Shawbrook Group PLC 21380071539WSMTM4410 2024-01-01 2024-12-31 21380071539WSMTM4410 2025-01-01 2025-12-31 21380071539WSMTM4410 2024-12-31 21380071539WSMTM4410 2025-12-31 21380071539WSMTM4410 2023-12-31 21380071539WSMTM4410 2024-01-01 2024-12-31 ifrs-full:SharePremiumMember 21380071539WSMTM4410 2024-01-01 2024-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 21380071539WSMTM4410 2024-01-01 2024-12-31 ifrs-full:IssuedCapitalMember 21380071539WSMTM4410 2024-01-01 2024-12-31 ifrs-full:RetainedEarningsMember 21380071539WSMTM4410 2024-01-01 2024-12-31 shaw:CapitalContributionReserveMember 21380071539WSMTM4410 2024-01-01 2024-12-31 shaw:CapitalSecuritiesMember 21380071539WSMTM4410 2024-01-01 2024-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 21380071539WSMTM4410 2025-01-01 2025-12-31 shaw:CapitalContributionReserveMember 21380071539WSMTM4410 2025-01-01 2025-12-31 ifrs-full:SharePremiumMember 21380071539WSMTM4410 2025-01-01 2025-12-31 ifrs-full:IssuedCapitalMember 21380071539WSMTM4410 2025-01-01 2025-12-31 ifrs-full:RetainedEarningsMember 21380071539WSMTM4410 2025-01-01 2025-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 21380071539WSMTM4410 2025-01-01 2025-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 21380071539WSMTM4410 2025-01-01 2025-12-31 shaw:CapitalSecuritiesMember 21380071539WSMTM4410 2023-12-31 shaw:CapitalSecuritiesMember 21380071539WSMTM4410 2023-12-31 ifrs-full:IssuedCapitalMember 21380071539WSMTM4410 2023-12-31 ifrs-full:SharePremiumMember 21380071539WSMTM4410 2023-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 21380071539WSMTM4410 2023-12-31 ifrs-full:RetainedEarningsMember 21380071539WSMTM4410 2023-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 21380071539WSMTM4410 2023-12-31 shaw:CapitalContributionReserveMember 21380071539WSMTM4410 2024-12-31 shaw:CapitalContributionReserveMember 21380071539WSMTM4410 2024-12-31 ifrs-full:SharePremiumMember 21380071539WSMTM4410 2024-12-31 shaw:CapitalSecuritiesMember 21380071539WSMTM4410 2024-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 21380071539WSMTM4410 2024-12-31 ifrs-full:ReserveOfCashFlowHedgesMember 21380071539WSMTM4410 2024-12-31 ifrs-full:IssuedCapitalMember 21380071539WSMTM4410 2024-12-31 ifrs-full:RetainedEarningsMember 21380071539WSMTM4410 2025-12-31 ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember 21380071539WSMTM4410 2025-12-31 shaw:CapitalContributionReserveMember 21380071539WSMTM4410 2025-12-31 shaw:CapitalSecuritiesMember 21380071539WSMTM4410 2025-12-31 ifrs-full:IssuedCapitalMember 21380071539WSMTM4410 2025-12-31 ifrs-full:RetainedEarningsMember 21380071539WSMTM4410 2025-12-31 ifrs-full:SharePremiumMember 21380071539WSMTM4410 2025-12-31 ifrs-full:ReserveOfCashFlowHedgesMember iso4217:GBP iso4217:GBP xbrli:shares 20 25 Shawbrook Group plc Annual Report and Accounts Real world banking. Sustainable returns

Financial Highlights

Note: Reconciliation from underlying to statutory results is provided on page 17.
1 The growth rate of 16% represents the loan book including originate to distribute (OTD) assets growing to £19.2 billion, however excludes the £0.6 billion loan book acquired through the ThinCats acquisition. Including this loan book represents a growth rate of 20%.

Shawbrook provides specialist finance to a broad and diverse range of customer segments, each of which values the flexibility, speed and certainty we deliver.

