are closely linked to the corporate strategy Alignment with workforce policies The majority of our workforce participate in an annual bonus plan, with performance metrics aligned to business performance and individual KPIs Senior employees are required to defer a portion of their bonus into shares	Performance measures will be set based on a Scorecard that is a combination of Financial and Non-Financial measures. At least 50% of the bonus will be based on financial performance with the remainder based on non-financial measures which will typically include personal and strategic performance targets relevant to the performance period. The objectives in the Scorecard, and the weightings on each element, will be set annually and may be flexed according to individual roles and priorities. Each element will be assessed independently, but with Committee discretion to vary the payout (including to zero) to ensure there is a strong link between payout and performance. The Bonus outcome also has a risk underpin if the Committee believes an adjustment of the outcome is appropriate. There is also a general discretion to adjust the outcome to reflect other exceptional factors at the discretion of the Committee. Normally, at least 30% of any bonus earned will be delivered in shares, which are required to be held for up to three years. Awards will be structured in order to meet regulatory requirements, which in some circumstances may require a higher proportion of bonus to be paid in shares, deferral over a longer period, or the use of additional holding periods. Malus and clawback provisions apply, as described in note 1 on page 150.	The maximum bonus opportunity in any financial year will increase to 200% of salary. The departing CEO will remain on 110% of salary (against the previous policy maximum of 135% of salary) The threshold level for payment is 25% of maximum for any quantitative measure



OSB GROUP PLC Annual Report and Accounts 2025		149

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued


Element	Purpose and link to strategy	Operation and performance conditions	Maximum
Performance Share Plan	To incentivise and recognise execution of the business strategy over the longer-term Rewards strong financial, share, risk and ESG performance over a sustained period Alignment with workforce policies Only the most senior individuals participate in the PSP promoting longer-term performance and aligning them to shareholders’ interests	PSP awards will typically be made annually at the discretion of the Committee, usually following the announcement of full-year results. Usually, awards will be based on a mixture of internal financial performance targets, risk-based measures, ESG measures and relative TSR. At least 50% of the total PSP award will ordinarily be based on financial and relative TSR metrics. The performance targets will usually be measured over three years Any vesting will be subject to an underpin, whereby the Committee must be satisfied that: (i) the vesting reflects the underlying performance of the Company; (ii) the business has operated within the Board’s risk appetite framework; and (iii) individual conduct has been satisfactory. There is also a general discretion to adjust the outcome to reflect other exceptional factors at the discretion of the Committee. Updated regulations have allowed the Committee to align the delivery of awards more closely to typical pay structures for Executive Directors of other UK listed companies. Awards will vest in line with regulatory requirements, which require 75% of the award granted to vest after three years and the remaining 25% to vest in year four. Both tranches of awards will be subject to a holding period bringing the total time from grant to release to five years. These changes will apply to both historic and future awards. The PSP awards will accrue dividend equivalents over the vesting period and these will be paid as soon as practicable after the relevant date of vesting. Malus and clawback provisions apply as described in note 1 on page 150.	The maximum PSP opportunity will, in any year, be 300% of salary The departing CEO will remain on 110% of salary (against the previous policy maximum of 135% of salary) The threshold level for payment is 25% of maximum for any quantitative measure



OSB GROUP PLC Annual Report and Accounts 2025		150

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued


Element	Purpose and link to strategy	Operation and performance conditions	Maximum
All-employee share plan (e.g. Sharesave Plan)	All employees, including Executive Directors, are encouraged to become shareholders through an all-employee share plan	A tax-favoured plan under which regular monthly savings may be made over a three-year period. These savings can then be used to fund the exercise of an option at the end of the three-year period, where the exercise price is discounted by up to 20%. Executive Directors may also participate in other all-employee HMRC-approved share plans should they be introduced by OSB Group in the future.	Maximum permitted savings based on HMRC limits
Share ownership guidelines	To increase alignment between Executive Directors and shareholders Alignment with workforce policies Shareholding requirements are only in place for the most senior employees to strengthen the alignment of their interests with those of our shareholders	Executive Directors are expected to build and maintain a minimum holding of OSB Group shares. Executive Directors must retain at least 50% of the shares acquired on vesting of any share awards (net of tax) until the required holding is attained. On cessation of employment, Executive Directors must retain the lower of the in-service shareholding requirement, or the Executive Directors’ actual shareholding, for two years.	At least 300% of salary for new Executive Directors/the current CFO or such higher level as the Committee may determine from time to time. For the departing CEO, the current policy maximum of 250% of salary will remain The net of tax value of any unvested deferred awards (which are not subject to any future performance condition) may count towards the definition of a shareholding for this purpose

1.Malus and clawback provisions apply to both the annual bonus, including amounts deferred into shares, and PSP awards. These provide for the recovery of incentive payments within seven years from grant in the event of: (i) a material misstatement

of results; (ii) an error; (iii) a significant failure of risk management; (iv) regulatory censure; (v) in instances of individual gross misconduct; (vi) corporate failure; (vii) reputational damage; or (viii) any other exceptional circumstance as determined by

the Board. A further three years may be applied following such a discovery in order to allow for the investigation of any such event. In order to affect any such clawback, the Committee may use a variety of methods: withhold deferred bonus shares,

future PSP awards or cash bonuses, or seek to recoup cash or shares already paid.

Choice of performance measures

for Executive Directors’ awards to

deliver our Strategy

The Group uses a Scorecard to support its

annual bonus which incorporates both

financial and non-financial business drivers

across the Group. The combination of

performance measures ties the Bonus

outcome to the balanced delivery of corporate

targets, risk measures and personal/strategic

objectives.

The Committee sets the threshold, target and

stretch limits and reviews the measures used

in the Scorecard annually, to ensure they

continue to be relevant and remain anchored

to the corporate plan and strategic objectives.

The PSP incorporates measures of

shareholder, financial and non-financial

performance, in line with our key objectives

of sustained growth in earnings leading to

the creation of shareholder value over the

long-term with appropriate consideration of

risk and ESG performance.

Relative TSR provides close alignment

between the relative returns experienced by

our shareholders and the rewards to

Executive Directors.

There is an underpin for the PSP to ensure

payouts are aligned with underlying

performance, financial and non-financial

risk and individual conduct.

Bonus and PSP targets are set taking into

account the business plan, shareholders’

expectations, the external market and

regulatory requirements.

In line with HMRC regulations for such

schemes, the Sharesave Plan does not

operate performance conditions.

Remuneration Policy

for other employees

The Committee has regard to pay structures

across the Group when setting the Policy for

Executive Directors and ensures that policies

at and below the Executive Director level are

coherent. There are no significant differences

in the overall remuneration philosophy,

although pay is generally more variable and

linked more to the long-term for those at

more senior levels. The Committee’s primary

reference point for the salary reviews for the

Executive Directors is the average salary

increase for the UK workforce, with the

expectation that increases for Executive

Directors will, other than in exceptional

circumstances, be at or below the increase

for the UK workforce (as a percentage

of salary).

Overall, the Policy for the Executive Directors

is more heavily weighted towards

performance-related pay than for other

employees. In particular, performance-

related long-term incentives are not provided

outside the most senior management

population as they are reserved for those

considered to have the greatest potential to

influence overall performance.



OSB GROUP PLC Annual Report and Accounts 2025		151

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Illustration of application of Remuneration Policy

The chart below illustrates how the composition of the Executive Directors’ remuneration packages would vary under various performance scenarios, based on the intended implementation in 2026.

57.2%

25.4%

17.4%

47.1%

31.4%

21.5%

42.8%

28.5%

28.6%

59.2%

26.3%

14.5%

49.1%

32.8%

18.1%

33.3%

33.4%

14.3%

28.5%

57.2%

24.0%

32.1%

43.9%

100%

26.3%

35.0%

38.7%

100%



Current CEO⁵	New CEO⁶	CFO⁷

1.Minimum performance assumes no award is earned under the bonus and no vesting is achieved under the PSP – only fixed pay (salary, benefits and pension are payable and expatriate allowance for new CEO).

2.At on-target, half of the bonus is earned and 25% of maximum is achieved under the PSP.

3.At maximum, full vesting is achieved under both the bonus and PSP (i.e. 200% of salary under the bonus and 300% PSP for current Executive Directors).

4.At maximum, but illustrating the effect of a 50% increase in the share price on PSP awards.

5.Current CEO illustration are based on current CEO salary of £944,719 and additional fixed remuneration of 8% (of salary) pension, plus car allowance of £20,000 and £2,000 medical benefits totalling £1,042,297 and existing annual bonus and LTIP

maximums of 110% of salary.

6.New CEO illustration based on new CEO salary of £944,000 and additional fixed remuneration of a fixed time bound expatriate allowance of £250,000 per annum, 8% (of salary) pension, £20,000 car allowance and £2,000 medical benefits totalling

£1,291,520, annual bonus maximum of 200% of salary and LTIP maximum of 300% of salary

7.CFO illustration based on CFO salary of £566,500, and additional fixed remuneration of 8% (of salary) pension, plus car allowance of £15,000 and £2,000 medical benefits totalling £627,000, annual bonus maximum of 200% of salary and LTIP

maximum of 300% of salary.

Other than as noted in the chart above, share price growth and all-employee share plan participation are not considered in these scenarios.



OSB GROUP PLC Annual Report and Accounts 2025		152

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

The terms and provisions that relate to remuneration in the Executive Directors’ service agreements are set out below. Service contracts are available for inspection at the Company’s registered office.


Provision	Policy
Notice period	12 months on either side
Termination payments	A payment in lieu of notice may be made on termination to the value of the Executive Director’s basic salary at the time of termination. Such payments may be made in instalments and in such circumstances can be reduced to the extent that the Executive Director mitigates their loss. Rights to Deferred Share Bonus Plan and PSP awards on termination are shown below. The employment of each Executive Director is terminable with immediate effect without notice in certain circumstances, including gross misconduct, fraud or financial dishonesty, bankruptcy or material breach of obligations under their service agreements
Remuneration	Salary, pension and core benefits are specified in the agreements. There is no contractual right to participate in the bonus or to receive long-term incentive awards
Post-termination	These include six months’ post-termination restrictive covenants against competing with the Group; nine months’ restrictive covenants against dealing with clients or suppliers of the Group; and nine months’ restrictive covenants against soliciting clients, suppliers and key employees
Contract date	Andy Golding: 12 February 2020, Victoria Hyde: 22 July 2024

Approach to Recruitment and Promotions for Executive Directors

The remuneration package for a new Executive Director would be set in accordance with the terms of the Group approved Policy.

On recruitment, the salary may (but need not necessarily) be set lower than the relevant current Executive Director, with phased increases (which may be above the average increase for the

wider employee population) as the new Executive Director gains experience. The salary would in all cases be set to reflect the individual’s experience and skills and the scope of the role. Bonus

and PSP awards will be in line with the approved Policy.

The Committee will, in agreeing any package consider the incoming Executive Director’s skills and experience, the departing Executive Director’s remuneration package, the remuneration

package at their former employer and relevant market practice for similar roles.The Group may take into account and compensate for remuneration foregone upon leaving a previous employer

using cash awards, the Group’s share plans, or awards under Listing Rule 9.3.2(2). This would include taking into account: the quantum foregone; the extent to which performance conditions

apply; the form of award; and the time left to vesting. These would be structured in line with any regulatory requirements (such as the PRA Rulebook).

For all appointments, the Committee may agree that the Group will meet certain appropriate relocation costs.

For an internal appointment, including the situation where an Executive Director is appointed following corporate activity, any variable pay earnt whilst in their prior role would pay out

according to its terms.

Should an individual be appointed to a role (Executive or Non-Executive) on an interim basis, the Company may provide additional remuneration, in line with the Policy, for the specific role for

the duration the individual holds the interim role.



OSB GROUP PLC Annual Report and Accounts 2025		153

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

The Remuneration Policy for Chair of the Board and Independent Non-Executive Directors


Element	Purpose and link to strategy	Operation and performance conditions	Maximum
Fees	To attract and retain a high- calibre Chair of the Board and INEDs by offering a market competitive fee	The Chair of the Board and INEDs are entitled to an annual fee, with supplementary fees payable for additional responsibilities including being the Chair or member of the Group Audit, Group Nomination and Governance, Group Remuneration and People, and Group Risk Committees and for acting as the SID. Fees are reviewed periodically and there are no performance conditions. The Chair of the Board and INEDs are entitled to reimbursement of travel and other reasonable expenses incurred in the performance of their duties.	There is no prescribed maximum annual increase. The Committee is guided by the general increase in the non-executive market but on occasion may need to recognise, for example, change in responsibility and/or time commitments

Letters of appointment

Letters of appointment set out the duties and responsibilities of INEDs. The key terms are:


Provision	Policy
Period of appointment	Initial three-year term, subject to annual re-election by shareholders. On expiry of the initial term and subject to the needs of the Board, INEDs may be invited to serve a further three years. Beyond nine years, INEDs will be appointed at the discretion of the Group Nomination and Governance Committee
Notice periods	Three months on either side. Terminable with immediate effect and without compensation or payment in lieu of notice if the Chair of Boards or INEDs are not elected or re-elected to their position as a Director of the Company by shareholders
Payment in lieu of notice	The Company is entitled to make a payment in lieu of notice on termination

Letters of appointment are available for inspection at the Company’s registered office. The effective dates of the current INEDs’ appointments are shown on pages 105-106.

Approach to Recruitment of a new Chair of the Board or INED

For the appointment of a new Chair or NED, the fee arrangement would be in accordance with the approved Policy in force at that time.



OSB GROUP PLC Annual Report and Accounts 2025		154

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

How we will implement the

Remuneration Policy for

Directors in 2026

The proposed operation is summarised

below.

Fixed Pay

The current CEO and CFO will receive a

salary increase of 3% from 1 April 2026 in line

with an average increase being applied to

the wider workforce, bringing their salaries to

£944,719 and £566,500. The salary for the

new CEO has been set in line with the current

CEO at £944,000. In addition as noted

earlier in the report, the new CEO will also

receive an expatriate allowance of £250,000

per annum for 2026.

Annual Bonus

The 2026 annual bonus will be subject to a

maximum limit of 200% of salary. This will

apply to the new CEO and the CFO. For the

new CEO this will be pro-rated based on the

proportion of the period worked.

The leaving date and terms of the current

CEO are still being confirmed, however any

annual bonus in respect of 2026 will

This change will not be applied to the

departing CEO, whose bonus opportunity will

remain at 110% of salary (against the actual

existing Policy maximum of 135% of salary),

pro-rated based on the proportion of the

period worked.

30% of the 2026 annual bonus will be

deferred, with shares required to be held for

up to three years.

The 2026 Scorecard, as set out in the table

below will be based 60% on financial

measures and 40% on non-financial

measures, with a measure on individual

objectives now included within the Scorecard.

The non-financial element will remain based

on a range of KPIs and include an individual

element.

The individual assessment previously sat

outside the non-financial scorecard. The

Committee will assess the non-financial

measures with a qualitative assessment at

the year end based on measurable progress

made against these priorities, as well as a

range of key KPIs.

The Scorecard is marked out of 100%.

Total bonus is calculated by combining the

resulting performance of each individual

measure, based on the relevant percentage

each represents of the

total bonus opportunity.

For FY26, the CEO and CFO will each have

10% of their maximum bonus allocated to

individual objectives.

Objectives have been set based on a set of

robust strategic and individual priorities for

the Executive Directors. Both the CEO and

CFO will be measured on (i) developing and

nurturing the Group’s reputation with key

external stakeholders; and (ii) supporting a

seamless transition from the existing CEO to

the new CEO.

For the CEO, he will also be measured on (i)

leading a high-performing leadership team

with credible succession in place; and (ii)

ensuring that the Board and all colleagues

are clear and confident on the continued

delivery of strategic priorities.

For the CFO, she will also be measured on (i)

leading a Finance function that drives the

business and supports a relentless focus on

the Financial plan; (ii) leading to ensure the

regulatory and control agenda is delivered to

a high quality; and (iii) leading successful

Treasury and Investor Relations functions.

2026 Balanced Business Scorecard


	Performance Area	Primary Stakeholders	KPI/Measure	Weighting
Financial	Profitability	Shareholders	RoTE	22.5%
	Profitability	Shareholders	Profit Before Tax	22.5%
	Cost Management	Shareholders	Cost Delivery	12.0%
	Growth	Shareholders	Net Loan Book Growth	3.0%
Total Financial				60.0%

Satisfaction	Customer & Broker Satisfaction	Customers, Brokers & Regulators	Qualitative Assessment against progress & key KPIs	5.0%
Risk, Quality & Control	Risk, Quality, Control & Audit outcomes	Regulators & Shareholders	Qualitative Assessment against progress & key KPIs	5.0%
Transformation	Transformation Outcomes	Shareholder, Customers & Brokers	Qualitative Assessment against progress & key KPIs	10.0%
Data	Data Outcomes	Customer & Regulators	Qualitative Assessment against progress & key KPIs	5.0%
People	People Outcomes	Employees	Qualitative Assessment against progress & key KPIs	5.0%
Personal	Individual Outcomes	All	Qualitative Assessment against progress & key KPIs	10.0%
Total Non-Financial				40.0%



OSB GROUP PLC Annual Report and Accounts 2025		155

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Performance Share Plan

A PSP award of 300% of salary will be made

for the current CFO shortly after the 2026

AGM.

The leaving date and terms of the current

CEO are still being confirmed, however any

PSP award in 2026 will be in line with the

existing Policy limit at 110% of salary (against

the actual existing Policy maximum of 135%

of salary), pro-rated based on the proportion

of the period worked.

For the new CEO, a PSP award of 300% of

salary will be made shortly after his relevant

start date.

The number of shares will be determined

based on the average closing price over the

three dealing days prior to the date of grant.

Performance will be measured over the three-

year period to 31 December 2028. Awards

will vest in line with regulatory requirements,

which require 75% to vest after three years,

and the remaining 25% to vest in year four.

Both tranches of awards will be subject to a

holding period bringing the total time from

grant to release to five years.

The PSP award will attract dividend

equivalents which will accrue over the vesting

period.

For the 2026 grant, the performance metrics

and weightings are detailed in the table

below. The metrics and weightings provide a

balanced assessment of corporate

performance over the three-year period

taking into account financial, share price and

non-financial metrics.

A discretionary assessment at the time of

vesting ensures that awards are granted in

line with underlying performance, risk

appetite and individual conduct over the

period.

The target ranges for RoTE and Relative TSR

have been carefully set by the Committee

taking into account a number of factors,

including those set out below, which will

influence the outlook for our business

performance over the three years to 31

December 2028.

In particular, the Committee has noted the

significant factors impacting the approach

to target-setting this year:

• Business plan for the next three years

• Investor expectations

• Employee motivation

The Committee is cognisant of the need for

targets to be appropriately stretching,

particularly given the increased weighting

being placed on variable pay in the proposed

Policy and we are comfortable that these

targets provide a strong link between reward

and performance delivered and are at least

as stretching as target ranges in prior years.

As evidenced by our incentive payment levels

in recent years, which have been well below

the maximum and below many of our

competitors who have delivered a similar

level of performance, we have a strong track

record of setting stretching targets and this

is the case again this year.


Metrics ¹	Weighting	Threshold (25% of maximum)	Stretch (100% of maximum)	Rationale
RoTE (3 year average)	37.5%	13.0%	15.0%	Measures the sustainable financial performance and financial efficiency of the business
Relative TSR versus FTSE 250	37.5%	Median	Upper quartile	Measures the success of the Company versus other listed companies
Risk (Non-Financial)	15.0%	Discretionary assessment	Discretionary assessment	Qualitative Assessment of risk management of our business (see below)
ESG	10.0%	Discretionary assessment	Discretionary assessment	Measures the progress against our ESG strategy (see below)
Total	100.0%

1.Key performance indicators (see pages 25- 27). No vesting below threshold and pro-rata vesting between threshold and stretch.

Risk metric (Non-financial)

For the risk-based measure, the Committee will assess the risk management performance with regard to all relevant risks including, but not limited to an assessment of regulatory risk,

operational (incl. people) risk, conduct risk, liquidity risk, funding risk, marketing risk and credit risk. There will be a full retrospective disclosure of the Committee’s assessment. To support this

assessment, the Group CRO will prepare an annual report for each year of the performance period, together with and a summary report after year three, with each report endorsed by the

Chair of the Group Risk Committee.



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Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

ESG metric (Non-Financial)

The ESG performance will be determined based on the Committee’s assessment of progress against the ESG strategy which will be informed by performance against key employees and

environmental metrics. The metrics and the targets are summarised below.


ESG metric	2028 target
Scope 1 and 2 emissions	71.4% reduction from the Group’s 2022 baseline, in line with our 2030 external emissions reduction target

Scope 3 emissions	16% reduction in Scope 3 Category 15 carbon intensity (tCO2e/M ²) from the mortgage loan book versus the Group’s 2022 baseline, in line with our 2030 external emissions reduction target

Gender diversity	40% of senior roles who identify as female

Ethnicity diversity	14% of senior roles who identify as being from an ethnically diverse background in line with Parker Review recommendations

Employee engagement score	696.5 score in our annual ‘Best Companies Survey’ for UK employees (equivalent to an ‘Outstanding’ rating) and a score of 83 in our annual ‘Great Place to Work’ Survey for employees of OSB India (or a similarly stretching score if an alternative method is used to assess employee engagement over the period)

Chair of the Board and Independent Non-Executive Director fees

The fees for the Chair of the Board and INEDs were reviewed by the Committee for the Board Chair and by the Board (minus the INEDs) for the INEDs. In line with the wider workforce average, an

increase of 3% (rounded) will be applied across all fees with effect from 1 April 2026.


Base fees		£’000
Chair of the Board ¹		367.6
Independent Non-Executive Director		89.1
Senior Independent Director		22.2
ESG Champion		8.3


Additional Board Committee fees	Chair £’000	Member £’000
Group Nomination and Governance Committee		5.6
Group Audit Committee	33.4	8.3
Group Remuneration and People Committee	33.4	8.3
Group Risk Committee	33.4	8.3
Group Models and Ratings Committee	11.1	5.6

1.The Chair of the Board’s fee is inclusive of all duties; no additional Chair or Member fees are paid in relation to Board Committees.



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Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued



	This section outlines details of the remuneration received by Executive Directors and INEDs in respect of the financial year ended 31 December 2025. This annual Directors’ Remuneration Report (the ‘Report’) will, in conjunction with the Annual Statement of the Committee Chair on pages 141-145, be proposed for an advisory vote by shareholders at the forthcoming AGM to be held on 7 May 2026. Where required, data provided has been audited by Deloitte, as indicated throughout the Report.

Key matters considered by the Committee in 2025

Key issues reviewed and discussed by the Committee during the year included:

• Review and approval of 2024 bonus awards

• Considering and recommending the Directors’ Remuneration Report to the Board for

approval

• Review and approval of 2025 salary increases

• Approval of the 2025 personal objectives for the CEO, CFO and

Group Executive Committee

• Determining the 2025 grants under the PSP, in particular in light of the share price at the

time of grant and whether to use a discounted share price at grant to reflect the lack of

dividend accruing on the award

• Updates on the performance of the 2025 Bonus Scorecard and in-flight PSP awards

• Review of pay arrangements across the Group

• Remuneration arrangements for the new CIO and COO

• Review of the Directors’ Remuneration Policy for presentation to shareholders at the

2026 AGM

• Annual review of the costs and performance of the Committee’s independent remuneration

adviser

• Considering and recommending the People and Culture Strategy and the DE&I Strategy

• Other business as usual matters for employees under the Committee’s scope

Advisers to the Committee

Korn Ferry provided independent advice to the Committee during 2025, having been

appointed following a competitive tender process in 2017. The total fees relating to work for the

Committee paid to Korn Ferry in respect of Directors Remuneration for 2025 were £127,698

(plus VAT) and were charged on a time and materials basis.

Korn Ferry has no other connection with the Company or any individual Director. Korn Ferry is

a member of the Remuneration Consultants’ Group and abides by the voluntary code of

conduct of that body, which is designed to ensure that objective and independent advice is

given to remuneration committees. The Committee is satisfied that Korn Ferry provides

objective and independent advice.

Other Committee input

The Committee consults with the CEO (as appropriate) and seeks input from the Chair of the

Group Risk Committee to ensure that any remuneration or pay scheme reflects the

Company’s risk appetite and profile and considers current and potential future risks.

The Committee also receives input on senior management remuneration from the CEO, CFO,

CPO and the Reward Director. The Company Secretary (or their nominee) acts as Secretary to

the Committee and advises on regulatory and technical matters, ensuring that the Committee

fulfils its duties under its terms of reference. No individual is present in discussions directly

relating to their own pay.



OSB GROUP PLC Annual Report and Accounts 2025		158

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Directors’ pay outcomes for 2025

Remuneration and fees payable for 2025 – (audited)

These tables below sets out the total remuneration received by each Executive Director and INED for the years ending 31 December 2025 and 31 December 2024.


		Basic salary	Taxable benefits ²	Pension ³	Annual bonus paid ⁴	Amount bonus deferred⁴	PSP ^5,6	Total fixed pay	Total variable pay	Total
Executive Directors	Year	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Andy Golding	2025	917	22	73	339	339	566	1,012	1,244	2,256
	2024	910	22	73	270	270	257	1,005	797	1,802
Victoria Hyde ¹	2025	550	17	53	203	203	212	620	619	1,239
	2024	244	7	13	64	64	–	264	128	392

1.Victoria Hyde was appointed on 22 July 2024. Remuneration shown is from date of appointment for services as a Director. The pension contribution paid was based on her previous salary before her appointment as a Director in 2024 for the entirety

of 2024. An additional remedying pension payment to make her good for the underpayment since her appointment as a Director was made in March 2025 and is included in this year’s Directors’ Remuneration Report.

2.Taxable benefits received include car allowance (CEO: £20,000; CFO: £15,000) and private medical cover.

3.Executive Directors currently receive pension contributions (or cash in lieu thereof) of 8% of salary, which is in line with the majority of the workforce.

4.50% of the bonus is payable in cash and 50% in shares deferred for three years in line with current policy.

5.The PSP figure for the year ended 31 December 2024 has been restated based on the share price on vesting of £4.49 for the 2022 PSP.

6.The PSP figure for the year ended 31 December 2025 has been valued using the fourth quarter average share price of £5.67. The value will be restated in next year’s report based on the actual share price on vesting for the 2023 PSP.

7.Whilst there was no salary increase in 2025, the year on year variance relates to the timing of the April 2024 salary increase, which only applied to 9 months of the reported period and is shown in 2025 as a full year amount


Total fees £’000	2025	2024
Chair
David Weymouth	356.9	356.9
Independent Non-Executive Directors
Kal Atwal¹	104.8	102.7
Henry Daubeney²	125.7	55.9
Noël Harwerth ³	132.5	137.9
Sarah Hedger⁴	47.2	132.5
Gareth Hoskin ⁵	92.6	–
Sally Jones-Evans⁶	93.4	–
Rajan Kapoor⁷	102.4	140.6
Simon Walker⁸	137.9	137.9
Total	1,193.4	1,064.4

INEDs cannot participate in any of the Company’s share schemes and are not eligible to join the Company pension scheme.

1.Kal Atwal received £0 (2024 £0) for taxable travel expenses; total payments received £104,770 (2024: £102,742).

2.Henry Daubeney received £0 (2024 £0) for taxable travel expenses; total payments received £125,738 (2024: £55,875).

3.Noël Harwerth received £1,260 (2024: £1,839) for taxable travel expenses; total payments received £133,743 (2024: £139,730).

4.Sarah Hedger received £0 (2024: £149.00) for taxable travel expenses; total payments received £47,219 (2024: £132,633).

5.Gareth Hoskin was appointed on 1 April 2025. He received £941 taxable travel expenses; total payments received £93,224.

6.Sally Jones-Evans was appointed on 1 April 2025. She received £3,279 taxable travel expenses; total payments received £96,679.

7.Rajan Kapoor received £0 (2024: £632.15) for taxable travel expenses; total payments received £102,382 (2024: £141.277).

8.Simon Walker received £0 (2024 £0) for taxable travel expenses; total payments received £137,891 (2024: £137,891).



OSB GROUP PLC Annual Report and Accounts 2025		159

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Executive Director bonus scheme 2025

The Group delivered a strong performance across the Balanced Business Scorecard (the ‘Scorecard’), with performance exceeding target for the Financial and Non-Financial segments

recognising our progress and achievements in these two areas. As an underpin, the Committee also considers whether the Scorecard’s formulaic outcome reflects the Group’s underlying

performance, risk appetite and profile, and considers current and potential future risks. For 2025 we moved to a qualitative assessment for the non-financial metrics and ensured that we

incorporated our key strategic priorities which allows both Management and the Committee to give a more well-rounded assessment on how the Group has performed. These were purposely set

at a very stretching and ambitious level given the extent to which we wanted to progress some of our strategic objectives.

The bonus payout under the Scorecard is 65.76%. For the CEO and the CFO, this represents 90% of their total bonus outcome. The remaining 10% is based on the achievement of stretching

personal objectives. Performance against personal objectives were considered by the Board and Committee to be very strong. This resulted in a payout of 8% out of 10% on this element for both

the CEO and CFO.

Total payouts under the 2025 Executive Directors’ Bonus Scheme are therefore 67.18% of maximum opportunity for the CEO and CFO. The Committee believes that these payouts are

appropriate, reflecting the underlying performance of the Group. The Committee considered these outcomes and does not believe that discretion is required. The bonus is paid half in cash and

half in shares, with the shares held for three years in line with current regulatory requirements.

Performance against the 2025 Scorecard is set out below:


			Targets ¹
			Threshold	Budget	Stretch	Actual	Outcome for
Category	Key performance indicator	Weighting	(25%)	(50%)	(100%)	FY25	CEO /CFO
Financial (65%)	PBT (£m)	22.5%	£339m	£377m	£415m	£383m	12.88%
	All-in RoTE (%)	22.5%	12.1%	13.4%	14.7%	13.7%	13.85%
	Cost Delivery (£m)	12.5%	£280m	£270m	£260m	£270.1m	6.22%
	Net loan book growth (%)	7.5%	–%	1.5%	4.0%	3.2%	6.30%
Non-Financial (35%)	Customer and Broker Satisfaction Outcomes	7.5%	Satisfactory Progress	Met Expectations	Significantly Exceeded Expectations	75.0%	5.63%
	Risk, Quality, Control & Audit Outcomes	7.5%	Satisfactory Progress	Met Expectations	Significantly Exceeded Expectations	80.0%	6.00%
	Modernisation Outcomes	10.0%	Satisfactory Progress	Met Expectations	Significantly Exceeded Expectations	75.0%	7.50%
	Data Outcomes	5.0%	Satisfactory Progress	Met Expectations	Significantly Exceeded Expectations	67.5%	3.38%
	People Outcomes	5.0%	Satisfactory Progress	Met Expectations	Significantly Exceeded Expectations	80.0%	4.00%
Sub-total for Scorecard only		100.0%					65.76%
Scorecard contribution to bonus outcome		90% ²					59.18%
Personal contribution to bonus outcome		10% ²					8.00%
Total payout as a % of maximum opportunity							67.18%

1.Targets – based on a sliding scale between Threshold (25% of maximum) and Stretch (100% of maximum).

2.The personal objectives percentage is 10% for the CEO and CFO. The Scorecard percentage is 90% for the CEO and CFO.



OSB GROUP PLC Annual Report and Accounts 2025		160

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

2025 personal performance

The Executive Directors could earn up to a maximum of 10% of their bonus based on their performance against agreed personal objectives.

The objectives for 2025 were built around strategic priorities (as identified in our 2024 Annual Report) and cultural indicators. Performance against these objectives for the Executive Directors

was considered to be very strong, with the delivery of key objectives in a challenging and uncertain year.

The objectives set at the start of the year and the Committee’s assessment of performance against them are set out below:


	Objectives	Key achievements
CEO	Lead a high-performing ExCo leadership team with robust succession in place to ensure effective delivery against our strategic objectives	• Led a high-performing ExCo leadership team across 2025 • Successful onboarding of new CIO, succession of COO and Group Commercial Director • Other senior restructuring at the ExCo minus one level
	Ensure Board and all colleagues are clear and confident on the strategic priorities and longer-term strategy development	• Significantly improved communication and senior visibility across OSB and despite significant cost reduction/restructuring programmes broadly maintaining Engagement scores • Strategic priorities developed for 2025 and communicated widely and used to frame agenda and delivery and ensure stronger focus than in prior years
	Develop and nurture OSB’s reputation with external stakeholders	• Regulators – relationships have been strengthened and improved with our supervising bodies • Shareholders – Initiatives to include Investor day established confidence with investors through delivery of guidance (and delivery against that guidance). Investor buy in to the medium and long-term transformation investment case, noting the significant increase in share price over the year
CFO	Develop and nurture OSB’s reputation with external stakeholders	• Contributed significantly to developing and nurturing our reputation with external stakeholders – to include regulators and shareholders • Led our Investor day which has helped established confidence with investors through delivery of guidance (and delivery against that guidance)
	Transform Finance into a leading finance function and deliver excellence in BAU	• Transformation of Finance into a leading finance function has been a key part in ensuring that above target delivery against financial plan • Driven a number of cost-saving opportunities across the Group and driven forward the operating model transformation
	Support building the Group’s single source of data and lead on building data-led insights	• Constructed the proposal around the central analytics team and co-ordinated much of the data section for Board strategy • Significant improvement on analytics across lending, saving and credit compared to previous with further evolution expected
	Support the Group’s transformation agenda	• Held team to account to ensure we delivered to scope and cost, and supported and challenged throughout the year • Delivered on Finance requirements for transformation in support of the delivery play (e.g. lendings, savings etc.)
	Lead high-performing Treasury and Investor Relations functions	• Commencement of improving the profile and presence of Treasury across the organisation through visible leadership of funding and hedging optimisation and delivery • Supported capital markets strategies and successfully planning the succession activities to include appointment of a new Group Treasurer and Head of Capital Markets



OSB GROUP PLC Annual Report and Accounts 2025		161

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Long-term incentive plan (audited)

The 2023 Awards under the PSP were based

on performance over the three-year period

which ended on 31 December 2025.

Performance was based 35% on EPS growth;

35% on TSR versus companies in the FTSE

250 Index (excluding Investment Trusts); and

15% each on RoE and an assessment of the

Group’s overall risk performance.

Performance against the EPS target range

was below the threshold for payment, so

there was a zero payout under this element.

The Group’s TSR over the performance

period placed the Group in the upper quartile

against the FTSE 250 peer group and

therefore 100% of the TSR part of the Award

was earned.

The average RoE over the performance

period was at threshold resulting in 25% of

the RoE part of the Award being earned.

In relation to the 15% Risk element, there was

a robust process to support the Committee’s

assessment of this measure. Papers were

prepared for each year of the performance

period by the Group CRO, together with an

overall assessment for the three-year

performance period, with each endorsed by

the Chair of the Group Risk Committee.

These papers allowed the Committee to

assess the Group’s risk performance under

six categories: Culture, Credit, Solvency and

Liquidity, Conduct and Compliance,

Operational and Reputational risk.

The Committee concluded that a score of

13% was appropriate for 2025. Together with

the scores of 12% and 11% given to the risk

elements of the 2023 PSP in 2023 and 2024,

this led to an overall rating of 12% (out of a

maximum 15%) for the three years to 31

December 2025.

In total, 50.75% of the maximum PSP Awards

have been earned. The Committee is

comfortable there has been an appropriate

link between reward, performance and the

broader stakeholder experience over the

three-year performance period (including the

experience of customers) and discretion was

not used to adjust the incentive outcome.


	Weighting	Threshold (25% vesting)	Stretch (100% vesting)	Actual	Vesting of portion
EPS	35%	92.0p	105.0p	74.0p	0% out of 35%
Relative TSR	35%	Median	Upper quartile	Upper Quartile	35% out of 35%
Average RoE¹	15%	15%	21%	15%	3.75% out of 15%
Non-financial/Risk	15%	Assessed by the Committee	Assessed by the Committee	Assessed by the Committee	12% out of 15%

1.RoE targets were set in 2023 based on achieving an average RoE for the three years to 31 December 2025. The RoE portion is subject to an underpin requiring that the CET1 ratio is not below the Board-approved minimum requirement,

which has been met.

The Committee is comfortable that the level of vesting is in line with underlying performance and reflects the impact of risk appetite, individual conduct and shareholder experience over the

performance period. The award was originally structure in line with UK Banking regulations, vesting in five equal tranches between 2026 and 2030, subject to a further one year holding period.

as explained earlier in the report, updated regulations have allowed the Committed align the delivery of this award more closely to typical pay structures for Executive Directors of other UK listed

companies. As such, the 2023 Award will now vest 75% in 2026 and 25% in 2027, with a further holding period on both tranches to 2028, being five years from the original grant.

The 2023 PSP awards will therefore vest as follows:


Executive Directors	Number of shares granted	Number of shares due to vest	Number of shares lapsed	Value from share price increase/ decrease¹	Total value vesting ²
Andy Golding	196,634	99,791	96,843	£69,124	£565,953
Victoria Hyde ³	73,815	37,461	36,354	£25,949	£212,456

1. Value of share price increase/(decrease) based on a £4.98 share price at the time of grant of the award compared to the three-month average share price of £5.67 to 31 December 2025.

2. Value of shares based on a three-month average share price of £5.67 to 31 December 2025.

3. Victoria’s 2023 PSP shares were granted prior to her appointment as CFO.



OSB GROUP PLC Annual Report and Accounts 2025		162

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Executive pay outcomes in context

Percentage change in the remuneration of the Directors

The table below sets out the percentage change in base salary, value of taxable benefits and bonus for all the Directors compared with the average percentage change for employees. For these

purposes, UK employees who have been employed for over a year (and therefore eligible for a salary increase) have been used as a comparator group as they are the analogous population

(based on service and location). The percentage change for Executive Directors and INEDs is typically calculated based on the remuneration disclosed in the single figure tables on page 158,

however for 2025 Executive Directors, the Chair of the Board and INEDs did not receive a salary or fee increase. The percentage is not included for Directors who joined the Board in the relevant

year, as the disclosure would not be meaningful.

The increase in annual bonus between this year and the previous year reflects the improved outturn on business performance compared to the previous year. There have been no material

changes to benefits over the period shown.

% change in salary/INED fees ¹

% change in taxable benefits ²

% change in annual bonus ³

% Change

2020/21

2021/22

2022/23

2023/24

2024/25

2020/21

2021/22

2022/23

2023/24

2024/25

2020/21

2021/22

2022/23

2023/24

2024/25

UK employees

5.1%

11.4%

9.0%

5.0%

21.9%

34.0%

25%

(13.0%)

14.2%

18.0%

Andy Golding

10.9%

3.0%

5.0%

0.6%

366.1%

(45.0%)

24.0%

25%

Victoria Hyde

n/a

22%

April Talintyre⁶

n/a

(69%)

n/a

330%

(48%)

(55%)

n/a

Kal Atwal

n/a

17%

n/a

Henry Daubeney

n/a

Noël Harwerth

16%

285%

(168%)

277%

91%

(31%) ⁴

n/a

Sarah Hedger

(1%)

23.5%

19.1%

9.0%

n/a

198%

(24%)

(59%)

(100%) ⁸

n/a

Gareth Hoskin ⁷

n/a

Sally Jones-Evans⁷

n/a

Rajan Kapoor

(2%)

10.2%

4.8%

3.0%

n/a

21%

(100%) ⁵

n/a

Simon Walker

n/a

23.0%

7.0%

n/a

David Weymouth

10%

3.0%

n/a

1. Executive Directors, the Chair and NEDs did not receive an increase in 2025, employees received an average of 5% taking into account April 2025 annual pay review and any other off-cycle individual increases during the year.

2. Prior year expense variations for Directors benefits relate to fluctuations in yearly expense claims.

3. 2025 bonus payout for CEO and CFO bonus is 67.18% versus 2024 payouts of 53.60% for the CEO and 54.91% for the CFO.

4. This relates to taxable travel expenses of £1,260 (2024: £1,839).

5. This relates to taxable travel expenses of £0 (2024: £632).

6. April Talintyre retired on 9 May 2024 and ceased employment on 2 November 2024.

7. Gareth Hoskin and Sally Jones-Evans joined the Board in April 2025.

8. This relates to taxable travel expenses of £0 (2024; £149)



OSB GROUP PLC Annual Report and Accounts 2025		163

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Comparison of Company performance and CEO remuneration

The following table summarises the CEO single figure for total remuneration, annual bonus and LTIP payout as a percentage of maximum opportunity for the ten years to 31 December 2025.


	2016	2017	2018	2019	2020 ¹	2021	2022	2023	2024	2025
Annual bonus
(% of maximum opportunity)	88.75%	85.00%	91.75%	75.89%	20.60%	86.83%	84.67%	44.33%	53.60%	67.18%
LTIP vesting
(% of maximum opportunity)	–%	100.00%	50.00%	75.10%	62.74%	87.16%	92.56%	70.98%	34.27%	50.75%
CEO single figure of remuneration
(£’000)	910	1,614	1,602	1,382	1,510	2,587	3,058	1,893	1,767	2,256

1.The cash portion of the 2020 bonus was waived by the Executive Directors before they became entitled to it. As such, only the share portion of the 2020 bonus was payable (i.e. half of the bonus of 41.2% of maximum).