Metric	2025 Value	2024 Value
Underlying profit before tax	£340.5 million	£293.8 million
Statutory profit before tax	£272.2 million	£295.1 million
Underlying return on tangible equity	17.2%	17.5%
Statutory return on tangible equity	13.2%	17.6%
Underlying basic EPS	47 pence	40 pence
Statutory basic EPS	35 pence	40 pence

Disciplined growth and efficiency

Metric	2025 Value	2024 Value
Growth in loan book including OTD to £19.2 billion	16%	(2024: £15.9 billion)
Underlying cost to income ratio	39.0%	40.8%
Statutory cost to income ratio	47.9%	40.6%
Underlying cost of risk	47bps	47bps
Statutory cost of risk	51bps	47bps
CET1 ratio	12.4%	13.0%
Total capital ratio	14.8%	15.9%

Robust, resilient foundations

Shawbrook Group plc | Annual Report and Accounts 2025 2
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Section	Page
Strategic Report	4
Our Strategy	5
A specialist lending business model delivering resilient returns through the cycle	6
Medium-term guidance	7
Chairman’s statement	10
Chief Executive Officer’s statement	13
AI spotlight	14
Financial review	20
Business reviews	32
Sustainability Report	48
Creating value for our stakeholders (S172 statement)	53
Non-financial and sustainability information statement	56
Group viability statement	57
Corporate Governance Report	58
Chairman’s introduction	59
Board of Directors	62
Corporate governance	73
Audit Committee Report	78
Risk Committee Report	82
Directors’ Remuneration Report	102
Nomination and Governance Committee Report	105
Directors’ Report	109
Risk Report	110
Approach to risk management	113
Risk governance and oversight	117
Top and emerging risks	128
Principal risks	181
ICAAP, ILAAP and stress testing	182
Solvent Exit Analysis, Recovery Plan and Resolution Pack	183
Climate Report	184
Strategy	194
Governance	196
Risk management	200
Metrics and targets	206
Financial Statements	207
Independent Auditor’s Report	216
Consolidated statement of profit and loss	217
Consolidated statement of comprehensive income	218
Consolidated and Company statement of financial position	219
Consolidated statement of changes in equity	220
Company statement of changes in equity	221
Consolidated statement of cash flows	222
Notes to the financial statements	282
Other Information	283
Abbreviations	285
Other performance indicators	286
Alternative Performance Measures (APMs)	291
Country-by-country reporting

shawbrook.co.uk linkedin.com/company/shawbrook-bank

Shawbrook Group plc | Annual Report and Accounts 2025 3
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Our Strategy

Diversified markets

We operate across a broad and growing total addressable market (TAM), providing flexibility in capital deployment and access to multiple structural growth opportunities across multiple asset classes and customer segments. This diversification enables us to grow selectively and optimise returns through different economic conditions.

Specialist at scale

We deliver specialist lending through a multi-brand portfolio and diversified distribution model, combining deep market expertise with the benefits of scale. Our unified operating platform, increasingly supported by automation and AI, delivers efficiency, consistency and operating leverage as the business grows.

Technology-enabled

Our scalable, technology and data-enabled platform enhances customer experiences and supports operating leverage across both our lending and deposit businesses. This allows us to scale at low incremental cost, strengthening efficiency, while maintaining robust controls and resilience.

Credit discipline

Disciplined underwriting and forward-looking risk management underpin our approach to credit, supported by deep specialist expertise and advanced data and technology. This focus on credit excellence has delivered a low and stable cost of risk across varying macroeconomic conditions.

Entrepreneurial culture

Our experienced management team and entrepreneurial culture enable agile decision-making, disciplined execution and long-term value creation. We prioritise organic growth, complemented by selective, value-accretive M&A in adjacent specialist markets where opportunities meet our strategic, risk and returns criteria.

Diversified markets
Specialist at scale
Technology- enabled
Credit discipline
Entrepreneurial culture

Our strategy is underpinned by five strategic advantages that differentiate our business and support consistent performance. Together, they create a resilient and scalable specialist banking model, enabling us to deploy capital selectively, manage risk through the cycle, and deliver sustainable shareholder returns.