Total shareholder return

This graph shows the value, at 31 December 2025, of £100 invested in OneSavings Bank plc on 1 January 2015, and following the insertion of a new holding company in November 2020, the

shares of OSB GROUP PLC, compared with the value of £100 invested in the FTSE All Share Index on the same date. The other points plotted are the values at intervening financial year ends.

The FTSE All Share Index is considered to be the most appropriate index against which to measure performance as the Group has been a member of this index since Admission of OneSavings

Bank plc to the London Stock Exchange.

Total shareholder return

Source: Datastream (LSEG)



OSB GROUP PLC Annual Report and Accounts 2025		164

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

CEO pay ratios

The ratio of the CEO’s single figure of total

pay to median UK employee pay is set out in

the table below. The ratio has been

calculated in accordance with methodology

B as it is the same pay data for employees as

is used for the gender pay gap analysis and

is based on pay and benefits as at 5 April

each year. Full-time equivalent pay for

individuals that do not work full-time has

been calculated by increasing their pay pro-

rata to that of a full-time individual. No

further estimates or adjustments have been

made. The employees identified are

considered to be representative of the

quartile positions as their total pay is in line

with expected positioning and the proportion

of fixed pay to variable pay is also in line with

other individuals at those levels.

Since 2018 our CEO pay ratio has changed

due to a number of organisational and

external events. For example OSB’s

Combination with CCFS in October 2019 and

the impact of incentive payments due to

COVID-19 in 2020.

The reduction to the ratios in 2024 and 2023

compared to previous years reflect a

reduction to the level of CEO pay caused by

relatively lower annual bonuses and lower

value payouts of PSP awards in those years.

The change in ratio in 2025 has increased in

the majority of quartiles due to our higher

variable pay outturns for all colleagues,

which is proportionally higher for the CEO.

There has been no change to the Group’s

employment models during this period and

the median ratio is consistent with the pay,

reward and progression policies within the

Group. The Executive Directors pay is set by

the Committee with reference to both the

internal relativities across the Group and

external market benchmarks. As such, the

pay ratio is considered appropriate and is

not considered excessive, particularly when

compared to other listed financial

services companies.


CEO pay ratio	2017	2018	2019	2020	2021	2022	2023	2024	2025
Method	B	B	B	B	B	B	B	B	B
CEO single figure	1,614	1,602	1,382	1,510	2,571	3,058	1,893	1,767	2,256
Upper quartile	24.8	22.3	22.5	28.1	35.9	45.1	26.4	20.4	25.2
Median	46.1	40.1	32.0	42.1	56.1	70.1	39.1	36.6	49.7
Lower quartile	62.1	59.5	54.6	51.6	82.2	86.3	57.9	56.5	58.8


	Basic salary (£'000)	Total pay (£'000)
2025	Basic salary (£'000)	Total pay (£'000)
CEO	916.7	2,256
Lower quartile – Employee A	33.1	38.4
Median – Employee B	38.7	45.4
Upper quartile – Employee C	76.4	89.4



OSB GROUP PLC Annual Report and Accounts 2025		165

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Relative importance of the spend on employee pay (audited)

The table below shows the Group’s total employee remuneration (including the Directors) compared to distributions to shareholders and profit before tax for 2025 and 2024. In addition to the

required disclosures showing total employee costs and distributions to shareholders, the table also shows PBT and headcount to provide a fuller picture.


	2025	2024
Total employee costs	£148.6m	£143.9m
Distributions to shareholders¹	£125.5m	£126.4m
Profit before tax (PBT) ²	£382.5m	£418.1m
Total employee costs vs PBT	38.8%	34.4%
Average headcount	2,483	2,559
Average PBT per employee	£154,048	£163,384

1.See note 13 to the financial statements. In addition to dividends, the Company repurchased a total of 18,070,090 (2024: 22,710,094) ordinary shares as part of its £100m (2024: £100m) share repurchase programmes 14 March 2025 (2024: 14 March

and 6 September 2024).

2.Profit before tax is presented on a statutory basis for 2025 and underlying basis for 2024. These are comparable as both exclude acquisition-related items, which were fully written off in 2024.

Other disclosures relating to 2025 Executive remuneration

Scheme interests awarded during the financial year (audited)

The table below shows the conditional share awards made to Executive Directors on 24 March 2025 under the 2025 PSP and the performance conditions attached to these awards.

The Committee has discretion to adjust the vesting level to ensure that the reward level reflects underlying performance, risk and individual conduct. There will be full disclosure of the

Committee’s deliberations on these matters in the 2027 Directors’ Remuneration Report. The Award was originally structured in line with UK banking regulations, vesting in five equal tranches

between 2028 and 2032, subject to a further one year holding period on each tranche. As explained earlier in the report, updated regulations have allowed the Committee align the delivery of

this award more closely to typical pay structures for executive directors of other UK listed companies. As such, the award will now vest 75% in 2028 and 25% in 2029, with a further holding

period on both tranches to 2030, being five years from the grant.


Executive	Face value of award (percentage of salary)	Face value of award	Number of shares¹	Percentage of awards released for achieving threshold targets	End of performance period
Andy Golding	110%	£1,008,346	281,913	25%	31 December 2027
Victoria Hyde	110%	£604,998	169,145	25%	31 December 2027

1. The number of shares awarded was calculated using a share price of £3.5768 (the average closing price over the three Dealing Days prior to 24 March 2025, discounted to reflect the expected dividend yield between the award date and the vesting

date of each tranche).

2.Performance conditions are (i) EPS for FY2027 30% weighting ( 25% vesting at 85p per share increasing to 100% vesting at 100p per share), (ii) TSR versus FTSE excluding investment Trusts (25% vesting for median performance increasing to 100%

vesting for upper quartile performance), (iii) RoTE 15% weighting (25% vesting at 13% increasing to 100% vesting at 14.45%), (iv) Risk 15% weighting (discretionary assessment) and (v) ESG 10% weighting (discretionary assessment).



OSB GROUP PLC Annual Report and Accounts 2025		166

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Payments to past Directors

Details were contained in last year’s report relating to the remuneration arrangements for our former CFO, April Talintyre, in connection with her retirement on 9 May 2024. April Talintyre was

determined to be a ‘good leaver’ for the purpose of the annual bonus and her PSP awards and has received the following remuneration in 2025, or will receive, the following remuneration in

the future:

• Previous Deferred Bonus Plan Awards relating to the FY22 annual bonus vested in 2025 and FY23 annual bonuses will vest in 2026 in line with their original terms, after three years.

• The 2022 PSP award was pro rated for the proportion of the three-year performance period elapsed on 2 November 2024. The 2023 PSP award will be similarly pro rated and remains subject

to regulatory vesting and holding periods.

• Outstanding and previously paid incentive awards remain subject to clawback and malus provisions.

• April is required to hold shares worth equivalent to 200% of her base salary for at least two years after ceasing employment.

Payments for loss of office

There were no payments for loss of office in the year under review.

Statement of Directors’ shareholdings and share interests (audited)

Directors are eligible to participate in our All-employee share plan SAYE schemes. Participation for our Executive Directors are included in the below table:

All-employee share plans (audited)


Executive Directors	Date of grant	Exercise price	Market price 31 December 2025	Exercisable from	Exercisable to	Number of options granted	Number of options as at 31 December 2025
Andrew Golding	1 December 2020	£2.2901	£6.4250	1 December 2023	n/a	7,859	7,859
April Talintyre (former CFO)	29 September 2023	£2.7157	£6.4250	1 December 2026	1 June 2027	6,819	6,819
Victoria Hyde	29 September 2023	£2.7157	£6.4250	1 December 2026	1 June 2027	6,819	6,819



OSB GROUP PLC Annual Report and Accounts 2025		167

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Statement of Directors’ shareholdings and share interests (audited)

Total shares owned by Directors and connected persons and share ownership guidelines

The CEO and the CFO are currently required to accumulate and maintain a holding of ordinary shares in the Company equivalent to no less than 250% and 200% of salary, respectively,

increasing to 300% from 2026 as part of the new Policy. This is calculated using the value of beneficially owned shares plus the net of tax value of deferred bonus shares or any other unvested

share awards which are not subject to performance conditions. Half of any vested share awards must be retained until the guideline is achieved. Based on the current share price, the CEO holds

shares in excess of these levels. The CFO has not yet reached the required level of 200% of salary. Until such time as the required shareholding level is achieved, the CFO must retain at least

50% of share awards which have reached the end of the vesting or holding period.


	Interest in Shares ¹		Interest in Share Awards		Shareholding	requirements
	Beneficially owned at 1 January	Beneficially owned at 31 December	Without performance conditions at 31 December	Subject to performance conditions as at 31 December	Shareholding requirement (percentage	Current shareholding (percentage
	2025	2025	2025 ²	2025	of basic salary)	of basic salary) ³
Executive Directors
Andy Golding⁴	831,168	658,458	548,319	543,055	250%	665%
Victoria Hyde	7,049	20,055	101,520	325,828	200%	90%
Non-Executive Directors
Kal Atwal	–		–	–	–	–
Henry Daubeney	20,000	20,000	–	–	–	–
Noël Harwerth	–	–	–	–	–	–
Gareth Hoskin	–	–	–	–	–	–
Sally Jones-Evans	–	–	–	–	–	–
Simon Walker	25,000	25,000	–	–	–	–
David Weymouth	22,414	22,414	–	–	–	–

1.Vested shares are held in a corporate nominee account and are subject to the relevant retention periods. This account is also used to monitor current and post-employment shareholding guidelines.

2.Includes DSBP awards and PSP awards to the extent that performance targets have been met.

3.Shareholding based on the closing share price on 31 December 2025 of £6.425 and year-end salaries. Where relevant, awards calculated at net of tax value for the shareholding requirements calculation.

4.Includes 518,184 shares that are owned by spouse.

The Company operates an anti-hedging policy under which individuals are not permitted to use any personal hedging strategies in relation to shares subject to a vesting and/or retention period.



OSB GROUP PLC Annual Report and Accounts 2025		168

Directors’ Remuneration Report continued The Remuneration Policy for Executive Directors continued

Statement of voting at the Annual General Meeting

Shareholders were asked to approve the 2024 Annual Report on Remuneration and the Directors’ Remuneration Policy at the 2025 AGM. The votes received are set out below:


Resolution	Votes for	% of votes cast	Votes against	% of votes cast	Total votes cast	Votes withheld
To approve the 2024 Remuneration Report (2025 AGM)	277,626,187	98.95	2,936,362	1.05	280,562,549	1,010,292
To approve the Remuneration Policy (2024 AGM)	301,192,571	98.01	6,100,599	1.99	307,293,170	11,148,042

Approval

This report was approved by the Board of Directors (on the recommendation of the Group Remuneration and People Committee) and signed on its behalf by:

Sally Jones-Evans

Chair of the Group Remuneration and People Committee

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		169

Directors’ Report: other information

In accordance with the Companies Act, the Directors present their report for the year ended 31 December 2025. Relevant information required to be included in the Directors’ Report including

disclosures required by the FCAs Disclosure and Transparency Rules and UK Listing Rule LR 6.1.1, are deemed to be incorporated by reference in this report and detailed in the table below.

Certain matters required to be disclosed in the Directors’ Report have been included in the Strategic Report.



Business activities and future development	16 - 38
Corporate Governance Report	104 - 174
Dividend	170
Employees	84 - 88
Engagement with stakeholders and section 172	119 - 123
Environmental matters	68 - 103
Events after the reporting period	247
Internal controls and financial risk management	44 - 72
Key performance indicators	25 - 27
Policies	83, 93
Principal risks and uncertainties	49 - 59
Social and community issues	89 - 90

Share capital and rights attaching to shares

As at 31 December 2025, the Company’s issued share capital comprised of:


Number of shares	% of total capital	Type of shares	Nominal value
355,974,125	100%	Ordinary	£0.01

Further details relating to share capital can be found in note 37.

Without prejudice to any special rights previously conferred on the holders of any existing shares or class of shares, any share in the Company may be issued with such rights

(including preferred, deferred or other special rights) or such restrictions, whether in regard to dividend, voting, return of capital or otherwise as the Company may from time to time by

ordinary resolution determine (or, in the absence of any such determination, as the Directors may determine).



OSB GROUP PLC Annual Report and Accounts 2025		170

Directors’ Report: other information continued

Authorities to allot and

pre-emption rights

On 8 May 2025, shareholders re-established

the general authority for the Directors to allot

up to £1,234,505.17 of the nominal value of

ordinary shares of £0.01 each. In addition,

shareholders gave authority for the Directors

to grant rights to subscribe for, or to convert

any security into, regulatory capital

convertible instruments up to £740,702.69 of

the nominal value of ordinary shares

equivalent to approximately 20% of issued

share capital.

Repurchase of shares

The Company has an unexpired authority to

repurchase ordinary shares up to a

maximum of 37,035,134 ordinary shares.

During the year, the Company repurchased

18,070,090 ordinary shares (each with a

nominal value of £0.01) as part of its £100m

share repurchase programme announced to

the market on 13 March 2025 (2024: £50m

plus a further £50m).

Employee share schemes

The Group’s Sharesave ‘save as you earn’

Scheme is an all-employee share option

scheme open to all UK-based employees. The

Sharesave Scheme allows employees to

purchase options by saving a fixed amount

of between £10 and £500 per month over a

period of three years, at the end of which,

the options, subject to leaver provisions, are

usually exercisable. The Sharesave Scheme

has been in operation since June 2014 and

options are granted annually, with the

exercise price set at a 20% discount of the

share price on the date of grant.

Further details of the Group’s employee

Sharesave schemes are set out on page 150

in the Directors’ Remuneration Report.

Results, dividends

and dividend waiver

The results for the year are set out in the

Consolidated Statement of Comprehensive

Income on page 186.

The Group has in place a dividend policy for

the purpose of establishing a clear

framework for the distribution of profits to

assist with capital management, whilst also

assessing and considering any associated

risks and constraints. For 2025, the payout

ratio remains as at least 25% of underlying

profit after taxation attributable to ordinary

shareholders.

During the year under review, the Company

paid an interim dividend of 11.2 pence per

share (2024: 10.7 pence). The Directors

recommend payment of a final dividend of

24.1 pence per share (2024: 22.9 pence),

subject to approval at the AGM on

7 May 2026, making a total ordinary

dividend for 2025 of 35.3 pence per share

(2024: 33.6 pence).

The OSB GROUP PLC Employee Benefit

Trust, which holds 134,349 shares in the

Company in connection with the operation of

the Group’s share plans, has lodged

standing instructions to waive dividends on

shares held by it that have not been

allocated to employees. The total amount of

dividends waived during 2025 was £45,813.

Directors and Directors’ interests

The names of the Directors who served

during the year and up to the date of signing

can be found in the Board and Board

Committee meeting attendance table on

page 112.

Directors may be elected by ordinary

resolution at a duly convened general

meeting or appointed by the Board. In

addition to any power to remove a Director

from office conferred by the Companies Act

2006, the Company may also by special

resolution remove a Director from office

before the expiration of his or her period of

office under the Articles.

In accordance with the Articles, at every

AGM all the Directors at the date of the

notice convening the AGM shall retire from

office and may offer themselves for

appointment or re-appointment by the

members.

Directors’ interests in the shares of the

Company are set out on page 167 in the

Directors’ Remuneration Report. None of the

Directors had interests in shares of the

Company greater than 0.18% of the ordinary

shares in issue. There have been no changes

to Directors’ interests in shares since 31

December 2025.

Directors’ indemnities

The Company maintains Directors’ and

Officers’ Liability Insurance which provides

appropriate cover for legal action brought

against its Directors and Officers. The

Company has also granted indemnities to

each of its Directors and Officers, and to

Directors and Officers of its subsidiary


	Interim Dividend	Final Dividend
Ordinary	11.2 pence per share	24.1 pence per share
Ex-dividend date	13 August 2026	02 April 2026
Record date	14 August 2026	07 April 2026
Payment date	18 September 2026	13 May 2026

companies, including Officers who are

appointed by the FCA or PRA to carry out

senior managerial functions or other similar

functions, on terms consistent with the

applicable statutory provisions.

Qualifying third-party indemnity provisions

(as defined by Section 234 of the Companies

Act) have therefore been in force during the

financial year to 31 December 2025 and

remain in force as at the date of this report in

relation to certain losses and liabilities which

those Directors and Officers may incur to

third parties in the course of action as a

director, officer or employee of the Company

or of any associated companies.

Equal opportunities

The Group is committed to applying its DE&I

Policy at all stages of recruitment and

selection. Short-listing, interviewing and

selection will always be conducted without

regard to gender, gender reassignment,

sexual orientation, marital or civil partnership

status, colour, race, nationality, ethnicity or

national origins, religion or belief, age,

pregnancy or maternity leave or trade union

membership. Any candidate with a disability

will not be excluded unless it is clear that the

candidate is unable to perform a duty that is

intrinsic to the role, having considered

reasonable adjustments. Reasonable

adjustments to the recruitment process will

be made to ensure that no applicant is

disadvantaged because of disability. The

recruitment interview process ensures line

managers ask candidates questions that are

not discriminatory or unnecessarily intrusive.

This commitment also applies to existing

employees, with the necessary adjustments

and training made, where there is a change

in circumstances.

Amendment of Articles

Any amendments to the Articles may be

made in accordance with the provisions of

the Companies Act 2006 by way of a special

resolution of the Company’s shareholders at

a general meeting.



OSB GROUP PLC Annual Report and Accounts 2025		171

Directors’ Report: other information continued

Employee engagement

Employees are kept informed of developments

within the business and in respect of their

employment through a variety of means,

such as employee meetings, briefings and the

intranet. Employee involvement is

encouraged, and views and suggestions are

taken into account when planning new

products and projects.

Additionally, Board members are keen to

engage with employees across all locations

and find the experience of visiting our

branches and offices within the UK and India

valuable.

The Workforce Advisory Forum (OurVoice) is

a forum established to enhance the level of

engagement between the Board and Group

Executive Committee and the wider

workforce, with the objective of discussing

matters which it is felt should be brought to

the attention of the Board.

OurVoice consists of employee

representatives from all core geographical

locations including OSB India, as well as Sally

Jones-Evans as the designated INED and

representatives from the Group Executive

Committee and HR Management. All Board

members and members of the Group

Executive Committee are invited to attend

meetings throughout the year. See page 84

for further information.

Further information in relation to the Board’s

engagement with the Group’s stakeholders

including customers, intermediaries,

shareholders, suppliers, regulators and

communities, can be found on pages 120 -

123.

Diversity

The Board recognises the benefits that

diversity brings to the business, and actively

promotes and encourages a culture and

environment that values and celebrates our

differences. Throughout 2025, the Group has

continued on its journey to become a diverse

and inclusive organisation committed to

providing equal opportunities through the

recruitment, training and development of its

employees. Further information on Board

diversity, equity and inclusion can be found

on pages 128 and for the Group on pages 86.

Greenhouse gas emissions

Information relating to greenhouse gas

emissions, energy consumption and actions

towards energy efficiency can be found

within the Sustainability Report on page 78.

The Group’s 2025 greenhouse gas emissions

basis for reporting is publicly available on the

website at: www.osb.co.uk/sustainability/

our-environment

Political donations

Shareholder authority to make aggregate

political donations not exceeding £50,000

was obtained at the AGM on 8 May 2025.

Neither the Company nor any of its

subsidiaries made any political donations

during the year and no positive expenditure

was incurred by the Company.

Notifiable interests in share capital

As at 31 December 2025, the Company had

received the following notifications of major

holdings of voting rights pursuant to the

requirements of Rule 5 of the Disclosure

Guidance and Transparency Rules:


	No. of ordinary shares	% of issued share capital
JPMorgan Asset Management Holdings Inc. ¹	18,997,685	5.33
BlackRock, Inc.	20,850,903	5.11
Jupiter Fund Management PLC ²	21,407,948	4.98
Norges Bank	15,267,616	4.10
GLG Partners LP³	21,159,035	5.65

1.Includes 0.23% of financial instruments.

2.Includes up to 0.03% of financial instruments.

3.Includes 0.5% of financial instruments.

Since 31 December 2025, the Company

received the following notification:

• On 26 January 2026, Dimensional Fund

Advisors LP notified that it had a

shareholding of 5.00%;

• On 18 February 2026, JPMorgan Asset

Management Holdings Inc notified that its

holding had decreased to 5.27% and

subsequently decreased further to 5.19%

on the same day.

Research and development

Information relating to research and

development of new products can be found

within the Strategic Report on pages 16 - 21.

Supervision and regulation

The Company is authorised by the PRA, part

of the Bank of England, and regulated by the

FCA and PRA. Some of its subsidiaries are

also authorised by the FCA and PRA.

Annual General Meeting

Accompanying this report is the Notice of the

AGM which sets out the resolutions to be

proposed to the meeting, together with an

explanation of each. This year’s AGM will be

held at our offices at 90 Whitfield Street,

Fitzrovia, London W1T 4EZ on 7 May 2026

at 11.00 am.

The Annual Report and Accounts and Notice

of the AGM will be sent to shareholders at

least 20 working days prior to the date of the

meeting. Shareholders are encouraged to

participate in the AGM process and all

resolutions will be proposed and voted on at

the meeting by shareholders or their proxies.

Voting results will be announced and made

available on the Company’s website,

www.osb.co.uk.

Shareholders may require the Directors to

call a general meeting other than an AGM as

provided by the Companies Act.

Requests to call a general meeting may be

made by members representing at least 5%

of the paid-up capital of the Company as

carries the right of voting at general

meetings of the Company (excluding any

paid-up capital held as treasury shares). A

request must state the general nature of the

business to be dealt with at the meeting and

may include the text of a resolution that may

properly be moved and is intended to be

moved at the meeting. A request may be in

hard copy form or in electronic form and

must be authenticated by the person or

persons making it. A request may be made in

writing to the Company Secretary to the

registered office or by sending an email to

company.secretariat@osb.co.uk. At any

general meeting convened on such request,

no business shall be transacted, except that

stated by the requisition or proposed by

the Board.



OSB GROUP PLC Annual Report and Accounts 2025		172

Directors’ Report: other information continued

Modern Slavery and Human

Trafficking Statements

The Group’s Modern Slavery and Human

Trafficking Statements are reviewed and

approved annually by the Board and are

published our website at www.osb.co.uk.

Oversight of our approach sits with the Board

and senior management, reflecting our

commitment to compliance with the law and

alignment towards best practice.

We expected all suppliers to uphold the

principles of our Vendor Code of Conduct

and Ethics, which prohibits forced or child

labour, requires safe working conditions, and

promotes respect for workforce rights and

the environment. Where appropriate, our

contractual terms include obligations relating

to human rights and modern slavery.

All new and existing material suppliers

undergo risk-based due diligence, and higher

risk relationships are subject to additional

checks. We request that suppliers complete

an ESG assessment via our specialist partner

Hellios, or a Group ESG questionnaire that

encompasses modern slavery, diversity,

equality and inclusion, climate change, and

other sustainability topics. This process

provides insight into supplier policies and

practices, helps identify areas for focus, and

supports continuous improvement.

We recognise that suppliers are at different

stages of their ESG journey. The Group

continues to encourage, engage and support

suppliers in aligning their strategies with our

own sustainability ambitions. Training on

supplier oversight, modern slavery, and ESG

is conducted with a competency evaluation

mandated for all colleagues, with

performance being monitored and reported

to the Board.

Payment practice reporting

Our business is supported by many suppliers,

allowing us to provide a high standard of

service to our customers.

Supplier payment practice reports are

published on a six-monthly basis and

approved and signed by the CFO and Group

Chief Operating Officer on behalf of the

main operating entities. The Group enters

into standard terms with suppliers, which

include terms requiring payment within 30

days of the invoice date following receipt of a

valid invoice. Over 98% of all invoices are

paid within 30 days in line with the standard

payment period for qualifying contracts. The

time taken to pay invoices is 11 days. The

maximum contractual payment period

agreed varies between 30 to 45 days. There

were no changes to the standard payment

terms in the reporting period. Any complaints

received in respect of invoice payments are

considered as part of the dispute resolution

process.

During the year, the Group did not deduct

any sums from payments under qualifying

contracts as a charge for remaining on a

supplier list. The Group also engages with

key suppliers as part of the Group’s

Recovery Plan which is reviewed by the

Board.

Other information

Corporate sustainability

The Board has considered climate-related

matters including the risks of climate change

when preparing this Annual Report. 100% of

the carbon dioxide equivalent emissions and

energy consumption figures within this

Annual Report relate to emissions in the UK

and details can be found on pages 78.

Events after the reporting period

Details relating to post-balance sheet events

are set out in note 50.

Financial Instruments

Information on financial instruments

including financial risk management

objectives and policies including the policy

for hedging the exposure of the Group to

price risk, credit risk, liquidity risk and cash

flow risk can be found in the Risk review on

page 44.

Section 172

Details on how the Company has complied

with section 172 can be found throughout the

Strategic and Directors’ Reports and on

pages 9 and 119 - 123.

Going concern statement

The Board undertakes regular rigorous

assessments of whether the Group is a going

concern in light of current and potential

future economic conditions and all available

information about future risks and

uncertainties.

In assessing whether the going concern basis

is appropriate, projections for the Group

have been prepared, covering its future

performance, capital and liquidity for a

period extending to June 2027. These

forecasts have been subject to sensitivity

tests utilising a range of stress scenarios,

which have been compared to the latest

economic scenarios provided by the Group’s

external economic advisors, as well as

reverse stress tests.

The assessments include the following:

• Financial and capital forecasts were

prepared utilising the latest economic

forecasts provided by the Group’s

external economic advisors. Reverse stress

tests were run to identify combinations of

adverse movements in house prices and

unemployment levels which would result in

the Group breaching its minimum

regulatory capital requirements. The

Directors assessed the likelihood of those

reverse stress scenarios occurring within

the next 12 months and concluded that

the likelihood is remote.



OSB GROUP PLC Annual Report and Accounts 2025		173

Directors’ Report: other information continued

• The latest liquidity and contingent

liquidity positions and forecasts were

assessed against internal combined stress

scenarios with the Group maintaining

sufficient liquidity throughout the going

concern assessment period.

• The Group continues to assess and

mature the resilience of its business

operating model and supporting

infrastructure in the context of the

emerging economic, business and

regulatory environment. The Group’s

Operational Resilience Self-Assessment

Report for 2024/2025 was reviewed and

endorsed by the Group Risk Committee

and, approved by the Board in June 2025.

The Group is in the process of updating

this for 2026 and had identified no

material changes to its conclusions. Key

areas of focus include the provision of the

Group’s Important Business Services (IBS)

to minimise the impact of any service

disruptions on the firm’s customers or the

wider financial services industry, and

validating the levels of resilience of the

third parties that the Group depends

upon for delivery of its IBS. There were no

items identified that could threaten the

Group’s viability over the going concern

assessment time horizon.

The Group’s financial projections

demonstrate that the Group has sufficient

capital and liquidity to continue to meet its

regulatory capital requirements as set out by

the PRA.

The Board has therefore concluded that the

Group has sufficient resources to continue in

operational existence for a period in excess

of 12 months from the date of approval of

these Financial Statements and as a result, it

is appropriate to prepare these consolidated

Financial Statements on a going concern

basis.

Key information in respect of the Group’s

ERMF and objectives and processes for

mitigating risks, including liquidity risk, are

set out in detail on pages 44-65.

Approved by the Board and signed on its

behalf by:

Jason Elphick

Group General Counsel and Company

Secretary OSB GROUP PLC

Registered number: 11976839

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		174

Statement of Directors’ Responsibilities in respect of the Annual Report and the financial statements

The Directors are responsible for preparing

the Annual Report and Company financial

statements in accordance with applicable

law and regulations.

Company law requires the Directors to

prepare Group and parent Company

financial statements for each financial year.

Under that law, they are required to prepare

the Group financial statements in

accordance with UK-adopted International

Financial Reporting Standards (IFRS) and

applicable law and have elected to prepare

the parent Company financial statements

on the same basis.

Under company law, the Directors must not

approve the financial statements unless they

are satisfied that they give a true and fair

view of the state of affairs of the Group and

parent Company and of their profit or loss

for the year.

In preparing each of the Group and parent

Company financial statements, the Directors

are required to:

• select suitable accounting policies and

then apply them consistently;

• make judgements and estimates that are

reasonable, relevant and reliable;

• state whether they have been prepared in

accordance with IFRSs as adopted by the

UK;

• assess the Group and parent Company’s

ability to continue as a going concern,

disclosing, as applicable, matters related

to going concern;

• use the going concern basis of accounting

unless they either intend to liquidate the

Group or the parent Company or to cease

operations or have no realistic alternative

but to do so;

• present information, including accounting

policies, in a manner that provides

relevant, reliable, comparable and

understandable information; and

• provide additional disclosures when

compliance with the specific requirements

of the financial reporting framework are

insufficient to enable users to understand

the impact of particular transactions,

other events and conditions on the Group

and parent Company’s financial position

and financial performance.

The Directors are responsible for keeping

adequate accounting records that are

sufficient to show and explain the parent

Company’s transactions and disclose with

reasonable accuracy at any time the

financial position of the parent Company

and the Group, to ensure that the financial

statements comply with the Companies Act.

They are also responsible for establishing a

suitable internal control framework to enable

the preparation of financial statements that

are free from material misstatement, whether

due to fraud or error, and have general

responsibility for taking all reasonable steps

to safeguard the Group’s assets and prevent

and detect fraud and other irregularities.

Under applicable law and regulations, the

Directors are also responsible for preparing a

Strategic Report, Directors’ Report, Directors’

Remuneration Report and Corporate

Governance Statement that complies

with that law and those regulations.

The Directors are responsible for maintaining

the integrity of the corporate and financial

information included on the Company’s

website. UK legislation governing the

preparation and dissemination of financial

statements may differ from legislation in

other jurisdictions.

Responsibility statement of the

Directors in respect of the annual

financial report

Each of the persons who is a Director at the

date of approval of this report confirms, to

the best of their knowledge, that:

• the financial statements, prepared in

accordance with the applicable set of

accounting standards, give a true and fair

view of the assets, liabilities, financial

position and profit or loss of the Company

and the undertakings included in the

consolidation taken as a whole; and

• the Strategic Report/Directors’ Report

includes a fair review of the development

and performance of the business and the

position of the Company and the

undertakings included in the consolidation

taken as a whole, together with a

description of the principal risks and

uncertainties that they face.

Each of the persons who is a Director at the

date of approval of this report confirms that:

• so far as the Director is aware, there is no

relevant audit information of which the

Company’s auditor is unaware; and

• they have taken all the steps they ought

to have taken as a Director in order to

make themselves aware of any relevant

audit information and to establish that the

Company’s auditors are aware of

that information.

Approved by the Board and signed on its

behalf by:

Jason Elphick

Group General Counsel

and Company Secretary

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		175

Financial

Statements


176	Independent Auditors’ Report
186	Consolidated Statement of Comprehensive Income
187	Consolidated Statement of Financial Position
188	Consolidated Statement of Changes in Equity
189	Consolidated Statement of Cash Flows
190	Notes to the Consolidated Financial Statements
248	Company Statement of Financial Position
249	Company Statement of Changes in Equity
250	Company Statement of Cash Flows
251	Notes to the Company Financial Statements



OSB GROUP PLC Annual Report and Accounts 2025		176

Independent Auditor’s Report to the members of OSB Group plc

Report on the audit of the financial statements

1. Opinion



	In our opinion: • the financial statements of OSB Group PLC (the ‘Company’) and its subsidiaries (the ‘Group’) give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 December 2025 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards; • the Company financial statements have been properly prepared in accordance with United Kingdom adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements which comprise:

• the consolidated statement of comprehensive income;

• the consolidated statement of financial position;

• the consolidated statement of changes in equity;

• the consolidated statement of cash flows;

• the related notes to the consolidated financial statements 1 to 50;

• the Company statement of financial position;

• the Company statement of changes in equity;

• the Company statement of cash flows; and

• the related notes to the company financial statements 1 to 9.

The financial reporting framework that has been applied in their preparation is applicable law

and United Kingdom adopted international accounting standards and, as regards the

Company financial statements, as applied in accordance with the provisions of the

Companies Act 2006.

2. Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs

(UK)) and applicable law. Our responsibilities under those standards are further described in

the auditor’s responsibilities for the audit of the financial statements section of our report.

We are independent of the Group and the Company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the UK, including the

Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest

entities, and we have fulfilled our other ethical responsibilities in accordance with these

requirements. The non-audit services provided to the Group and Company for the year are

disclosed in note 8 to the financial statements. We confirm that we have not provided

any non-audit services prohibited by the FRC’s Ethical Standard to the Group or the

Company.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our opinion.

3. Summary of our audit approach



Key audit matters	The key audit matters that we identified in the current year were: • expected credit losses; and • effective interest rate income recognition. Within this report, key audit matters are identified as follows:
Materiality	The materiality that we used for the Group financial statements was £19.1m, which was determined by reference to profit before tax.
Scoping	Our Group audit scoping accounted for 98.6% of the Group’s interest receivable and similar income, 94.8% of the Group’s profit before tax and 99.8% of the Group’s net assets. All audit work was performed by the Group engagement team.
Significant changes in our approach	There was no significant change in our approach in the current year.


	Newly identified			Similar level of risk
	Increased level of risk			Decreased level of risk



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4. Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going

concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the directors’ assessment of the Group’s and Company’s ability to continue

to adopt the going concern basis of accounting included:

• We obtained and read management’s going concern assessment, which included

consideration of the Group’s operational resilience, in order to understand and evaluate the

key judgements made by management;

• We obtained an understanding of relevant controls around management’s going concern

assessment;

• We obtained management’s income statement, balance sheet and capital and liquidity

forecasts and assessed key assumptions for reasonableness and their projected impact on

capital and liquidity ratios, particularly with respect to loan book growth and potential

credit losses;

• Supported by our in-house prudential risk specialists, we read the most recent ICAAP and

ILAAP submissions, assessed management’s capital and liquidity projections, assessed the

results of management’s capital reverse stress testing, evaluated key assumptions and

methods used in the capital reverse stress testing model and tested the mechanical

accuracy of the capital reverse stress testing model;

• We read correspondence with regulators to understand the capital and liquidity

requirements imposed by the Group’s regulators, and evidence any changes to those

requirements. This included specific consideration of the change in the Group’s resolution

strategy from Bail-in to Transfer and the resultant impact on the Minimum Requirement for

Own Funds and Eligible Liabilities (MREL);

• We assessed the historical accuracy of forecasts prepared by management;

• We assessed the impact of the ongoing economic uncertainty, including how further rises in

living and borrowing costs may impact potential credit losses; and

• We evaluated the Group’s disclosures on going concern against the requirements of IFRS

and in view of the latest FRC guidance.

Based on the work we have performed, we have not identified any material uncertainties

relating to events or conditions that, individually or collectively, may cast significant doubt on

the Group's and Company’s ability to continue as a going concern for a period of at least

twelve months from when the financial statements are authorised for issue.

In relation to the reporting on how the Group has applied the UK Corporate Governance Code,

we have nothing material to add or draw attention to in relation to the directors’ statement in

the financial statements about whether the directors considered it appropriate to adopt the

going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are

described in the relevant sections of this report.



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5. Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation

of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.


5.1. Expected Credit Losses
The Group has recognised £123.6m of expected credit losses (‘ECL’) as at 31 December 2025 (2024: £126.9m). This represented 0.47% (2024: 0.50%) of loans and advances to customers. The estimation of ECL under IFRS 9 is inherently complex and requires significant judgement, particularly given the uncertain economic environment, which increases the complexity of forward-looking macroeconomic scenarios and the identification of customers with significant increases in credit risk. We identified the following areas in relation to ECL that required significant judgement and estimation uncertainty: • Macroeconomic scenarios • Modelled ECL assessment • Individually assessed ECL Refer to the significant issues considered by the Group Audit Committee on page 133, risk profile performance overview on page 60, judgements in applying accounting policies and critical accounting estimates on page 198 and Note 20 on page 212.
Key audit matter description	Macroeconomic scenarios: As set out on page 62, the Group sources economic forecasts from a third-party economics expert and then applies judgement to determine which scenarios to select and the probability weightings to assign. The Group considered four probability weighted scenarios, including base, upside, downside, and severe downside scenarios. The key economic variables determined by management in within the macroeconomics model were house price index (HPI), unemployment rate and base rate. The estimation of these variables involves a high degree of subjectivity and estimation uncertainty.
How the scope of our audit responded to the key audit matter	We carried out the following audit procedures in response to the Group’s macroeconomic scenarios and the probability weightings applied: • Obtained an understanding of the relevant controls over macroeconomic scenarios, focusing on the determination of key assumptions in relation to scenarios and probability weightings; • Assessed the competence, capability and objectivity of the third-party economics expert; • Supported by our economic specialists, assessed and challenged the scenarios adopted and the probability weightings assigned to them considering the economic environment as at 31 December 2025 and industry data; • With the involvement of our economic specialists, we challenged the Group’s economic outlook, in particular the key economic variables (HPI, unemployment rate and base rate), by reference to other available economic outlook data; and • Supported by our credit risk specialists, assessed the performance of the macroeconomic model and whether the economic variables selected were appropriate through considering the modelled macroeconomic results relative to those observed in historical recessions.



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5.1. Expected Credit Losses continued
Key audit matter description	Modelled ECL Assessment: The Group measures impairment primarily through the use of complex models. Key areas of judgement within these models include the assessment of whether there has been a significant increase in credit risk (SICR) between the date of initial recognition of the exposure and 31 December 2025, and the determination of loss given default (LGD) assumptions, specifically the propensity to go into possession following default (PPD) and forced sale discount (FSD). There is a risk that the Group’s staging criteria does not accurately capture SICR, and that the PPD and FSD assumptions may not appropriately reflect expected losses.
How the scope of our audit responded to the key audit matter	We carried out the following audit procedures in response to the Group’s modelled ECL assessments, with support from our credit risk specialists: • Obtained an understanding of the relevant controls over modelled ECL, focusing on model monitoring, model validation, and the determination and review of model judgements and assumptions in relation to key areas such as SICR and LGD; • Obtained an understanding of the loan book’s staging mix and its movement during the year; • Assessed the Group’s quantitative and qualitative staging criteria used in the SICR assessment by analysing loan transfers from Stage 1 to Stage 2, comparing them to the 30 days past due "backstop" and other qualitative factors; • Independently re-coded the Group’s IFRS 9 model for SICR, obtained relevant input data, and reconciled the output to that noted by management; • Tested the completeness and accuracy of the data used in applying the quantitative and qualitative criteria for SICR; • Assessed the appropriateness of management's recalibration methodology for PPD and FSD assumptions; • Independently re-coded the Group's IFRS 9 models for PPD and FSD, obtained relevant input data, and reconciled outputs against management's models to validate effective implementation; and • Considered findings raised in the Group’s model monitoring and validation reviews for SICR, PPD, and FSD and assessed their impact on year-end provisions.
Key audit matter description	Individually assessed ECL: For larger stage 3 exposures, individual provision assessments necessitate significant judgement and specialised knowledge in determining appropriate methodologies and inputs. This process is inherently subjective and uncertain, driven by the rapidly evolving economic landscape.
How the scope of our audit responded to the key audit matter	We carried out the following audit procedures in response to the Group’s individually assessed provisions and underlying methodology: • On a sample basis, assessed the completeness of management’s individual assessment watchlist and the accuracy of inputs used within; • With support from our real estate specialists, we independently assessed collateral valuations used within management's discounted cash flow analysis for a sample of watchlist facilities; • On a sample basis, we developed independent individually assessed provision estimates to evaluate management's computations and assumptions; and • Assessed the effective implementation of management’s individual provisioning policy whereby a modelled assessment is applied to all loans, and under certain statuses the greater of the modelled and individually assessed provision is applied.
Key observations	We are satisfied with the reasonableness of the modelled ECL assessments, individually assessed provisions, and the macroeconomic scenarios used in determining the ECL provision. Overall, we determined that the expected credit losses were appropriately stated as at 31 December 2025.



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5.2. Effective interest rate income recognition
The Group’s net interest income for the year ended 31 December 2025 was £679.4m (2024: £666.4m), this represents income recognised under the effective interest rate (‘EIR’) method. In accordance with the requirements of IFRS 9, interest income, directly attributable fees, discounts, incentives and commissions on a constant yield basis EIR are required to be spread over the expected life of the loan assets. EIR is complex and the Group’s approach to determining the EIR involves the use of models and significant estimation in determining the behavioural life of loan assets. Given the complexity and judgement involved in accounting for EIR and given that revenue recognition is an area susceptible to fraud, there is an opportunity for management to manipulate the amount of interest income reported in the financial statements. Refer to the significant issues considered by the Group Audit Committee on page 133, judgements in applying accounting policies and critical accounting estimates on page 200, the accounting policy on pages 191 and Note 3 on page 201.
Key audit matter description	EIR adjustments arise from revisions to estimated cash receipts or payments for loan assets that occur for reasons other than a movement in market interest rates or credit losses. They result in an adjustment to the carrying amount of the loan asset, with the adjustment recognised in the income statement in interest receivable and similar income. As the EIR adjustments reflect changes to the timing and volume of forecast customer redemptions, they are inherently judgemental. The level of judgement exercised is increased where there is limited availability of historical repayment information. For the Precise loan portfolios, the EIR adjustments are more sensitive to changes in the behavioural life curves. Changes in the modelled behavioural life across the Group’s portfolios during the year resulted in an interest income loss of £10.5m (2024: £15.9m loss), the majority of which relates to the Precise loan portfolios. The current economic environment and expected future decreases in interest rates continues to result in uncertainty with regards to forecasting expected behavioural lives and prepayment rates.
How the scope of our audit responded to the key audit matter	We carried out the following audit procedures in response to the Group’s EIR balance: • Obtained an understanding of the relevant controls over EIR, focusing on the calculation and review of EIR adjustments and the determination of customer redemption profiles and behavioural life curves; • Tested the completeness and accuracy of a sample of inputs into the EIR model for originated loans; • With the involvement of our analytics and modelling specialists, used our own independent EIR models and the Group’s relevant input data and behavioural life curves to recalculate the EIR adjustment and reconciled outputs against management's models to validate effective implementation; • Challenged the appropriateness of key assumptions made to estimate the expected future income considering the interest rate environment that has been experienced in the UK over the last year, economic forecasts of future interest rates and trends in customer behaviour observed in recent months; and • Independently derived behavioural life curves using the Group’s actual loan data over recent years, incorporating those assumptions that we considered reasonable. We used these curves in our own independent EIR model to estimate the EIR adjustments and compared this output to the amounts recorded by the Group.
Key observations	We determined that the EIR models and assumptions used were appropriate and that net interest income for the year is appropriately stated.



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6. Our application of materiality

6.1.Materiality

We define materiality as the magnitude of misstatement in the financial statements that

makes it probable that the economic decisions of a reasonably knowledgeable person would

be changed or influenced. We use materiality both in planning the scope of our audit work and

in evaluating the results of our work.

Based on our professional judgement, we determined materiality for the financial statements

as a whole as follows:


	Group financial statements	Company financial statements
Materiality	£19.1m (2024: £22.1m)	£16.1m (2024: £15.5m)
Basis for determining materiality	We determined materiality for the Group to be 5.0% of profit before tax of £382.5m (2024: 5.3% of profit before tax).	We determined materiality for the Company by reference to 1% of net assets. This is consistent with prior year.
Rationale for the benchmark applied	As a listed Group, profit before tax is typically a primary measure of performance for key stakeholders. This is consistent with the prior year benchmark.	The Company is principally a holding company and we have therefore determined net assets to be the most relevant benchmark to determine materiality.

6.2.Performance materiality

We set performance materiality at a level lower than materiality to reduce the probability that,

in aggregate, uncorrected and undetected misstatements exceed the materiality for the

financial statements as a whole.


	Group financial statements	Company financial statements
Performance materiality	60% (2024: 60%) of Group materiality	60% (2024: 60%) of Company materiality
Basis and rationale for determining performance materiality	Performance materiality was set at 60% of materiality (2024: 60%). In determining performance materiality, we considered a number of factors, including: our understanding of the control environment; our understanding of the business; and the nature, volume and size of uncorrected misstatements identified in the previous audit.

6.3.Error reporting threshold

We agreed with the Audit Committee that we would report to the Committee all audit differences in

excess of £0.96m (2024: £1.1m), as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure

matters that we identified when assessing the overall presentation of the financial statements.

7. An overview of the scope of our audit

7.1.Identification and scoping of components

Our Group audit was scoped by obtaining an understanding of the Group and its

environment, including Group-wide controls, the structure and organisation of the Group,

and assessing the risks of material misstatement at the Group level.

We selected relevant components taking into account the individual component's contribution

to relevant classes of transactions, account balances or disclosures in the Group financial

statements. For the purposes of our audit scope, we defined a component as a single reporting

unit for which management prepares a reporting package within the Group consolidation and

determined an appropriate performance materiality for each component. Consistent with the

prior year we identified OneSavings Bank plc and Charter Court Financial Services Limited, the

two main banking entities of the Group, as well as Interbay ML Ltd, another significant lending

subsidiary, as components where an audit of the entire financial information was required. The

other components were subject to audit procedures through either audit procedures on

specific account balances or being subject to specified procedures.

All the audit work over components was performed by the Group audit team, with our

maximum component materiality determined as £10.9m.

Our audit considered in-scope components which accounted for 98.6% (2024: 97.5%) of the

Group’s interest receivable and similar income, 94.8% (2024: 97.0%) of the Group’s profit

before tax and 99.8% (2024: 97.5%) of the Group’s net assets.

Residual values were addressed by risk assessment and analytical procedures performed at

a Group level. At a Group level we also tested the Group’s consolidation process.



OSB GROUP PLC Annual Report and Accounts 2025		182

Independent Auditor’s Report continued to the members of OSB Group plc

7.2.Our consideration of the control environment

Our internal controls testing approach was informed by our scoping and risk assessment

activities. We assessed the Group’s end-to end financial reporting processes focusing on the

lending and savings areas and obtained an understanding of relevant controls over these

balances. This included identifying relevant IT systems and, with the involvement of our IT

specialists, we obtained an understanding of relevant general IT controls.

As a result of deficiencies identified in internal IT access controls across the Group in previous

periods, we planned to adopt a non-controls reliance approach over all financial statement

lines for all components. Where deficiencies were identified in the control environment,

including deficiencies in IT controls, our risk assessment procedures included an assessment of

those deficiencies to determine the impact on our audit plan.

For further information on the Group’s IT environment, please refer to the ‘Systems of internal

Control and risk management’ section of the Group Audit Committee report.

7.3.Our consideration of climate-related risks

In planning our audit, we have considered the impact of climate change on the Group’s

operations and impact on its financial statements. The Group has set out its commitments,

aligned with the goals of the Paris Climate Accord, to be a net zero bank by 2050. Further

information is provided in the Group’s Strategic Report and Task Force on Climate-Related

Financial Disclosures (“TCFD”) on pages 95 to 102. The Group sets out its assessment of the

potential impact of climate change on page 100 and the potential impact on the financial

statements in note 20 on page 212.

In conjunction with our climate risk specialists, we have held discussions with the Group to

understand:

• the process for identifying affected operations, including the governance and controls over

this process, and the subsequent effect on the financial reporting for the Group; and

• the long-term strategy to respond to climate change risks as they evolve.

Our audit work has involved:

• assessing the completeness of the physical and transition risks identified and considered in

the Group’s climate risk assessment and the conclusion that there is no material impact of

climate change risk on current year financial reporting; and

• assessing disclosures in the Annual Report and their consistency between the financial

statements and the remainder of the Annual Report.

We have been engaged to provide limited assurance on the description of activities

undertaken to meet the Recommendations of the TCFD and selected Environmental, Social

and Governance metrics (“Selected ESG Metrics”) (together the “Assured ESG Information”) in

the Annual Report for the year ended 31 December 2025. Please refer to pages 258 to 260 for

our separate assurance report.

8. Other information

The other information comprises the information included in the annual report other than the

financial statements and our auditor’s report thereon. The directors are responsible for the

other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to

the extent otherwise explicitly stated in our report, we do not express any form of assurance

conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained

in the course of the audit, or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are

required to determine whether this gives rise to a material misstatement in the financial

statements themselves. If, based on the work we have performed, we conclude that there

is a material misstatement of this other information, we are required to report that fact.



	We have nothing to report in this regard.

9. Responsibilities of directors

As explained more fully in the directors’ responsibilities statement, the directors are responsible

for the preparation of the financial statements and for being satisfied that they give a true and

fair view, and for such internal control as the directors determine is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to

fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s

and the Company’s ability to continue as a going concern, disclosing as applicable, matters

related to going concern and using the going concern basis of accounting unless the directors

either intend to liquidate the Group or the Company or to cease operations, or have no

realistic alternative but to do so.

10. Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as

a whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,

but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located

on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of

our auditor’s report.



OSB GROUP PLC Annual Report and Accounts 2025		183

Independent Auditor’s Report continued to the members of OSB Group plc

11. Extent to which the audit was considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations.

We design procedures in line with our responsibilities, outlined above, to detect material

misstatements in respect of irregularities, including fraud. The extent to which our procedures

are capable of detecting irregularities, including fraud is detailed below.

11.1Identifying and assessing potential risks related to irregularities

In identifying and assessing risks of material misstatement in respect of irregularities, including

fraud and non-compliance with laws and regulations, we considered the following:

• the nature of the industry and sector, control environment and business performance

including the design of the Group’s remuneration policies, key drivers for directors’

remuneration, bonus levels and performance targets;

• the Group’s own assessment of the risks that irregularities may occur either as a result of

fraud or error that was approved by the board;

• results of our enquiries of management, internal audit, the directors and the Audit

Committee about their own identification and assessment of the risks of irregularities,

including those that are specific to the Group’s sector;

• any matters we identified having obtained and reviewed the Group’s documentation of

their policies and procedures relating to:

– identifying, evaluating and complying with laws and regulations and whether they were

aware of any instances of non-compliance;

– detecting and responding to the risks of fraud and whether they have knowledge of any

actual, suspected or alleged fraud;

– the internal controls established to mitigate risks of fraud or non-compliance with laws

and regulations;

• the matters discussed among the audit engagement team and relevant internal specialists,

including tax, valuations, real estate, IT, climate risk, prudential risk, economic, financial

instruments, share based payments, credit risk and analytics and modelling specialists

regarding how and where fraud might occur in the financial statements and any potential

indicators of fraud.

As a result of these procedures, we considered the opportunities and incentives that may exist

within the organisation for fraud and identified the greatest potential for fraud in the following

areas: expected credit losses and effective interest rate income recognition. In common with all

audits under ISAs (UK), we are also required to perform specific procedures to respond to the

risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the Group

operates in, focusing on provisions of those laws and regulations that had a direct effect on

the determination of material amounts and disclosures in the financial statements. The key

laws and regulations we considered in this context included the UK Companies Act, Listing

Rules and tax legislation.

In addition, we considered provisions of other laws and regulations that do not have a direct

effect on the financial statements but compliance with which may be fundamental to the

Group’s ability to operate or to avoid a material penalty. These included the Group’s

prudential regulatory requirements and capital, liquidity and conduct requirements.

11.2Audit response to risks identified

As a result of performing the above, we identified expected credit losses and effective interest

rate income recognition as key audit matters related to the potential risk of fraud. The key

audit matters section of our report explains the matters in more detail and also describes the

specific procedures we performed in response to those key audit matters.

In addition to the above, our procedures to respond to risks identified included the following:

• reviewing the financial statement disclosures and testing to supporting documentation to

assess compliance with provisions of relevant laws and regulations described as having a

direct effect on the financial statements;

• enquiring of management, the Audit Committee and in-house and external legal counsel

concerning actual and potential litigation and claims;

• performing analytical procedures to identify any unusual or unexpected relationships that

may indicate risks of material misstatement due to fraud;

• reading minutes of meetings of those charged with governance, reviewing internal audit

reports and reviewing correspondence with the Prudential Regulation Authority, the

Financial Conduct Authority and HMRC; and

• in addressing the risk of fraud through management override of controls, testing the

appropriateness of journal entries and other adjustments; assessing whether the

judgements made in making accounting estimates are indicative of a potential bias; and

evaluating the business rationale of any significant transactions that are unusual or outside

the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all

engagement team members including internal specialists and remained alert to any

indications of fraud or non-compliance with laws and regulations throughout the audit.



OSB GROUP PLC Annual Report and Accounts 2025		184

Independent Auditor’s Report continued to the members of OSB Group plc

Report on other legal and regulatory requirements

12. Opinions on other matters prescribed by the Companies Act 2006



	In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: • the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the Company and their environment obtained in the course of the audit, we have not identified any material misstatements in the strategic report or the directors’ report.

13. Corporate Governance Statement

The Listing Rules require us to review the directors’ statement in relation to going concern,

longer-term viability and that part of the Corporate Governance Statement relating to the

Group’s compliance with the provisions of the UK Corporate Governance Code specified for

our review.


	Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: • the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 172 and 173; • the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on page 172 and 173; • the directors' statement on fair, balanced and understandable set out on page 135; • the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 49; • the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 134; and • the section describing the work of the audit committee set out on page 131 to 137.

14. Opinion on other matter prescribed by the Capital Requirements (Country-

by-Country Reporting) Regulations 2013



	In our opinion the information given in note 45 to the financial statements for the financial year ended 31 December 2025 has been properly prepared, in all material respects, in accordance with the Capital Requirements (Country-by Country Reporting) Regulations 2013.

15. Matters on which we are required to report by exception

15.1.Adequacy of explanations received and accounting records

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• we have not received all the information and explanations we require for our audit; or

• adequate accounting records have not been kept by the Company, or returns adequate for

our audit have not been received from branches not visited by us; or

• the Company financial statements are not in agreement with the accounting records and

returns.



	We have nothing to report in respect of these matters.

15.2.Directors’ remuneration

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures

of directors’ remuneration have not been made or the part of the directors’ remuneration report

to be audited is not in agreement with the accounting records and returns.



	We have nothing to report in respect of these matters.

16. Other matters which we are required to address

16.1.Auditor tenure

Following the recommendation of the Audit Committee, we were appointed by the

shareholders of the OSB Group PLC on 17 November 2020 to audit the Group financial

statements for the year ending 31 December 2020 and subsequent financial periods. The

period of total uninterrupted engagement including previous renewals and reappointments of

the firm is six years, covering the years ending 31 December 2020 to 31 December 2025.

Prior to our appointment to audit the Company, we were auditor of the Group headed by

OneSavings Bank plc, since 9 May 2019. The period of total uninterrupted engagement for

OneSavings Bank plc, including previous renewals and reappointments of the firm, is seven

years, covering the year ended 31 December 2019 to 31 December 2025.



OSB GROUP PLC Annual Report and Accounts 2025		185

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16.2.Consistency of the audit report with the additional report to the Audit Committee

Our audit opinion is consistent with the additional report to the Audit Committee we are

required to provide in accordance with ISAs (UK).

17. Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter

3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might

state to the Company’s members those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than the Company and the Company’s

members as a body, for our audit work, for this report, or for the opinions we have formed.

As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency

Rule (DTR) 4.1.15R – DTR 4.1.18R, these financial statements will form part of the Electronic

Format Annual Financial Report filed on the National Storage Mechanism of the FCA in

accordance with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides no assurance over

whether the Electronic Format Annual Financial Report has been prepared in compliance with

DTR 4.1.15R – DTR 4.1.18R. We have been engaged to provide assurance on whether the

Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R –

DTR 4.1.18R and will publicly report separately to the members on this.

Ben Jackson, FCA (Senior statutory auditor)

For and on behalf of Deloitte LLP

Statutory Auditor

London, United Kingdom

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		186

Consolidated Statement of Comprehensive Income For the year ended 31 December 2025


		2025	2024
	Note	£m	£m
Interest receivable and similar income	3	1,914.8	2,099.3
Interest payable and similar charges	4	(1,235.4)	(1,432.9)
Net interest income		679.4	666.4
Fair value losses on financial instruments	5	(22.1)	(1.5)
Gain/(loss) on sale of financial assets held at amortised cost	6	3.4	(2.4)
Other operating income	7	7.3	4.7
Total income		668.0	667.2
Administrative expenses	8	(270.1)	(258.1)
Increase in provisions	33	(2.4)	(2.7)
Impairment of financial assets	21	(13.0)	11.7
Profit before taxation		382.5	418.1
Taxation	11	(96.8)	(110.0)
Profit for the year		285.7	308.1
Other comprehensive expense
Items which may be reclassified to profit or loss:
Fair value changes on debt instruments measured at fair value through other comprehensive income (FVOCI):
Arising in the year	16	1.6	(0.1)
Tax on items in other comprehensive expense		(0.2)	–
Revaluation of foreign operations		(2.1)	–
Other comprehensive expense		(0.7)	(0.1)
Total comprehensive income for the year		285.0	308.0
Dividend, pence per share	13	35.3	33.6
Earnings per share (EPS), pence per share
Basic	12	75.6	77.6
Diluted	12	73.6	75.7

The above results are derived wholly from continuing operations.

The notes on pages 190 to 247 form part of these accounts.

The financial statements on pages 186 to 247 were approved by the Board of Directors on 4 March 2026.



OSB GROUP PLC Annual Report and Accounts 2025		187

Consolidated Statement of Financial Position As at 31 December 2025


		2025	2024
	Note	£m	£m
Assets
Cash in hand		0.4	0.3
Loans and advances to credit institutions	15	3,053.0	3,405.9
Investment securities	16	1,814.5	1,434.4
Loans and advances to customers	17	25,920.6	25,126.3
Fair value adjustments on hedged assets	23	85.1	(179.3)
Derivative assets	22	101.4	313.8
Other assets	24	21.0	17.8
Current taxation asset		1.7	14.8
Deferred taxation asset	11	8.8	6.2
Non-current assets held for sale		1.5	–
Property, plant and equipment	25	47.8	54.6
Intangible assets	26	66.9	48.8
Total assets		31,122.7	30,243.6
Liabilities
Amounts owed to credit institutions	27	1,838.1	1,935.2
Amounts owed to retail depositors	28	24,251.1	23,820.3
Fair value adjustments on hedged liabilities	23	11.9	(6.1)
Amounts owed to other customers	29	478.4	104.9
Debt securities in issue	30	1,010.0	1,018.3
Derivative liabilities	22	152.0	81.9
Lease liabilities	31	6.3	9.1
Other liabilities	32	70.8	56.4
Provisions	33	3.4	4.6
Deferred taxation liability	11	20.5	13.1
Senior notes	34	723.4	722.7
Subordinated debt liabilities	35	260.1	259.8
		28,826.0	28,020.2


		2025	2024
	Note	£m	£m
Equity
Share capital	37	3.6	3.7
Share premium	37	6.0	4.5
Other equity instruments	38	167.1	150.0
Retained earnings		3,457.0	3,406.4
Other reserves	39	(1,337.0)	(1,341.2)
Shareholders’ funds		2,296.7	2,223.4
Total equity and liabilities		31,122.7	30,243.6

The notes on pages 190 to 247 form part of these accounts. The financial statements on pages

186 to 247 were approved by the Board of Directors on 4 March 2026 and signed on its behalf


Andy Golding Chief Executive Officer	Victoria Hyde Chief Financial Officer

Company number: 11976839



OSB GROUP PLC Annual Report and Accounts 2025		188

Consolidated Statement of Changes in Equity For the year ended 31 December 2025


	Share capital	Share premium	Capital redemption and transfer reserve¹	Own shares ²	Foreign exchange reserve	FVOCI reserve	Share-based payment reserve	Retained earnings	Other equity instruments	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
As at 1 January 2024	3.9	3.8	(1,354.7)	(1.0)	(2.1)	0.2	14.2	3,330.2	150.0	2,144.5
Profit for the year	–	–	–	–	–	–	–	308.1	–	308.1
Other comprehensive expense	–	–	–	–	–	(0.1)	–	–	–	(0.1)
Total comprehensive (expense)/income	–	–	–	–	–	(0.1)	–	308.1	–	308.0
Coupon paid on Additional Tier 1 (AT1) securities	–	–	–	–	–	–	–	(9.0)	–	(9.0)
Dividends paid	–	–	–	–	–	–	–	(126.4)	–	(126.4)
Share-based payments	–	0.7	–	–	–	–	1.7	4.7	–	7.1
Own shares ²	–	–	–	0.1	–	–	–	(0.1)	–	–
Share repurchase ³	(0.2)	–	0.2	–	–	–	–	(101.1)	–	(101.1)
Tax recognised in equity	–	–	–	–	–	–	0.3	–	–	0.3
As at 31 December 2024	3.7	4.5	(1,354.5)	(0.9)	(2.1)	0.1	16.2	3,406.4	150.0	2,223.4
Profit for the year	–	–	–	–	–	–	–	285.7	–	285.7
Other comprehensive (expense)/income	–	–	–	–	(2.1)	1.6	–	–	–	(0.5)
Tax on items in other comprehensive (expense)/income	–	–	–	–	–	(0.2)	–	–	–	(0.2)
Total comprehensive (expense)/income	–	–	–	–	(2.1)	1.4	–	285.7	–	285.0
Coupon paid on AT1 securities	–	–	–	–	–	–	–	(10.1)	–	(10.1)
Dividends paid	–	–	–	–	–	–	–	(125.5)	–	(125.5)
Redemption of AT1 securities	–	–	–	–	–	–	–	(0.3)	(132.9)	(133.2)
Issuance of AT1 securities	–	–	–	–	–	–	–	–	150.0	150.0
Transaction costs on issuance of AT1 securities	–	–	–	–	–	–	–	(2.0)	–	(2.0)
Share-based payments	0.1	1.5	–	–	–	–	1.9	4.8	–	8.3
Share repurchase ³	(0.2)	–	0.2	–	–	–	–	(100.4)	–	(100.4)
Foreign exchange adjustment	–	–	–	–	–	–	–	(1.6)	–	(1.6)
Tax recognised in equity	–	–	–	–	–	–	2.8	–	–	2.8
As at 31 December 2025	3.6	6.0	(1,354.3)	(0.9)	(4.2)	1.5	20.9	3,457.0	167.1	2,296.7

1.Comprises Capital redemption reserve of £1.0m (2024: £0.8m ) and Transfer reserve of £(1,355.3)m (2024: £(1,355.3)m).

2.The Group has adopted look-through accounting (see note 1 (c)) and recognised the Employee Benefit Trust (EBT) within OSB GROUP PLC (OSBG).

3.Includes £99.3m ( 2024: £100.0m ) for shares repurchased and £1.1m (2024: £1.1m) for transaction costs and fees.

Share capital and premium is disclosed in note 37 and the reserves are further analysed in note 39.



OSB GROUP PLC Annual Report and Accounts 2025		189

Consolidated Statement of Cash Flows For the year ended 31 December 2025


		2025	2024
	Note	£m	£m
Cash flows from operating activities
Profit before taxation		382.5	418.1
Adjustments for non-cash and other items	46	167.3	246.0
Changes in operating assets and liabilities	46	(229.6)	1,691.0
Cash generated from operating activities		320.2	2,355.1
Provisions paid	33	(3.6)	–
Net tax paid		(73.0)	(119.4)
Net cash generated from operating activities		243.6	2,235.7
Cash flows from investing activities
Maturity and sales of investment securities		558.0	789.1
Purchases of investment securities		(932.7)	(811.2)
Interest received on investment securities		74.8	36.7
Proceeds from sale of property, plant and equipment	25	0.4	–
Purchases of property, plant and equipment and intangible assets	25, 26	(32.9)	(43.9)
Net cash from investing activities		(332.4)	(29.3)
Cash flows from financing activities
Financing received	36	2,477.2	1,736.5
Financing repaid	36	(2,412.0)	(2,716.8)
Interest paid on financing	36	(192.4)	(273.3)
Dividends paid	13	(125.5)	(126.4)
Redemption of AT1 securities		(133.2)	–
Issuance of AT1 securities		148.0	–
Share repurchase ¹		(89.4)	(90.6)
Other financing activities	36	(16.6)	(18.4)
Net cash from financing activities		(343.9)	(1,489.0)
Net (decrease)/increase in cash and cash equivalents		(432.7)	717.4
Cash and cash equivalents at the beginning of the year	14	3,231.4	2,514.0
Cash and cash equivalents at the end of the year	14	2,798.7	3,231.4
Movement in cash and cash equivalents		(432.7)	717.4

1. Includes £88.8m ( 2024: £89.9m ) for shares repurchased and £0.6m ( 2024: £0.7m ) transaction costs and fees.



OSB GROUP PLC Annual Report and Accounts 2025		190

Notes to the Consolidated Financial Statements For the year ended 31 December 2025

1.Accounting policies

OSB Group PLC is a public company limited by shares. The Group is registered in England and

Wales (company number 11976839) and the registered office is OSB House Quayside,

Chatham Maritime, Chatham, United Kingdom, ME4 4QZ. The principal activities and the

nature of the Group’s operations are set out in the Strategic Report.

(a)Basis of preparation

The financial statements have been prepared in accordance with IFRS Accounting Standards

as adopted by the United Kingdom Endorsement Board (UKEB) and interpretations issued by

the IFRS Interpretations Committee (IFRS IC) and in conformity with the requirements of the

Companies Act 2006.

The financial statements have been prepared on a historical cost basis, as modified by the

revaluation of investment securities and derivative contracts and other financial assets held

at fair value through profit or loss (FVTPL) or FVOCI (see note 1 (m) (ii)).

The financial statements are presented in pounds sterling. All amounts in the financial

statements have been rounded to the nearest £0.1m.

(b)Going concern

The Board undertakes regular rigorous assessments of whether the Group is a going concern

in light of current and potential future economic conditions and all available information about

future risks and uncertainties.

In assessing whether the going concern basis is appropriate, projections for the Group have

been prepared, covering its future performance, capital and liquidity for a period extending to

June 2027. These forecasts have been subject to sensitivity tests utilising a range of stress

scenarios, which have been compared to the latest economic scenarios provided by the

Group’s external economic advisors, as well as reverse stress tests.

The assessments include the following:

• Financial and capital forecasts were prepared utilising the latest economic forecasts

provided by the Group’s external economic advisers. Reverse stress tests were run to

identify combinations of adverse movements in house prices and unemployment levels

which would result in the Group breaching its minimum regulatory capital requirements.

The Directors assessed the likelihood of those reverse stress scenarios occurring within the

next 12 months and concluded that the likelihood is remote.

• The latest liquidity and contingent liquidity positions and forecasts were assessed against

internal combined stress scenarios with the Group maintaining sufficient liquidity

throughout the going concern assessment period.

• The Group continues to assess and mature the resilience of its business operating model

and supporting infrastructure in the context of the emerging economic, business and

regulatory environment. The Group’s Operational Resilience Self-Assessment Report for

2024/2025 was reviewed and endorsed by the Group Risk Committee and approved by the

Board in June 2025. The Group is in the process of updating this for 2026 and has

identified no material changes to its conclusions. Key areas of focus include the provision of

the Group’s Important Business Services (IBSs) to minimise the impact of any service

disruptions on the firm’s customers or the wider financial services industry, and validating

the levels of resilience of the third parties that the Group depends upon for delivery of its

IBSs. There were no items identified that could threaten the Group’s viability over the going

concern assessment time horizon.

The Group’s financial projections demonstrate that the Group has sufficient capital and

liquidity to continue to meet its regulatory capital requirements as set out by the Prudential

Regulation Authority (PRA).

The Board has therefore concluded that the Group has sufficient resources to continue in

operational existence for a period in excess of 12 months from the date of approval of these

financial statements and, as a result, it is appropriate to prepare these consolidated financial

statements on a going concern basis.

(c)Basis of consolidation

The Group accounts include the results of OSB GROUP PLC (the Company) and all its

subsidiary undertakings. Subsidiaries are those entities, including structured entities, over

which the Group has control. The Group controls an entity when it is exposed, or has rights,

to variable returns from its involvement with the entity and has the ability to affect those

returns through its power over the investee.

Judgement is applied in assessing the relevant factors and conditions in totality when

determining whether the Group controls an entity. Specifically, judgement is applied in

assessing whether the Group has substantive decision-making rights over the relevant

activities and whether it is exercising power as a principal or an agent.

The Group is not deemed to control an entity when it exercises power over an entity in an

agency capacity. In determining whether the Group is acting as an agent, the Directors

consider the overall relationship between the Group, the investee and other parties to the

arrangement with respect to the following factors: (i) the scope of the Group’s decision-

making power; (ii) the rights held by other parties; (iii) the remuneration to which the Group is

entitled; and (iv) the Group’s exposure to variability of returns. The determination of control is

based on the current facts and circumstances and is continuously assessed.

Where the Group does not retain a direct ownership interest in a securitisation entity, but the

Directors have determined that the Group controls those entities, they are treated as

subsidiaries and are consolidated. Control is determined to exist if the Group has the power to

direct the activities of each entity (for example, managing the performance of the underlying

mortgage assets and raising debt on those mortgage assets which is used to fund the Group)

and, in addition to this, the Group is exposed to a variable return (for example, retaining the

residual risk on the mortgage assets).



OSB GROUP PLC Annual Report and Accounts 2025		191

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

Securitisation structures that do not meet these criteria are not treated as subsidiaries and are

excluded from the consolidated accounts. Where the Group retains an interest in the

securitisation, the loan notes held are not recognised separately but form part of the

measurement of the deemed loan balance.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group

and are deconsolidated from the date that control ceases. Upon consolidation, intercompany

transactions, balances and unrealised gains on transactions are eliminated. Unrealised losses

are also eliminated unless the transaction provides evidence of impairment of the asset

transferred. Accounting policies of subsidiaries have been changed where necessary to ensure

consistency, so far as is possible, with the policies adopted by the Group.

The Group’s EBT is controlled and recognised by the Company using the look-through

approach, i.e. as if the EBT is included within the accounts of the Company.

In the Company’s financial statements, investments in subsidiary undertakings are stated at

cost less impairment. A full list of the Company’s subsidiaries which are included in the

Group’s consolidated financial statements can be found in note 2 to the Company’s

financial statements on page 251 to 252.

(d)Foreign currency translation

The financial statements of each of the Company’s subsidiaries are measured using the

currency of the primary economic environment in which the subsidiary operates (the

functional currency). Foreign currency transactions are translated into the functional

currencies using the exchange rates prevailing at the date of the transactions. Monetary items

denominated in foreign currencies are retranslated at the rate prevailing at the period end.

(e)Segmental reporting

IFRS 8 requires operating segments to be identified on the basis of internal reports and

components of the Group which are regularly reviewed by the chief operating decision maker

to allocate resources to segments and to assess their performance. For this purpose, the chief

operating decision maker of the Group is the Board of Directors.

The Group provides loans, asset finance and retail deposits within the UK.

The Group segments its lending business and operates under two segments:

• OneSavings Bank (OSB)

• Charter Court Financial Services (CCFS)

The Group has disclosed relevant risk management tables in note 41 at a sub-segment level to

provide detailed analysis of the Group’s core lending business.

(f)Interest income and expense

Interest income and interest expense for all interest-bearing financial instruments measured at

amortised cost and FVOCI is recognised in profit or loss using the effective interest rate (EIR)

method. The EIR is the rate that exactly discounts estimated future cash payments or receipts

through the expected life of the financial asset or financial liability to the gross carrying

amount of a financial asset or to the amortised cost of a financial liability.

Interest income on financial assets categorised as stage 1 or 2 is recognised on a gross basis,

with interest income on stage 3 assets recognised net of expected credit losses (ECL).

For purchased or originated credit-impaired assets (see note 1 (m) (vii)), interest income is

calculated by applying the credit-adjusted EIR to the amortised cost of the asset. The

calculation of interest income does not revert to a gross basis even if the credit risk of the asset

improves. See note 1 (m) (vii) for further information on IFRS 9 stage classifications.

When calculating the EIR, the Group estimates cash flows considering all contractual terms of

the instrument and behavioural aspects (for example, prepayment options) but not

considering future credit losses. The calculation of the EIR includes transaction costs and fees

paid or received that are an integral part of the interest rate, together with the discounts or

premiums arising on the acquisition of loan portfolios. Transaction costs include incremental

costs that are directly attributable to the acquisition or issue of a financial instrument.

The Group monitors the actual cash flows for each portfolio and resets cash flows on a

monthly basis, discounted at the EIR to derive a new carrying value, with changes taken

to profit or loss as interest income.

The EIR is adjusted where there is a movement in the expected reference interest rate (Sterling

Overnight Index Average (SONIA), synthetic London Interbank Offered Rate (LIBOR) or base

rate) affecting portfolios with a variable interest rate which will impact future cash flows. The

revised EIR is the rate which exactly discounts the revised cash flows to the gross carrying

value of the loan portfolio.

Interest income on investment securities is included in interest receivable and similar income.

Interest on derivatives is included in interest receivable and similar income or interest expense

and similar charges following the underlying instrument it is hedging.

Coupons paid on AT1 securities are recognised directly in equity in the period in which they are paid.

(g)Fees and commissions

Fees and commissions which are an integral part of the EIR of a financial instrument are

recognised as an adjustment to the EIR and recorded in interest income. The Group includes

early redemption charges within the EIR.

Fees received on mortgage administration services and mortgage origination activities, which

are not an integral part of the EIR, are recorded in other operating income and accounted for

in accordance with IFRS 15 Revenue from Contracts with Customers, with income recognised

when the services are delivered and the benefits are transferred to clients and customers.



OSB GROUP PLC Annual Report and Accounts 2025		192

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

Other fees and commissions are recognised on the accrual basis as services are provided or on

the performance of a significant act, net of value added tax (VAT) and similar taxes.

(h)Taxation

Income tax comprises current and deferred tax. It is recognised in profit or loss, other

comprehensive income (OCI) or directly in equity, consistent with the recognition of items it

relates to. The Group recognises tax on coupons paid on AT1 securities directly in profit or loss.

Deferred tax assets are recognised only to the extent that it is probable that future taxable

profits will be available to utilise the asset. The recognition of deferred tax asset is mainly

dependent on the projections of future taxable profits and future reversals of temporary

differences. The current projections of future taxable income indicate that the Group will

be able to utilise its deferred tax asset within the foreseeable future.

Deferred tax liabilities are recognised for all taxable temporary differences.

The Company and its tax-paying UK subsidiaries are in a group payment arrangement for

corporation tax and show a net corporation tax liability and deferred tax liability accordingly.

The Company and its UK subsidiaries are in the same VAT group.

(i)Dividends

Dividends are recognised in equity in the period in which they are paid or, if earlier, approved

by shareholders.

(j)Cash and cash equivalents

For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents

comprise cash, non-restricted balances with credit institutions and highly liquid financial

assets with original maturities of less than three months from date of acquisition, subject to an

insignificant risk of changes in their fair value and are used by the Group in the

management of its short-term commitments.

(k)Property, plant and equipment

Property, plant and equipment comprise freehold land and buildings, major alterations to

office premises, computer equipment and fixtures measured at cost less accumulated

depreciation. These assets are reviewed for impairment annually, and if they are considered

to be impaired, are written down immediately to their recoverable amounts.

Items of property, plant and equipment are depreciated on a straight-line basis over their

estimated useful economic lives as follows:


Buildings	50 years
Fixtures & fittings, computer hardware and vehicles	5 years
Leasehold improvements	Shorter of 10 years or lease term
Plant	15-40 years

For assets under construction (development assets), no depreciation is charged until the asset

is available for use.

Land, deemed to be 25% of purchase price of buildings, is not depreciated.

(l)Intangible assets

The Group only recognises internally generated intangible assets if all of the

following conditions are met:

• an asset is being created that can be identified after establishing the technical and

commercial feasibility of the resulting product;

• it is probable that the asset created will generate future economic benefits; and

• the development cost of the asset can be measured reliably.

Subsequent expenditure on an internally generated intangible asset, after its purchase or

completion, is recognised as an expense in the period in which it is incurred. Where no

internally generated intangible asset can be recognised, development expenditure is

recognised as an expense in the period in which it is incurred.

Purchased software and costs directly associated with the development of computer software

are capitalised as intangible assets where the software is a unique and identifiable asset

controlled by the Group and will generate future economic benefits. Costs to establish

technological feasibility or to maintain existing levels of performance are recognised as an

expense. Software is only recognised if:

• The Group has the contractual right to take possession of the software during the hosting

period without significant penalty; and

• It is feasible for the Group to run the software on its own hardware or contract with a party

unrelated to the supplier to host the software.

The costs of configuring or customising supplier application software in a Software-as-a-

Service (SaaS) arrangement that is determined to be a service contract is recognised as an

expense or prepayment. SaaS is an arrangement that provides the Group with the right to

receive access to the supplier’s application software in the future which is treated as a service

contract, rather than a software lease or the acquisition of a software intangible asset. Where

the configuration and customisation services are not distinct from the right to receive access

to the software, then the costs are recognised as an expense over the term of the

arrangement.

Intangible assets are reviewed for impairment at least semi-annually, and if they are

considered to be impaired, are written down immediately to their recoverable amounts.

Impairment losses previously recognised for intangible assets, other than goodwill, are

reversed when there has been a change in the estimates used to determine the asset’s

recoverable amount. An impairment loss reversal is recognised in the Consolidated Statement

of Comprehensive Income and the carrying amount of the asset is increased to its recoverable

amount.



OSB GROUP PLC Annual Report and Accounts 2025		193

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

Intangible assets are amortised on a straight line basis over their estimated useful lives

as follows:


Computer software and licenses	5-7 years
Assets arising on Combination	4-5 years

For development costs of assets that are under construction, no amortisation is applied until

the asset is available for use and is calculated using a full month when available for use.

The Group reviews the amortisation period on an annual basis. If the expected useful life of an

asset is different from previous assessments, the amortisation period is changed accordingly.

(m)Financial instruments

i.Recognition

The Group initially recognises loans and advances, deposits, debt securities issued, senior

notes and subordinated debt liabilities on the date on which they are originated or acquired.

All other financial instruments are accounted for on the trade date which is when the

Group becomes a party to the contractual provisions of the instrument.

For financial instruments classified as amortised cost or FVOCI, the Group initially recognises

financial assets and financial liabilities at fair value plus transaction income or costs that are

directly attributable to its origination, acquisition or issue. Financial instruments classified as

amortised cost are subsequently measured using the EIR method.

Transaction costs directly attributable to the acquisition or issue of a financial instrument

at FVTPL are recognised in profit or loss as incurred.

ii.Classification

The Group classifies financial instruments based on the business model and the contractual

cash flow characteristics of the financial instruments. In accordance with IFRS 9, the Group

classifies financial assets into one of three measurement categories:

• Amortised cost – assets in a business model to hold financial assets in order to collect

contractual cash flows, where the contractual terms of the financial asset give rise on

specified dates to cash flows that are solely payments of principal and interest (SPPI)

on the principal amount outstanding.

• FVOCI – assets held in a business model which collects contractual cash flows and sells

financial assets, where the contractual terms of the financial assets give rise on specified

dates to cash flows that are SPPI on the principal amount outstanding.

• FVTPL – assets not measured at amortised cost or FVOCI. The Group measures derivatives,

an acquired mortgage portfolio and some investment securities under this category.

The Group reassesses its business models each reporting period.

The Group classifies non-derivative financial liabilities as measured at amortised cost.

The Group classifies certain financial instruments as equity where they meet the following

conditions:

• the financial instrument includes no contractual obligation to deliver cash or another

financial asset on potentially unfavourable conditions;

• the financial instrument is a non-derivative that includes no contractual obligation for the

issuer to deliver a variable number of its own equity instruments; or

• the financial instrument is a derivative that will be settled only by the issuer exchanging a

fixed amount of cash or another financial asset for a fixed number of its own

equity instruments.

The Group’s sources of debt funding are deposits from retail customers and credit institutions,

including collateralised loan advances from the Bank of England (BoE) under the Term Funding

Scheme with additional incentives for SMEs (TFSME) and Indexed Long-Term Repo (ILTR),

asset-backed loan notes issued through the Group’s securitisation programmes, subordinated

debt liabilities and senior notes. Cash received under the TFSME is recorded in amounts owed

to credit institutions. Financial liabilities, including Tier 2 instruments, are classified as such

where the terms allow no absolute discretion over the payment of interest.

During the year equity financial instruments comprised own shares and AT1 securities. AT1

securities are designated as equity instruments and recognised at fair value on the date of

issuance in equity along with incremental costs directly attributable to the issuance of equity

instruments. Accordingly, the coupons paid on AT1 securities are recognised directly in

retained earnings when paid.

iii.Derecognition

The Group offers refinancing options to customers at which point the original mortgage asset

is derecognised and a new financial asset is recognised.

The forbearance measures offered by the Group are considered a modification event as the

contractual cash flows are renegotiated or otherwise modified. The Group considers the

renegotiated or modified cash flows are not a substantial modification from the contractual

cash flows and does not consider that forbearance measures give rise to a derecognition

event.

Securitisations lead to derecognition of the associated mortgage pool where the Group

transfers its right to receive cash flows from the mortgages or assumes an obligation to pay

these cash flows to a third party in a qualifying ‘pass-through arrangement’ and transfers

substantially all the risks and rewards of ownership of the pool to a third party. In assessing

this latter point, the Group compares its exposure to variability on any retained investment in

the securitisation structure to that on the underlying mortgages.

Financial liabilities are derecognised only when the obligation is discharged, cancelled or

has expired.



OSB GROUP PLC Annual Report and Accounts 2025		194

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

iv.Offsetting

The Group’s derivatives are covered by industry standard master netting agreements.

Master netting agreements create a right of set-off that becomes enforceable only following

a specified event of default or in other circumstances not expected to arise in the normal

course of business. These arrangements do not qualify for offsetting and as such the Group

reports derivatives on a gross basis.

Collateral in respect of derivatives is subject to the standard industry terms of International

Swaps and Derivatives Association (ISDA) Credit Support Annex. This means that the cash

received or given as collateral can be pledged or used during the term of the transaction but

must be returned on maturity of the transaction. The terms also give each counterparty the

right to terminate the related transactions upon the counterparty’s failure to post collateral.

Collateral paid or received does not qualify for offsetting and is recognised in loans and

advances to credit institutions and amounts owed to credit institutions, respectively.

v.Amortised cost measurement

The amortised cost of a financial asset or financial liability is the amount at which the financial

asset or financial liability is measured at initial recognition, less principal payments or receipts,

plus or minus the cumulative amortisation using the EIR method of any difference between the

initial amount recognised and the maturity amount, minus any reduction for impairment

of assets.

vi.Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an

orderly transaction between market participants at the measurement date in the principal or,

in its absence, the most advantageous market to which the Group has access at that date.