47bps median cost of risk $^2$
c.200 Early warning indicators through 140 Power BI dashboards
18% of FTE in digital roles
100% access to AI-enabled tools
13 lending verticals
Multi-brand portfolio
c.£300 billion TAM $^1$
4 core segments
25 M&A transactions since inception
8+ years average tenure of Senior Management Team

$^1$ The Group’s lending TAM grew to c.£300 billion as at 31 December 2024 based on Group information (including data based on estimates from leading consulting firm).
$^2$ Median cost of risk calculated over the period FY 2013 to FY 2025.

Shawbrook Group plc | Annual Report and Accounts 2025 4
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Distribution Channel	Loan Book Size (2025)
Direct	£4.4bn
Digital	£6.1bn $^1$
Partners	£7.6bn
Inorganic	£1.0bn

$^1$ Retail Mortgage Brands.

Differentiated propositions across diversified markets
Enabled by an efficient and scalable operating model
Underpinned by capital strength and balance sheet resilience
3
2
1

A specialist lending business model delivering resilient returns through the cycle

Highly capital generative model supporting robust capital ratios
Disciplined deployment aligned to risk appetite and returns
Resilient balance sheet with strong liquidity and funding buffers
Active optimisation across assets, funding and liquidity
Deep in-house capability across funding, liquidity and risk
Flexible access to diversified funding sources

Segment	Loan Book
SME	£4.4bn
Retail Mortgage	£6.1bn $^1$ loan book
Brands	£7.6bn loan book
Real Estate	£1.0bn loan book

Shawbrook Group plc | Annual Report and Accounts 2025 5Estate Consumer Finance Note: Segmental loan book splits presented on this page do not total the Group’s total loan book number due to rounding. 1 Including the carrying amount of all structured asset sales derecognised through our originate to distribute strategy. Our differentiated proposition supports strong demand and attractive margins, funded efficiently through our deposit franchise. Data-led risk management, scalable technology and disciplined capital allocation underpin resilient growth and the consistent delivery of sustainable, attractive risk-adjusted returns. Credit excellence and disciplined risk management Specialist teams Data-driven decisioning Clear risk ownership Cross-functional Modular technology AI and automation A resilient, deposit-led funding base supporting lending growth through the cycle


£20.2bn total funding	£18.4bn deposits
• Financial sponsors	• Speciality finance
• Corporate leverage	• Asset based lending
• Development finance	• Digital SME lending
• Buy-to-let	• Commercial investment
• Bridging	• Buy-to-let
• Owner- occupied mortgages	• Motor finance
• Unsecured personal loans

A common operating architecture enabling efficient growth and consistent delivery

Shawbrook Group plc | Annual Report and Accounts 2025 5

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Medium-term guidance

Metric	Guidance
Loan book growth 1	Low double digits per annum
Underlying return on tangible equity	High-teens
Cost to income ratio	Mid-30s% with opportunity for further cost optimisation thereafter
Dividend policy and distributions	Maiden ordinary dividend in respect of FY26 results, payable in 2027; progressive build thereafter
Underlying profit before tax growth	Mid-high teens growth per annum
CET1 ratio	12.0-13.0%

1 Including originate to distribute (OTD) assets.

Shawbrook Group plc | Annual Report and Accounts 2025 6

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

“Our premium proposition, built on delivering specialist expertise and high-quality service, enabled us to continue to support key parts of the UK economy, particularly SMEs and professional property investors. Our model operates at scale, allowing us to serve our customers consistently across evolving market conditions, while maintaining a prudent approach to risk and capital.“

John Callender
Chairman

Chairman’s statement

Shawbrook Group plc | Annual Report and Accounts 2025 7

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Our entrepreneurial culture and mindset

Our people and culture remain central to Shawbrook’s performance and long-term success. As an ambitious specialist bank, our entrepreneurial mindset is a defining strength of the Group. It enables us to innovate and reinforces accountability across the organisation. We seek to foster an inclusive environment where colleagues feel empowered to think like owners, remain confident in the strength of our premium proposition, and are ambitious about what Shawbrook can achieve. Engagement remains strong, with high levels of pride and advocacy reflected in our most recent employee engagement survey, which recorded a score of 78%.