When available, the Group measures the fair value of an instrument using the quoted price in

an active market for that instrument. A market is regarded as active if transactions for the

asset or liability take place with sufficient frequency and volume to provide pricing information

on an ongoing basis. The Group measures its investment securities at fair value using quoted

market prices where available.

If there is no quoted price in an active market, then the Group uses valuation techniques that

maximise the use of relevant observable inputs and minimise the use of unobservable inputs.

The Group uses SONIA curves to value its derivatives. The fair value of the Group’s derivative

financial instruments incorporates credit valuation adjustments (CVA) and debit valuation

adjustments (DVA). The DVA and CVA take into account the respective credit ratings of the

Group’s two banking entities and counterparty and whether the derivative is collateralised

or not. Derivatives are valued using discounted cash flow models and observable market

data and are sensitive to benchmark interest and basis rate curves.

vii.Identification and measurement of impairment of financial assets

The Group assesses all financial assets for impairment.

Loans and advances to customers

The Group uses the IFRS 9 three-stage ECL approach for measuring impairment. The three

impairment stages are as follows:

• Stage 1 – a 12-month ECL allowance is recognised where there is no significant increase in

credit risk (SICR) since initial recognition.

• Stage 2 – a lifetime ECL allowance is recognised for assets where a SICR is identified since

initial recognition. The assessment of whether credit risk has increased significantly since

initial recognition is performed for each reporting period for the life of the loan.

• Stage 3 – requires objective evidence that an asset is credit impaired, at which point a

lifetime ECL allowance is recognised.

The Group measures impairment through the use of individual and modelled assessments.

Individual assessment

The Group’s provisioning process requires individual assessment for high exposure or higher

risk loans, where Law of Property Act (LPA) receivers have been appointed, the property is

taken into possession or there are other events that suggest a high probability of credit loss.

The individual assessments are carried out for all the loans associated with one counterparty.

The Group estimates cash flows from these loans, including expected interest and principal

payments, rental or sale proceeds, selling and other costs.

For all individually assessed loans, should the present value of estimated future cash flows

discounted at the original EIR be less than the carrying value of the loan, a provision is

recognised for the difference with such loans being classified as impaired. However, should the

present value of the estimated future cash flows exceed the carrying value, no provision

is recognised.

Additionally the Group applies a modelled assessment to all loans and under certain statuses

the greater of the modelled and individually assessed provision requirement is applied.

IFRS 9 modelled impairment

Measurement of ECL

The assessment of credit risk and the estimation of ECL are unbiased and probability

weighted. The ECL calculation is a product of an individual loan’s probability of default (PD),

exposure at default (EAD) and loss given default (LGD) discounted at the EIR. The ECL drivers

of PD, EAD and LGD are modelled at an account level. The assessment of whether a SICR has

occurred is based on quantitative relative and absolute PD thresholds and a suite of qualitative

triggers.



OSB GROUP PLC Annual Report and Accounts 2025		195

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

Significant increase in credit risk (movement to stage 2)

The Group’s transfer criteria determine what constitutes a SICR, which results in an exposure

being moved from stage 1 to stage 2.

At the point of initial recognition, a loan is assigned a PD estimate. For each monthly reporting

date thereafter, an updated PD estimate is computed. The Group’s transfer criteria analyse

relative and absolute changes in PD versus the PD assigned at the point of origination,

together with qualitative triggers using both internal indicators, such as forbearance and

external information, such as changes in income and adverse credit information to assess for

SICR. In the event that given early warning triggers have not already identified SICR, an

account more than 30 days past due is considered to have experienced a SICR.

A borrower will move back into stage 1 only if the SICR definition is no longer triggered.

Definition of default (movement to stage 3)

The Group uses a number of quantitative and qualitative criteria to determine whether an

account meets the definition of default and therefore moves to stage 3. The criteria

currently include:

• If an account is more than 90 days past due.

• Accounts triggering an unlikeliness to pay indicator, which include possession, distressed

restructuring forbearance, and internal behavioural alerts such as default within a

borrower’s broader relationship with the bank or external behavioural alerts such as

bankruptcy or individual voluntary arrangement (IVA).

A borrower will move out of stage 3 when its credit risk improves such that it no longer meets

the 90 days past due and unlikeliness to pay criteria and following this has completed an

internally approved 12-month probation period. The borrower will move to stage 1 or stage

2 dependent on whether the SICR applies.

Forward-looking macroeconomic scenarios

The risk of default and ECL assessments take into consideration the expectations of economic

changes that are deemed to be reasonably possible.

The Group conducts analysis to determine the most significant factors which may influence

the likelihood of an exposure defaulting in the future. The macroeconomic factors relate to

the House Price Index (HPI), unemployment rate (UR), Consumer Price Index (CPI), Gross

Domestic Product (GDP), Commercial Real Estate Index (CRE) and the BoE Base Rate (BBR).

The Group has developed an approach for factoring probability-weighted macroeconomic

forecasts into ECL calculations, adjusting PD and LGD estimates. The macroeconomic

scenarios feed directly into the ECL calculation, as the adjusted PD and LGD estimates are

used within the individual account ECL allowance calculations.

The Group sources economic forecast information from an appropriately qualified third party

when determining scenarios. The Group considers four probability-weighted scenarios, being

base, upside, downside and severe downside scenarios. The expected scenarios, management

actions and results are discussed and approved by the Board.

The base case is also utilised within the Group’s impairment forecasting process which in turn

feeds the wider business planning processes. The ECL models are also used to set the Group’s

credit risk appetite thresholds and limits.

Period over which ECL is measured

The ECL is measured from the initial recognition of the asset which is the date at which the

loan is originated or the date a loan is purchased and at each balance sheet date thereafter.

The maximum period considered when measuring ECL (either 12 months or lifetime ECL) is the

maximum contractual period over which the Group is exposed to the credit risk of the asset.

For modelling purposes, the Group considers the contractual maturity of the loan product

and then considers the behavioural trends of the asset.

Purchased or originated credit impaired (POCI)

Acquired loans that meet the Group’s definition of default (90 days past due or an unlikely

to pay position) at acquisition are treated as POCI assets. These assets attract a lifetime ECL

allowance over the full term of the loan, even when these loans no longer meet the definition

of default post-acquisition. The Group does not originate credit-impaired loans.

Write-off

Loans are written off against the related provision when the underlying security is sold and

there is a shortfall amount remaining. Subsequent recoveries of amounts previously written off

are taken through profit and loss. Accounts that are derecognised for accounting purposes will

continue to be serviced and corresponding collection procedures are only discontinued

following approval from the Group Chief Credit Officer.

Intercompany loans

Intercompany receivables in the Company financial statements are assessed for ECL based on

an assessment of the PD and LGD, discounted to a net present value.

Other financial assets

Other financial assets comprise cash balances with the BoE and other credit institutions and

high-grade investment securities. The Group deems the likelihood of default across these

counterparties as low and does not recognise a provision against the carrying balances.

Share repurchase

Upon Board authorisation of a share repurchase programme and signing an irrevocable

agreement, a share repurchase liability is recognised in other liabilities with the offset in

retained earnings. Each share repurchase reduces the provision. Upon share cancellation,

share capital is debited with a credit to the capital redemption reserve equal to the nominal

value of £0.01 for each share cancelled.



OSB GROUP PLC Annual Report and Accounts 2025		196

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

(n)Loans and advances to customers

Loans and advances to customers are predominantly mortgage loans and advances to

customers with fixed or determinable payments that are not quoted in an active market and

that the Group does not intend to sell in the near term. They are initially recorded at fair value

plus any directly attributable transaction costs and are subsequently measured at amortised

cost using the EIR method, less impairment losses. Where exposures are hedged by derivatives,

designated and qualifying as fair value hedges, the fair value adjustment for the hedged risk

to the carrying value of the hedged loans and advances is reported in fair value adjustments

for hedged assets.

Loans and the related provision are written off when there is a shortfall remaining after the

underlying security is sold. Subsequent recoveries of amounts previously written off are taken

through profit or loss.

Loans and advances to customers over which the Group transfers its rights to the collateral

thereon to the BoE under the TFSME and ILTR schemes are not derecognised from the

Consolidated Statement of Financial Position, as the Group retains substantially all the risks

and rewards of ownership, including all cash flows arising from the loans and advances and

exposure to credit risk. The Group classifies the loans and advances at amortised cost under

IFRS 9 Financial Instruments.

Loans and advances to customers include a small acquired mortgage portfolio where the

contractual cash flows include payments that are not SPPI and as such are measured at

FVTPL.

Loans and advances to customers include the Group’s asset finance lease lending. Finance

leases are initially measured at an amount equal to the net investment in the lease, using the

interest rate implicit in the finance lease. Direct costs are included in the initial measurement of

the net investment in the lease and reduce the amount of income recognised over the lease

term. Finance income is recognised over the lease term, based on a pattern reflecting

a constant periodic rate of return on the net investment in the lease.

(o)Investment securities

Investment securities include securities held for liquidity purposes. These assets are non-

derivatives that are classified on an individual basis as amortised cost, FVOCI or FVTPL.

(p)Sale and repurchase agreements

Financial assets sold subject to repurchase agreements (repo) continue to be recognised in the

financial statements if they fail the derecognition criteria of IFRS 9 described in paragraph m)iii

above. The financial assets that are retained in the financial statements are reflected as loans

and advances to customers or investment securities and the counterparty liability is included

in amounts owed to credit institutions or other customers. Financial assets purchased under

agreements to resell at a predetermined price where the transaction is financing in nature

(reverse repo) are accounted for as loans and advances to credit institutions. The difference

between the sale and repurchase price is treated as interest and accrued over the life of the

agreement using the EIR method.

(q)Derivative financial instruments

The Group uses derivative financial instruments (interest rate swaps) to manage its exposure to

interest rate risk. The Group does not hold or issue derivative financial instruments for

proprietary trading.

The Group also uses derivatives to hedge the interest rate risk inherent in irrevocable offers to

lend. This exposes the Group to movements in the fair value of derivatives until the loan

is drawn. The changes to fair value are recognised in profit or loss in the period.

(r)Hedge accounting

The Group has chosen to continue to apply the hedge accounting requirements of

International Accounting Standards (IAS) 39 instead of the requirements in Chapter 6 of IFRS

9. The Group uses fair value hedge accounting for a portfolio hedge of interest rate risk.

The hedging strategy of the Group is divided into portfolio hedges, where the hedged item is a

homogeneous portfolio of assets (mortgage lending or fixed rate bonds) or liabilities (savings

products), and micro hedges, where the hedged item is a distinctly identifiable asset or liability

(debt issuance). The Group applies fair value hedge accounting for both its portfolio and micro

hedges.

i.Portfolio hedges

Portfolio hedge accounting allows for hedge effectiveness testing and accounting over an

entire portfolio of financial assets or liabilities. The Group applies fair value portfolio hedge

accounting to its fixed rate portfolio of mortgages and savings accounts and to fixed rate

bonds held as a liquidity portfolio. The hedged portfolio is analysed into repricing time periods

based on expected repricing dates, utilising the Group Assets and Liabilities Committee

(ALCO) approved prepayment curve. Interest rate swaps are designated against the repricing

time periods to establish the hedge relationship.

ii.Micro hedges

The Group’s micro hedging strategy entails hedge accounting on an individual instrument-by-

instrument basis, which in some instances may be implemented through partial term fair value

hedging where the instrument may be exercised early. The Group applies fair value micro

hedge accounting to manage its exposure to the interest rate risk arising from some of its fixed

rate debt issuances. Interest rate swaps are assigned to specific issuances of fixed rate notes

with terms that closely align with the hedged item.



OSB GROUP PLC Annual Report and Accounts 2025		197

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

iii.Hedge effectiveness

Hedge effectiveness is calculated as a percentage of the fair value movement of the interest

rate swap against the fair value movement of the hedged item over the period tested.

The Group considers the following as key sources of hedge ineffectiveness:

• the mismatch in maturity date of the swap and hedged item, as swaps with a given

maturity date cover a portfolio of hedged items which may mature throughout the month;

• the actual behaviour of the hedged item differing from expectations, such as early

repayments or withdrawals and arrears;

• minimal movements in the yield curve leading to ineffectiveness where hedge relationships

are sensitive to small value changes; and

• the mismatch in the swap interest rate and rate used to value the hedged item where the

swap rate is higher than the contractual rate of the hedged item.

Where there is an effective hedge relationship for fair value hedges, the Group recognises the

change in fair value of each hedged item in profit or loss with the cumulative movement in their

value being shown separately in the Consolidated Statement of Financial Position as fair value

adjustments on hedged assets and liabilities. The fair value changes of both the derivative and

the hedge substantially offset each other to reduce profit volatility.

The Group discontinues hedge accounting when the derivative ceases through expiry, when

the derivative is cancelled or the underlying hedged item matures, is sold or is repaid.

If a derivative no longer meets the criteria for hedge accounting or is cancelled whilst still

effective, including LIBOR-linked derivatives cancelled as a result of Interbank Offered Rate

(IBOR) reforms, the fair value adjustment relating to the hedged assets or liabilities within the

hedge relationship prior to the derivative becoming ineffective or being cancelled remains on

the Consolidated Statement of Financial Position and is amortised over the remaining life of

the hedged assets or liabilities. The rate of amortisation over the remaining life is in line with

expected income or cost generated from the hedged assets or liabilities. Each reporting period,

the expectation is compared to actual with an accelerated run-off applied where the two

diverge by more than set parameters.

(s)Debit and credit valuation adjustments

The DVA and CVA are included in the fair value of derivative financial instruments. The DVA is

based on the expected loss a counterparty faces due to the risk of the Group’s two banking

entities defaulting. The CVA reflects the Group’s risk of the counterparty’s default.

The methodology is based on a standard calculation, taking into account the credit rating of

the swap counterparty, time to maturity, the fair value of the swap and any

collateral arrangements.

(t)Provisions and contingent liabilities

A provision is recognised when there is a present obligation as a result of a past event, it is

probable that the obligation will be settled and the amount can be estimated reliably.

Provisions include ECLs on the Group’s undrawn loan commitments.

Contingent liabilities are possible obligations arising from past events, whose existence will be

confirmed only by uncertain future events, or present obligations arising from past events

which are either not probable or the amount of the obligation cannot be reliably measured.

Contingent liabilities are not recognised but disclosed.

(u)Employee benefits – defined contribution scheme

The Group contributes to defined contribution personal pension plans or defined contribution

retirement benefit schemes for all qualifying employees who subscribe to the terms and

conditions of the schemes’ policies.

Obligations for contributions to defined contribution pension arrangements are recognised as

an expense in profit or loss as incurred.

(v)Share-based payments

Equity-settled share-based payments to employees providing services are measured at the

fair value of the equity instruments at the grant date in accordance with IFRS 2. The fair value

excludes the effect of non-market-based vesting conditions.

The cost of the awards is charged on a straight-line basis to profit or loss (with a

corresponding increase in the share-based payment reserve within equity) over the vesting

period in which the employees become entitled to the awards. The increase within the share-

based payment reserve is reclassified to retained earnings upon exercise.

The amount recognised as an expense for non-market conditions and related service

conditions is adjusted each reporting period to reflect the actual number of awards expected

to be met. The amount recognised as an expense for awards subject to market conditions is

based on the proportion that is expected to meet the condition as assessed at the grant date.

No adjustment is made to the fair value of each award calculated at grant date.

Share-based payments that are not subject to further vesting conditions (i.e. the Deferred

Share Bonus Plan (DSBP) for senior managers) are expensed in the year services are received

with a corresponding increase in equity.

Where the allowable cost of share-based options or awards for tax purposes is greater than

the cost determined in accordance with IFRS 2, the tax effect of the excess is taken to the

share-based payment reserve within equity. The tax effect is reclassified to retained earnings

upon vesting.

Employer’s national insurance is charged to profit or loss at the share price at the reporting

date on the same service or vesting schedules as the underlying options and awards.

Own shares are recorded at cost and deducted from equity and represent shares of OSBG

that are held by the EBT.



OSB GROUP PLC Annual Report and Accounts 2025		198

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

1.Accounting policies continued

(w)Leases

Lessee accounting

The Group’s leases are predominantly for property leases where the Group is a lessee. At lease

commencement date, the Group recognises the right-of-use asset and lease liability on the

statement of financial position, except for leases of low-value assets and short-term leases of

12 months or less are recognised directly in profit or loss on a straight-line basis over the

lease term.

Lease liability payments are recognised within financing activities in the Consolidated

Statement of Cash Flows.

The Group assesses the likely impact of early terminations in recognising the right-of-use asset

and lease liability where an option to terminate early exists.

For modifications that increase the length of a lease the modified lease term is determined,

and the lease liability remeasured by discounting the revised lease payments using a revised

discount rate, at the effective date of the lease modification; a corresponding adjustment is

made to the right-of-use asset. Where modifications decrease the length of a lease, the lease

liability and right-of-use asset are reduced in proportion to the reduction in the lease term,

with any gain or loss recognised in profit or loss.

Lessor accounting

Finance leases are initially measured at an amount equal to the net investment in the lease,

using the interest rate implicit in the finance lease. Finance income is recognised over the lease

term, based on a pattern reflecting a constant periodic rate of return on the net investment in

the lease.

(x)Adoption of new standards

International financial reporting standards issued and adopted for the first time in the

year ended 31 December 2025

‘Lack of Exchangeability – Amendments to International Accounting Standard 21)’ is effective

from 1 January 2025. The adoption of the amendment has not had a material impact on the

Group.

Exemptions

The Group has applied the temporary exception issued by IASB from the accounting

requirements for deferred taxes in IAS 12 ‘Income Taxes’. Accordingly, the Group neither

recognises nor discloses information about deferred tax assets and liabilities related to Pillar 2

income taxes.

International financial reporting standards issued but not yet effective which are

applicable to the Group

In April 2024, the IASB released IFRS 18 Presentation and Disclosure in Financial Statements

which is designed to give more comparability between entities in the presentation and

classification of items within the income statement and around management-defined

performance measures and is effective for reporting periods beginning on or after 1 January

2026. The Group is currently assessing the impacts of this standard.

Certain other amendments to accounting standards and interpretations that were not

effective on 31 December 2025 have not been early-adopted by the Group. The adoption of

these amendments is not expected to have a material impact on the financial statements of

the Group in future periods.

2.Judgements in applying accounting policies and critical

accounting estimates

In preparing these financial statements, the Group has made judgements, estimates and

assumptions which affect the reported amounts within the current and future financial years.

Actual results may differ from these estimates.

As set out in the Strategic Report on page 95, climate change is a global challenge and an

emerging risk to businesses, people and the environment. Therefore, in preparing the financial

statements, the Group has considered the impact of climate-related risks on its financial

position and performance, including the impact on ECL and redemption profiles included in

EIR. While the effects of climate change represent a source of uncertainty, the Group does not

consider there to be a material impact on its judgements and estimates from the physical or

transition risks in the short term. As part of the Group’s recognition of climate risk and overall

Environmental, Social and Governance (ESG) agenda, the Group considers the physical risks

of climate change and has retained a post-model adjustment (PMA) of £1.0m (2024: £0.3m) as

of 31 December 2025.

Estimates and judgements are regularly reviewed based on past experience, expectations of

future events and other factors.

Judgements

The Group has made the following key judgements in applying the accounting policies:

(i)Loan book impairments

Significant increase in credit risk for classification in stage 2

The Group applies both quantitative and qualitative measures to assess whether an asset has

experienced a SICR. Determining specific trigger thresholds, alongside relevant risk indicators,

involves judgement, and variations in these thresholds could materially affect the ECL

allowance. The Group continuously reviews and monitors the effectiveness of its SICR criteria,

with quantitative measures incorporating forward looking information. In addition, qualitative

triggers are applied in certain circumstances, including where a customer holds multiple loans

and linked accounts are in arrears; where the customer has exceeded their contractual term;

where there are early signs of bankruptcy or individual voluntary arrangements; where key

forbearance or impairment measures have been implemented; or where accounts are

otherwise in arrears.



OSB GROUP PLC Annual Report and Accounts 2025		199

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

2.Judgements in applying accounting policies and critical

accounting estimates continued

(ii)IFRS 9 classification

Application of the ‘business model’ requirements under IFRS 9 requires the Group to conclude

on the business models that it operates and is a fundamental aspect in determining the

classification of the Group’s financial assets.

Management assessed the intention for holding financial assets and the contractual terms of

those assets, concluding that the Group’s business model is a ‘held to collect’ business model.

This conclusion was reached on the basis that the Group originates and purchases loans and

advances with the intention to collect contractual cash flows over the life of the originated or

purchased financial instrument. The Group considered recent transactions leading to the

derecognition of mortgages (see note 6) and concluded that the size and frequency of such

transactions did not affect the Group’s overall business model.

The Group considers whether the contractual terms of a financial asset give rise on specified

dates to cash flows that are SPPI on the principal amount outstanding when applying the

classification criteria of IFRS 9. The majority of the Group’s assets being loans and advances

to customers which have been accounted for under amortised cost with the exception of one

acquired mortgage book of £11.6m (2024: £12.9m) that is recognised at FVTPL.

Estimates

The Group has made the following estimates in the application of the accounting policies that

have a significant risk of material adjustment to the carrying amount of assets and liabilities

within the next financial year:

(i)Loan book impairments

Set out below are details of the critical accounting estimates which underpin loan impairment

calculations, with only those that may result in a material impact over the next 12 months

being disclosed. The Group has recognised total impairments of £123.6m (2024: £ 126.9m) at

the reporting date as disclosed in note 20.

Modelled impairment

Modelled provision assessments are also subject to estimation uncertainty, underpinned by a

number of estimates being made by management which are utilised within impairment

calculations. Key areas of estimation within modelled provisioning calculations include those

regarding PD, LGD and forward-looking macroeconomic scenarios.

Probability of default model

The Group has a number of PD models, which include estimates regarding scorecards, survival

rates, prepayment rates and lifetime curves. The PD is sensitive to the application of

unemployment rates, with an uplift of the unemployment rate by 1% seen as a reasonable

change when reviewing historical and expected 12-month outcomes. The table below shows

the resulting incremental provision required in a 1% uplift in unemployment rate (2024: an 1%

uplift in unemployment rate) applied to all scenarios in perpetuity.


	2025	2024
	£m	£m
OSB	11.5	6.5
CCFS	1.3	2.0
Group	12.8	8.5

The Group’s forecasts of unemployment rates used in the impairment models are disclosed in

the Risk profile performance review on page 62.

Loss given default model

The Group has a number of LGD models, which include estimates regarding propensity to go

to possession given default (PPD), forced sale discount, time to sale and sale costs. The LGD is

sensitive to the application of the HPI, with an 8% haircut (2024: an 8% haircut) seen to be a

reasonable downside movement within observed market volatility and is broadly consistent

with adverse but plausible macroeconomic conditions. The table below shows the resulting

incremental provision required in an 8% house price haircut (2024: an 8% house price haircut)

being directly applied to all exposures at 31 December 2025 which not only adjust the sale

discount but also the propensity to go to possession.


	2025	2024
	£m	£m
OSB	19.3	22.3
CCFS	5.8	9.1
Group	25.1	31.4

The Group’s forecasts of HPI movements used in the impairment models are disclosed in the

Risk profile performance review on page 62.



OSB GROUP PLC Annual Report and Accounts 2025		200

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

2.Judgements in applying accounting policies and critical

accounting estimates continued

Forward-looking macroeconomic scenarios

The forward-looking macroeconomic scenarios affect all model components of the ECL thus

the calculation remains sensitive to both the scenarios utilised and their associated

probability weightings.

The Group has adopted an approach which utilises four macroeconomic scenarios.

These scenarios are provided by a reputable economics advisory firm, providing management

and the Board with advice on which scenarios to utilise and the probability weightings to

attach to each scenario. A base case forecast is provided, together with a plausible upside

scenario. Two downside scenarios are also provided (downside and a severe downside). The

Group’s macroeconomic scenarios can be found on page 62.

The following tables detail the ECL scenario sensitivity analysis with each scenario weighted at

100% probability. The sensitivity analysis is performed without considering the staging shifts

driven by relative or absolute PD thresholds. The purpose of using multiple economic scenarios

is to model the non-linear impact of assumptions surrounding macroeconomic factors and

incorporate them into the ECL calculation:


As at 31 December 2025	Weighted (see note 20)	100% Base case scenario	100% Upside scenario	100% Downside scenario	100% Severe downside scenario
Total loans before provisions, £m	26,032.6	26,032.6	26,032.6	26,032.6	26,032.6
Modelled ECL, £m	74.6	56.8	48.4	98.8	176.4
Individually assessed provisions ECL, £m	44.3	44.3	44.3	44.3	44.3
Post model adjustments ECL, £m	4.7	3.8	3.2	5.9	10.3
Total ECL, £m	123.6	104.9	95.9	149.0	231.0
ECL coverage, %	0.47	0.40	0.37	0.57	0.89


As at 31 December 2024	Weighted (see note 20)	100% Base case scenario	100% Upside scenario	100% Downside scenario	100% Severe downside scenario
Total loans before provisions, £m	25,240.3	25,240.3	25,240.3	25,240.3	25,240.3
Modelled ECL, £m	79.6	63.6	53.2	114.5	153.0
Individually assessed provisions ECL, £m	37.6	37.6	37.6	37.6	37.6
Post model adjustments ECL, £m	9.7	7.2	4.3	15.9	23.5
Total ECL, £m	126.9	108.4	95.1	168.0	214.1
ECL coverage, %	0.50	0.43	0.38	0.67	0.85

The Group’s assessment of ECL primarily focuses on scenarios where economic distress is

driven by weak demand. These scenarios typically involve low inflation accompanied by falling

interest rates.

While the Group acknowledges that economic distress can also stem from supply-side shocks

(characterised by high inflation and rising interest rates), the analysis suggested that the

impact of such scenarios on the ECL calculation is not currently significant. The Group will

continue to monitor the potential impact of supply-driven shocks on ECL and will incorporate

these considerations if they become material in future reporting periods.

(ii)Effective interest rate on lending

Estimates are made when calculating the EIR for loan assets. These include the likely customer

redemption profiles. Mortgage products offered by the Group include directly attributable net

fee income and a period on reversion rates after the fixed/discount period.

Products revert to the standard variable rate (SVR) or base rate plus a margin for the Kent

Reliance (OSB) brand, a SONIA/Base rate plus a margin for the Precise (CCFS) brand and a

LIBOR replacement rate/base rate for the InterBay brand. Subsequent to origination, changes

in actual and expected customer prepayment rates are reflected as increases or decreases in

the carrying value of loan assets with a corresponding increase or decrease in interest income.

The Group uses historical customer behaviours, expected take-up rate of retention products

and macroeconomic forecasts in its assessment of expected prepayment rates. Customer

prepayments in a fixed rate or incentive period can give rise to Early Repayment Charge

(ERC) income.



OSB GROUP PLC Annual Report and Accounts 2025		201

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

2.Judgements in applying accounting policies and critical

accounting estimates continued

Judgement is used in estimating the expected average life of a mortgage, to determine the

quantum and timing of redemptions that incur ERCs, the period over which net fee income is

recognised and the length of time customers spend on reversion after the fixed/discounted

period. Estimates are reviewed regularly and during 2025, the Group made small adjustments

to the average time on reversion reflecting latest observed behaviour. An additional adjustment

related to the intra-month recognition of received cash flows had the effect of removing 0.3

months in the average time spent in reversion across the Group’s portfolios. The adverse EIR

adjustment for 2025 was £10.5m (31 December 2024: adverse EIR adjustment of £15.9m) which

reduced net interest income and loans and advances to customers.

The impact of a -/+ two months movement in time spent on reversion by Precise customers is -/

+ £17.7m. £13.9m of this total sensitivity relates to the £2.5bn of loans with product terms

issued up to the end of 2022. These loans are from the annual cohorts identified as having

been written in a low-rate environment. The remaining £3.8m sensitivity relates to the £6.9bn in

loans with product terms issued from 2023 onwards, written in a higher-rate environment,

where the step-up in reversion is smaller.

As base rate increased throughout 2022 and 2023, using the EIR approach resulted in

additional monthly net interest income as the benefit of time spent on a reversion rate became

greater. Forward rates are used in the EIR calculation and a decrease greater than the current

forward rate assumptions leads to a decrease in monthly net interest income. Based on the

loans and advances to customers, balance as at 31 December 2025, if there was a 50bps

parallel shift downwards in the forward curve, it is estimated that this would decrease monthly

interest income by £1.3m across all mortgage portfolios.

3.Interest receivable and similar income


	2025	2024
	£m	£m
At amortised cost:
On OSB mortgages ¹	946.4	858.6
On CCFS mortgages ²	579.6	627.4
On finance leases	26.4	17.9
On investment securities	44.4	30.7
On other liquid assets ³	117.9	173.7
Amortisation of fair value adjustments on CCFS loan book at Combination	–	(24.4)
Amortisation of fair value adjustments on hedged assets ⁴	23.0	20.5
	1,737.7	1,704.4
At FVTPL:
Net income on derivative financial instruments – lending and investment activities	144.5	384.3
On investment securities	18.5	1.6
	163.0	385.9
At FVOCI:
On investment securities	14.1	9.0
	1,914.8	2,099.3

1.Includes adverse EIR behavioural adjustment of £3.4m ( 2024: £3.1m adverse).

2.Includes adverse EIR behavioural adjustment of £7.1m (2024: £12.8m adverse).

3.Includes primarily interest income on BoE call account, call accounts with other banks and on cash margin with swap

counterparties.

4.The amortisation relates to hedged assets where the hedges were terminated before maturity and were effective at the

point of termination.



OSB GROUP PLC Annual Report and Accounts 2025		202

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

4.Interest payable and similar charges


	2025	2024
	£m	£m
At amortised cost:
On retail deposits	1,024.6	1,118.1
On BoE borrowings	40.6	113.8
On debt securities in issue	51.0	62.7
On senior notes	64.7	63.5
On subordinated debt liabilities	25.3	25.3
On wholesale borrowings	20.5	17.7
On Perpetual Subordinated Bonds	–	0.5
On lease liabilities	0.2	0.3
	1,226.9	1,401.9
At FVTPL:
Net expense on derivative financial instruments – savings activities	4.7	20.5
Net expense on derivative financial instruments – subordinated debt liabilities and senior notes	1.4	7.2
Net expense on derivative financial instruments – structural hedge	2.4	3.3
	1,235.4	1,432.9

5.Fair value losses on financial instruments


	2025	2024
	£m	£m
Fair value changes in hedged assets	248.3	31.7
Hedging of assets	(251.8)	(53.6)
Fair value changes in hedged liabilities	(19.0)	37.9
Hedging of liabilities	20.8	(35.8)
Ineffective portion of hedges	(1.7)	(19.8)
Net (losses)/gains on unmatched swaps	(16.2)	21.2
Amortisation of inception adjustments	(9.4)	(5.5)
Amortisation of acquisition-related inception adjustments	–	2.3
Amortisation of de-designated hedge relationships	3.9	(0.9)
Fair value movements on mortgages at FVTPL	0.3	0.7
Fair value movements on loans and advances to credit institutions at FVTPL	–	0.5
Fair value movements on investment securities at FVTPL	0.9	–
Debit and credit valuation adjustment	0.1	–
	(22.1)	(1.5)

6.Gain/(loss) on sale of financial assets held at amortised cost

In September 2025, the Group sold its second charge portfolio for proceeds of £134.2m. The

Group recognised a profit on sale of £3.4m from this transaction.

In December 2024, the Group completed PMF 2024-2 transaction which securitised £1,249.9m

of CCFS Buy-to-Let (BTL) mortgages. The Group recognised a loss on sale of £2.4m from this

transaction.

7.Other operating income


	2025	2024
	£m	£m
Interest received on mortgages held at FVTPL	0.7	0.9
Fees and commissions receivable	5.5	3.8
Other income	1.1	–
	7.3	4.7



OSB GROUP PLC Annual Report and Accounts 2025		203

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

8.Administrative expenses


	2025	2024
	£m	£m
Staff costs	148.6	143.9
Support costs	53.3	49.3
Professional fees	25.3	25.7
Facilities costs	7.1	7.9
Depreciation (see note 25)	6.7	6.3
Amortisation (see note 26)	9.2	5.0
Marketing costs	5.6	5.0
Other costs	14.3	15.0
	270.1	258.1

Included in professional fees are amounts paid to the Company’s auditor as follows:


	2025	2024
	£'000	£'000
Fees payable to the Company's auditor for the audit of the Company's annual accounts	87	83
Fees payable to the Company's auditor for the audit of the accounts of subsidiaries	4,376	4,038
Total audit fees	4,463	4,121
Audit-related assurance services¹	319	391
Other assurance services²	414	330
Other non-audit services³	1	73
Total non-audit fees	734	794
Total fees payable to the Company's auditor	5,197	4,915

1.Includes review of interim financial information and profit verifications.

2.Costs comprise assurance reviews of Alternative Performance Measures (APMs), ESG, European Single Electronic

Format (ESEF) tagging and AT1 issuance comfort letter.

3.2024 costs primarily comprise work related to the Euro Medium Term Note (EMTN) programme.

Staff costs comprise the following:


	2025	2024
	£m	£m
Salaries, incentive pay and other benefits	120.9	119.2
Share-based payments	6.9	6.3
Social security costs	15.2	12.7
Other pension costs	5.6	5.7
	148.6	143.9

During the year £6.9m ( 2024 : £2.7m) of staff costs were capitalised to intangible assets as

part of the Group’s transformation programme.

The average number of people employed by the Group (including Executive Directors) during

the year is analysed below.


	2025	2024
UK	1,467	1,566
India	1,016	993
	2,483	2,559

9.Directors’ emoluments and transactions


		Restated ¹
	2025	2024
	£'000	£'000
Short-term employee benefits ¹	3,241	2,853
Post-employment benefits	126	102
Share-based payments ²	898	746
	4,265	3,701

1.Short-term employee benefits comprise Directors’ salary costs, Non-Executive Directors’ fees and other short-term

incentive benefits, which are disclosed in the Annual Report on Remuneration. The 2024 comparative has been restated

to exclude deferred bonuses of £393k, which are disclosed separately in the paragraph below.

2.Share-based payments represent the amounts received by Directors for schemes that vested during the year.

In addition to the total Directors’ emoluments above, the Executive Directors were granted

deferred bonuses of £542k (2024: £393k) in the form of shares.



OSB GROUP PLC Annual Report and Accounts 2025		204

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

9.Directors’ emoluments and transactions continued

The Executive Directors received a further share award under the Performance Share Plan

(PSP) with a grant date fair value of £1,613k (2024: £1,613k) using a share price of £3.58 (2024:

£3.86) (the mid-market quotation on the day preceding the date of grant). These shares will

vest in line with regulatory requirements, with 75% to vest after three years and the remaining

25% to vest in year four. See page 155 of the Directors’ Remuneration Report for further

information.

The Directors of the Company are employed and compensated by OneSavings Bank plc.

No compensation was paid for loss of office during 2025 and 2024.

There were no outstanding loans granted in the ordinary course of business to Directors and

their connected persons as at 31 December 2025 and 2024.

The Annual Report on Remuneration and note 10 Share-based payments provide further

details on Directors’ emoluments.

10.Share-based payments

The share-based expense for the year includes a charge in respect of the Sharesave

Scheme, DSBP and PSP. All charges are included in employee expenses within note 8

Administrative expenses.

A summary of the share-based schemes operated by the Group is set out below.

Sharesave Scheme

The Sharesave Scheme is a share option scheme which is available to all UK-based employees.

The Sharesave Scheme allows employees to purchase options by saving a fixed amount of

between £10 and £500 per month over a period of three years at the end of which the options,

subject to leaver provisions, are usually exercisable. If not exercised, the amount saved is

returned to the employee. The Sharesave Scheme has been in operation since 2014 and an

invitation to join the scheme is usually extended annually, with the option price calculated

using the mid-market price of an OSBG ordinary share over the three dealing days prior to

the Invitation Date and applying a discount of 20%.

Deferred Share Bonus Plan

DSBP awards are granted to Executive Directors and certain senior managers to allow a

portion of their performance bonuses to be deferred in shares for up to three to seven years for

Executive Directors and typically one year for senior managers. There are no further

performance or vesting conditions attached to deferred awards for senior managers, which

also applies to Executive Directors for awards granted from April 2021.The DSBP awards are

subject to clawback provisions and are expensed in the year services are received with a

corresponding increase in equity.

DSBP awards for senior managers carry entitlements to dividend equivalents, which are paid

when the awards vest. DSBP awards granted from April 2021 to Executive Directors are entitled

to dividend equivalents. Awards granted in prior years were not entitled to dividend

equivalents.

Performance Share Plan

PSP awards are typically made annually at the discretion of the Group Remuneration and

People Committee with Executive Directors and certain senior managers being eligible for

awards. The vesting of PSP awards is determined based on a mixture of internal financial

performance targets, risk-based measures, ESG targets and relative total shareholder returns

(TSR). The Group recognises the expense related to the PSP scheme over three years.

The performance conditions that apply to PSP awards are based on a combination of

weightings as follows:


	2024 onwards	2020–2023
EPS %	30	35
TSR %	30	35
Risk based %	15	15
Return on equity (ROE) %	15	15
ESG %	10	–

The PSP conditions are assessed independently. The EPS element assesses the EPS growth rate

over the performance period. For the TSR element, the performance of the Company’s

ordinary shares is measured against the constituents of the FTSE 250 (excluding investment

trusts). The risk-based measure is assessed against the risk management performance with

regard to all relevant risks. The ROE element is assessed based on the Group’s profit after

taxation as a percentage of average shareholders’ equity. From 2025 this measure is based on

Return on Tangible Equity, as defined in Appendix 4. The ESG performance will be determined

based on the progress against the ESG strategy which will be informed by performance

against key employees and environmental metrics.

The share-based payment expense during the year comprised the following:


	2025	2024
	£m	£m
Sharesave Scheme	0.8	0.8
Deferred Share Bonus Plan	2.9	2.6
Performance Share Plan	3.2	2.9
	6.9	6.3



OSB GROUP PLC Annual Report and Accounts 2025		205

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

10.Share-based payments continued

Movements in the number of share awards and their weighted average exercise prices are set

out below:


	Sharesave Scheme		Deferred Share Bonus Plan	Performance Share Plan
	Number	Weighted average exercise price, £	Number	Number
As at 1 January 2025	2,935,729	2.91	944,795	8,564,430
Granted	335,050	4.48	570,101	3,821,018
Exercised/Vested	(425,537)	3.37	(554,781)	(918,105)
Forfeited	(347,569)	2.98	(8,042)	(1,714,923)
As at 31 December 2025	2,497,673	3.03	952,073	9,752,420
Exercisable at:
31 December 2025	25,377	3.25	–	–


As at 1 January 2024	2,801,587	2.91	895,162	6,747,268
Granted	898,516	2.96	587,681	3,501,310
Exercised/Vested	(303,627)	2.47	(531,669)	(772,568)
Forfeited	(460,747)	3.29	(6,379)	(911,580)
As at 31 December 2024	2,935,729	2.91	944,795	8,564,430
Exercisable at:
31 December 2024	81,035	3.90	–	–

For the share-based awards granted during the year, the weighted average grant date fair

value was 338 pence (2024: 272 pence).

The range of exercise prices and weighted average remaining contractual life of outstanding

awards are as follows:


	2025		2024
Exercise price	Number	Weighted average remaining contractual life (years)	Number	Weighted average remaining contractual life (years)
Sharesave Scheme
229–448 pence (2024: 229–429 pence)	2,497,673	1.5	2,935,729	2.0
Deferred Share Bonus Plan
Nil	952,073	0.9	944,795	1.1
Performance Share Plan
Nil	9,752,420	2.5	8,564,430	2.5
	13,202,166	2.2	12,444,954	2.3

Sharesave Scheme


	2025	2024	2023	2022	2021	2020	2019
Contractual life, years	3	3	3	3	3	5	5
Share price at issue, £	5.60	3.70	3.40	5.36	5.13	2.86	3.32
Exercise price, £	4.48	2.96	2.72	4.29	3.96	2.29	2.65
Expected volatility, %	34.0	51.9	46.5	31.4	37.9	57.6	31.9
Risk-free rate, %	3.5	3.7	4.8	5.3	1.3	0.2	0.8
Dividend yield, %	6.1	8.1	9.9	7.3	4.5	3.3	4.8
Grant date fair value, £	1.33	1.28	0.85	0.68	1.46	1.34	0.91

The Sharesave Schemes are not entitled to dividends between the option and exercise date.

A Black Scholes model is used to determine the grant date fair value with three inputs:

• Expected volatility – based on the Company’s share price.

• Risk-free rate – based on Government bonds.

• Dividend yield – based on the average dividend yield across external analyst reports for the

quarter prior to scheme grant date.



OSB GROUP PLC Annual Report and Accounts 2025		206

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

10.Share-based payments continued

Deferred Share Bonus Plan

For awards granted from 2021, there are no further performance or vesting conditions

attached to deferred awards, for further details see DSBP above.

For DSBP awards where conditions exist, these schemes carry no rights to dividend equivalents

and a Black Scholes model is used to determine the grant date fair value with a dividend yield

input applied – based on the average dividend yield across external analyst reports for the

quarter prior to scheme grant date.

Performance Share Plan

Non-market performance conditions also exist for the scheme, notably that a participant is

employed by the Company over the performance period with good leaver exceptions, and an

attrition rate is applied as an estimate of the actual number of awards that will meet the

related conditions at the vesting date.

The awards are not entitled to a dividend equivalent between grant date and vesting and a

Black Scholes model is used to determine the grant date fair value with a dividend yield input

applied – based on the average dividend yield across external analyst reports for the quarter

prior to the scheme grant date.

The fair value of the portion of awards that is subject to market conditions (i.e. the relative TSR

element of the PSP) is determined at the grant date using a Monte Carlo model.

The inputs into the models are as follows:


	2025	2024	2023	2022	2021
Mid-market share price, £	4.46	3.86	5.01	5.58	4.94
Attrition rate, %	11.6	9.7	6.0	6.9	12.8
Expected volatility, %	42.0	49.8	35.4	37.4	59.5
Dividend yield, %	7.5	7.3	8.7	4.7	3.8
Vesting rate – TSR %	25.7	33.0	62.7	32.3	40.8
Grant date fair value, £	3.38	2.53	3.08	4.64	4.26

11.Taxation

The Group publishes its tax strategy on its corporate website. The table below shows the

components of the Group’s tax charge for the year:


	2025	2024
	£m	£m
Current tax
Corporation tax	90.4	110.2
Corporation tax – prior year adjustments	(0.4)	(4.8)
Total current tax charge	90.0	105.4

Deferred tax
Deferred tax	6.5	5.4
Deferred tax – prior year adjustments	0.3	5.5
Release of deferred tax on CCFS Combination	–	(6.3)
Total deferred tax charge	6.8	4.6

Total tax charge	96.8	110.0



OSB GROUP PLC Annual Report and Accounts 2025		207

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

11.Taxation continued

The charge for taxation on the Group’s profit before taxation differs from the charge based on

the standard rate of UK Corporation Tax of 25.0% (2024: 25.0%) as follows:


	2025	2024
	£m	£m
Profit before taxation	382.5	418.1
Profit multiplied by the standard rate of UK Corporation Tax 25% (2024: 25%)	95.6	104.5
Bank surcharge¹	4.7	6.6
Tax effects of:
Income not taxable	(1.4)	(0.2)
Timing differences on capital items	(6.0)	(4.7)
Fair value adjustments on acquisition	–	6.3
Adjustments in respect of earlier years	(0.4)	(4.8)
Tax on coupon paid on AT1 securities²	(2.5)	(2.3)
Total current tax charge	90.0	105.4

Movements in deferred taxes	6.5	5.4
Deferred tax – prior year adjustments	0.3	5.5
Release of deferred tax on CCFS Combination	–	(6.3)
Total deferred tax charge	6.8	4.6
Total tax charge	96.8	110.0

1.In 2024 the tax charge for the two banking entities of £7.4m was offset by the tax impact of unwinding CCFS

Combination items of £0.8m.

2.The Group has issued AT1 capital instruments that are classified as Hybrid Capital Instruments (HCI) for tax purposes.

The coupons paid under HCI are deductible under UK tax legislation despite being charged to equity.

Factors affecting tax charge for the year

The standard rate of UK corporation tax applicable in the period was 25.0% (2024: 25.0%).

The Group’s banking entities also pay the bank surcharge at 3.0% (2024: 3.0%) on combined

profits for the full year above £100.0m (2024: £100.0m).

The effective tax rate for the year ended 31 December 2025, excluding the impact of

adjustments in respect of earlier years and the deferred tax rate change, was 25.3% (2024:

26.1%). This is higher than the standard rate of UK corporation tax, principally due to the

impact of the bank surcharge payable by the two banking entities, offset by the impact of

swap movements in securitisation companies that are not subject to tax, and deductions

available for the coupon paid on AT1 instruments that are charged to equity.

During the year a tax credit of £2.8m (2024: £0.3m) (comprising a deferred tax credit of £2.2m

(2024: £0.1m) and current tax credit of £0.6m (2024: £0.2m)) has been recognised directly

within equity relating to the Group's share-based payment schemes.

During the year a tax debit of £0.2m (2024: nil) has been recognised within other

comprehensive income relating to investment securities classified as FVOCI.

Deferred taxation asset

The table below shows movements on deferred tax assets during the year.


	2025	2024
	£m	£m
As at 1 January ¹	6.2	3.9
Profit or loss credit	0.6	1.2
Transferred from deferred tax liability ²	–	1.0
Tax taken directly to OCI	(0.2)	–
Tax taken directly to equity	2.2	0.1
As at 31 December ¹	8.8	6.2

1.Deferred taxation assets are recognised on share-based payments, IFRS 9 transitional adjustments, losses carried

forward and accelerated depreciation.

2.In 2024 £1.0m relating to accelerated depreciation previously shown within the deferred tax asset has been transferred

to the deferred tax liability.

As at 31 December 2025, the Group had £3.5m (2024: £3.5m) of losses for which a deferred

tax asset has not been recognised as the Group does not expect sufficient future profits in the

entity from which the deferred tax asset arises to be available to utilise the losses.

As at 31 December 2025, deferred tax assets of £3.4m (2024: £2.7m) are expected to be

utilised within 12 months and £5.4m (2024: £3.5m) utilised after 12 months.



OSB GROUP PLC Annual Report and Accounts 2025		208

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

11Taxation continued

Deferred taxation liability

The table below shows movements on deferred tax liability during the year.


	2025	2024
	£m	£m
As at 1 January ¹	13.1	6.3
Profit or loss charge ²	7.1	0.3
Profit or loss charge – prior year	0.3	5.5
Transfer from deferred tax asset ³	–	1.0
As at 31 December ¹	20.5	13.1

1.Deferred taxation liability recognised on receipt of capital allowances in advance of associated depreciation, and on the

timing differences in the recognition of assets and liabilities at fair value on Combination.

2.In 2024, the profit or loss charge includes a release of £6.6m relating to fair values unwound of assets and liabilities

recognised on Combination.

3.In 2024, £1.0m relating to accelerated depreciation previously shown within the deferred tax asset was transferred to

the deferred tax liability.

As at 31 December 2025, deferred tax liabilities of £2.9m (2024: £1.1m) are expected to be due

within 12 months and £17.6m (2024: £12.0m) due after 12 months.

12.Earnings per share

EPS is based on the profit for the year and the weighted average number of ordinary shares in

issue. Basic EPS are calculated by dividing profit attributable to ordinary shareholders by the

weighted average number of ordinary shares in issue during the year. Diluted EPS take into

account share options and awards which can be converted to ordinary shares.

For the purpose of calculating EPS, profit attributable to ordinary shareholders is arrived at by

adjusting profit for the year for the coupon on securities classified as equity:


	2025	2024
	£m	£m
Profit after tax	285.7	308.1
Less: coupon paid on AT1 securities classified as equity	(10.1)	(9.0)
Profit attributable to ordinary shareholders	275.6	299.1


	2025	2024
Weighted average number of shares, millions
Basic	364.6	385.6
Dilutive impact of share-based payment schemes	9.7	9.5
Diluted	374.3	395.1
Earnings per share, pence per share
Basic	75.6	77.6
Diluted	73.6	75.7



OSB GROUP PLC Annual Report and Accounts 2025		209

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

13.Dividends


	2025		2024
	£m	Pence per share	£m	Pence per share
Final dividend for the prior year	84.9	22.9	85.6	21.8
Interim dividend for the current year	40.6	11.2	40.8	10.7
	125.5		126.4

The Directors recommend a final dividend of £85.8m , 24.1 pence per share (2024: £85.2m,

22.9 pence per share) payable on 13 May 2026 with an ex-dividend date of 2 April 2026 and a

record date of 7 April 2026. This dividend is not reflected in these financial statements as it is

subject to approval by shareholders at the Annual General Meeting on 7 May 2026 .

If the final dividend is approved, this will make up the total dividend for 2025 of £126.4m,

35.3 pence per share (2024: £126.0m, 33.6 pence per share).

A summary of the Company’s distributable reserves is shown below:


	2025	2024
	£m	£m
Retained earnings	1,349.1	1,354.2
Own shares ¹	(0.9)	(0.9)
Distributable reserves	1,348.2	1,353.3

1.Own shares comprises own shares held in the Group’s EBT of £0.9m ( 2024: £0.9m) which are recognised within OSBG

under look-through accounting.

Further additional distributable reserves can be realised over time from dividend receipts from

profits generated from the subsidiaries including two regulated banks within the Group.

14.Cash and cash equivalents

The following table analyses the cash and cash equivalents disclosed in the consolidated

statement of cash flows:


	2025	2024
	£m	£m
Cash in hand	0.4	0.3
Unencumbered loans and advances to credit institutions (see note 15)	2,798.3	3,231.1
	2,798.7	3,231.4

15.Loans and advances to credit institutions


	2025	2024
	£m	£m
Unencumbered:
BoE call account	2,429.6	3,053.9
Short-term reverse repurchase agreements	200.6	–
Call accounts	83.4	58.5
Cash held in special purpose vehicles (SPVs) ¹	58.9	99.5
Term deposits	25.8	19.2
	2,798.3	3,231.1
Encumbered:
Cash held in SPVs ¹	38.2	40.6
Cash margin given	216.5	134.2
	254.7	174.8

	3,053.0	3,405.9

1.Cash held in SPVs is ring-fenced for use in managing the Group’s securitised debt facilities under the terms of

securitisation agreements. Cash held in SPVs is treated as unencumbered in proportion to the retained interest in the

SPV, based on the nominal value of the bonds held by the Group to total bonds in the securitisation, and is included in

cash and cash equivalents. Cash retained in SPVs designated as cash reserve credit enhancement is treated as

encumbered in proportion to the external holdings in the SPV and excluded from cash and cash equivalents.



OSB GROUP PLC Annual Report and Accounts 2025		210

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

16.Investment securities


	2025	2024
	£m	£m
Held at amortised cost:
RMBS loan notes	608.5	742.1
Covered bonds	209.1	56.2
UK Sovereign debt	147.3	–
	964.9	798.3
Held at FVOCI:
Supranational bonds	269.2	–
Covered bonds	148.9	–
UK Sovereign debt	30.7	226.0
	448.8	226.0
Held at FVTPL:
RMBS loan notes	400.8	410.1
	1,814.5	1,434.4

At 31 December 2025, the Group used £293.9m of RMBS loan notes (2024: nil ) as collateral in

repurchase agreements.

The Directors consider that the primary purpose of holding investment securities is prudential.

These securities are held as liquid assets with the intention of use on a continuing basis in the

Group’s activities and are classified as amortised cost, FVOCI and FVTPL in accordance with

the Group’s business model for each security.

The credit risk on investment securities held at amortised cost and FVOCI has not significantly

increased since initial recognition and is categorised as stage 1. At 31 December 2025, there

were no ECLs recognised on investment securities (2024: nil ) as set out in note 1(m)(vii).

Movements during the year in investment securities held by the Group are analysed as follows:


	2025	2024
	£m	£m
As at 1 January	1,434.4	621.7
Additions ¹	932.7	1,597.3
Disposals and maturities	(558.0)	(789.1)
Movement in accrued interest	2.2	4.6
Changes in fair value	3.2	(0.1)
As at 31 December	1,814.5	1,434.4

1.2024 additions included £786.1m of notes received as part of PMF 2024-2 securitisation.

At 31 December 2025, investment securities included investments in unconsolidated structured

entities (see note 41) of £461.8m notes in PMF 2024-2 (2024: £472.5m notes in PMF 2024-2 and

£92.6m notes in PMF 2020-1B). These investments represent the maximum exposure to loss

from unconsolidated structured entities.

17.Loans and advances to customers


	2025	2024
	£m	£m
Held at amortised cost:
Loans and advances (see note 18)	25,608.4	24,923.4
Finance lease (see note 19)	424.2	316.9
	26,032.6	25,240.3
Less: Expected credit losses (see note 20)	(123.6)	(126.9)
	25,909.0	25,113.4
Held at FVTPL:
Residential mortgages	11.6	12.9
	25,920.6	25,126.3



OSB GROUP PLC Annual Report and Accounts 2025		211

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

18.Loans and advances


	2025			2024
	OSB	CCFS	Total	OSB	CCFS	Total
	£m	£m	£m	£m	£m	£m
Gross carrying amount
Stage 1	13,327.6	7,407.5	20,735.1	12,029.3	7,539.0	19,568.3
Stage 2	2,194.4	1,621.4	3,815.8	2,411.8	1,935.5	4,347.3
Stage 3	714.8	299.5	1,014.3	653.2	294.1	947.3
Stage 3 (POCI)	16.4	26.8	43.2	27.8	32.7	60.5
	16,253.2	9,355.2	25,608.4	15,122.1	9,801.3	24,923.4

The mortgage loan balances pledged as collateral for liabilities are:


	2025	2024
	£m	£m
BoE under TFSME and ILTR	2,385.4	3,745.2
Securitisation	1,019.5	995.9
	3,404.9	4,741.1

The Group’s securitisation programmes and use of TFSME and ILTR result in certain assets

being encumbered as collateral against such funding. As at 31 December 2025, the

percentage of the Group’s gross loans and advances to customers that are encumbered was

13% (2024: 19%).

The contractual amount outstanding on loans and advances that were written off during the

reporting period and were still subject to collections and recovery activity was £9.9m at

31 December 2025 (2024: £1.9m).

As at 31 December 2025, loans and advances of £305.9m (2024: £280.8m) were in a probation

period before they can move out of Stage 3, see note 1 (m) (vii) for further details.

Where a borrower has multiple facilities, all facilities are considered in default when a

minimum threshold of the borrower’s exposure has been classified as defaulted. As at 31

December 2025, loans and advances of £89.0m (2024: £72.0m) were in this category of

default.

The table below shows the movement in loans and advances to customers by IFRS 9 stage

during the year:


	Stage 1	Stage 2	Stage 3	Stage 3 (POCI)	Total
	£m	£m	£m	£m	£m
As at 1 January 2024	20,362.5	4,531.9	709.1	70.9	25,674.4
Originations¹	3,771.6	–	–	–	3,771.6
Acquisitions²	5.9	–	–	–	5.9
Disposals⁴	(1,126.1)	(124.5)	(0.2)	–	(1,250.8)
Repayments and write-offs³	(2,669.7)	(469.2)	(128.4)	(10.4)	(3,277.7)
Transfers:
- To Stage 1	1,244.4	(1,210.5)	(33.9)	–	–
- To Stage 2	(1,874.4)	1,933.5	(59.1)	–	–
- To Stage 3	(145.9)	(313.9)	459.8	–	–
As at 31 December 2024	19,568.3	4,347.3	947.3	60.5	24,923.4
Originations¹	4,467.7	–	–	–	4,467.7
Acquisitions²	11.8	–	–	–	11.8
Disposals⁴	(88.2)	(26.8)	(14.8)	(4.3)	(134.1)
Repayments and write-offs³	(2,858.0)	(604.7)	(184.7)	(13.0)	(3,660.4)
Transfers:
- To Stage 1	1,047.5	(1,007.2)	(40.3)	–	–
- To Stage 2	(1,266.4)	1,384.3	(117.9)	–	–
- To Stage 3	(147.6)	(277.1)	424.7	–	–
As at 31 December 2025	20,735.1	3,815.8	1,014.3	43.2	25,608.4

1.Originations include further advances and drawdowns on existing commitments.

2.The Group repurchased £11.8m (2024: £5.9m) of own-originated UK residential and Buy-to-Let mortgages from

deconsolidated SPVs at par.

3.Repayments and write-offs include customer redemptions and £20.2m (2024: £10.7m) of write-offs during the year.

4.Disposals include loans and advances to customers derecognised as part of the sale of the second charge portfolio

(2024: PMF 2024-2 securitisation).



OSB GROUP PLC Annual Report and Accounts 2025		212

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

19.Finance leases

The Group provides asset finance lending through InterBay Asset Finance Limited.


	2025	2024
	£m	£m
Gross investment in finance leases, receivable
Less than one year	160.2	120.3
Between one and two years	131.3	97.7
Between two and three years	94.6	74.0
Between three and four years	58.1	42.2
Between four and five years	25.3	18.9
More than five years	7.6	4.8
	477.1	357.9
Unearned finance income	(52.9)	(41.0)
Net investment in finance leases	424.2	316.9
Net investment in finance leases, receivable
Less than one year	136.3	102.0
Between one and two years	115.7	85.6
Between two and three years	86.1	67.4
Between three and four years	54.4	39.3
Between four and five years	24.3	18.0
More than five years	7.4	4.6
	424.2	316.9

The Group has recognised £6.3m of ECLs on finance leases as at 31 December 2025 (2024:

£4.1m). During the year, originations in InterBay Asset Finance Limited amounted to £242.1m

( 2024: £182.1m).

20.Expected credit losses

The ECL has been calculated based on various scenarios as set out below:


	2025			2024
	ECL provision	Weighting	Weighted ECL provision	ECL provision	Weighting	Weighted ECL provision
	£m	%	£m	£m	%	£m
Scenarios
Upside	48.4	30	14.5	53.2	30	16.0
Base case	56.8	40	22.7	63.6	40	25.4
Downside scenario	98.8	20	19.8	114.5	20	22.9
Severe downside scenario	176.4	10	17.6	153.0	10	15.3
Total weighted provisions			74.6			79.6
Other Provisions:
Individually assessed provisions			44.3			37.6
Post model adjustments			4.7			9.7
Total provision			123.6			126.9

The Group held £4.7m (2024: £9.7m) of ECL due to post model adjustments for risks not

sufficiently accounted for in the IFRS 9 framework.



OSB GROUP PLC Annual Report and Accounts 2025		213

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

20.Expected credit losses continued

The risk associated with the cost of borrowing, as interest rates have remained elevated, has

transitioned into the model framework (2024: £2.1m). Similarly the PMA held to address the

observed elongated time to sales post the pandemic have also transitioned into the model

framework (2024: £6.3m). PMAs continue to be recognised for the physical risk relating to

climate change and concerns around cladding amounting to £2.0m (2024: £1.3m). The

Development Finance PMA recognised at 30 June 2025 continues to consider the uncertainty

arising from a potential severe economic downturn at £1.9m, with the addition of a new PMA

for the risk associated with the Renter's Rights Bill, which is expected to extend the time to sale,

amounting to £0.8m.

The Group’s ECL by segment and IFRS 9 stage is shown below:


	2025			2024
	OSB	CCFS	Total	OSB	CCFS	Total
	£m	£m	£m	£m	£m	£m
Stage 1	17.3	1.0	18.3	11.8	1.9	13.7
Stage 2	23.2	5.1	28.3	29.6	9.7	39.3
Stage 3	63.7	12.2	75.9	58.6	13.1	71.7
Stage 3 (POCI)	0.3	0.8	1.1	1.1	1.1	2.2
	104.5	19.1	123.6	101.1	25.8	126.9

The table below shows the movement in the ECL by IFRS 9 stage during the year. ECLs on

originations and acquisitions reflect the IFRS 9 stage of loans originated or acquired during the

year as at 31 December and not the date of origination. Re-measurement of loss allowance

relates to existing loans which did not redeem during the year and includes the impact of loans

moving between IFRS 9 stages.


	Stage 1	Stage 2	Stage 3	Stage 3 (POCI)	Total
	£m	£m	£m	£m	£m
As at 1 January 2024	22.4	54.3	66.7	2.4	145.8
Originations	6.1	–	–	–	6.1
Acquisitions	0.1	–	–	–	0.1
Disposals¹	(0.6)	(0.3)	–	–	(0.9)
Repayments and write-offs	(2.4)	(5.0)	(15.4)	(0.3)	(23.1)
Re-measurement of loss allowance	(24.3)	13.0	18.5	(0.3)	6.9
Transfers:
- To Stage 1	15.3	(13.4)	(1.9)	–	–
- To Stage 2	(2.3)	3.9	(1.6)	–	–
- To Stage 3	(0.2)	(9.0)	9.2	–	–
Changes in assumptions and model parameters	(0.4)	(4.2)	(3.8)	0.4	(8.0)
As at 31 December 2024	13.7	39.3	71.7	2.2	126.9
Originations	8.1	–	–	–	8.1
Disposals¹	(0.1)	(0.1)	(0.8)	(0.4)	(1.4)
Repayments and write-offs	(0.9)	(4.9)	(22.6)	(0.7)	(29.1)
Re-measurement of loss allowance	(12.5)	17.6	27.3	–	32.4
Transfers:
- To Stage 1	10.4	(9.1)	(1.3)	–	–
- To Stage 2	(1.0)	3.2	(2.2)	–	–
- To Stage 3	(0.4)	(6.6)	7.0	–	–
Changes in assumptions and model parameters	1.0	(11.1)	(3.2)	–	(13.3)
As at 31 December 2025	18.3	28.3	75.9	1.1	123.6

1.Disposals include ECL on the loans and advances to customers derecognised as part of sale of the second charge

portfolio (2024: PMF 2024-2 securitisation).



OSB GROUP PLC Annual Report and Accounts 2025		214

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

20Expected credit losses continued

The table below shows the stage 2 ECL balances by transfer criteria:


	2025			2024
	Carrying value	ECL	Coverage	Carrying value	ECL	Coverage
	£m	£m	%	£m	£m	%
Criteria:
Relative/absolute PD movement	3,456.7	24.3	0.70	3,998.9	35.7	0.89
Qualitative measures	278.3	3.5	1.26	283.6	3.3	1.16
30 days past due backstop	86.3	0.5	0.58	70.4	0.3	0.43
Total	3,821.3	28.3	0.74	4,352.9	39.3	0.90

The Group has a number of qualitative measures to determine whether a SICR has taken

place. These triggers utilise both internal performance information, to analyse whether an

account is in distress but not yet in arrears, and external credit bureau information,

to determine whether the customer is experiencing financial difficulty with an external

credit obligation.

21.Impairment of financial assets

The charge/(credit) for impairment of financial assets in the Consolidated Statement of

Comprehensive Income comprises:


	2025	2024
	£m	£m
Write-offs in year, net of recoveries	20.2	10.7
Decrease in ECL provision	(7.2)	(22.4)
	13.0	(11.7)

22.Derivatives

The table below reconciles the gross amount of derivative contracts to the carrying balance

shown in the Consolidated Statement of Financial Position:


	Gross amount of recognised financial assets / (liabilities)	Net amount of financial assets / (liabilities) presented in the Consolidated Statement of Financial Position	Contracts subject to master netting agreements not offset in the Consolidated Statement of Financial Position	Cash collateral paid / (received) not offset in the Consolidated Statement of Financial Position	Net amount
As at 31 December 2025	£m	£m	£m	£m	£m
Derivative assets:
Interest rate risk hedging – product ¹	90.0	90.0	(65.6)	(6.7)	17.7
Interest rate risk hedging – structural hedge	11.4	11.4	(0.1)	(11.3)	–
	101.4	101.4	(65.7)	(18.0)	17.7
Derivative liabilities:
Interest rate risk hedging – product¹	(151.8)	(151.8)	65.6	83.1	(3.1)
Interest rate risk hedging – structural hedge	(0.2)	(0.2)	0.1	0.1	–
	(152.0)	(152.0)	65.7	83.2	(3.1)



OSB GROUP PLC Annual Report and Accounts 2025		215

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

22.Derivatives continued


	Gross amount of recognised financial assets / (liabilities)	Net amount of financial assets / (liabilities) presented in the Consolidated Statement of Financial Position	Contracts subject to master netting agreements not offset in the Consolidated Statement of Financial Position	Cash collateral paid / (received) not offset in the Consolidated Statement of Financial Position	Net amount
As at 31 December 2024	£m	£m	£m	£m	£m
Derivative assets:
Interest rate risk hedging – product¹	312.7	312.7	(75.7)	(163.8)	73.2
Interest rate risk hedging – structural hedge	1.1	1.1	(1.1)	–	–
	313.8	313.8	(76.8)	(163.8)	73.2
Derivative liabilities:
Interest rate risk hedging – product¹	(77.0)	(77.0)	75.7	–	(1.3)
Interest rate risk hedging – structural hedge	(4.9)	(4.9)	1.1	3.8	–
	(81.9)	(81.9)	76.8	3.8	(1.3)

1.Product relates to the hedging of loan assets, retail deposits, investment securities and debt issued, including pipeline

hedges.

Derivative assets and liabilities include an initial margin of £150.3m ( 2024: £131.7m) with swap

counterparties. Margin is posted daily in respect of derivatives transacted with

swap counterparties.

Included within the Group’s derivative assets is £17.7m ( 2024: £72.6m) and derivative liabilities

£5.5m (2024: £1.2m) relating to derivative contracts not covered by master netting agreements

on which no cash collateral has been paid.

The table below profiles the maturity of nominal amounts for interest rate risk hedging

derivatives based on contractual maturity:


	Total nominal	Less than 3 months	3–12 months	1–5 years	More than 5 years
As at 31 December 2025	£m	£m	£m	£m	£m
Derivative assets	16,448.7	1,942.3	8,203.3	6,167.1	136.0
Derivative liabilities	15,816.1	473.5	2,495.3	12,596.3	251.0
	32,264.8	2,415.8	10,698.6	18,763.4	387.0

As at 31 December 2024
Derivative assets	16,474.8	1,555.4	4,390.7	10,249.0	279.7
Derivative liabilities	11,291.4	711.0	4,696.8	5,773.6	110.0
	27,766.2	2,266.4	9,087.5	16,022.6	389.7

The Group has 1,468 (2024: 1,111) derivative contracts with an average fixed rate of 3.64%

(2024: 3.71%).

23.Hedge accounting


	2025	2024
	£m	£m
Hedged assets
Current hedge relationships	93.7	(165.3)
Swap inception adjustment	5.0	23.5
Cancelled hedge relationships	(13.1)	(33.2)
De-designated hedge relationships	(0.5)	(4.3)
Fair value adjustments on hedged assets	85.1	(179.3)
Hedged liabilities
Current hedge relationships	(12.9)	9.0
Swap inception adjustment	1.0	(2.9)
Fair value adjustments on hedged liabilities	(11.9)	6.1

The swap inception adjustment relates to hedge accounting adjustments arising when hedge

accounting commences, reflecting the change in fair value on the hedged item due to the

hedged risk that occurred prior to being designated in a hedge accounting relationship. The

Group uses the associated swap value as a proxy for this initial value, based on derivative

instruments previously taken out on the mortgage pipeline or new retail deposits.



OSB GROUP PLC Annual Report and Accounts 2025		216

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

23Hedge accounting continued

De-designated hedge relationships relate to hedge accounting adjustments on failed hedge

relationships which are amortised over the remaining lives of the original hedged items and

also include the Group’s equity structural hedge.

Cancelled hedge relationships predominantly represent the unamortised fair value adjustment

for interest rate risk hedges that have been cancelled and replaced due to IBOR transition,

securitisation activities, the equity structural hedge and legacy long-term fixed rate

mortgages (c. 25 years at origination).

The table below analyses the Group’s portfolio hedge accounting for fixed rate loans and

advances to customers:


	2025		2024
	Hedged item	Hedging instrument	Hedged item	Hedging instrument
Loans and advances to customers	£m	£m	£m	£m
Carrying amount of hedged item/nominal value of hedging instrument	17,348.2	17,275.9	13,123.0	13,809.9
Cumulative fair value adjustments of hedged item/fair value of hedging instrument	93.1	(89.4)	(165.3)	217.6
Changes in the fair value adjustment of hedged item/ hedging instrument used for recognising the hedge ineffectiveness for the period	248.3	(251.8)	31.7	(53.6)
Cumulative fair value on cancelled hedge relationships	(13.1)	–	(33.2)	–

In the Consolidated Statement of Financial Position, £40.0m (2024: £265.9m) of hedging

instruments were recognised within derivative assets; and £129.4m (2024: £48.3m) within

derivative liabilities.

The movement in cancelled hedge relationships is as follows:


	2025	2024
Hedged assets	£m	£m
As at 1 January	(33.2)	(30.8)
New cancellations¹	(2.9)	(22.9)
Amortisation	23.0	20.5
As at 31 December	(13.1)	(33.2)

1.The new cancellations are from the securitisation of mortgages during the year where the Group cancels swaps which

were effective prior to the event, replacing these with new swaps within SPV structures, with the designated hedge

moved to cancelled hedge relationships to be amortised over the remaining original life of the swap. Additionally,

in 2024, cancellations occurred due to the commencement of the structural hedge programme.

The table below analyses the Group’s portfolio hedge accounting for fixed rate amounts

owed to retail depositors:


	2025		2024
	Hedged item	Hedging instrument	Hedged item	Hedging instrument
Customer deposits	£m	£m	£m	£m
Carrying amount of hedged item/nominal value of hedging instrument	8,254.6	8,313.1	8,368.8	8,393.9
Cumulative fair value adjustments of hedged item/fair value of hedging instrument	(3.4)	11.5	6.5	(4.3)
Changes in the fair value adjustment of hedged item/ hedging instrument used for recognising the hedge ineffectiveness for the period	(25.7)	8.9	24.9	(22.8)

In the Consolidated Statement of Financial Position, £11.5m (2024: £3.6m) of hedging

instruments were recognised within derivative assets; and nil (2024: £7.9m) within derivative

liabilities.



OSB GROUP PLC Annual Report and Accounts 2025		217

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

23.Hedge accounting continued

The table below analyses the Group’s portfolio hedge accounting for fixed rate investment

securities:


	2025		2024
	Hedged item	Hedging instrument	Hedged item	Hedging instrument
Investment Securities	£m	£m	£m	£m
Carrying amount of hedged item/nominal value of hedging instrument	279.5	276.0	–	–
Cumulative fair value adjustments of hedged item/fair value of hedging instrument	0.6	(1.2)	–	–

In the Consolidated Statement of Financial Position, £1.2m (2024: nil) of hedging instruments

were recognised within derivative liabilities.

The table below analyses the Group’s ‘micro’ hedge accounting for fixed rate senior notes and

subordinated debt liabilities:


	2025		2024
Senior notes and subordinated debt liabilities	Hedged item	Hedging instrument	Hedged item	Hedging instrument
Senior notes and subordinated debt liabilities	£m	£m	£m	£m
Carrying amount of hedged item/nominal value of hedging instrument	765.0	765.0	765.0	765.0
Cumulative fair value adjustments of hedged item/fair value of hedging instrument	(9.5)	10.9	2.5	(2.7)
Changes in the fair value adjustment of hedged item/hedging instrument used for recognising the hedge ineffectiveness for the period	6.7	11.9	13.0	(13.0)

The Group has elected to partially hedge the senior notes up to the optional redemption date

which reflects management’s expectations about the exercise of the call option.

In the Consolidated Statement of Financial Position, £10.9m (2024: £5.9m) of hedging

instruments were recognised within derivative assets, and nil (2024: £8.6m) within derivative

liabilities.

24.Other assets


	2025	2024
	£m	£m
Falling due within one year:
Prepayments	16.1	15.1
Other assets	1.6	1.1

Falling due more than one year:
Prepayments	2.7	1.0
Other assets	0.6	0.6
	21.0	17.8



OSB GROUP PLC Annual Report and Accounts 2025		218

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

25.Property, plant and equipment


	Freehold land and buildings	Development asset	Leasehold improvements	Equipment and fixtures	Plant	Right-of-use assets
	Freehold land and buildings	Development asset	Leasehold improvements	Equipment and fixtures	Plant	Property leases	Other leases	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Cost
As at 1 January 2024	20.3	–	3.0	18.8	–	15.8	5.7	63.6
Additions ¹	–	11.8	0.6	3.8	–	0.9	–	17.1
Transfer during the year	3.7	(4.1)	0.3	0.1	–	–	–	–
Disposals and write-offs ²	–	–	–	(2.9)	–	–	–	(2.9)
As at 31 December 2024	24.0	7.7	3.9	19.8	–	16.7	5.7	77.8
Additions ¹	0.1	1.2	0.4	1.9	2.0	–	–	5.6
Transfer during the year	–	(8.6)	0.1	(0.9)	9.4	–	–	–
Disposals and write-offs ²	(3.4)	–	(1.0)	(2.0)	–	(3.3)	–	(9.7)
Foreign exchange difference	(1.8)	–	–	(0.8)	–	–	–	(2.6)
As at 31 December 2025	18.9	0.3	3.4	18.0	11.4	13.4	5.7	71.1
Accumulated depreciation
As at 1 January 2024	2.0	–	1.5	9.1	–	6.8	0.4	19.8
Charged in year	0.3	–	0.3	3.3	–	2.4	–	6.3
Disposals and write-offs ²	–	–	–	(2.9)	–	–	–	(2.9)
As at 31 December 2024	2.3	–	1.8	9.5	–	9.2	0.4	23.2
Charged in year	0.3	–	0.4	3.3	0.3	2.4	–	6.7
Disposals and write-offs ²	(0.8)	–	(0.7)	(1.9)	–	(2.6)	–	(6.0)
Foreign exchange difference	–	–	–	(0.6)	–	–	–	(0.6)
As at 31 December 2025	1.8	–	1.5	10.3	0.3	9.0	0.4	23.3
Net book value
As at 31 December 2025	17.1	0.3	1.9	7.7	11.1	4.4	5.3	47.8
As at 31 December 2024	21.7	7.7	2.1	10.3	–	7.5	5.3	54.6

1.Additions include property lease modifications of nil (2024: £0.5m) of right-of-use assets.

2.Disposals and write-offs include derecognition of fully depreciated assets and assets reclassified as held for sale.



OSB GROUP PLC Annual Report and Accounts 2025		219

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

26.Intangible assets


	Development costs ¹	Computer software and licences	Assets arising on Combination	Total
	£m	£m	£m	£m
Cost
As at 1 January 2024	20.7	13.6	21.4	55.7
Additions	27.5	0.2	–	27.7
Transfer during the year	(32.3)	32.3	–	–
Disposals and write-offs ²	–	(1.3)	(21.4)	(22.7)
As at 31 December 2024	15.9	44.8	–	60.7
Additions	27.3	–	–	27.3
Transfer during the year	(27.1)	27.1	–	–
Disposals and write-offs ²	–	(2.4)	–	(2.4)
Foreign exchange difference	–	(0.1)	–	(0.1)
As at 31 December 2025	16.1	69.4	–	85.5
Accumulated amortisation
As at 1 January 2024	2.0	7.8	19.8	29.6
Transfer during the year	(2.0)	3.3	(1.3)	–
Charged in year	–	2.1	2.9	5.0
Disposals and write-offs ²	–	(1.3)	(21.4)	(22.7)
As at 31 December 2024	–	11.9	–	11.9
Charged in year	–	9.2	–	9.2
Disposals and write-offs ²	–	(2.4)	–	(2.4)
Foreign exchange difference	–	(0.1)	–	(0.1)
As at 31 December 2025	–	18.6	–	18.6
Net book value
As at 31 December 2025	16.1	50.8	–	66.9
As at 31 December 2024	15.9	32.9	–	48.8

1.Development costs are largely related to the transformation project.

2.During the year the Group derecognised fully amortised assets.

The Directors have considered the carrying value of intangible assets and determined that

there are no indications of impairment at the year end.

27.Amounts owed to credit institutions


	2025	2024
	£m	£m
BoE TFSME	–	1,394.9
BoE ILTR	1,509.9	380.3
Commercial repo	328.2	–
	1,838.1	1,775.2
Cash collateral and margin received	–	160.0
	1,838.1	1,935.2

28.Amounts owed to retail depositors


	2025			2024
	OSB	CCFS	Total	OSB	CCFS	Total
	£m	£m	£m	£m	£m	£m
Fixed rate deposits	8,063.4	5,108.1	13,171.5	9,016.1	6,340.2	15,356.3
Variable rate deposits	6,024.9	5,054.7	11,079.6	4,509.3	3,954.7	8,464.0
	14,088.3	10,162.8	24,251.1	13,525.4	10,294.9	23,820.3

29.Amounts owed to other customers


	2025	2024
	£m	£m
Fixed rate deposits	223.7	102.3
Variable rate deposits	254.7	2.6
	478.4	104.9



OSB GROUP PLC Annual Report and Accounts 2025		220

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

30.Debt securities in issue


	2025	2024
	£m	£m
Asset-backed loan notes at amortised cost	1,010.0	1,018.3

Amount due for settlement within 12 months	25.7	2.3
Amount due for settlement after 12 months	984.3	1,016.0
	1,010.0	1,018.3

The asset-backed loan notes are secured on fixed and variable rate mortgages and are

redeemable in part from time to time, but such redemptions are mainly from the net principal

received from borrowers in respect of underlying mortgage assets. The maturity date of the

funds matches the contractual maturity date of the underlying mortgage assets. The Group

expects that a large proportion of the underlying mortgage assets, and therefore these notes,

will be repaid within five years.

Where the Group owns the call rights for a transaction, it may repurchase the asset-backed

loan notes on any interest payment date on or after the call dates, or on any interest payment

date when the current balance of the mortgages outstanding is less than or equal to 10% of

the principal amount outstanding on the loan notes on the date they were issued.

Interest is payable at fixed margins above SONIA.

The asset-backed loan notes were issued through the following funding vehicles:


	2025	2024
	£m	£m
PMF 2024-1 plc	417.1	441.2
CMF 2025-1 plc	241.7	–
CMF 2024-1 plc	196.9	283.1
CMF 2023-1 plc	130.6	193.5
Canterbury Finance No.4 plc	23.7	100.5
	1,010.0	1,018.3

31.Lease liabilities


	2025	2024
	£m	£m
As at 1 January	9.1	11.2
New leases	–	0.6
Lease termination	(0.9)	–
Lease modification	–	(0.8)
Lease repayments	(2.1)	(2.2)
Interest accruals	0.2	0.3
As at 31 December	6.3	9.1

During the year, the Group incurred expenses of nil ( 2024: £0.2m ) in relation to short-term

leases and £0.1m (2024: £0.1m) in relation to low value leases.

32.Other liabilities


	2025	2024
	£m	£m
Falling due within one year:
Accruals	39.6	33.8
Other creditors	11.8	12.4
Share repurchase liability	19.0	10.0
Deferred income	0.4	0.2
	70.8	56.4

On 14 March 2025, the Group commenced a share repurchase programme of up to £100.0m,

recognising a £100.7m (including incentive fees of £0.7m) reduction in retained earnings and a

share repurchase liability. As at 31 December 2025, 15,590,331 shares had been purchased by

the Group’s agent under the programme at a total cost of £81.7m, reducing the share

repurchase liability to £19.0m. Other creditors included £2.2m for 350,015 shares purchased

by the agent prior to 31 December 2025 for which the Group has completed payment in

January 2026. Any share repurchases made under this programme were announced to the

market each day in line with regulatory requirements, see note 37 for further details.



OSB GROUP PLC Annual Report and Accounts 2025		221

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

33.Provisions and contingent liabilities

Following the Group’s review of its collection processes and how mortgage customers in

arrears are managed, a retrospective review of the Group’s application of forbearance

measures and associated outcomes for certain cohorts of customers has been completed. This

review has led the Group continuing to recognise a provision of £1.9m as of 31 December 2025

based on its estimated costs to redress the accounts in scope and the costs to operationalise

the activity, with redress expected to be applied in 2026.

Provisions also include immaterial provisions related to ECL on undrawn loan facilities and

dismantling costs.

The Group operates in a highly regulated environment and in the normal course of business,

may from time to time receive complaints and claims or be involved in legal proceedings that

could lead to a provision or contingent liability. This environment continues to evolve through

legislation, regulatory guidance and court rulings and the Group actively monitors these

developments. At the reporting date the Group considered that it had no material provisions or

contingent liabilities save as here.

An analysis of the Group’s provisions is presented below:


	2025	2024
	£m	£m
As at 1 January	4.6	0.8
Additions	–	1.1
Paid during the year	(3.6)	–
Profit or loss charge	2.4	2.7
As at 31 December	3.4	4.6

34.Senior notes

The Group’s outstanding senior notes are as follows:


			2025	2024
	Reset date	Spread	£m	£m
Fixed rate:
Senior notes 2028 (9.5%)	7 September 2027	4.985%	308.1	307.7
Senior notes 2030 (8.875%)	16 January 2029	5.252%	415.3	415.0
			723.4	722.7

The senior notes comprise fixed rate notes denominated in pounds sterling and are listed on

the official list of the Financial Conduct Authority (FCA) and admitted to trading on the main

market of the London Stock Exchange plc.

The principal terms of the senior notes are as follows:

• Interest: Interest on the senior notes is fixed at an initial rate until the reset date. If the

senior notes are not redeemed prior to the reset date, the interest rate will be reset and fixed

based on a benchmark gilt rate plus the specified spread.

• Redemption: The Issuer may redeem the senior notes in whole (but not in part) in its sole

discretion on the reset date. Optional redemption may also take place for certain

regulatory or tax reasons. Any optional redemption requires the prior consent of the PRA.

• Ranking: The senior notes constitute direct, unsubordinated and unsecured obligations of

OSBG and rank at least pari passu, without any preference, among themselves as senior

notes. The notes rank behind the claims of depositors, but in priority to holders of Tier 1 and

Tier 2 capital instruments as well as equity holders of OSBG.