A robust and resilient balance sheet

Resilience remains at the core of our strategy. During 2025, we maintained strong capital and liquidity positions and a well-diversified funding base, underpinned by our savings proposition and supported by selective use of wholesale markets. Customer behaviour continues to evolve, with an increasing number of savers accessing our products through wealth platforms and digital marketplaces, as well as directly. In response, we have strengthened our relationships with these partners to ensure customers can access Shawbrook savings in the way that best suits their needs. This demonstrates our ability to leverage and adapt our distribution capabilities in line with customer insight, further strengthening and diversifying our funding proposition. This strength, together with conservative risk management and credit excellence, leaves the Group well placed to deliver sustainable growth. Further information on our risk profile, capital and funding is set out in the Risk Report starting on page 109.

2025 was a milestone year for Shawbrook. We delivered another strong performance with underlying profit before tax of £340.5 million (£272.2 million on a statutory basis). Our return as a listed company marked an important step for the Group, providing a robust platform from which to continue the disciplined execution of our strategy. The strength of our model allowed us to continue growing responsibly, while generating an underlying return on tangible equity of 17.2%, (13.2% on a statutory basis) and maintaining our prudent approach to risk and capital. This is our first Annual Report and Accounts since re-listing. Admission to trading on the London Stock Exchange has broadened and diversified our shareholder base. On behalf of the Board, I would like to welcome the new investors who joined our share register, and thank our existing shareholders for their continued support.

Shawbrook Group plc | Annual Report and Accounts 2025 8

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Creating value for our stakeholders

One of the Board’s primary duties is to promote the long-term success of the Company for the benefit of its shareholders and wider stakeholders. During the year, we engaged extensively with both existing and prospective investors. Our return to the public markets provided an opportunity to meet a broad range of new shareholders, including through several investor roadshows and capital markets events. These interactions enabled us to explain our strategy, performance and approach to risk and sustainability, while also listening carefully to investor feedback. Directors engaged with customers, colleagues and distribution partners across the UK, and we maintained a regular and open dialogue with our regulators. Insights from these engagements, together with our wider stakeholder interactions, informed Board discussions and decision-making throughout 2025. Further examples of how the Board has fulfilled its obligations under Section 172 of the Companies Act 2006 can be found on page 48.

Advancing our sustainability agenda

Our approach to sustainability reflects the role Shawbrook plays in supporting customers who are often underserved by mainstream lenders, alongside continued investment in our people and a considered response to evolving regulatory expectations. Through this approach, we seek to build a resilient business that creates long-term value for our stakeholders and the wider UK economy. We recently refreshed our sustainability strategy to ensure it remains aligned with and embedded within the Group’s strategy. It is structured around three clear priorities: empowering our people, strengthening our communities and securing a sustainable future. Further detail is set out in our Sustainability and Climate Reports on pages 32 and 183.

Looking ahead

We enter 2026 with strong momentum, a resilient balance sheet and a clear strategic direction. The external environment is likely to remain volatile, with heightened geopolitical tensions and continued uncertainty around interest rate and inflation trajectories. While the precise implications of these developments are difficult to predict, Shawbrook is well positioned to operate confidently through periods of change and uncertainty. AI will also continue to test, challenge and reshape our business and the broader economy, and we are preparing accordingly. Our sustained investment in technology and data provides strong foundations for the responsible, scalable adoption of AI across the business, enhancing our proposition, improving operational efficiency and strengthening risk management. Combined with our focus on digital capability, our proven business model, strong capital position and differentiated specialist proposition, this gives the Board confidence in the Group’s ability to deliver sustainable, long-term value for shareholders. On behalf of the Board, I thank our colleagues for their exceptional commitment and efforts during 2025, and our customers, partners and shareholders for their continued trust.