The table below shows a reconciliation of the Group’s senior notes during the year:


	2025	2024
	£m	£m
As at 1 January	722.7	307.5
Additions ¹	–	398.0
Movement in accrued interest	0.7	17.2
As at 31 December	723.4	722.7

1.2024 additions includes £2.0m towards transaction costs which has been amortised through the EIR of the loan notes.



OSB GROUP PLC Annual Report and Accounts 2025		222

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

35.Subordinated debt liabilities

The Group’s outstanding subordinated debt liabilities are summarised below:


			2025	2024
	Reset date	Spread	£m	£m
Fixed rate:
Subordinated debt liabilities 2033 (9.993%)	27 July 2028	6.296%	260.1	259.8

All subordinated debt liabilities are denominated in pounds sterling and are listed on the

official list of the FCA and admitted to trading on the main market of the London Stock

Exchange plc.

The principal terms of the subordinated debt liabilities are as follows:

• Interest: Interest on the subordinated debt liabilities is fixed at an initial rate until the reset

date. If the subordinated debt liabilities are not redeemed prior to the reset date, the

interest rate will be reset and fixed based on a benchmark gilt rate plus the specified

spread.

• Redemption: The Issuer may redeem the subordinated debt liabilities in whole (but not in

part) in its sole discretion on any day from (and including) 27 April 2028 to (and including)

27 July 2028 (the reset date) as specified in the terms of the agreement. Optional

redemption may also take place for certain regulatory or tax reasons. Any optional

redemption requires the prior consent of the PRA.

• Ranking: The subordinated debt liabilities constitute direct, unsecured and subordinated

obligations of OSBG and rank at least pari passu, without any preference, among

themselves as Tier 2 capital. The subordinated debt liabilities rank behind the claims of

depositors and other unsecured and unsubordinated creditors, but rank in priority to

holders of Tier 1 capital instruments and of equity holders of OSBG.

The table below shows a reconciliation of the Group’s subordinated debt liabilities during

the year:


	2025	2024
	£m	£m
As at 1 January	259.8	259.5
Movement in accrued interest	0.3	0.3
As at 31 December	260.1	259.8

36.Cash flows from financing activities

The table below shows a reconciliation of the Group’s liabilities classified as financing activities

within the Consolidated Statement of Cash Flows:


	Amounts owed to credit institutions (see note 27)	Debt securities in issue (see note 30)	Senior notes (see note 34)	Subordinated debt liabilities (see note 35)	PSBs	Total
	£m	£m	£m	£m	£m	£m
As at 1 January 2024	3,362.2	818.5	307.5	259.5	15.2	4,762.9
Cash movements
Principal drawdowns	594.4	744.1	398.0	–	–	1,736.5
Principal repayments	(2,153.4)	(548.4)	–	–	(15.0)	(2,716.8)
Interest paid	(142.7)	(58.6)	(46.3)	(25.0)	(0.7)	(273.3)
Non-cash movements
Interest charged	114.7	62.7	63.5	25.3	0.5	266.7
As at 31 December 2024	1,775.2	1,018.3	722.7	259.8	–	3,776.0
Cash movements
Principal drawdowns	2,228.4	248.8	–	–	–	2,477.2
Principal repayments	(2,154.0)	(258.0)	–	–	–	(2,412.0)
Interest paid	(53.3)	(50.1)	(64.0)	(25.0)	–	(192.4)
Non-cash movements
Interest charged	41.8	51.0	64.7	25.3	–	182.8
As at 31 December 2025	1,838.1	1,010.0	723.4	260.1	–	3,831.6



OSB GROUP PLC Annual Report and Accounts 2025		223

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

36.Cash flows from financing activities continued

The table below shows other financing activities:


		2025	2024
	Note	£m	£m
Coupon paid on AT1 securities		(10.1)	(9.0)
Net swap interest paid on subordinated debt liabilities and senior notes		(3.7)	(5.0)
Net swap interest paid on structural hedge		(2.3)	(3.3)
Repayments of principal portion of lease liabilities	31	(1.9)	(1.9)
Proceeds from issuance of shares under employee Save As You Earn (SAYE) schemes		1.4	0.8
Net cash from other financing activities		(16.6)	(18.4)

37.Share capital


	Number of shares issued and fully paid	Nominal value	Premium
Ordinary shares	Number of shares issued and fully paid	£m	£m
As at 1 January 2024	393,187,681	3.9	3.8
Shares cancelled under repurchase programme	(22,595,996)	(0.2)	–
Shares issued under OSBG employee share plans	1,554,107	–	0.7
As at 31 December 2024	372,145,792	3.7	4.5
Shares cancelled under repurchase programme	(18,070,090)	(0.2)	–
Shares issued under OSBG employee share plans	1,898,423	0.1	1.5
As at 31 December 2025	355,974,125	3.6	6.0

The Group commenced a share repurchase programme on 6 September 2024 which allowed the

Group to repurchase a maximum of 39,358,310 shares, restricted by a total cost of £50.0m.

Since 1 January 2025, 2,365,661 shares were repurchased under the programme and 2,479,759

shares were cancelled. On completion,13,087,132 shares, representing 3.52% of the issued share

capital, were repurchased and cancelled at an average price of £3.77 per share and a total cost

of £49.3m excluding transaction costs.

Since the inception of a new share repurchase programme on 14 March 2025, 15,940,346 shares

were repurchased as at 31 December 2025 at an average price of £5.12 per share and a total

cost of £81.7m, of which 15,590,331 shares have been cancelled representing 4.19% of the issued

share capital. The programme allows the Group to repurchase a maximum of 26,271,178 shares,

restricted by a total cost of £100.0m excluding transaction costs.

The holders of ordinary shares are entitled to receive dividends as declared from time to time,

and are entitled to one vote per share at meetings of the Company. All ordinary shares rank

equally with regard to the Company’s residual assets.

All ordinary shares issued in the current and prior year were fully paid.

38.Other equity instruments

The Group’s other equity instruments are as follows:


	2025	2024
Additional Tier 1 securities	£m	£m
6% Perpetual subordinated contingent convertible securities	17.1	150.0
7.75% Perpetual subordinated contingent convertible securities	150.0	–
	167.1	150.0

AT1 Securities

On 5 October 2021, OSBG issued AT1 securities which comprise £150.0m of Fixed Rate Resetting

Perpetual Subordinated Contingent Convertible Securities that qualify as AT1 capital under CRD IV.

The securities will be subject to full conversion into ordinary shares of OSBG in the event that the

Group’s Common Equity Tier 1 (CET1) capital ratio falls below 7%. The securities pay interest at a

rate of 6% per annum until the first reset date of 7 April 2027, with the reset interest rate equal to

539.3 basis points over the five-year Gilt Rate (benchmark gilt) for such a period. Interest is paid

semi-annually in April and October. OSBG may, at any time, cancel any interest payment at its full

discretion and must cancel interest payments in certain circumstances specified in the terms and

conditions of the securities. On 27 November 2025, following a tender offer, £132.9m of these AT1

securities were redeemed with £17.1m remaining outstanding. The securities are perpetual with no

fixed redemption date. OSBG may, at its option, redeem the securities, in whole but not in part, (i)

on any day falling in the period commencing on (and including) 7 October 2026 and ending on

(and including) the first reset date or (ii) on any reset date thereafter at 100% of their principal

amount, together with any accrued but unpaid interest (which excludes any interest cancelled or

deemed cancelled as described above) to (but excluding) the date fixed for redemption.

On 25 November 2025, OSBG issued AT1 securities which comprise £150.0m of Fixed Resetting

Perpetual Subordinated Contingent Convertible Securities that qualify as AT1 capital under CRD IV.

The securities will be subject to full conversion into ordinary shares of OSBG in the event that the

Group’s Common Equity Tier 1 (CET1) capital ratio falls below 7%. The securities pay interest at a

rate of 7.75% per annum until the first reset date of 25 May 2031, with the reset interest equal to

380.1 basis points over the five-year Gilt Rate (benchmark gilt) for such a period. Interest is paid

semi-annually in May and November. OSBG may, at any time, cancel any interest payment at its

full discretion and must cancel interest payments in certain circumstances specified in the terms

and conditions of the securities. The securities are perpetual with no fixed redemption date. OSBG

may at its option, redeem the securities, in whole but not in part, (i) on any day falling in the period

commencing on (and including) 25 November 2030 and ending on (and including) the first reset

date or (ii) on any reset date thereafter at 100% of their principal amount, together with any

accrued but unpaid interest (which excludes any interest cancelled or deemed cancelled as

described above) to (but excluding) the date fixed for redemption.



OSB GROUP PLC Annual Report and Accounts 2025		224

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

39.Other reserves

The Group’s other reserves are as follows:


	2025	2024
	£m	£m
Share-based payment	20.9	16.2
Capital redemption & transfer	(1,354.3)	(1,354.5)
Own shares	(0.9)	(0.9)
FVOCI	1.5	0.1
Foreign exchange	(4.2)	(2.1)
	(1,337.0)	(1,341.2)

Capital redemption and transfer reserve

The capital redemption reserve represents the shares cancelled through the Group’s share

repurchase programme.

On 27 November 2020, a new ultimate parent company was inserted into the Group, being

OSBG. The share capital generated from issuing 447,304,198 nominal shares at £3.04 per

share, replacing the nominal shares of £0.01 in OSB previously recognised in share capital at

the consolidation level, created a transfer reserve of £1,355.3m.

Own shares

The Company has adopted the look-through approach for the EBT, including the EBT within

the Company. As at 31 December 2025, the EBT held 134,349 OSBG shares (2024: 134,349

OSBG shares). The Group and Company show these shares as a deduction from equity,

being the cost at which the shares were acquired of £0.9m (2024: £0.9m).

FVOCI reserve

The FVOCI reserve represents the cumulative net change in the fair value of investment

securities measured at FVOCI.

Foreign exchange reserve

The foreign exchange reserve relates to the revaluation of the Group’s Indian subsidiary,

OSB India Private Limited.

40.Financial commitments and guarantees

a) The Group had £3.8m (2024: £4.9m) of contracted capital expenditure commitments not

provided for as at 31 December 2025.

b) The Group had £0.1m (2024: £0.1m) of minimum lease commitments under leases for low-

value assets and short-term leases of 12 months or less.

c) Undrawn loan facilities:


	2025	2024
	£m	£m
OSB mortgages	764.9	697.9
CCFS mortgages	384.0	289.1
	1,148.9	987.0

Undrawn loan facilities are approved loan applications which have not yet been exercised.

They are payable on demand and are usually drawn down or expire within three months.

d) The Group did not have any issued financial guarantees as at 31 December 2025

(2024: nil).

41.Risk management

Overview

Financial instruments form the vast majority of the Group’s assets and liabilities. The Group

manages risk on a consolidated basis and risk disclosures that follow are provided on

this basis.

Types of financial instruments

Financial instruments are a broad definition that includes financial assets, financial liabilities and

equity instruments. The main financial assets of the Group are loans to customers and liquid

assets, which in turn consist of cash in the BoE call accounts, call accounts with other credit

institutions, RMBS, covered bonds, supranational bonds and UK sovereign debt. These are

funded by a combination of financial liabilities and equity instruments. Financial liability funding

comes predominantly from retail deposits and drawdowns under BoE facilities including ILTR,

supported by debt securities, senior notes, subordinated debts, wholesale and other funding.

Equity instruments include own shares and AT1 securities meeting the equity classification

criteria. The Group’s main activity is mortgage lending; it raises funds or invests in particular

types of financial assets to meet customer demand and manage the risks arising from its

operations. The Group does not trade in financial instruments for speculative purposes.

The Group uses derivative instruments to manage its financial risks. Derivatives are used by

the Group solely to reduce (hedge) the risk of loss arising from changes in market rates.

Derivatives are not used for speculative purposes.



OSB GROUP PLC Annual Report and Accounts 2025		225

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

Types of derivatives and uses

The derivative instruments used by the Group in managing its risk exposures are interest rate

swaps. Interest rate swaps convert fixed interest rates to floating or vice versa. As with other

derivatives, the underlying product is not sold and payments are based on notional

principal amounts.

Unhedged fixed rate liabilities create the risk of paying above-the-market rate if interest rates

subsequently decrease. Unhedged fixed rate mortgages and liquid assets bear the opposite

risk of income below-the-market rate when rates go up. While fixed rate assets and liabilities

naturally hedge each other to a certain extent, this hedge is usually never perfect because of

maturity mismatches and principal amounts.

The Group uses swaps to convert its instruments, such as mortgages, deposits and issued

debt, from fixed or base rate-linked rates to reference linked variable rates. This ensures a

guaranteed margin between the interest income and interest expense, regardless of changes

in the market rates.

Types of risk

The principal financial risks to which the Group is exposed are credit, liquidity and market

risks, the latter comprising interest and exchange rate risk. In addition to financial risks, the

Group is exposed to various other risks, most notably operational, conduct and compliance/

regulatory, which are covered in the Risk review on pages 44 to 65.

Credit risk

Credit risk is the risk that losses may arise as a result of the Group’s borrowers or market

counterparties failing to meet their obligations to repay.

The Group has adopted the Standardised Approach for assessment of credit risk regulatory

capital requirements. This approach considers risk weightings as defined under Basel II and

Basel III principles.

The classes of financial instruments to which the Group is most exposed are loans and

advances to customers, loans and advances to credit institutions, cash in the BoE call account,

call and current accounts with other credit institutions and investment securities. The

maximum credit risk exposure equals the total carrying amount of the above categories plus

off-balance sheet undrawn committed mortgage facilities.

The change, during the year and cumulatively, in the fair value of investments in debt

securities and loans and advances to customers at FVOCI and FVTPL that is attributable

to changes in credit risk is not material.

Credit risk – loans and advances to customers

Credit risk associated with mortgage lending is largely driven by the housing market and level

of unemployment. A recession and/or high interest rates could cause pressure within

the market, resulting in rising levels of arrears and repossessions.

All loan applications are assessed in accordance with the Group’s Lending Policies. Changes

to the policies are approved by the Group Risk Committee, with mandates set for the approval

of loan applications.

The Group Credit Committee and ALCO regularly monitor lending activity, taking appropriate

actions to reprice products and adjust lending criteria in order to control risk and manage

exposure. Where necessary and appropriate, changes to the Lending Policies

are recommended to the Group Risk Committee.

The following tables show the Group’s maximum exposure to credit risk and the impact of

collateral held as security, capped at the gross exposure amount, by impairment stage.

Capped collateral excludes the impact of forced sale discounts and costs to sell. The collateral

value is determined by indexing against HPI data.


	OSB		CCFS		Total
	Gross carrying amount	Capped collateral held	Gross carrying amount	Capped collateral held	Gross carrying amount	Capped collateral held
2025	£m	£m	£m	£m	£m	£m
Stage 1	13,742.1	13,673.2	7,407.5	7,407.3	21,149.6	21,080.5
Stage 2	2,199.9	2,197.9	1,621.4	1,621.3	3,821.3	3,819.2
Stage 3	719.0	703.9	299.5	297.4	1,018.5	1,001.3
Stage 3 (POCI)	16.4	16.4	26.8	26.6	43.2	43.0
	16,677.4	16,591.4	9,355.2	9,352.6	26,032.6	25,944.0


2024
Stage 1	12,338.1	12,290.5	7,539.0	7,538.4	19,877.1	19,828.9
Stage 2	2,417.4	2,416.0	1,935.5	1,935.0	4,352.9	4,351.0
Stage 3	655.7	649.6	294.1	294.1	949.8	943.7
Stage 3 (POCI)	27.8	27.4	32.7	32.6	60.5	60.0
	15,439.0	15,383.5	9,801.3	9,800.1	25,240.3	25,183.6

The Group’s main form of collateral held is property, based in the UK and the Channel Islands.



OSB GROUP PLC Annual Report and Accounts 2025		226

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

The Group uses indexed loan to value (LTV) ratios to assess the quality of the uncapped collateral held. Property values are updated to reflect changes in the HPI. A breakdown of loans and

advances to customers by indexed LTV is as follows:


	2025				2024
	OSB	CCFS	Total		OSB	CCFS	Total
Band	£m	£m	£m	%	£m	£m	£m	%
0%–50%	2,066.3	933.4	2,999.7	11	2,375.0	1,091.3	3,466.3	14
50%–60%	2,108.4	931.8	3,040.2	12	2,291.2	1,312.7	3,603.9	14
60%–70%	4,092.8	2,264.5	6,357.3	24	4,548.2	3,035.8	7,584.0	30
70%–80%	6,369.0	4,212.8	10,581.8	41	4,624.2	3,881.3	8,505.5	34
80%–90%	1,335.3	885.8	2,221.1	9	1,043.7	461.5	1,505.2	6
90%–100%	255.7	110.2	365.9	1	221.0	14.8	235.8	1
>100%	449.9	16.7	466.6	2	335.7	3.9	339.6	1
Total loans before provisions	16,677.4	9,355.2	26,032.6	100	15,439.0	9,801.3	25,240.3	100

The table below shows the LTV banding for the OSB segments’ two major lending streams:


	2025				2024
OSB	BTL/SME ¹	Residential	Total		BTL/SME ¹	Residential	Total
Band	£m	£m	£m	%	£m	£m	£m	%

0%–50%	931.9	1,134.4	2,066.3	12	1,037.4	1,337.6	2,375.0	15
50%–60%	1,890.4	218.0	2,108.4	13	2,021.2	270.0	2,291.2	15
60%–70%	3,925.3	167.5	4,092.8	25	4,345.0	203.2	4,548.2	29
70%–80%	6,185.2	183.8	6,369.0	37	4,430.7	193.5	4,624.2	31
80%–90%	1,108.4	226.9	1,335.3	8	799.1	244.6	1,043.7	7
90%–100%	227.8	27.9	255.7	2	190.8	30.2	221.0	1
>100%	441.3	8.6	449.9	3	331.6	4.1	335.7	2
Total loans before provisions	14,710.3	1,967.1	16,677.4	100	13,155.8	2,283.2	15,439.0	100

1.Includes net investment in finance leases.



OSB GROUP PLC Annual Report and Accounts 2025		227

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

The tables below show the LTV analysis of the OSB BTL/SME sub-segment:


	OSB
Band	Buy-to-Let ¹	Commercial	Residential development	Funding lines	Total
2025	£m	£m	£m	£m	£m
0%–50%	798.6	127.8	4.6	0.9	931.9
50%–60%	1,529.1	236.6	118.1	6.6	1,890.4
60%–70%	3,345.0	391.1	181.8	7.4	3,925.3
70%–80%	5,391.6	756.0	37.6	–	6,185.2
80%–90%	901.2	207.2	–	–	1,108.4
90%–100%	139.5	88.3	–	–	227.8
>100%	381.1	59.1	1.0	0.1	441.3
Total loans before provisions	12,486.1	1,866.1	343.1	15.0	14,710.3


2024
0%–50%	925.7	107.0	3.9	0.8	1,037.4
50%–60%	1,819.0	128.7	66.1	7.4	2,021.2
60%–70%	3,951.9	207.2	184.0	1.9	4,345.0
70%–80%	3,918.8	495.5	7.0	9.4	4,430.7
80%–90%	562.0	237.1	–	–	799.1
90%–100%	100.8	90.0	–	–	190.8
>100%	239.9	90.5	1.0	0.2	331.6
Total loans before provisions	11,518.1	1,356.0	262.0	19.7	13,155.8

1.Includes net investment in finance leases.

The table below shows the LTV analysis of the OSB Residential sub-segment:


	2025			2024
	First charge	Second charge	Total	First charge	Second charge	Total
OSB	£m	£m	£m	£m	£m	£m
Band
0%–50%	1,134.4	–	1,134.4	1,272.8	64.8	1,337.6
50%–60%	218.0	–	218.0	248.6	21.4	270.0
60%–70%	167.5	–	167.5	192.9	10.3	203.2
70%–80%	183.8	–	183.8	189.5	4.0	193.5
80%–90%	226.9	–	226.9	244.0	0.6	244.6
90%–100%	27.9	–	27.9	29.8	0.4	30.2
>100%	8.6	–	8.6	3.6	0.5	4.1
Total loans before provisions	1,967.1	–	1,967.1	2,181.2	102.0	2,283.2



OSB GROUP PLC Annual Report and Accounts 2025		228

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

The tables below show the LTV analysis of the four CCFS sub-segments:


	CCFS
Band	Buy-to-Let	Residential	Bridging	Second charge lending	Total
2025	£m	£m	£m	£m	£m	%
0%–50%	224.5	496.9	212.0	–	933.4	10
50%–60%	437.6	386.3	107.9	–	931.8	10
60%–70%	1,316.9	767.0	180.6	–	2,264.5	24
70%–80%	3,283.9	842.5	86.4	–	4,212.8	45
80%–90%	347.8	534.5	3.5	–	885.8	10
90%–100%	7.6	101.2	1.4	–	110.2	1
>100%	11.7	2.5	2.5	–	16.7	–
Total loans before provisions	5,630.0	3,130.9	594.3	–	9,355.2	100


2024
0%–50%	335.2	607.7	123.8	24.6	1,091.3	11
50%–60%	714.9	508.1	73.1	16.6	1,312.7	13
60%–70%	2,024.9	896.5	101.4	13.0	3,035.8	31
70%–80%	3,099.8	713.3	60.3	7.9	3,881.3	40
80%–90%	183.0	275.7	1.2	1.6	461.5	5
90%–100%	7.4	3.6	3.7	0.1	14.8	–
>100%	2.1	0.8	1.0	–	3.9	–
Total loans before provisions	6,367.3	3,005.7	364.5	63.8	9,801.3	100

Forbearance measures undertaken

The Group has a range of options available where borrowers experience financial difficulties

that impact their ability to service their financial commitments under the loan agreement.

These options are explained in the Risk review on page 63.

A summary of the forbearance measures undertaken during the year is shown below. The

balances disclosed reflect the year-end balance of the accounts where a forbearance measure

was undertaken during the year.


	Number of accounts	As at 31 December 2025	Number of accounts	As at 31 December 2024
Forbearance type	2025	£m	2024	£m
Interest-only switch	756	49.3	1,081	127.3
Interest rate reduction	790	71.4	1,077	85.6
Payment deferral	792	119.7	747	104.5
Others	181	24.5	108	30.8
Total	2,519	264.9	3,013	348.2

Loan type
First charge owner-occupier	1,924	118.3	2,322	226.1
Second charge owner-occupier	–	–	169	4.9
Buy-to-Let	522	108.0	460	104.0
Commercial	73	38.6	62	13.2
Total	2,519	264.9	3,013	348.2



OSB GROUP PLC Annual Report and Accounts 2025		229

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

Geographical analysis by region

An analysis of loans, excluding asset finance leases, by region is provided below:


	2025				2024
	OSB	CCFS	Total		OSB	CCFS	Total
Region	£m	£m	£m	%	£m	£m	£m	%
East Anglia	454.0	1,016.0	1,470.0	6	447.4	1,084.7	1,532.1	6
East Midlands	821.6	659.7	1,481.3	6	756.7	674.3	1,431.0	6
Greater London	6,940.0	2,503.7	9,443.7	37	6,329.8	2,769.6	9,099.4	36
Guernsey	14.0	–	14.0	–	17.0	–	17.0	–
Jersey	54.7	–	54.7	–	63.2	–	63.2	–
North East	239.7	283.4	523.1	2	224.4	282.4	506.8	2
North West	1,099.0	861.8	1,960.8	8	1,017.1	890.1	1,907.2	8
Northern Ireland	4.9	–	4.9	–	7.9	–	7.9	–
Scotland	13.8	283.6	297.4	1	23.5	282.1	305.6	1
South East	3,652.2	1,532.3	5,184.5	20	3,419.1	1,577.6	4,996.7	20
South West	1,118.6	678.8	1,797.4	7	1,047.7	680.1	1,727.8	7
Wales	356.3	279.1	635.4	2	345.1	289.4	634.5	3
West Midlands	962.5	746.4	1,708.9	7	907.4	755.9	1,663.3	7
Yorks and Humberside	521.9	510.4	1,032.3	4	515.8	515.1	1,030.9	4
Total loans before provisions	16,253.2	9,355.2	25,608.4	100	15,122.1	9,801.3	24,923.4	100

Approach to measurement of credit quality

The Group categorises the credit quality of loans and advances to customers into internal risk grades based on the 12-month PD calculated at the reporting date. The PDs include a combination

of internal behavioural and credit bureau characteristics and where possible are aligned with capital models to generate the risk grades which are then further grouped into the following credit

quality segments:

• Excellent – where there is a very high likelihood the asset will be recovered in full with a negligible or very low risk of default.

• Good – where there is a high likelihood the asset will be recovered in full with a low risk of default.

• Satisfactory – where the assets demonstrate a moderate default risk.

• Lower – where the assets require closer monitoring and the risk of default is of greater concern.



OSB GROUP PLC Annual Report and Accounts 2025		230

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

The following tables disclose the credit risk quality ratings of loans and advances to customers by IFRS 9 stage. The assessment of whether credit risk has increased significantly since initial

recognition is performed for each reporting period for the life of the loan. Loans and advances to customers initially booked on very low PDs and graded as excellent quality loans can experience

SICR and therefore be moved to Stage 2. Similarly, loans and advances to customers initially booked on high PDs having lower credit quality can remain in stage 1 if subsequently SICR is not

experienced or triggered.


	Stage 1	Stage 2	Stage 3	Stage 3 (POCI)	Total	PD lower range	PD upper range
2025	£m	£m	£m	£m	£m	%	%
OSB
Excellent	5,736.4	100.6	–	–	5,837.0	–	0.3
Good	7,106.3	1,056.8	–	–	8,163.1	0.3	2.0
Satisfactory	771.4	442.5	–	–	1,213.9	2.0	7.4
Lower	128.0	600.0	–	–	728.0	7.4	100.0
Impaired	–	–	719.0	–	719.0	100.0	100.0
POCI	–	–	–	16.4	16.4	100.0	100.0
CCFS
Excellent	4,373.4	429.9	–	–	4,803.3	–	0.3
Good	2,727.9	606.9	–	–	3,334.8	0.3	2.0
Satisfactory	257.9	211.1	–	–	469.0	2.0	7.4
Lower	48.3	373.5	–	–	421.8	7.4	100.0
Impaired	–	–	299.5	–	299.5	100.0	100.0
POCI	–	–	–	26.8	26.8	100.0	100.0
	21,149.6	3,821.3	1,018.5	43.2	26,032.6


2024
OSB
Excellent	5,426.9	212.9	–	–	5,639.8	–	0.3
Good	6,199.2	1,135.3	–	–	7,334.5	0.3	2.0
Satisfactory	633.0	503.1	–	–	1,136.1	2.0	7.4
Lower	79.0	566.1	–	–	645.1	7.4	100.0
Impaired	–	–	655.7	–	655.7	100.0	100.0
POCI	–	–	–	27.8	27.8	100.0	100.0
CCFS
Excellent	4,623.4	622.3	–	–	5,245.7	–	0.3
Good	2,682.2	740.7	–	–	3,422.9	0.3	2.0
Satisfactory	220.1	242.5	–	–	462.6	2.0	7.4
Lower	13.3	330.0	–	–	343.3	7.4	100.0
Impaired	–	–	294.1	–	294.1	100.0	100.0
POCI	–	–	–	32.7	32.7	100.0	100.0
	19,877.1	4,352.9	949.8	60.5	25,240.3



OSB GROUP PLC Annual Report and Accounts 2025		231

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

The tables below show the Group’s other financial assets and derivatives by credit risk rating

grade. The credit grade is based on the external credit rating of the counterparty; AAA to AA-

are rated Excellent; A+ to A- are rated Good; and BBB+ to BBB- are rated Satisfactory.


	Excellent	Good	Satisfactory	Total
2025	£m	£m	£m	£m
Investment securities	1,810.4	1.9	2.2	1,814.5
Loans and advances to credit institutions	2,723.7	304.7	24.6	3,053.0
Derivative assets	55.5	45.9	–	101.4
	4,589.6	352.5	26.8	4,968.9

2024
Investment securities	1,434.4	–	–	1,434.4
Loans and advances to credit institutions	3,127.2	264.4	14.3	3,405.9
Derivative assets	174.7	139.1	–	313.8
	4,736.3	403.5	14.3	5,154.1

Credit risk – loans and advances to credit institutions and investment securities

The Group holds treasury instruments in order to meet liquidity requirements and for general

business purposes. The credit risk arising from these investments is closely monitored and

managed by the Group’s Treasury function. In managing these assets, Group Treasury

operates within guidelines laid down in the Group Market and Liquidity Risk Policy approved

by ALCO and performance is monitored and reported to ALCO monthly, including through the

use of an internally developed rating model based on counterparty credit default

swap spreads.

The Group has limited exposure to emerging markets (Indian operations) and non-investment

grade debt. ALCO is responsible for approving treasury counterparties.

During the year, the average balance of cash in hand, loans and advances to credit

institutions and investment securities on a monthly basis was £4,371.2m (2024: £4,081.1m).

The table below shows the industry sector of the Group’s loans and advances to credit

institutions and investment securities:


	2025		2024
	£m	%	£m	%
BoE	2,429.6	49	3,053.9	63
Other banks	623.4	13	352.0	7
Central government	178.0	4	226.0	5
Securitisation	1,367.3	28	1,208.4	25
Supranationals	269.2	6	–	–
Total	4,867.5	100	4,840.3	100

The table below shows the geographical exposure of the Group’s loans and advances to credit

institutions and investment securities:


	2025		2024
	£m	%	£m	%
United Kingdom	4,841.7	99	4,821.1	100
India	25.8	1	19.2	–
Total	4,867.5	100	4,840.3	100

The Group monitors exposure concentrations against a variety of criteria, including asset

class, sector and geography. To avoid refinancing risks associated with any one counterparty,

sector or geographical region, the Board has set appropriate limits.

For further information on Credit risk please refer to pages 60.



OSB GROUP PLC Annual Report and Accounts 2025		232

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

Liquidity risk

Liquidity risk is the risk of having insufficient liquid assets to fulfil obligations as they become

due or the cost of raising liquid funds becoming too expensive.

The Group’s approach to managing liquidity risk is to maintain sufficient liquid resources to

cover cash flow imbalances and fluctuations in funding in order to retain full public confidence

in the solvency of the Group and to enable the Group to meet its financial obligations as they

fall due. This is achieved through maintaining a prudent level of liquid assets and control of the

growth of the business. The Group has established call accounts with the BoE and has access

to its contingent liquidity facilities.

The Board has delegated the responsibility for liquidity management to the Chief Executive

Officer, assisted by ALCO, with day-to-day management delegated to Treasury as detailed in

the Group Market and Liquidity Risk Policy. The Board is responsible for setting risk appetite

limits over the level and maturity profile of funding and for monitoring the composition of the

Group financial position.

The Group also monitors a range of triggers which are designed to capture liquidity stresses in

advance in order to allow sufficient time for management action to take effect. These are

monitored daily, with breaches immediately reported to the Group Chief Risk Officer, Chief

Executive Officer, Chief Financial Officer and the Group Treasurer.

The tables below show the maturity profile for the Group’s financial assets and liabilities based

on contractual maturities at the reporting date:


	Carrying amount	On demand	Less than 3 months	3–12 months	1–5 years	More than 5 years
2025	£m	£m	£m	£m	£m	£m
Financial asset by type
Cash in hand	0.4	0.4	–	–	–	–
Loans and advances to credit institutions	3,053.0	2,825.4	211.8	15.6	0.2	–
Investment securities	1,814.5	–	6.4	44.7	1,763.4	–
Loans and advances to customers	25,920.6	–	253.9	670.1	2,048.4	22,948.2
Derivative assets	101.4	–	4.6	30.2	66.4	0.2
Total assets	30,889.9	2,825.8	476.7	760.6	3,878.4	22,948.4
Financial liability by type
Amounts owed to retail depositors	24,251.1	10,091.4	6,678.5	5,823.1	1,658.1	–
Amounts owed to credit institutions	1,838.1	–	684.3	1,153.8	–	–
Amounts owed to other customers	478.4	9.2	289.9	166.7	12.6	–
Derivative liabilities	152.0	–	1.1	8.8	141.3	0.8
Debt securities in issue	1,010.0	–	2.0	23.7	984.3	–
Lease liabilities	6.3	–	0.3	1.3	3.4	1.3
Senior notes	723.4	–	25.3	–	698.1	–
Subordinated debt liabilities	260.1	–	10.7	–	249.4	–
Total liabilities	28,719.4	10,100.6	7,692.1	7,177.4	3,747.2	2.1
Cumulative liquidity gap		(7,274.8)	(14,490.2)	(20,907.0)	(20,775.8)	2,170.5



OSB GROUP PLC Annual Report and Accounts 2025		233

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued


	Carrying amount	On demand	Less than 3 months	3–12 months	1–5 years	More than 5 years
2024	£m	£m	£m	£m	£m	£m
Financial asset by type
Cash in hand	0.3	0.3	–	–	–	–
Loans and advances to credit institutions	3,405.9	3,386.5	12.5	6.7	0.2	–
Investment securities	1,434.4	–	606.2	127.2	647.4	53.6
Loans and advances to customers	25,126.3	–	212.6	480.7	1,831.3	22,601.7
Derivative assets	313.8	–	11.3	25.5	274.8	2.2
Total assets	30,280.7	3,386.8	842.6	640.1	2,753.7	22,657.5
Financial liability by type
Amounts owed to retail depositors	23,820.3	7,314.5	7,267.6	8,125.9	1,112.3	–
Amounts owed to credit institutions	1,935.2	160.0	321.5	1,453.7	–	–
Amounts owed to other customers	104.9	1.4	5.2	98.3	–	–
Derivative liabilities	81.9	–	1.2	9.4	71.2	0.1
Debt securities in issue	1,018.3	–	2.3	–	1,016.0	–
Lease liabilities	9.1	–	0.4	1.4	6.0	1.3
Senior notes	722.7	–	25.3	–	697.4	–
Subordinated debt liabilities	259.8	–	10.7	–	249.1	–
Total liabilities	27,952.2	7,475.9	7,634.2	9,688.7	3,152.0	1.4
Cumulative liquidity gap		(4,089.1)	(10,880.7)	(19,929.3)	(20,327.6)	2,328.5

Liquidity risk – undiscounted contractual cash flows

The following tables provide an analysis of the Group’s gross contractual undiscounted cash

flows, derived using interest rates and contractual maturities at the reporting date

and excluding impacts of early payments or non-payments:


	Carrying amount	Gross inflow/ outflow	Up to 3 months	3 - 12 months	1 - 5 years	More than 5 years
2025	£m	£m	£m	£m	£m	£m
Financial asset by type
Cash in hand	0.4	0.4	0.4	–	–	–
Loans and advances to credit institutions	3,053.0	3,054.6	3,038.8	15.6	0.2	–
Investment securities	1,814.5	2,087.6	15.7	109.7	1,962.2	–
Loans and advances to customers	25,920.6	62,806.2	598.2	2,187.3	9,258.0	50,762.7
Derivative assets	101.4	103.9	19.2	54.9	29.7	0.1
Total assets	30,889.9	68,052.7	3,672.3	2,367.5	11,250.1	50,762.8
Off-balance sheet loan commitments	1,148.9	1,148.9	1,148.9	–	–	–
Financial liability by type
Amounts owed to retail depositors	24,251.1	25,015.5	17,221.7	6,050.6	1,743.2	–
Amounts owed to credit institutions	1,838.1	1,860.4	688.9	1,171.5	–	–
Amounts owed to other customers	478.4	478.5	299.2	166.7	12.6	–
Derivative liabilities	152.0	161.1	7.6	53.0	100.7	(0.2)
Debt securities in issue	1,010.0	1,128.0	30.1	38.4	1,059.5	–
Lease liabilities	6.3	6.3	0.3	1.3	3.4	1.3
Senior notes	723.4	881.2	32.0	32.0	817.2	–
Subordinated debt liabilities	260.1	318.7	12.5	12.5	293.7	–
Total liabilities	28,719.4	29,849.7	18,292.3	7,526.0	4,030.3	1.1



OSB GROUP PLC Annual Report and Accounts 2025		234

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued


	Carrying amount	Gross inflow/ outflow	Up to 3 months	3 - 12 months	1 - 5 years	More than 5 years
2024	£m	£m	£m	£m	£m	£m
Financial asset by type
Cash in hand	0.3	0.3	0.3	–	–	–
Loans and advances to credit institutions	3,405.9	3,406.0	3,399.1	6.7	0.2	–
Investment securities	1,434.4	1,558.2	619.0	159.0	725.4	54.8
Loans and advances to customers	25,126.3	62,539.2	553.6	1,849.2	9,284.6	50,851.8
Derivative assets	313.8	325.1	63.9	139.4	121.8	–
Total assets	30,280.7	67,828.8	4,635.9	2,154.3	10,132.0	50,906.6
Off-balance sheet loan commitments	987.0	987.0	987.0	–	–	–
Financial liability by type
Amounts owed to retail depositors	23,820.3	25,520.8	15,413.9	8,929.7	1,177.2	–
Amounts owed to credit institutions	1,935.2	1,991.6	484.1	1,507.5	–	–
Amounts owed to other customers	104.9	104.9	1.4	5.2	98.3	–
Derivative liabilities	81.9	88.4	11.6	14.3	62.5	–
Debt securities in issue	1,018.3	1,177.0	32.4	95.4	1,049.2	–
Lease liabilities	9.1	9.0	0.4	1.4	5.9	1.3
Senior notes	722.7	945.3	32.0	32.0	881.3	–
Subordinated debt liabilities	259.8	343.7	12.5	12.5	318.7	–
Total liabilities	27,952.2	30,180.7	15,988.3	10,598.0	3,593.1	1.3

The actual repayment profile of loans and advances to customers may differ from the analysis

above since many mortgage loans are repaid prior to the contractual end date.

The actual repayment profile of retail deposits may differ from the analysis above due to the

option of early withdrawal with a penalty.

Liquidity risk – asset encumbrance

Asset encumbrance levels are monitored by ALCO. The following tables provide an analysis of

the Group’s encumbered and unencumbered assets:


	Encumbered		Unencumbered
	Pledged as collateral	Other ¹	Available as collateral	Other	Total
2025	£m	£m	£m	£m	£m
Cash in hand	–	–	0.4	–	0.4
Loans and advances to credit institutions	216.5	38.2	2,429.6	368.7	3,053.0
Investment securities	324.7	–	1,489.8	–	1,814.5
Loans and advances to customers ²	3,404.9	–	21,724.3	791.4	25,920.6
Derivative assets	–	–	–	101.4	101.4
Non-financial assets	–	–	–	232.8	232.8
	3,946.1	38.2	25,644.1	1,494.3	31,122.7


2024
Cash in hand	–	–	0.3	–	0.3
Loans and advances to credit institutions	134.2	40.6	3,053.9	177.2	3,405.9
Investment securities	22.7	–	1,411.7	–	1,434.4
Loans and advances to customers ²	4,741.1	–	19,101.3	1,283.9	25,126.3
Derivative assets	–	–	–	313.8	313.8
Non-financial assets	–	–	–	(37.1)	(37.1)
	4,898.0	40.6	23,567.2	1,737.8	30,243.6

1.Represents assets that are not pledged but that the Group believes it is restricted from using to secure funding for legal

or other reasons.

2.Unencumbered loans and advances to customers classified as other are restricted for use as collateral. These include

property registered outside of the UK (Jersey and Guernsey), loans and advances not secured by immovable property

and non-performing loans.



OSB GROUP PLC Annual Report and Accounts 2025		235

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

Liquidity risk – liquidity reserves

The tables below analyse the Group’s liquidity reserves, where carrying value is considered to

be equal to fair value:


	2025	2024
	£m	£m
Unencumbered balances with central banks	2,429.6	3,053.9
Unencumbered cash and balances with other banks	368.7	177.2
Other cash and cash equivalents	0.4	0.3
Unencumbered investment securities	1,489.8	1,411.7
	4,288.5	4,643.1

Market risk

Market risk is the risk of an adverse change in the Group’s income or the Group’s net worth

arising from movement in interest rates, exchange rates or other market prices. Market risk

exists, to some extent, in all the Group’s businesses. The Group recognises that the effective

management of market risk is essential to the maintenance of stable earnings and

preservation of shareholder value.

Interest rate risk

The primary market risk faced by the Group is interest rate risk. Interest rate risk is the risk

of loss from adverse movement in the overall level of interest rates. It arises from mismatches in

the timing of repricing of assets and liabilities, both on and off-balance sheet. The Group does

not run a trading book, with all interest rate risk residing in the banking book (interest rate risk

in the banking book (IRRBB)). Through prudent management, the Group seeks to minimise its

IRRBB exposures, typically through matching assets and liabilities with similar tenors,

executing offsetting interest rate swaps and maintaining a structural hedge programme.

OSB and CCFS Banks apply an economic value (EV) at risk approach as well as an earnings-

at-risk approach for interest rate risk and basis risk. The interest rate sensitivity is impacted by

behavioural assumptions used by the Group; the most significant of which are prepayments

and mortgage offer pipeline take up. Expected prepayments and offer conversions are

monitored and modelled on a regular basis based upon historical analysis.

The EV measure of duration risk quantifies risk by applying six shaped interest rate shock

scenarios to the current forward curve. Scenarios are reviewed on semi-annual basis and

approved by ALCO and are based on three ‘shapes’ of curve movement (parallel, twist, flex)

using historical data to calibrate the severity of the shocks applied. The most detrimental net

present value to these scenarios is measured against the Board risk appetite of 1.5% of Tier 1

capital. The table below shows the maximum decreases to economic value under these

scenarios after taking into account the effect of hedging:


	2025	2024
	£m	£m
OSB	8.6	9.2
CCFS	4.4	2.9
	13.0	12.1

The earnings measure of duration risk (EaR) quantifies the impact of changes in interest rates

to the net interest income of the Bank within a given 12-month time horizon. A parallel shock of

+/-100bps is applied to interest rate sensitive instruments to determine EaR sensitivity of the

Group, assuming a constant balance sheet. EaR risk appetite limits are approved by the

Board, and currently set at 4% of full-year net interest income (NII). The table below shows the

maximum decreases after taking into account the effect of hedging:


	2025	2024
	£m	£m
OSB	6.7	1.1
CCFS	6.0	6.5
	12.7	7.6

EaR quantifies the impact of changes in interest rates to the net interest income within a given

three-year time horizon. A parallel shock of +/-100bps is applied to interest rate sensitive

instruments to determine EaR sensitivity of the Group, assuming a constant balance sheet.

EaR risk appetite limits are approved by the Board, and currently set at 4% of three-year net

interest income.


	2025	2024
	£m	£m
OSB	24.1	14.2
CCFS	17.4	19.0
	41.5	33.2



OSB GROUP PLC Annual Report and Accounts 2025		236

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

41.Risk management continued

Basis risk measures the degree to which the Bank is sensitive to exposures repricing by varying

degrees, even where their duration is the same, due to them being linked to different indices.

These indices may be market rates (e.g. BBR or SONIA) or administered (e.g. the Group’s SVR,

other discretionary variable rates, or that received on call accounts with other banks). The

Group measures basis risk using the impact of four scenarios on net interest income over a

one-year period, with the largest negative impact across the scenarios being the basis risk

exposure assessed against risk appetite. Dislocations between the bases are calculated on a

one in 20-year confidence interval level and include increasing, decreasing and static base

rate environment, as well as a fourth scenario (in a decreasing rate environment) which

measures the impact of the timing lag between the repricing of administered rate savings

against SVR linked mortgages. The Board has set a limit on basis risk exposure for CCFS at 3%

of full-year net interest income and 2.5% for OSB. The table below shows the maximum

decreases to net interest income at 31 December 2025 and 2024:


	2025	2024
	£m	£m
OSB	5.9	6.7
CCFS	5.4	4.1
	11.3	10.8

Foreign exchange rate risk

The Group has limited exposure to foreign exchange risk in respect of its Indian operations.

A 5% increase in the GBP/INR exchange rate would result in a £1.1m (2024: £0.7m) effect in

profit or loss and £0.8m (2024: £1.0m) in equity.

Structured entities

The structured entities consolidated within the Group at 31 December 2025 were Canterbury

Finance No.2 plc, Canterbury Finance No.3 plc, Canterbury Finance No.4 plc, Canterbury

Finance No.5 plc, CMF 2023-1 plc, CMF 2024-1 plc, PMF 2024-1 plc, CMF 2025-1 plc and CSC

Shelf 2025-1 plc. These entities hold legal title to a pool of mortgages which are used as a

security for issued debt. The transfer of mortgages fails derecognition criteria because the

Group retained the subordinated notes and residual certificates issued and as such did not

transfer substantially the risks and rewards of ownership of the securitised mortgages.

Therefore, the Group is exposed to credit, interest rate and other risks on the securitised

mortgages.

Cash flows generated from the structured entities are ring-fenced and are used to pay interest

and principal of the issued debt securities in a waterfall order according to the seniority of the

bonds. The structured entities are self-funded and the Group is not contractually or

constructively obliged to provide further liquidity or financial support.

The structured entities consolidated within the Group at 31 December 2024 were Canterbury

Finance No.2 plc, Canterbury Finance No.3 plc, Canterbury Finance No.4 plc, Canterbury

Finance No.5 plc, CMF 2020-1 plc, CMF 2023-1 plc, Keys Warehouse No.1 Limited, CMF

2024-1 plc and PMF 2024-1 plc.

Unconsolidated structured entities

Structured entities, which were sponsored by the Group comprise Precise Mortgage Funding

2019-1B plc, Precise Mortgage Funding 2020-1B plc, PMF 2024-2 plc and Rochester Financing

No.3 plc.

The structured entities are considered sponsored by the Group if any of the following

conditions are met:

• the Group had a key role in establishing the entity;

• the Group transferred assets to the entity;

• the entity’s name includes a reference to the Group; or

• the Group provides guarantees on the entity’s performance.

These structured entities are not consolidated by the Group, as the Group does not control the

entities and is not exposed to the risks and rewards of ownership from the securitised

mortgages. The Group has no contractual arrangements with the unconsolidated structured

entities other than the investments disclosed in note 16 and servicing the structured entities’

mortgage portfolios.

The Group has not provided any support to the unconsolidated structured entities listed and

has no obligation or intention to do so.

During 2025 the Group received £26.2m interest income (2024: £8.1m) and £4.0m servicing

income (2024: £2.1m) from unconsolidated structured entities.



OSB GROUP PLC Annual Report and Accounts 2025		237

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

42.Financial instruments and fair values

i.Financial assets and financial liabilities

The following tables set out the classification of financial instruments in the Consolidated Statement of Financial Position:


		2025
		FVTPL ¹	FVOCI	Amortised cost	Total carrying amount
	Note	£m	£m	£m	£m
Assets
Cash in hand		–	–	0.4	0.4
Loans and advances to credit institutions	15	–	–	3,053.0	3,053.0
Investment securities	16	400.8	448.8	964.9	1,814.5
Loans and advances to customers	17	11.6	–	25,909.0	25,920.6
Derivative assets	22	101.4	–	–	101.4
Other assets ²	24	–	–	2.2	2.2
		513.8	448.8	29,929.5	30,892.1
Liabilities
Amounts owed to retail depositors	28	–	–	24,251.1	24,251.1
Amounts owed to credit institutions	27	–	–	1,838.1	1,838.1
Amounts owed to other customers	29	–	–	478.4	478.4
Debt securities in issue	30	–	–	1,010.0	1,010.0
Derivative liabilities	22	152.0	–	–	152.0
Other liabilities ³	32	–	–	70.4	70.4
Senior notes	34	–	–	723.4	723.4
Subordinated debt liabilities	35	–	–	260.1	260.1
		152.0	–	28,631.5	28,783.5

1.All FVTPL assets and liabilities are mandatorily measured as such.

2.Balance excludes prepayments.

3.Balance excludes deferred income.


		2024
		FVTPL ¹	FVOCI	Amortised cost	Total carrying amount
	Note	£m	£m	£m	£m
Assets
Cash in hand		–	–	0.3	0.3
Loans and advances to credit institutions	15	–	–	3,405.9	3,405.9
Investment securities	16	410.1	226.0	798.3	1,434.4
Loans and advances to customers	17	12.9	–	25,113.4	25,126.3
Derivative assets	22	313.8	–	–	313.8
Other assets ²	24	–	–	1.7	1.7
		736.8	226.0	29,319.6	30,282.4
Liabilities
Amounts owed to retail depositors	28	–	–	23,820.3	23,820.3
Amounts owed to credit institutions	27	–	–	1,935.2	1,935.2
Amounts owed to other customers	29	–	–	104.9	104.9
Debt securities in issue	30	–	–	1,018.3	1,018.3
Derivative liabilities	22	81.9	–	–	81.9
Other liabilities ³	32	–	–	56.2	56.2
Senior notes	34	–	–	722.7	722.7
Subordinated debt liabilities	35	–	–	259.8	259.8
		81.9	–	27,917.4	27,999.3

1.All FVTPL assets and liabilities are mandatorily measured as such.

2.Balance excludes prepayments.

3.Balance excludes deferred income.

The Group has no non-derivative financial assets or financial liabilities classified as held

for trading.

The designation at FVTPL for all financial assets is applied at inception.



OSB GROUP PLC Annual Report and Accounts 2025		238

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

42.Financial instruments and fair values continued

ii.Fair values

The following tables summarise the carrying value and estimated fair value of financial

instruments not measured at fair value in the Consolidated Statement of Financial Position:


	2025		2024
	Carrying value	Estimated fair value	Carrying value	Estimated fair value
	£m	£m	£m	£m
Assets
Cash in hand	0.4	0.4	0.3	0.3
Loans and advances to credit institutions	3,053.0	3,053.0	3,405.9	3,405.9
Investment securities	964.9	965.6	798.3	796.0
Loans and advances to customers	25,909.0	25,738.4	25,113.4	24,843.5
Other assets ¹	2.2	2.2	1.7	1.7
	29,929.5	29,759.6	29,319.6	29,047.4
Liabilities
Amounts owed to retail depositors	24,251.1	24,328.5	23,820.3	23,806.8
Amounts owed to credit institutions	1,838.1	1,838.1	1,935.2	1,935.2
Amounts owed to other customers	478.4	478.4	104.9	104.9
Debt securities in issue	1,010.0	1,010.0	1,018.3	1,018.3
Other liabilities ²	70.4	70.4	56.2	56.2
Senior notes	723.4	768.0	722.7	763.0
Subordinated debt liabilities	260.1	276.1	259.8	273.5
	28,631.5	28,769.5	27,917.4	27,957.9

1.Balance excludes prepayments.

2.Balance excludes deferred income.

The fair values in these tables are estimated using the valuation techniques below.

The estimated fair value is stated as at 31 December and may be significantly different

from the amounts which will actually be paid on the maturity or settlement dates of each

financial instrument.

Cash in hand

This represents physical cash across the Group’s branch network where fair value is

considered to be equal to carrying value.

Loans and advances to credit institutions

This mainly represents the Group’s working capital current accounts and call accounts with

central governments and other banks with an original maturity of less than three months. Fair

value is not considered to be materially different to carrying value.

Investment securities

Investment securities’ fair values are provided by a third party and are based on the market

values of the financial instruments.

Loans and advances to customers

This mainly represents secured mortgage lending to customers. The fair value of fixed rate

mortgages has been estimated by discounting future cash flows at current market rates of

interest based on the SONIA forward curve. Future cash flows include the impact of ECL. The

interest rate on variable rate mortgages is considered to be equal to current market product

rates and as such fair value is estimated to be equal to carrying value.

Other assets

Other assets disclosed in the table above exclude prepayments and the fair value is considered

to be equal to carrying value.

Amounts owed to retail depositors

The fair value of fixed rate retail deposits has been estimated by discounting future cash flows

at current market rates of interest based on the SONIA forward curve. Retail deposits at

variable rates and deposits payable on demand are considered to be at current market rates

and as such fair value is estimated to be equal to carrying value.

Amounts owed to credit institutions

This mainly represents amounts drawn down under the BoE TFSME, ILTR and commercial

repos. Fair value is considered to be equal to carrying value.

Amounts owed to other customers

This represents saving products to corporations and local authorities. The fair value of fixed

rate deposits is estimated by discounting future cash flows at current market rates of interest

based on the SONIA forward curve. Deposits at variable rates are considered to be at current

market rates and the fair value is estimated to be equal to carrying value.



OSB GROUP PLC Annual Report and Accounts 2025		239

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

42.Financial instruments and fair values continued

Debt securities in issue

While the Group’s debt securities in issue are listed, the quoted prices for an individual note

may not be indicative of the fair value of the issue as a whole, due to the specialised nature of

the market in such instruments and the limited number of investors participating in it. Fair

value is not considered to be materially different to carrying value.

Other liabilities

Other liabilities disclosed in the table above exclude deferred income and the fair value is

considered to be equal to carrying value.

Senior notes and Subordinated debt liabilities

The senior notes and subordinated debt liabilities are listed on the London Stock Exchange

with fair value being the quoted market price at the reporting date.

iii.Fair value classification

The Group classifies fair value measurements using a fair value hierarchy that reflects the

significance of the inputs used in making the measurements. The following tables provide an

analysis of financial assets and financial liabilities measured at fair value in the Consolidated

Statement of Financial Position grouped into Levels 1 to 3 based on the degree to which the fair

value is observable:


	Carrying amount	Principal amount	Level 1	Level 2	Level 3	Total
2025	£m	£m	£m	£m	£m	£m
Financial assets
Investment securities	849.6	842.4	299.9	549.6	0.1	849.6
Loans and advances to customers	11.6	13.4	–	–	11.6	11.6
Derivative assets	101.4	16,448.7	–	101.4	–	101.4
	962.6	17,304.5	299.9	651.0	11.7	962.6
Financial liabilities
Derivative liabilities	152.0	15,816.1	–	152.0	–	152.0


	Carrying amount	Principal amount	Level 1	Level 2	Level 3	Total
2024	£m	£m	£m	£m	£m	£m
Financial assets
Investment securities	636.1	638.3	226.0	409.8	0.3	636.1
Loans and advances to customers	12.9	14.9	–	–	12.9	12.9
Derivative assets	313.8	16,474.8	–	313.8	–	313.8
	962.8	17,128.0	226.0	723.6	13.2	962.8
Financial liabilities
Derivative liabilities	81.9	11,291.4	–	81.9	–	81.9

Level 1: Fair values that are based entirely on quoted market prices (unadjusted) in an actively

traded market for identical assets and liabilities that the Group has the ability to access.

Valuation adjustments and block discounts are not applied to Level 1 instruments. Since

valuations are based on readily available observable market prices, this makes them most

reliable, reduces the need for management judgement and estimation and also reduces the

uncertainty associated with determining fair values.

Level 2: Fair values that are based on one or more quoted prices in markets that are not active

or for which all significant inputs are taken from directly or indirectly observable market data.

These include valuation models used to calculate the present value of expected future cash

flows and may be employed either when no active market exists or when there are no quoted

prices available for similar instruments in active markets.

Level 3: Fair values for which any one or more significant input is not based on observable

market data and the unobservable inputs have a significant effect on the instrument’s fair

value. Valuation models that employ significant unobservable inputs require a higher degree of

management judgement and estimation in determining the fair value. Management judgement

and estimation are usually required for the selection of the appropriate valuation model to be

used, determination of expected future cash flows on the financial instruments being valued,

determination of the probability of counterparty default and prepayments, determination of

expected volatilities and correlations and the selection of appropriate discount rates.



OSB GROUP PLC Annual Report and Accounts 2025		240

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

42.Financial instruments and fair values continued

The following tables provide an analysis of financial assets and financial liabilities not

measured at fair value in the Consolidated Statement of Financial Position grouped into Levels

1 to 3 based on the degree to which the fair value is observable:


			Estimated fair value
	Carrying amount	Principal amount	Level 1	Level 2	Level 3	Total
2025	£m	£m	£m	£m	£m	£m
Financial assets
Cash in hand	0.4	0.4	–	0.4	–	0.4
Loans and advances to credit institutions	3,053.0	3,048.4	–	3,053.0	–	3,053.0
Investment securities	964.9	954.6	–	965.6	–	965.6
Loans and advances to customers	25,909.0	26,135.8	–	2,044.4	23,694.0	25,738.4
Other assets ¹	2.2	2.2	–	2.2	–	2.2
	29,929.5	30,141.4	–	6,065.6	23,694.0	29,759.6
Financial liabilities
Amounts owed to retail depositors	24,251.1	23,894.4	–	11,079.6	13,248.9	24,328.5
Amounts owed to credit institutions	1,838.1	1,827.3	–	1,838.1	–	1,838.1
Amounts owed to other customers	478.4	454.5	–	–	478.4	478.4
Debt securities in issue	1,010.0	1,008.0	–	1,010.0	–	1,010.0
Other liabilities ²	70.4	70.4	–	70.4	–	70.4
Senior notes	723.4	700.0	–	768.0	–	768.0
Subordinated debt liabilities	260.1	250.0	–	276.1	–	276.1
	28,631.5	28,204.6	–	15,042.2	13,727.3	28,769.5

1.Balance excludes prepayments.

2.Balance excludes deferred income.


			Estimated fair value
	Carrying amount	Principal amount	Level 1	Level 2	Level 3	Total
2024	£m	£m	£m	£m	£m	£m
Financial assets
Cash in hand	0.3	0.3	–	0.3	–	0.3
Loans and advances to credit institutions	3,405.9	3,400.1	–	3,405.9	–	3,405.9
Investment securities	798.3	793.2	–	796.0	–	796.0
Loans and advances to customers	25,113.4	25,313.6	–	2,183.0	22,660.5	24,843.5
Other assets ¹	1.7	1.7	–	1.7	–	1.7
	29,319.6	29,508.9	–	6,386.9	22,660.5	29,047.4
Financial liabilities
Amounts owed to retail depositors	23,820.3	23,412.5	–	8,464.0	15,342.8	23,806.8
Amounts owed to credit institutions	1,935.2	1,913.0	–	1,935.2	–	1,935.2
Amounts owed to other customers	104.9	103.1	–	–	104.9	104.9
Debt securities in issue	1,018.3	1,016.2	–	1,018.3	–	1,018.3
Other liabilities ²	56.2	56.2	–	56.2	–	56.2
Senior notes	722.7	700.0	–	763.0	–	763.0
Subordinated debt liabilities	259.8	250.0	–	273.5	–	273.5
	27,917.4	27,451.0	–	12,510.2	15,447.7	27,957.9

1.Balance excludes prepayments.

2.Balance excludes deferred income.

43.Pension scheme

Defined contribution scheme

The amount charged to profit or loss in respect of contributions to the Group’s defined

contribution and stakeholder pension arrangements is the contribution payable in the year.

The total pension cost in the year amounted to £5.6m (2024: £5.7m).



OSB GROUP PLC Annual Report and Accounts 2025		241

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

44.Operating segments

The Group segments its lending business and operates under two segments in line with internal

reporting to the Board:

• OSB

• CCFS

The Group applies consistent accounting policies across all segments. The Group separately

discloses the impact of Combination accounting but does not consider this a business

segment.

The financial position and results of operations of the above segments are summarised below:


	OSB	CCFS	Combination	Total
2025	£m	£m	£m	£m
Balances at the reporting date
Gross loans and advances to customers	16,677.4	9,366.8	–	26,044.2
Expected credit losses	(104.5)	(19.1)	–	(123.6)
Loans and advances to customers	16,572.9	9,347.7	–	25,920.6
Capital expenditure	32.9	–	–	32.9
Depreciation and amortisation	14.1	1.8	–	15.9

Profit or loss for the year
Net interest income	413.9	265.5	–	679.4
Other expense	(11.0)	(0.4)	–	(11.4)
Total income	402.9	265.1	–	668.0
Impairment of financial assets	(16.3)	3.3	–	(13.0)
Contribution to profit	386.6	268.4	–	655.0
Administrative expenses	(163.0)	(107.1)	–	(270.1)
Provisions	(2.3)	(0.1)	–	(2.4)
Profit before taxation	221.3	161.2	–	382.5
Taxation	(56.7)	(40.1)	–	(96.8)
Profit for the year	164.6	121.1	–	285.7


	OSB	CCFS	Combination	Total
2024	£m	£m	£m	£m
Balances at the reporting date
Gross loans and advances to customers	15,439.0	9,814.2	–	25,253.2
Expected credit losses	(101.1)	(25.8)	–	(126.9)
Loans and advances to customers	15,337.9	9,788.4	–	25,126.3
Capital expenditure	43.7	0.2	–	43.9
Depreciation and amortisation	7.5	3.1	0.7	11.3

Profit or loss for the year
Net interest income/ (expense)	389.0	301.6	(24.2)	666.4
Other (expense)/income	(3.5)	3.1	1.2	0.8
Total income/(expense)	385.5	304.7	(23.0)	667.2
Impairment of financial assets	2.9	9.9	(1.1)	11.7
Contribution to profit	388.4	314.6	(24.1)	678.9
Administrative expenses	(149.9)	(107.5)	(0.7)	(258.1)
Provisions	(2.7)	–	–	(2.7)
Profit/(loss) before taxation	235.8	207.1	(24.8)	418.1
Taxation	(65.3)	(51.6)	6.9	(110.0)
Profit/(loss) for the year	170.5	155.5	(17.9)	308.1



OSB GROUP PLC Annual Report and Accounts 2025		242

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

45.Country by country reporting (CBCR)

CBCR was introduced through Article 89 of CRD IV, aimed at the banking and capital markets industry. The name, nature of activities and geographic location of the Group’s companies are

presented below:


Jurisdiction	Country	Name	Activities
UK ¹	England	OSB GROUP PLC	Holding company
		OneSavings Bank plc	Mortgage lending and deposit taking
		5D Finance Limited	Mortgage servicer and provider
		Broadlands Finance Limited ²	Mortgage administration services
		CCFSG Holdings Limited	Holding company
		Charter Court Financial Services Limited	Mortgage lending and deposit taking
		Charter Mortgages Limited	Mortgage administration and analytical services
		Easioption Limited	Intermediate holding company
		Exact Mortgage Experts Limited	Group service company
		Guernsey Home Loans Limited	Mortgage provider
		Heritable Development Finance Limited	Mortgage originator and servicer
		Inter Bay Financial I Limited	Holding company
		InterBay Asset Finance Limited	Asset finance and mortgage provider
		Interbay Funding, Ltd	Mortgage servicer
		Interbay ML, Ltd	Mortgage provider
		Jersey Home Loans Limited	Mortgage provider
		Prestige Finance Limited	Mortgage originator and servicer
		Reliance Property Loans Limited	Mortgage provider
		Rochester Mortgages Limited	Mortgage provider
	Guernsey	Guernsey Home Loans Limited	Mortgage provider
	Jersey	Jersey Home Loans Limited	Mortgage provider



OSB GROUP PLC Annual Report and Accounts 2025		243

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

45.Country by country reporting (CBCR) continued


Jurisdiction	Country	Name	Activities
UK	England	Canterbury Finance No. 2 plc	Special purpose vehicle
		Canterbury Finance No. 3 plc
		Canterbury Finance No. 4 plc
		Canterbury Finance No. 5 plc
		CMF 2023-1 plc
		CMF 2024-1 plc
		PMF 2024-1 plc
		CMF 2025-1 plc
		CSC Shelf 2025-1 plc
		Keys Warehouse No.1 Limited
UK	England	WSE Bourton Road Limited	Land lease investment
India	India	OSB India Private Limited	Back office processing

1.Guernsey Home Loans Limited (Guernsey) and Jersey Home Loans Limited (Jersey) are incorporated in Guernsey and Jersey respectively but are considered to be located in the UK as they are managed and controlled in the UK with no permanent

establishments in Guernsey or Jersey.

2. Broadlands Finance Limited was dissolved on 27 January 2026.

Other disclosures required by the CBCR directive are provided below:


2025	UK	India	Consolidation ²	Total
Average number of employees	1,467	1,016	–	2,483
Turnover ¹, £m	666.4	24.3	(22.7)	668.0
Profit/(loss) before tax, £m	380.9	4.3	(2.7)	382.5
Corporation tax paid, £m	71.8	1.2	–	73.0


2024
Average number of employees	1,566	993	–	2,559
Turnover ¹, £m	666.1	21.9	(20.8)	667.2
Profit/(loss) before tax, £m	417.1	3.5	(2.5)	418.1
Corporation tax paid, £m	118.5	0.9	–	119.4

1.Turnover represents total income before impairment of financial and intangible assets, regulatory provisions and operating costs, but after net interest income, gains and losses on financial instruments and other operating income.

2.Relates to a management fee to Indian subsidiaries from OneSavings Bank plc for providing back-office processing.



OSB GROUP PLC Annual Report and Accounts 2025		244

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

45.Country by country reporting (CBCR) continued

The tables below reconcile tax charged and tax paid during the year.


	UK	India	Total
2025	£m	£m	£m
Tax charge	95.7	1.1	96.8
Effects of:
Other timing differences	(6.7)	–	(6.7)
Tax outside of profit or loss	(0.5)	–	(0.5)
Prior year tax included within tax charge	0.3	–	0.3
Prior year tax repaid during the year	–	(0.1)	(0.1)
Tax in relation to this period prepaid	(16.5)	0.2	(16.3)
R&D tax claim	(0.5)	–	(0.5)
Tax paid	71.8	1.2	73.0


2024
Tax charge	109.1	0.9	110.0
Effects of:
Other timing differences	0.9	–	0.9
Tax outside of profit or loss	(0.2)	–	(0.2)
Prior year tax included within tax charge	4.8	–	4.8
Tax in relation to future periods prepaid	3.9	–	3.9
Tax paid	118.5	0.9	119.4

46.Adjustments for non-cash items and changes in operating assets

and liabilities


	2025	2024
	£m	£m
Adjustments for non-cash and other items:
Depreciation and amortisation	15.9	11.3
Interest on investment securities	(77.0)	(41.3)
Interest on subordinated debt liabilities	25.3	25.3
Interest on PSBs	–	0.5
Interest on securitised debt	51.0	62.7
Interest on senior notes	64.7	63.5
Interest on financing debt	41.8	114.7
Impairment charge/(credit) on loans	13.0	(11.7)
Interest on other liquid assets	(0.6)	–
Administrative expenses	(2.0)	–
Provisions	2.4	2.7
Net expense on derivative financial instruments–subordinated debt liabilities and senior notes	1.4	7.2
Net expense on derivative financial instruments–structural hedge	2.4	3.3
Fair value losses on financial instruments	22.1	1.5
Share-based payments	6.9	6.3
Total adjustments for non-cash and other items	167.3	246.0
Changes in operating assets and liabilities:
(Increase)/decrease in loans and advances to credit institutions	(79.9)	125.7
Increase in loans and advances to customers¹	(807.0)	(135.0)
Increase in amounts owed to retail depositors	430.8	1,693.7
Decrease in cash collateral and margin received	(160.0)	(52.8)
Net (increase)/decrease in other assets	(3.2)	9.8
Net increase in derivatives and hedged items	14.3	1.7
Net increase in amounts owed to other customers	373.5	41.6
Net increase in other liabilities	3.6	6.3
Exchange differences on working capital	(1.7)	–
Total changes in operating assets and liabilities	(229.6)	1,691.0

1.In 2024, the movement in loans and advances to customers has been adjusted to reflect the effect of £786.1m of non-

cash consideration received initially as part of the PMF 2024-1 securitisation. The classification of the cash

consideration received, included in the movement, reflects the operating nature of the assets sold.



OSB GROUP PLC Annual Report and Accounts 2025		245

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

47.Controlling party

As at 31 December 2025 there was no controlling party of the ultimate parent company of the

Group, OSB GROUP PLC.

48.Transactions with key management personnel

All related party transactions were made on terms equivalent to those that prevail in arm’s

length transactions. During the year, there were no related party transactions between the key

management personnel and the Group other than as described below.

The Directors and Group Executive team are considered to be key management personnel.

Directors’ remuneration is disclosed in note 9 and in the Directors’ Remuneration Report on

page 146. The Group Executive team are all employees of OSB, the table below shows the

aggregate remuneration for members of the team who are non-directors:


	2025	2024
	£'000	£'000
Short-term employee benefits	5,124	4,770
Post-employment benefits	242	232
Share-based payments	1,794	1,371
	7,160	6,373

Key management personnel and connected persons held deposits with the Group of £1.7m

(2024: £1.6m).

49.Capital management

The Group’s capital management approach is to provide a sufficient capital base to cover

business risks and support future business development. The Group remained, throughout the

year, compliant with its capital requirements as set out by the PRA, the Group’s primary

prudential supervisor.

The Group manages and reports its capital at a number of levels including Group level and for

the two regulated banking entities within the Group, on an individual consolidation basis (OSB

solo) and on an individual entity basis (Charter Court Financial Services Limited). OSB solo

consists of OneSavings Bank plc and its UK subsidiaries except for the CCFS entities acquired

in 2019 and other selected subsidiaries. The capital position of the two regulated banking

entities is not separately disclosed.

The Group’s capital management is based on the three ‘pillars’ of Basel III.

Under Pillar 1, the Group calculates its minimum capital requirements based on 8% of risk-

weighted assets.

Under Pillar 2, the Group, and its regulated entities, complete an annual self-assessment of

risks known as the Internal Capital Adequacy Assessment Process (ICAAP). The PRA applies

additional requirements to this assessment amount to cover risks under Pillar 2 to generate

a Total Capital Requirement and also sets capital buffers for the Group.

Pillar 3 requires firms to publish a set of disclosures which allow market participants to assess

information on the Group’s capital, risk exposures and risk assessment process. The Group’s

Pillar 3 disclosures can be found on the Group’s website.

On 20 January 2026, the PRA issued its final rules on the implementation of Basel 3.1 in the UK

and confirming 1 January 2027 as its commencement date. The Group has taken account of

this in planning for future capital requirements.

The ultimate responsibility for capital adequacy rests with the Board of Directors. The Group’s

ALCO is responsible for the management of the capital process within the risk appetite defined

by the Board, including approving policy, overseeing internal controls and setting internal

limits over capital ratios.

The Group actively manages its capital position and reports this on a regular basis to the

Board and senior management via ALCO and other governance committees. Capital

requirements are included within budgets, forecasts and strategic plans with initiatives being

executed against this plan.



OSB GROUP PLC Annual Report and Accounts 2025		246

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

49.Capital management continued

The Group’s Pillar 1 capital information is presented below:


	(Unaudited) 2025	(Unaudited) 2024
	£m	£m
Common Equity Tier 1 (CET1) capital
Called up share capital	3.6	3.7
Share premium	6.0	4.5
Retained earnings	3,457.0	3,406.4
Foreseeable dividends	(85.8)	(85.2)
Other reserves	(1,337.0)	(1,341.2)
CET1 capital: instruments and reserves	2,043.8	1,988.2
Regulatory Adjustments
Prudent valuation adjustment ¹	(1.0)	(0.4)
Intangible assets	(66.9)	(48.8)
Deferred tax asset	(0.1)	(0.2)
COVID-19 ECL transitional adjustment	–	7.6
Total CET1 capital	1,975.8	1,946.4
AT1 capital
AT1 securities	167.1	150.0
Total Tier 1 capital	2,142.9	2,096.4
Tier 2 capital
Tier 2 securities	250.0	250.0
Total Tier 2 capital	250.0	250.0
Total regulatory capital	2,392.9	2,346.4
Risk-weighted assets (unaudited)	12,541.7	11,915.7

1.The Group has adopted the simplified approach under the Prudent Valuation rules, recognising a deduction equal to the

sum of absolute value equal to 0.1% (2024: 0.1%) of fair value assets and liabilities excluding offsetting fair valued assets

and liabilities.

The movement in CET1 during the year was as follows:


	(Unaudited) 2025	(Unaudited) 2024
	£m	£m
As at 1 January	1,946.4	1,905.7
Movement in retained earnings	50.6	76.2
Share premium from Sharesave Scheme vesting	1.5	0.7
Movement in other reserves	4.1	2.0
Movement in foreseeable dividends	(0.6)	0.5
COVID-19 ECL transitional adjustment	(7.6)	(16.2)
Movement in prudent valuation adjustment	(0.6)	0.1
Net increase in intangible assets	(18.1)	(22.7)
Movement in deferred tax asset for carried forward losses	0.1	0.1
As at 31 December	1,975.8	1,946.4

The Group’s MREL information is presented below:


	(Unaudited) 2025	(Unaudited) 2024
	£m	£m
Total regulatory capital	2,392.9	2,346.4
Eligible liabilities	700.0	700.0
Total own funds and eligible liabilities	3,092.9	3,046.4

The Group has not issued any MREL debt during 2025 (2024: £400.0m).

Through to the end of 2025 the Group had been assigned a preferred Resolution Strategy of

single point of entry (SPE) Bail-In from the Holding Company, (OSB GROUP PLC) and had met

both its interim state loss absorbing capacity, (MREL) plus buffers of 22% RWAs and had also

achieved the end state required levels of 2x Minimum Capital Requirement plus buffers, (for

which it had a deadline of 13 July 2026).

In the Group’s year-end Resolution Letter, it was determined that from 1 January 2026, the

Group would move to a Transfer Strategy, based on which, moving forwards, the Group is

only required to meet Minimum Capital Requirements - the loss absorption amount which is

equal to:

i.Minimum capital requirements (i.e. Pillar 1 + Pillar 2A); or,

ii. If higher, any applicable leverage ratio requirement.



OSB GROUP PLC Annual Report and Accounts 2025		247

Notes to the Consolidated Financial Statements continued For the year ended 31 December 2025

50.Events after the reporting date

The Board has authorised a share repurchase of up to £100.0m of shares in the market from 6

March 2026. Any purchases made under this programme will be announced to the market

each day in line with regulatory requirements.



OSB GROUP PLC Annual Report and Accounts 2025		248

Company Statement of Financial Position As at 31 December 2025


		2025	2024
	Note	£m	£m
Assets
Investments in subsidiaries and intercompany loans	2	2,610.0	2,584.5
Current taxation asset		3.0	0.8
Total assets		2,613.0	2,585.3
Liabilities
Other liabilities	3	21.2	10.5
Senior notes	4	723.4	722.7
Subordinated debt liabilities	4	260.1	259.8
		1,004.7	993.0
Equity
Share capital	4	3.6	3.7
Share premium	4	6.0	4.5
Other equity instruments	4	167.1	150.0
Retained earnings		1,349.1	1,354.2
Other reserves	6	82.5	79.9
Shareholders’ funds		1,608.3	1,592.3
Total equity and liabilities		2,613.0	2,585.3

The profit after tax for the year ended 31 December 2025 of OSBG was £229.0m ( 2024: £227.7m). As permitted by section 408 of the Companies Act 2006, no separate Statement of

Comprehensive Income is presented in respect of the Company.

The notes on pages 251 to 253 form an integral part of the Company financial statements.

The financial statements were approved by the Board of Directors on 4 March 2026 and were signed on its behalf by:


Andy Golding	Victoria Hyde
Chief Executive Officer	Chief Financial Officer

Company number: 11976839



OSB GROUP PLC Annual Report and Accounts 2025		249

Company Statement of Changes in Equity For the year ended 31 December 2025


	Share capital	Share premium	Capital redemption and transfer reserve ¹	Own shares ²	Share-based payment reserve	Other equity instruments	Retained earnings	Total
	£m	£m	£m	£m	£m	£m	£m	£m
As at 1 January 2024	3.9	3.8	66.3	(1.0)	11.6	150.0	1,358.6	1,593.2
Profit for the year	–	–	–	–	–	–	227.7	227.7
Dividend paid	–	–	–	–	–	–	(126.4)	(126.4)
Share-based payments	–	0.7	–	–	2.7	–	4.5	7.9
Own shares ²	–	–	–	0.1	–	–	(0.1)	–
Coupon paid on AT1 securities	–	–	–	–	–	–	(9.0)	(9.0)
Share repurchase ³	(0.2)	–	0.2	–	–	–	(101.1)	(101.1)
As at 31 December 2024	3.7	4.5	66.5	(0.9)	14.3	150.0	1,354.2	1,592.3
Profit for the year	–	–	–	–	–	–	229.0	229.0
Coupon paid on AT1 securities	–	–	–	–	–	–	(10.1)	(10.1)
Dividend paid	–	–	–	–	–	–	(125.5)	(125.5)
Redemption of AT1 securities	–	–	–	–	–	(132.9)	(0.3)	(133.2)
Issuance of AT1 securities	–	–	–	–	–	150.0	–	150.0
Transactions costs on issuance of AT1 securities	–	–	–	–	–	–	(2.0)	(2.0)
Share-based payments	0.1	1.5	–	–	2.4	–	4.2	8.2
Share repurchase ³	(0.2)	–	0.2	–	–	–	(100.4)	(100.4)
As at 31 December 2025	3.6	6.0	66.7	(0.9)	16.7	167.1	1,349.1	1,608.3

1.Includes Capital redemption reserve of £1.0m (2024: £0.8m ) and Transfer reserve of £65.7m (2024: £65.7m).

2.The Company has adopted look-through accounting (see note 1 (c) to the Group’s consolidated financial statements) and recognised the EBT within OSBG.

3.Includes £99.3m ( 2024: £100.0m) for shares repurchased and £1.1m (2024: £1.1m) for transaction costs and incentive fees.



OSB GROUP PLC Annual Report and Accounts 2025		250

Company Statement of Cash Flows For the year ended 31 December 2025


		2025	2024
	Note	£m	£m
Cash flows from operating activities
Profit before taxation		228.6	227.7
Adjustments for non-cash and other items:
Interest on subordinated debt liabilities		25.3	25.3
Interest on senior notes		64.7	63.5
Administrative expenses		(0.2)	–
Changes in operating assets and liabilities:
Change in intercompany loans ¹		(1.8)	(417.2)
Cash generated from/(used in) in operating activities		316.6	(100.7)
Net tax paid		(2.8)	(0.8)
Net cash generated from/(used in) in operating activities		313.8	(101.5)
Cash flows from investing activities
Net change in investments in subsidiaries		(16.0)	–
Net cash from investing activities		(16.0)	–
Cash flows from financing activities
Issuance of senior notes	5	–	398.0
Interest paid on financing	5	(89.0)	(71.3)
Redemption of AT1 securities		(133.2)	–
Issuance of AT1 securities		148.0	–
Share repurchase ²		(89.4)	(90.6)
Dividend paid		(125.5)	(126.4)
Coupon paid on AT1 securities		(10.1)	(9.0)
Proceeds from issuance of shares under employee SAYE scheme		1.4	0.8
Net cash from financing activities		(297.8)	101.5
Net increase in cash and cash equivalents		–	–


		2025	2024
	Note	£m	£m
Cash and cash equivalents at the beginning of the year		–	–
Cash and cash equivalents at the end of the year ³		–	–
Movement in cash and cash equivalents		–	–

Cash flows from operating activities include:
Dividends received from subsidiary⁴		219.0	218.7

1.Includes £1.1m (2024: less than £0.1m) of current taxation asset surrendered to OSB.

2.Includes £88.8m (2024: £89.9m ) for shares repurchased and £0.6m (2024: £0.7m) transaction costs and fees.

3.The Company’s bank balance is swept to OneSavings Bank plc daily resulting in a nil balance.

4.The Company’s principal activity is to hold the investment in its wholly owned subsidiary, OneSavings Bank plc.

Dividends received are treated as operating income.



OSB GROUP PLC Annual Report and Accounts 2025		251

Notes to the Company Financial Statements For the year ended 31 December 2025

1.Basis of preparation

The separate financial statements of the Company are presented as required by the

Companies Act 2006. As permitted by that Act, the separate financial statements have

been prepared in accordance with IFRS as adopted by the UK.

The financial statements have been prepared on the historical cost basis. The financial

statements are presented in pounds sterling. All amounts in the financial statements have been

rounded to the nearest £0.1m (£m). The functional currency of the Company is pounds

sterling, which is the currency of the primary economic environment in which the Company

operates.

The principal accounting policies adopted are the same as those set out in note 1 to the

Group’s consolidated financial statements, aside from accounting policy in note 1 (v) share-

based payments. For the Company, the cost of the awards is recognised on a straight-line

basis to investment in subsidiaries (with a corresponding increase in the share-based payment

reserve within equity) over the vesting period in which the employees become unconditionally

entitled to the awards.

There are no critical judgements and estimates that apply to the Company.

2.Investments in subsidiaries and intercompany loans

The Company holds an investment in ordinary shares of £1,458.7m ( 2024: £1,452.1m) and in

AT1 securities of £99.6m (2024: £90.0m) in its direct subsidiary, OneSavings Bank plc (OSB).

The Company also holds an investment in AT1 securities of £66.4m (2024: £60.0m) in an

indirect subsidiary, Charter Court Financial Services Limited (CCFSL). The investment in

shares and AT1 securities are carried at cost.


	Investment in subsidiaries	Intercompany loans (payable)/ receivable
	£m	£m
As at 1 January 2024	1,595.0	565.1
Additions ¹	7.2	418.8
Repayments	–	(1.6)
As at 31 December 2024	1,602.2	982.3
Additions ¹	155.4	4.7
Repayments ²	(132.9)	(1.7)
As at 31 December 2025	1,624.7	985.3

1.Additions in investment in subsidiaries include purchase of AT1 issuance of £89.3m (2024: nil) issued by OSB and £59.6m

(2024: nil) issued by CCFSL and share-based payments of £6.5m (2024: £7.2m).

2.Repayments in investment in subsidiaries include redemption of AT1 securities of £79.7m (2024: nil) issued by OSB and

£53.2m (2024: nil) issued by CCFSL.

In addition to the transactions outlined above, the transactions with subsidiaries during the

year comprise transactions with OSB which include £4.7m (2024: £18.8m) of accrued interest

movement on subordinated debt liabilities and senior notes, and £1.7m (2024: £0.8m) relates to

tax funded by OSB. (2024: The transactions with subsidiaries during the year comprise

transactions with OSB which include senior notes issuance of £400.0m, £15.5m of accrued

interest movement on subordinated debt liabilities and senior notes. Repayments include

£0.8m of share repurchase costs and £0.8m relates to tax funded by OSB.)

Financial assets comprise of investments in AT1 securities and intercompany loan receivables,

being subordinated debt liabilities and senior notes issued by subsidiaries, all of which have

the same rates and terms and conditions as the Company’s external issued AT1 securities,

subordinated debt liabilities and senior notes. Financial liabilities comprise of intercompany

loans, which are payable on demand. For details see note 34 Senior notes and note 35

Subordinated debt liabilities of the Group’s consolidated financial statements.