John Callender
Chairman

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FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Chief Executive Officer’s statement

“During 2025, we continued to deliver attractive returns, with underlying profit before tax of £340.5 million and an underlying return on tangible equity of 17.2%. The scale and diversity of our portfolio, underpinned by a performance-driven, entrepreneurial culture, continues to provide resilience and opportunity.“

Marcelino Castrillo
Chief Executive Officer

Shawbrook Group plc | Annual Report and Accounts 2025 10

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Growth in specialist markets

In 2025, we continued to deliver the embedded growth inherent in our business by focusing on what Shawbrook does best – providing specialist finance in markets where our knowledge, speed of decision- making and relationship-led approach differentiate us. Underpinned by disciplined origination and credit expertise, our loan book grew by 16% 1 , reflecting strong customer demand and consistent execution. The scale and diversity of our portfolio continues to provide resilience and opportunity throughout the cycle, positioning us well for sustained momentum in the years ahead. We also continued to execute a selective acquisition strategy, focused on bringing high quality brands, businesses and capabilities into the Group to enhance our core franchise and long-term returns.Each transaction is assessed rigorously against our return, risk and integration criteria to ensure it strengthens the Group. During 2025, we completed the acquisition of ThinCats Limited (ThinCats), a leading specialist SME lender. Our largest acquisition to date, integration is progressing well, with c.90% of expected synergies realised. Together with the subsequent acquisition of the fintech platform, Playter, and its AI-enabled business lending platform, we have expanded our capability in a key market and added complementary technology and talent to our wider SME business.

Welcome, to our 2025 Annual Report and Accounts, the first since returning to the public markets. During 2025, we continued to deliver growth alongside attractive returns, with underlying profit before tax of £340.5 million (£272.2 million on a statutory basis) and an underlying return on tangible equity of 17.2% (13.2% on a statutory basis). This performance, alongside the completion of our Initial public offering (IPO) and inclusion in the FTSE 250, marks an important milestone for the Group. It was encouraging to see the extent to which investors recognised the consistency of performance and future potential of the business through our IPO. Being a listed company enhances our brand visibility, supports the attraction and retention of talent, and provides access to a broader population of both domestic and international investors.

Shawbrook Group plc | Annual Report and Accounts 2025 11

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Technology and AI delivering positive customer and colleague experiences

Continued focus on our digital capabilities, including significant advancements in the use of AI, remains central to our strategy, supporting operating leverage, decision-making and our risk management. AI augments the specialist judgement of our experienced colleagues, with core activities such as valuation handling and complaints handling now supported. By automating repeatable processes and surfacing contextual insights, we are increasing capacity for colleagues to focus on client engagement and risk management. We remain cognisant of AI’s impact on the broader economy and continue to assess potential credit risks and implications arising from AI-driven disruption and structural change. We have also continued to invest in our proprietary platforms, and in 2025 we completed the full roll-out of our Digital Savings Platform and made significant progress in the delivery of new core banking technology.

Capital strength and credit excellence

Our performance continues to be underpinned by disciplined credit management. Our cost of risk remained stable, reflecting consistent underwriting standards and forward-looking approach to risk management. We use data, technology and AI to proactively manage credit risk, supported by a comprehensive set of early warning indicators that enable us to identify potential issues early and act decisively. This approach underpins our ability to deliver attractive risk-adjusted returns through different market conditions. We continue to benefit from a well-diversified deposit base, access to multiple funding sources and a strong capital and liquidity position. The early repayment of the TFSME facility in July reflects the strength and flexibility of our balance sheet. We remain focused on disciplined capital management, allocating it to opportunities that meet our return and risk criteria while preserving balance sheet strength.

Entrepreneurial mindset and culture

Our strategy is underpinned by a performance- driven, entrepreneurial culture and the commitment of our people. We empower teams to innovate and continuously develop our propositions, while maintaining clear accountability and strong risk discipline, which is critical to delivering consistent results over time. We believe this culture is a source of competitive advantage, and continue to invest in our people to support our ability to attract, develop and retain exceptional talent.

Looking ahead

As we look ahead, we remain focused on delivering the guidance we set at IPO. We enter 2026 with clear priorities and a resilient, scalable platform. A key strategic priority for 2026 and beyond will be sustained, targeted investment in technology and data. By embedding AI into our model and culture, we are enhancing operating efficiency, credit capability and portfolio resilience. As a listed company, we are well positioned to continue delivering disciplined growth and sustainable risk-adjusted returns for shareholders, while supporting our customers and contributing to economic growth across the UK.