A list of the Company’s direct and indirect subsidiaries as at 31 December 2025 and 2024 are

shown below:


Direct investments	Activity	Registered office	Ownership
OneSavings Bank plc	Mortgage lending and deposit taking	The Observatory	100%


Indirect investments	Activity	Registered office	Ownership
5D Finance Limited	Mortgage servicer and provider	The Observatory	100%
Broadlands Finance Limited ²	Mortgage administration services	OSB House	100%
Canterbury Finance No.2 plc	Special purpose vehicle	Capricorn Centre	–
Canterbury Finance No.3 plc	Special purpose vehicle	Capricorn Centre	–
Canterbury Finance No.4 plc	Special purpose vehicle	Churchill Place	–
Canterbury Finance No.5 plc	Special purpose vehicle	Churchill Place	–
CCFSG Holdings Limited	Holding company	OSB House	100%
Charter Court Financial Services Limited	Mortgage lending and deposit taking	Charter Court	100%
Charter Mortgages Limited	Mortgage administration and analytical services	Charter Court	100%



OSB GROUP PLC Annual Report and Accounts 2025		252

Notes to the Company Financial Statements continued For the year ended 31 December 2025

2.Investments in subsidiaries and intercompany loans continued


Indirect investments	Activity	Registered office	Ownership
CMF 2023-1 plc	Special purpose vehicle	Churchill Place	–
CMF 2024-1 plc	Special purpose vehicle	Churchill Place	–
CMF 2025-1 plc¹	Special purpose vehicle	Churchill Place	–
Easioption Limited	Holding company	The Observatory	100%
Exact Mortgage Experts Limited	Group service company	Charter Court	100%
Guernsey Home Loans Limited	Mortgage provider	Reliance House	100%
Guernsey Home Loans Limited (Guernsey)	Mortgage provider	Guernsey	100%
Heritable Development Finance Limited	Mortgage originator and servicer	The Observatory	100%
Inter Bay Financial I Limited	Holding company	OSB House	100%
InterBay Asset Finance Limited	Asset finance and mortgage provider	Reliance House	100%
Interbay Funding, Ltd	Mortgage servicer	Reliance House	100%
Interbay ML, Ltd	Mortgage provider	OSB House	100%
Jersey Home Loans Limited	Mortgage provider	Reliance House	100%
Jersey Home Loans Limited (Jersey)	Mortgage provider	Jersey	100%
Keys Warehouse No.1 Limited	Special purpose vehicle	Capricorn Centre	–
OSB India Private Limited	Back office processing	India	100%
PMF 2024-1 plc	Special purpose vehicle	Churchill Place	–
CSC Shelf 2025-1 plc ¹	Special purpose vehicle	Churchill Place	–
Prestige Finance Limited	Mortgage originator and servicer	Reliance House	100%


Indirect investments	Activity	Registered office	Ownership
Reliance Property Loans Limited	Mortgage provider	Reliance House	100%
Rochester Mortgages Limited	Mortgage provider	The Observatory	100%
WSE Bourton Road Limited	Land lease investment	OSB House	100%

1. CSC Shelf 2025-1 plc and CMF 2025-1 plc were incorporated in 2025. There were no other changes to investments in

subsidiaries from the prior year.

2. Broadlands Finance Limited was dissolved on 27 January 2026.

All investments are in the ordinary share capital of each subsidiary.

OSB India Private Limited is owned 70.28% by OneSavings Bank plc, 29.72% by Easioption

Limited and 0.001% by Reliance Property Loans Limited.

SPVs which the Group controls are treated as subsidiaries for accounting purposes.

All of the entities listed above have been consolidated into the Group’s consolidated financial

statements. The location of the entities listed above are disclosed in note 45 to the Group’s

consolidated financial statements.

The investment and intercompany receivables are reviewed annually for indicators of

impairment. If impairment indicators are identified an impairment review of the investment is

conducted which will quantify if the carrying value is in excess of the recoverable amount or

an impairment has occurred. In determining recoverable amount, the fair value less costs to

sell and the value in use are assessed, with the value in use being an estimate of the present

value of future cash flows generated by the investment. Impairment of intercompany

receivables is considered within the scope of IFRS 9 for ECL.

The following are the registered offices of the subsidiaries:

Charter Court – 2 Charter Court, Broadlands, Wolverhampton, WV10 6TD

Guernsey – 2nd Floor, Lefebvre Place, Lefebvre Street, St Peter Port, Guernsey GY1 2JP

India – Salarpuria Magnificia No. 78, 9th & 10th floor, Old Madras Road, Bangalore, India, 560016

Jersey – 26 New Street, St Helier, Jersey, JE2 3RA

OSB House – Quayside, Chatham Maritime, Chatham, England, ME4 4QZ

Reliance House – Reliance House, Sun Pier, Chatham, Kent, ME4 4ET

The Observatory – Brunel Way, Dock Road, Chatham, Kent, United Kingdom ME4 4AF

Churchill Place – 5 Churchill Place, 10th Floor, London, E14 5HU

Capricorn Centre – 18a Capricorn Centre Cranes Farm Road, Basildon, Essex, SS14 3JJ



OSB GROUP PLC Annual Report and Accounts 2025		253

Notes to the Company Financial Statements continued For the year ended 31 December 2025

3.Other liabilities


	2025	2024
	£m	£m
Falling due within one year:
Other creditors	2.2	0.5
Share repurchase liability	19.0	10.0
	21.2	10.5

For details see note 32 Other liabilities of the Group’s consolidated financial statements on

page 220.

4.Senior notes, subordinated debt liabilities, share capital, and other

equity instruments

For details see note 34 Senior notes, 35 Subordinated debt liabilities, 37 Share capital and 38

Other equity instruments of the Group’s consolidated financial statements from page 221 to

223.

5.Reconciliation of cash flows from financing activities

The tables below show a reconciliation of the Company’s liabilities classified as financing

activities within the Company statement of cash flows:


	Senior notes (see note 4)	Subordinated debt liabilities (see note 4)	Total
	£m	£m	£m
As at 1 January 2024	307.5	259.5	567.0
Cash movements:
Principal drawdowns	398.0	–	398.0
Interest paid	(46.3)	(25.0)	(71.3)
Non-cash movements:
Interest charged	63.5	25.3	88.8
As at 31 December 2024	722.7	259.8	982.5
Cash movements:
Interest paid	(64.0)	(25.0)	(89.0)
Non-cash movements:
Interest charged	64.7	25.3	90.0
As at 31 December 2025	723.4	260.1	983.5

6.Other reserves

The Company’s other reserves are as follows:


	2025	2024
	£m	£m
Share-based payment	16.7	14.3
Capital redemption and transfer	66.7	66.5
Own shares	(0.9)	(0.9)
	82.5	79.9

Capital redemption and transfer reserve

The capital redemption reserve represents the shares cancelled through the Group’s share

repurchase programme.

The transfer reserve represents the difference between the net assets of the Group at the point

of insertion of OSBG as the listed holding company and the fair value of the newly issued

share capital of OSBG.

For own shares see note 39 of the Group’s consolidated financial statements.

7.Directors and employees

The Company has no employees. OneSavings Bank plc provides the Company with employee

services and bears the costs, along with other subsidiaries in the Group, associated with the

Directors of the Company. These costs are not recharged to the Company.

8.Risk management

The principal financial risks that the Company is exposed to, as a holding company for its

subsidiaries, are those that its subsidiaries are exposed to. These risks are managed at Group

level, through the Group’s risk governance framework reporting to the Group Risk Committee.

For further information see note 41 of the Group’s consolidated financial statements.

9.Controlling party

As at 31 December 2025 there was no controlling party of OSB GROUP PLC.



OSB GROUP PLC Annual Report and Accounts 2025		254

Appendices


255	Forward-looking statements
256	Independent Reasonable Assurance Report on Selected Alternative Performance Measures
258	Independent Limited Assurance Report on selected Environmental, Social and Governance metrics
261	Alternative Performance Measures
263	Independent auditor’s reasonable assurance report on the compliance of the Electronic Format Annual Financial report
265	Glossary
266	Company Information



OSB GROUP PLC Annual Report and Accounts 2025		255

Appendix 1 Forward-looking statements

This document is not audited and contains certain forward-looking statements with respect to

the business, strategy and plans of OSB GROUP PLC (OSBG), its current goals, beliefs,

intentions, strategies and expectations relating to its future financial condition, performance

and results, and ESG ambitions, targets and commitments described herein. Such forward-

looking statements include, without limitation, those preceded by, followed by or that include

the words ‘targets’, ‘believes’, ‘estimates’, ‘expects’, ‘aims’, ‘intends’, ‘will’, ‘may’, ‘anticipates’,

‘projects’, ‘plans’, ‘forecasts’, ‘outlook’, ‘likely’, ‘guidance’, ‘trends’, ‘future’, ‘would’, ‘could’,

‘should’ or similar expressions or negatives thereof but are not the exclusive means of

identifying such statements. Statements that are not historical or current facts, including

statements about OSBG’s, its directors’ and/or management’s beliefs and expectations, are

forward-looking statements. By their nature, forward-looking statements involve risk and

uncertainty because they relate to events and depend upon circumstances that may or may

not occur in the future that could cause actual results or events to differ materially from those

expressed or implied by the forward-looking statements. Factors that could cause actual

business, strategy, plans and/or results (including but not limited to the payment of dividends)

to differ materially from the plans, objectives, expectations, estimates and intentions

expressed in such forward-looking statements made by OSBG or on its behalf include, but are

not limited to: general economic and business conditions in the UK and internationally,

including any changes in global trade policies; market related trends and developments;

fluctuations in exchange rates, stock markets, inflation, deflation, interest rates, energy prices

and currencies; policies of the Bank of England, the European Central Bank and other G7

central banks; the ability to access sufficient sources of capital, liquidity and funding when

required; changes to OSBG’s credit ratings; the ability to derive cost savings; changing

demographic developments, and changing customer behaviour, including consumer spending,

saving and borrowing habits; changes in customer preferences; changes to borrower or

counterparty credit quality; instability in the global financial markets, including Eurozone

instability, the potential for countries to exit the European Union (the EU) or the Eurozone, and

the impact of any sovereign credit rating downgrade or other sovereign financial issues;

technological changes and risks to cyber security; natural and other disasters, adverse

weather and similar contingencies outside OSBG’s control; inadequate or failed internal or

external processes, people and systems; acts of war and terrorist acts or hostility and

responses to those acts; geopolitical events and diplomatic tensions; the impact of outbreaks,

epidemics and pandemics or other such events; changes in laws, regulations, taxation, ESG

reporting standards, accounting standards or practices, including as a result of the UK’s exit

from the EU; regulatory capital or liquidity requirements and similar contingencies outside

OSBG’s control; the policies and actions of governmental or regulatory authorities in the UK,

the EU or elsewhere including the implementation and interpretation of key legislation and

regulation; the ability to attract and retain senior management and other employees; the

extent of any future impairment charges or write-downs caused by, but not limited to,

depressed asset valuations, market disruptions and illiquid markets; market relating trends

and developments; exposure to regulatory scrutiny, legal proceedings, regulatory

investigations or complaints; changes in competition and pricing environments; the inability to

hedge certain risks economically; the adequacy of loss reserves; the actions of competitors,

including non-bank financial services and lending companies; the success of OSBG in

managing the risks of the foregoing; and other risks inherent to the industries and markets in

which OSBG operates.

Accordingly, no reliance may be placed on any forward-looking statement. Neither OSBG, nor

any of its directors, officers or employees provides any representation, warranty or assurance

that any of these statements or forecasts will come to pass or that any forecast results will be

achieved. Any forward-looking statements made in this document speak only as of the date

they are made and it should not be assumed that they have been revised or updated in the

light of new information of future events. Except as required by the Prudential Regulation

Authority, the Financial Conduct Authority, the London Stock Exchange PLC or applicable law,

OSBG expressly disclaims any obligation or undertaking to release publicly any updates or

revisions to any forward-looking statements contained in this document to reflect any change

in OSBG’s expectations with regard thereto or any change in events, conditions or

circumstances on which any such statement is based. For additional information on possible

risks to OSBG’s business, (which may cause actual results to differ materially from those

expressed or implied in any forward-looking statement), please see the “Risk review”

section above.

Nothing in this document or any subsequent discussion of this document constitutes or forms

part of a public offer under any applicable law or an offer or the solicitation of an offer to

purchase or sell any securities or financial instruments. Nor does it constitute advice or a

recommendation with respect to such securities or financial instruments, or any invitation or

inducement to engage in investment activity under section 21 of the Financial Services and

Markets Act 2000. Past performance cannot be relied on as a guide to future performance.

Statements about historical performance must not be construed to indicate that future

performance, share price or results in any future period will necessarily match or exceed those

of any prior period. Nothing in this document is intended to be, or should be construed as, a

profit forecast or estimate for any period.



OSB GROUP PLC Annual Report and Accounts 2025		256

Appendix 2 Independent Reasonable Assurance Report to the Directors of OSB GROUP PLC on Selected Alternative Performance Measures

Our as surance conclusion

We have performed an independent reasonable assurance engagement on the Alternative

Performance Measures (collectively, the APMs) set out below for the financial year ended 31

December 2025. The assured APMs are highlighted with the symbol ∆ throughout the OSB

GROUP PLC (OSB Group) 2025 Annual Report and Accounts (ARA). The definition and the

basis of preparation for each of the assured APMs is described in Appendix 4 to the 2025 ARA

(OSB Group’s APM Definitions and Basis of Preparation).

Based on our procedures described in this report, and evidence we have obtained, in our

opinion, the assured APMs for the financial year ended 31 December 2025 have been

prepared, in all material respects, in accordance with OSB Group’s APM Definitions and Basis

of Preparation.

Scope of our work

OSB GROUP PLC has engaged us to perform an independent reasonable assurance

engagement in accordance with International Standard on Assurance Engagements 3000

(Revised) Assurance Engagements Other than Audits or Reviews of Historical Financial

Information (“ISAE 3000 (Revised), issued by the International Auditing and Assurance

Standards Board (“IAASB”) and our agreed terms of engagement.

The APMs in scope of our engagement are as follows:


APMs
• Originations • Net interest margin • Cost to income ratio • Management expense ratio • Loan loss ratio	• Basic earnings per share • Dividend per share • Return on tangible equity • Net interest margin excluding liquid assets • Core administrative expenses

The APMs, as listed in the above table, need to be read and understood together with the

Group’s APM Definitions and Basis of Preparation set out in Appendix 4 to the 2025 ARA.

Inherent limitations

We obtained reasonable assurance over the preparation of the APMs in accordance with the

Group’s APM Definitions and Basis of Preparation. Inherent limitations exist in all assurance

engagements. Any internal control structure, no matter how effective, cannot eliminate the

possibility that fraud, errors or irregularities may occur and remain undetected and because

we use selective testing in our engagement, we cannot guarantee that errors or irregularities,

if present, will be detected.

The self-defined APM Definitions and Basis of Preparation, the nature of the assured APMs,

and absence of consistent external standards allow for different, but acceptable,

measurement methodologies to be adopted which may result in variances between entities.

The adopted measurement methodologies may also impact comparability of the Narrative

Disclosures reported by different organisations and from year to year within an organisation

as methodologies develop.

Directors’ responsibilities

The Directors are responsible for preparing an Annual Report which complies with the

requirements of the Companies Act 2006 and for being satisfied that the Annual Report,

taken as a whole, is fair, balanced and understandable.

The directors are also responsible for:

• selecting and establishing the Group’s APM Definitions and Basis of Preparation;

• preparing, measuring, presenting and reporting the APMs in accordance with the Group’s

APM Definitions and Basis of Preparation;

• publishing the Group’s APM Definitions and Basis of Preparation publicly in advance of,

or at the same time as, the publication of the APMs’

• designing, implementing and maintaining internal processes and controls over information

relevant to the preparation and presentation of the assured APMs to ensure that they are

free from material misstatement, whether due to fraud or error; and

• providing sufficient access and making available all necessary records, correspondence,

information and explanations to allow the successful completion of the engagement.

Our responsibilities

We are responsible for:

• planning and performing procedures to obtain sufficient appropriate evidence in order

to express and independent reasonable assurance conclusion on the APMs.

• communicating matters that may be relevant to the APMs to the appropriate party

including identified or suspected non-compliance with laws and regulations, fraud or

suspected fraud, and bias in the preparation of the APMs.

• Reporting our conclusion in the form of an independent reasonable Assurance Report

to the Directors.



OSB GROUP PLC Annual Report and Accounts 2025		257

Appendix 2 Independent Reasonable Assurance Report to the Directors of OSB GROUP PLC on Selected Alternative Performance Measures continued

Our independence and competence

We have complied with the independence and other ethical requirements of the FRC’s Ethical

Standard and the ICAEW Code of Ethics. The ICAEW Code is founded on fundamental

principles of integrity, objectivity, professional competence and due care, confidentiality and

professional behaviour.

We applied the International Standard on Quality Management (UK) 1 “ISQM (UK) 1”, issued by

the Financial Reporting Council. Accordingly, we maintain a comprehensive system of quality

control including documented policies and procedures regarding compliance with ethical

requirements, professional standards and applicable legal and regulatory requirements.

Key procedures performed

The nature, timing and extent of the assurance procedures selected depended on our

judgment, including the assessment of the risks of material misstatement, whether due to

fraud or error, of the assured APMs. In making those risk assessments, we considered internal

controls relevant to the preparation of the assured APMs.

In carrying out our reasonable assurance engagement in respect of the APMs, we performed

the following procedures:

• agreeing amounts used in the calculation of APMs which are derived or extracted from the

audited financial statements of OSB Group for the year ended 31 December 2025 to the

financial statements.

• for amounts used in the calculation of APMs which were not derived or extracted from the

financial statements of OSB Group for the year ended 31 December 2025 testing, on a

sample basis, the underlying data used in determining the assured APMs.

• checking the mathematical accuracy of the calculations used to prepare the assured APMs

and testing whether they were prepared in accordance with OSB Group’s APM Definitions

and Basis of Preparation.

• reading the 2025 ARA and assessing whether the assured APMs were presented and

described consistently.

We were not asked to give, and therefore have not given, any assurance over (i) any APMs

other than the assured APMs or (ii) other data in the ARA as part of this engagement.

We believe that the evidence obtained is sufficient and appropriate to provide a basis for

our opinion.

Use of our report

This report is made solely to the Directors of OSB GROUP PLC in accordance with ISAE 3000

(Revised) and our agreed terms of engagement. Our work has been undertaken so that we

might state to the Directors of OSB GROUP PLC those matters we have agreed to state to

them in this independent reasonable assurance report and for no other purpose.

Without assuming or accepting any responsibility or liability in respect of this report to any

party other than OSB GROUP PLC, we acknowledge that the Directors of OSB GROUP PLC

may choose to make this report publicly available for others wishing to have access to it,

which does not and will not affect or extend for any purpose or on any basis our

responsibilities.

To the fullest extent permitted by law, we do not accept or assume responsibility to anyone

other than OSB GROUP PLC for our work, for this report or for the conclusions we

have formed.

Deloitte LLP

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		258

Appendix 3 Independent Limited Assurance Report to the Directors of OSB Group PLC

Independent limited Assurance Report by Deloitte LLP to the Directors of OSB Group PLC on

the selected Environmental, Social and Governance (“ESG”) metrics and a description of

activities undertaken to meet the Recommendations of the Task Force on Climate-related

Financial Disclosures (“TCFD”) (the “Selected Information”) within the Annual Report for the

reporting year ended 31 December 2025.

Our assurance conclusion

Based on our procedures described in this report, and evidence we have obtained, nothing has

come to our attention that causes us to believe that the Selected Information for the year

ended 31 December 2025, and as listed below and indicated with a in the Annual Report has

not been prepared, in all material respects, in accordance with the Applicable Criteria defined

by the directors as set out here: https://www.osb.co.uk/sustainability/esg-hub/environment

Scope of our work

OSB Group PLC has engaged us to perform an independent limited assurance engagement in

accordance with International Standard on Assurance Engagements 3000 (Revised) Assurance

Engagements Other than Audits or Reviews of Historical Financial Information (“ISAE 3000

(Revised)”) and the International Standard on Assurance Engagements 3410 Assurance

engagements on greenhouse gas statements (ISAE 3410) issued by the International Auditing

and Assurance Standards Board (“IAASB”) and our agreed terms of engagement.

The Selected Information in scope of our engagement for the year ended 31 December 2024 as

indicated with a in the Annual Report, is as follows:


Selected Information	Unit of Measurement	Reported Amount	Applicable Criteria

Greenhouse Gas (“GHG”) emissions:
• Total direct (Scope 1) emissions	Metric tonnes CO2e	39.78	Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition (2004). Plus, any applicable methodology as published by the Company (commonly referred to as a ‘basis of reporting’).
• Total indirect (Scope 2) emissions (Location-based)		263.98
• Total indirect (Scope 2) emissions (Market-based)		4.49


Selected Information	Unit of Measurement	Reported Amount	Applicable Criteria

GHG Intensity:
• Scope 1 and 2 (location-based)	Metric tonnes of CO2e per full-time employee (FTE)	0.21	Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition (2004). Plus, any applicable methodology as published by the Company (commonly referred to as a ‘basis of reporting’).
• Scope 1 and 2 (location-based)	Metric tonnes CO2e per £million total income	0.45


Selected Information	Applicable Criteria

TCFD:
The description of activities undertaken to meet the Recommendations of the TCFD included within the 2025 Annual Report.	Section D (“Supplemental Guidance for the Financial Sector”) part 1 (Banks) of the TCFD Annex entitled “Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures (October 2021), incorporating guidance for All Sectors and Supplemental Guidance for Banks”.

The Selected Information, as listed in the above table, needs to be read and understood

together with the Applicable Criteria available here: https://www.osb.co.uk/sustainability/esg-

hub/environment



OSB GROUP PLC Annual Report and Accounts 2025		259

Appendix 3 continued Independent Limited Assurance Report to the Directors of OSB Group PLC continued

Inherent limitations of the Selected Information

We obtained limited assurance over the preparation of the Selected Information in accordance

with the Applicable Criteria. Inherent limitations exist in all assurance engagements.

Any internal control structure, no matter how effective, cannot eliminate the possibility that

fraud, errors or irregularities may occur and remain undetected and because we use selective

testing in our engagement, we cannot guarantee that errors or irregularities, if present, will be

detected.

The self-defined Applicable Criteria, the nature of the Selected Information, and absence of

consistent external standards allow for different, but acceptable, measurement methodologies

to be adopted which may result in variances between entities. The adopted measurement

methodologies may also impact comparability of the Selected Information reported by

different organisations and from year to year within an organisation as methodologies

develop.

TCFD as applied by all companies includes information based on climate-related scenarios

that are subject to inherent uncertainty because of incomplete scientific and economic

knowledge about the likelihood, timing, or effect of possible future physical and transitional

climate-related impacts. For the avoidance of doubt, the scope of our engagement and our

responsibilities do not involve us performing work necessary for any assurance on the

reliability, proper compilation or accuracy of the prospective information provided as part of

the TCFD scenario analysis and transition plans.

Directors’ responsibilities

The Directors are responsible for preparing an Annual Report which complies with the

requirements of the Companies Act 2006 and for being satisfied that the Annual Report, taken

as a whole, is fair, balanced and understandable.

The Directors are also responsible for:

• Selecting and establishing the Applicable Criteria.

• Preparing, measuring, presenting and reporting the Selected Information in accordance

with the Applicable Criteria.

• Publishing the Applicable Criteria publicly in advance of, or at the same time as, the

publication of the Selected Information.

• Designing, implementing, and maintaining internal processes and controls over information

relevant to the preparation of the Selected Information to ensure that they are free from

material misstatement, including whether due to fraud or error.

• Providing sufficient access and making available all necessary records, correspondence,

information and explanations to allow the successful completion of our limited

assurance engagement.

Our responsibilities

We are responsible for:

• Planning and performing procedures to obtain sufficient appropriate evidence in order to

express an independent limited assurance conclusion on the Selected Information.

• Communicating matters that may be relevant to the Selected Information to the

appropriate party including identified or suspected non-compliance with laws and

regulations, fraud or suspected fraud, and bias in the preparation of the Selected

Information.

• Reporting our conclusion in the form of an independent limited Assurance Report to the

Directors.

Our independence and competence

In conducting our engagement, we complied with the independence requirements of the FRC’s

Ethical Standard and the ICAEW Code of Ethics. The ICAEW Code is founded on fundamental

principles of integrity, objectivity, professional competence and due care, confidentiality and

professional behaviour.

We applied the International Standard on Quality Management 1 (“ISQM 1”) issued by the

International Auditing and Assurance Standards Board. Accordingly, we maintained a

comprehensive system of quality management including documented policies and procedures

regarding compliance with ethical requirements, professional standards and applicable legal

and regulatory requirements.

Key procedures performed

We are required to plan and perform our work to address the areas where we have identified

that a material misstatement in respect of the Selected Information is likely to arise. The

procedures we performed were based on our professional judgment. In carrying out our limited

assurance engagement in respect of the Selected Information, we performed the following

procedures:

• Performed an assessment of the Applicable Criteria selected to determine whether they

were suitable for the engagement circumstances, and, where necessary, discussed with the

Directors the need for a ‘Basis of Reporting’.

• Performed analytical review procedures to understand the underlying subject matter and

identify areas where a material misstatement of the Selected Information was likely to arise.

• Through inquiries of management, obtained an understanding of the Company, its

environment, processes and information systems relevant to the preparation of the Selected

Information sufficient to identify and further assess risks of material misstatement in the

Selected Information, and provide a basis for designing and performing procedures to

respond to assessed risks and to obtain limited assurance to support a conclusion.



OSB GROUP PLC Annual Report and Accounts 2025		260

Appendix 3 continued Independent Limited Assurance Report to the Directors of OSB Group PLC continued

• Through inquiries of management, obtained an understanding of internal controls relevant

to the Selected Information, the quantification process and data used in preparing the

Selected Information, the methodology for gathering qualitative information, and the

process for preparing and reporting the Selected Information. We did not evaluate the

design of particular internal control activities, obtain evidence about their implementation

or test their operating effectiveness.

• Through inquiries of management, documented whether an external expert had been used

in the preparation of the Selected Information, then evaluated the competence, capabilities

and objectivity of that expert in the context of the work performed and also the

appropriateness of that work as evidence.

• Inspected documents relating to the Selected Information, including Board Committee

minutes and where applicable internal audit outputs to understand the level of

management awareness and oversight of the Selected Information.

• Performed procedures over the Selected Information, including recalculation of relevant

formulae used in manual calculations and assessment whether the data had been

appropriately consolidated.

• Performed procedures over underlying data on a statistical sample basis to assess whether

the data had been collected and reported in accordance with the Applicable Criteria,

including verifying to source documentation.

• Performed procedures over the Selected Information including assessing management’s

assumptions and estimates.

• Accumulated misstatements and control deficiencies identified, including assessing

whether material.

• Read the narrative accompanying the Selected Information with regard to the Applicable

Criteria, and for consistency with our understanding of OSB Group PLC.

In relation to TCFD information only, we:

• Reviewed documentation relating to the governance, strategy and financial planning and

risk management processes;

• Inquired with those responsible within the organisation to understand:

– the role of the Board in relation to climate-related risk and opportunities and

management’s role in assessing and managing climate-related risks and opportunities;

– the nature of climate-related risk and opportunities identified including time horizons;

the impact of climate-related risks and opportunities on the business, strategy and

financial planning; and the impact of identified and considered climate scenarios on

the strategy;

– the process for identifying climate-related risks; the process for managing climate-

related risks; and how these processes are integrated into the overall risk management;

and

• Evaluated and reviewed the TCFD disclosure for consistency of knowledge and

understanding obtained during course of our work.

We performed our engagement to obtain limited assurance over the preparation of the

Selected Information in accordance with the Applicable Criteria. We draw your attention to the

following specific limitation:

• The underlying electricity consumption input into Scope 2 (location and market-based)

emissions listed in the Annual Report includes estimations provided by suppliers and third-

party sources. Our procedures did not include obtaining assurance over the information

provided by suppliers or third parties.

The procedures performed in a limited assurance engagement vary in nature and timing from,

and are less in extent than for, a reasonable assurance engagement. Consequently, the level

of assurance obtained in a limited assurance engagement is substantially lower than the

assurance that would have been obtained had a reasonable assurance engagement

been performed.

Use of our report

This report is made solely to the Directors of OSB Group PLC in accordance with ISAE 3000

(Revised) and our agreed terms of engagement. Our work has been undertaken so that we

might state to the Directors of OSB Group PLC those matters we have agreed to state to

them in this report and for no other purpose.

Without assuming or accepting any responsibility or liability in respect of this report to any

party other than the Company and the Directors of OSB Group PLC, we acknowledge that the

Directors of OSB Group PLC may choose to make this report publicly available for others

wishing to have access to it, which does not and will not affect or extend for any purpose or on

any basis our responsibilities. To the fullest extent permitted by law, we do not accept or

assume responsibility to anyone other than OSB Group PLC and the Directors of OSB Group

PLC as a body, for our work, for this report, or for the conclusions we have formed.

Deloitte LLP

4 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		261

Appendix 4 Alternative Performance Measures (APMs)

APMs demonstrate the Group’s resilient performance in 2025 compared to 2024. The Board

and Management use APMs when assessing and measuring performance of the Group against

set strategic priorities.

APMs in this Annual Report are not a substitute for IFRS measures and readers should consider

the IFRS measures as well.

Net interest margin (NIM)

Net interest income as a percentage of a 13 point average¹ of interest earning assets (cash,

investment securities, loans and advances to customers and credit institutions). It represents

the margin earned on loans and advances and liquid assets after all hedging and funding

income or expense relating to business activity.

NIM excluding liquid assets is defined as net interest income as a percentage of a 13 point

average¹ of net loans and advances to customers. It represents the margin earned on loans

and advances after all hedging and funding income or expense relating to business activity.

It is aligned with the methodology used by the Group’s closest peers.

2025 statutory NIM is comparable with 2024 underlying NIM as both metrics exclude

acquisition-related items, which were fully written off in 2024.


	2025	2024
	£m	£m
Net interest income - A	679.4	666.4
Add back: acquisition-related adjustments	–	24.2
Net interest income - underlying B	679.4	690.6

13 point average of interest earning assets - C	29,822.1	30,098.7
Less: 13 point average of liquid assets	(4,371.2)	–
13 point average net loans - D	25,450.9	–

13 point average of underlying interest earning assets - E	–	30,082.6
Less: 13 point average of underlying liquid assets		(4,081.3)
13 point average of underlying net loans - F	–	26,001.3

NIM equals A/C	2.28%	2.21%
Underlying NIM equals B/E	–	2.30%

NIM excluding liquid assets equals A/D	2.67%	–
Underlying NIM excluding liquid assets equals B/F	–	2.66%

Cost to income ratio and core administrative expenses

Administrative expenses as a percentage of total income. It is a measure of operational

efficiency.


	2025	2024
	£m	£m
Administrative expenses - A	270.1	258.1
Less: transformation costs	(24.4)	(15.0)
Less: bank levy	(3.9)	(3.3)
Core administrative expenses	241.8	239.8

Total income - B	668.0	667.2

Cost to income ratio equals A/B	40.4%	38.7%

Management expense ratio

Administrative expenses as a percentage of a 13 point average¹ of total assets. It is a measure

of operational efficiency.


	2025	2024
	£m	£m
Administrative expenses (as in cost to income ratio above) - A	270.1	258.1
13 point average of total assets - B	30,131.1	30,398.4

Management expense ratio equals A/B	0.90%	0.85%

Loan loss ratio

Expected credit losses as a percentage of a 13 point average¹ of gross loans and advances. It is

a measure of the credit performance of the loan book.


	2025	2024
	£m	£m
Impairment of financial assets - A	13.0	(11.7)
13 point average of gross loans - B	25,577.5	26,158.4

Loan loss ratio equals A/B	0.05%	(0.04%)



OSB GROUP PLC Annual Report and Accounts 2025		262

Appendix 4 continued Alternative Performance Measures (APMs) continued

Return on tangible equity (RoTE)

Profit attributable to ordinary shareholders, which is profit after tax after deducting coupons

on AT1 securities, as a percentage of a 13 point average¹ of shareholders’ equity excluding the

13 point average¹ of intangible assets and AT1 securities.


	2025	2024
	£m	£m
Profit after tax	285.7	308.1
Less: coupons on AT1 securities	(10.1)	(9.0)
Profit attributable to ordinary shareholders - A	275.6	299.1

13 point average of shareholders’ tangible equity (excluding AT1 securities) - B	2,017.3	2,001.3

Return on tangible equity equals A/B	13.7%	14.9%

Basic earnings per share

Profit attributable to ordinary shareholders, which is profit after tax after deducting coupons

on AT1 securities, gross of tax, divided by the weighted average number of ordinary shares in

issue.


	2025	2024
	£m	£m
Profit attributable to ordinary shareholders (as in RoTE ratio above) - A	275.6	299.1
Weighted average number of ordinary shares in issue - B	364.6	385.6

Basic earnings per share equals A/B	75.6	77.6

1.13 point average is calculated as an average of opening balance and closing balances for 12 months of the

financial year.

Tangible net asset value per sha re (TNAV)

Shareholders’ equity excluding intangible assets and AT1 securities as at the end of the year

divided by the number of shares outstanding as at the end of the year.


	2025	2024
	£m	£m
Shareholders' equity	2,296.7	2,223.4
Less: intangible assets	(66.9)	(48.8)
Less: AT1 securities	(167.1)	(150.0)
Tangible net asset value - A	2,062.7	2,024.6

Number of shares outstanding - B	356.0	372.1

Tangible net asset value per share (pence) A/B	579	544



OSB GROUP PLC Annual Report and Accounts 2025		263

Appendix 5 Independent auditor’s reasonable assurance report to the Members of OSB Group Plc on the compliance of the Electronic Format Annual Financial Report with Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R-DTR 4.1.18R

Report on compliance with the requirements for iXBRL mark up (‘tagging’)

of consolidated financial statements included in the Electronic Format

Annual Financial Report

We have undertaken a reasonable assurance engagement on the iXBRL mark up of consolidated

financial statements for the year ended 31 December 2025 of OSB Group Plc (the “company”)

included in the Electronic Format Annual Financial Report prepared by the company.

Our assurance conclusion

Based on our procedures described in this report, and evidence we have obtained, in our

opinion, the consolidated financial statements for the year ended 31 December 2025 of the

company included in the Electronic Format Annual Financial Report, are marked up, in all

material respects, in compliance with DTR 4.1.15R-DTR 4.1.18R.

Scope of our work

OSB Group Plc has engaged us to conduct an independent reasonable assurance

engagement in accordance with International Standard on Assurance Engagements (UK)

3000, Assurance Engagements Other than Audits or Reviews of Historical Financial

Information (“ISAE (UK) 3000”) issued by the Financial Reporting Council, to express an

opinion on whether the iXBRL mark up of consolidated financial statements complies in all

material respects with DTR 4.1.15R-DTR 4.1.18R based on the evidence we have obtained.

Directors’ responsibilities

The directors are responsible for preparing the Electronic Format Annual Financial Report in

compliance with DTR 4.1.15R-DTR 4.1.18R. This responsibility includes:

• the selection and application of appropriate iXBRL tags using judgement where necessary.

• ensuring consistency between digitised information and the consolidated financial

statements presented in human-readable format.

• the design, implementation and maintenance of internal control relevant to the application

of DTR 4.1.15R-DTR 4.1.18R.

Our responsibilities

We are responsible for:

• planning and performing procedures to obtain sufficient appropriate audit evidence in

order to express an independent reasonable assurance conclusion on the iXBRL mark up.

• reporting our conclusion in the form of an independent reasonable Assurance Report to

the Members.

Our independence and competence

In conducting our engagement, we complied with the independence requirements of the FRC’s

Ethical Standard and the ICAEW Code of Ethics. The ICAEW Code is founded on fundamental

principles of integrity, objectivity, professional competence and due care, confidentiality and

professional behaviour.

We applied the International Standard on Quality Management (UK) 1 (“ISQM (UK) 1”), issued

by the Financial Reporting Council. Accordingly, we maintained a comprehensive system of

quality management including documented policies and procedures regarding compliance

with ethical requirements, professional standards and applicable legal and regulatory

requirements.

Key procedures performed

A reasonable assurance engagement in accordance with ISAE (UK) 3000 involves performing

procedures to obtain reasonable assurance about the compliance of the mark-up of the

consolidated financial statements with the DTR 4.1.15R-DTR 4.1.18R. The nature, timing and

extent of procedures selected were based on our professional judgement, including the

assessment of the risks of material departures from the requirements set out in DTR 4.1.15R-

DTR 4.1.18R, whether due to fraud or error. Our reasonable assurance engagement consisted

primarily of:

• obtaining an understanding of the iXBRL mark-up process, including internal control over

the mark up process relevant to the engagement.

• reconciling the marked-up data with the audited consolidated financial statements of the

company dated 31 December 2025.

• evaluating the appropriateness of the company’s mark-up of the consolidated financial

statements using the iXBRL mark-up language.

• evaluating the appropriateness of the company’s use of iXBRL elements selected from a

generally accepted taxonomy and the creation of extension elements where no suitable

element in the generally accepted taxonomy has been identified.

• evaluating the use of anchoring in relation to the extension elements.

In this report we do not express an audit opinion, review conclusion or any other assurance

conclusion on the consolidated financial statements. Our audit opinion relating to the

consolidated financial statements of the company for the year ended 31 December 2025 is set

out in our Independent Auditor’s Report dated 4 March 2026.



OSB GROUP PLC Annual Report and Accounts 2025		264

Appendix 5 Independent auditor’s reasonable assurance report to the Members of OSB Group Plc on the compliance of the Electronic Format Annual Financial Report with Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R-DTR 4.1.18R continued

Use of our report

This report is made solely to the company’s members, as a body, in accordance with ISAE (UK)

3000 and our agreed terms of engagement. Our work has been undertaken so that we might

state to the company those matters we have agreed to state to them in this report and for no

other purpose.

Without assuming or accepting any responsibility or liability in respect of this report to any

party other than the company and the company’s members, we acknowledge that the

company may choose to make this report publicly available for others wishing to have access

to it, which does not and will not affect or extend for any purpose or on any basis our

responsibilities. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the company and the company’s members as a body,

for our work, for this report, or for the conclusions we have formed.

Deloitte LLP

18 March 2026



OSB GROUP PLC Annual Report and Accounts 2025		265

Glossary


AGM	Annual General Meeting
ALCO	Group Assets and Liabilities Committee
APM	Alternative Performance Measures
BoE	Bank of England
CCFS	Charter Court Financial Services
CEO	Chief Executive Officer
CET1	Common Equity Tier 1
CFO	Chief Financial Officer
CRD IV	Capital Requirements Directive and Regulation
CRO	Chief Risk Officer
DoLSub	Domestic Liquidity Sub-Group
DSBP	Deferred Share Bonus Plan
EAD	Exposure at Default
ECL	Expected Credit Loss
EIR	Effective Interest Rate
EPS	Earnings Per Share
EU	European Union
FCA	Financial Conduct Authority
FRC	Financial Reporting Council
FSCS	Financial Services Compensation Scheme
FSD	Forced Sale Discount
FTSE	Financial Times Stock Exchange
HMRC	His Majesty’s Revenue and Customs
HPI	House Price Index
IAS	International Accounting Standards
IBOR	Interbank Offered Rate
ICAAP	Internal Capital Adequacy Assessment Process
ICR	Interest Coverage Ratio
IFRS	International Financial Reporting Standards
ILAAP	Internal Liquidity Adequacy Assessment Process
ILTR	Indexed Long-Term Repo
IPO	Initial Public Offering


IRB	Internal Ratings-Based approach to credit risk
ISA	Individual Savings Account
KRFI	Kent Reliance for Intermediaries
KRPS	Kent Reliance Provident Society Limited
LCR	Liquidity Coverage Ratio
LGD	Loss Given Default
LIBOR	London Interbank Offered Rate
LTIP	Long-Term Incentive Plan
LTV	Loan to value
MREL	Minimum Requirement for Own Funds and Eligible Liabilities
NIM	Net Interest Margin
NPS	Net Promoter Score
OSB	OneSavings Bank plc
OSBG	OSB GROUP PLC
PD	Probability of Default
PPD	Propensity to go to Possession Given Default
PRA	Prudential Regulation Authority
PSBs	Perpetual Subordinated Bonds
PSP	Performance Share Plan
RMBS	Residential Mortgage-Backed Securities
RoE	Return on equity
ROTE	Return on tangible equity
RWA	Risk weighted assets
SAYE	Save As You Earn or Sharesave
SDLT	Stamp Duty Land Tax
SICR	Significant Increase in Credit Risk
SID	Senior Independent Director
SME	Small and Medium Enterprises
SONIA	Sterling Overnight Index Average
SRMF	Strategic Risk Management Framework
TFS	Term Funding Scheme
TFSME	Term Funding Scheme with additional incentives for SMEs


CAUTIONARY STATEMENT:	This Annual Report contains forward-looking statements that involve inherent risks and uncertainties. Actual results may differ materially from those contained in such forward-looking statements. See Forward-looking statements on page 255