Marcelino Castrillo
Chief Executive Officer

Shawbrook Group plc | Annual Report and Accounts 2025 12

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Colleague adoption and culture

Embedding AI is as much cultural as technological. Adoption has been supported through structured training, clear usage policies and strong executive sponsorship. We are focused on scaling the highest-value use cases and embedding GenAI more deeply into day-to-day decision-making processes. In 2025, we continued to embed AI across the organisation to enhance customer experience, strengthen credit consistency and support operating efficiency, within a defined governance framework. AI-enabled tools support core activities, including valuation handling, broker engagement and customer support. Importantly, AI remains an enabler of judgement, not a substitute for it. By automating repeatable processes and surfacing relevant insight more effectively, we increase capacity for our experienced colleagues to focus on nuanced credit assessment, expert structuring and relationship- led support. AI deployment is supported by scalable data architecture and in-house technical capability. Model risk management, data integrity, explainability and ethical deployment are all embedded in our approach.

AI spotlight

	availability, with 55% of all employees active since launch	internally developed GPTs	GPT messages per month, with leading use cases spanning call quality analysis, credit paper review and complaints correspondence
100%	c.200	1	c.13,000
1

As at end of February 2026.

Managing AI-related credit risk

We recognise that AI-driven structural change may affect certain sectors over time. We assess exposure to sectors most sensitive to technological disruption and are incorporating this analysis into our portfolio monitoring and underwriting approach. Our approach combines:
* Human-authorised credit decisions
* Governance and monitoring of AI models for accuracy, explainability and performance
* Clear accountability for ethical and responsible deployment

AI in action across the Group

Selected AI deployments include:

Deployment	Impact
Savings secure message AI agent	Reduced average response times by 50%, improving customer experience and service consistency.
Retail Mortgage valuation AI agent (TML)	Reduced valuation assessment time by 67%, increasing underwriting capacity while maintaining human approval.
Software delivery	50% increase in software delivery in 2025 with the same headcount, with engineers leveraging AI to explore ideas, create prototypes and produce and test code more rapidly.
Quality control automation (Savings)	Reduced call review time by 60%, strengthening compliance monitoring and customer outcome oversight.

These use cases increase processing capacity and enhance risk consistency, supporting operating leverage and improved customer outcomes. AI is allowing our software engineers to spend more time in the business with colleagues, exploring ideas and challenging existing constraints, which is essential to retaining our specialist edge and customer focus.

Shawbrook Group plc | Annual Report and Accounts 2025 13

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Financial review

“2025 was an important year for Shawbrook. We delivered a strong set of results that reinforced our position as a leading specialist bank and marked our return to the public markets. We maintained strong momentum throughout the year, delivering further efficiency gains and strong risk-adjusted returns, alongside loan book growth of 16% 1 .”

Dylan Minto
Chief Financial Officer

Shawbrook Group plc | Annual Report and Accounts 2025 14

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Performance indicators

Definitions of all metrics included in the following tables are provided on pages 285 to 290.

Financial performance metrics

In the year ended 31 December 2025, there are total underlying adjustments of (£68.3 million) (2024: £1.3 million) (see page 17). The following table is shown on both an underlying and statutory basis.# Underlying Statutory 2025 2024 Change % 2025 2024 Change %
Gross asset yield (%) | 9.00 | 9.84 | (0.84) | 9.00 | 9.84 | (0.84)
Liability yield (%) | (4.77) | (5.57) | 0.80 | (4.79) | (5.57) | 0.78
Net interest margin (%) | 4.23 | 4.27 | (0.04) | 4.22 | 4.27 | (0.05)
Cost to APE efficiency ratio (%) | (1.65) | (1.74) | 0.09 | (2.02) | (1.73) | (0.29)
Cost to income ratio (%) | 39.0 | 40.8 | (1.8) | 47.9 | 40.6 | 7.3
Cost of risk (%) | (0.47) | (0.47) | - | (0.51) | (0.47) | (0.04)
Return on lending assets before tax (%) | 2.10 | 2.06 | 0.05 | 1.68 | 2.07 | (0.39)
Return on tangible equity (%) | 17.2 | 17.5 | (0.3) | 13.2 | 17.6 | (4.4)
Return on tangible equity (calculated using actual TNAV) (%) | 16.3 | 16.7 | (0.4) | 12.4 | 16.8 | (4.4)
Earnings per share (pence) | 47 | 40 | 15.5 | 35 | 40 | (12.3)

Our rigorous approach to cost management allowed us to continue investing while reducing our underlying cost to income ratio to 39.0%, supporting an underlying return on tangible equity of 17.2%. Our forward-looking approach to risk management contributed to a stable underlying cost of risk of 47bps. We further strengthened our capital and liquidity position through the successful raising of primary capital at IPO, the completion of two additional originate to distribute ‘(OTD)’ transactions, and the full repayment of our drawings under the Bank of England’s TFSME scheme in July 2025. Our strong capital base also gives us confidence in meeting the Basel 3.1 requirements ahead of their expected 2027 implementation. We enter 2026 with strong momentum, a clear strategy and a resilient balance sheet. Our scalable platform and prudent approach to risk management give us confidence in delivering sustainable growth and attractive returns for our shareholders.

Shawbrook Group plc | Annual Report and Accounts 2025 15
FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

Financial position metrics

2025	2024	Change %
Assets and liabilities
Loan book (£m)	17,794.7	15,206.4
Loan book (£m) including OTD assets	19,167.2	15,927.8
Average principal employed (£m)	16,182.2	14,290.4
Customer deposits (£m)	18,353.5	15,804.0
Wholesale funding (£m)	1,842.9	1,925.3
Liquidity
Liquidity coverage ratio (%)	147.2	176.0
Capital and leverage
Common Equity Tier 1 capital ratio (%)	12.4	13.0
Total Tier 1 capital ratio (%)	13.4	14.2
Total capital ratio (%)	14.8	15.9
Leverage ratio (%)	7.8	8.1
Risk-weighted assets (£m)	12,003.2	9,946.6

¹ Capital and leverage metrics are shown on a transitional basis after applying IFRS 9 transitional arrangements. A comparison of the Group’s reported capital metrics (including transitional adjustments) to the capital metrics as if IFRS 9 transitional arrangements had not been applied (the ‘fully loaded’ basis) is provided on page 171.

Shawbrook Group plc | Annual Report and Accounts 2025 16
FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

Summary of statutory results for the period

2025 £m	2024 £m	Change %
Operating income ¹	1,457.1	1,405.9
Interest expense and similar charges	(772.7)	(796.1)
Net operating income	684.4	609.8
Administrative expenses	(267.4)	(248.8)
Impairment losses on financial assets	(76.7)	(67.2)
Provisions for liabilities and charges	0.2	-
Total operating expenses	(343.9)	(316.0)
Underlying profit before tax	340.5	293.8
Underlying adjustments
Provisions for liabilities and charges	(1.0)	5.3
Corporate activity costs	(17.2)	(4.0)
IPO related costs	(20.3)	-
IFRS 2 modification	(29.8)	-
Total underlying adjustments	(68.3)	1.3
Statutory profit before tax	272.2	295.1
Tax	(76.7)	(75.2)
Statutory profit after tax	195.5	219.9

¹ Includes interest income calculated using the effective interest rate method, other interest and similar income, net operating lease income, net fee and commission income, net gains on derecognition of financial assets measured at amortised cost, net gains/(losses) on derivative financial instruments and hedge accounting and net other operating income/expense.
² nm (not meaningful) indicates that a percentage comparison is not meaningful due to the size of the prior period balance or because the movement is between positive and negative amounts.

The following adjustments have been excluded from the underlying results:
* Provisions for liabilities and charges:
* Motor finance provision charge: a £1.0 million provision recognised in 2025 in respect of potential motor finance commission redress (2024: £nil) (see Note 35 of the Financial Statements).
* Timeshare provision recovery: no further provisions were taken in 2025, (2024: £5.3 million credit) (see Note 35 of the Financial Statements).
* Corporate activity costs: costs incurred in connection with strategic corporate transactions during the year, primarily relating to the acquisition of ThinCats. These include transaction and integration-related costs, certain employee-related costs arising directly from the acquisition, incremental funding costs incurred in advance of completion in respect of funding raised ahead of deployment into the acquired loan portfolio, and the recognition on acquisition of a £6.3 million expected credit loss allowance in respect of the acquired loan portfolio, reflecting alignment to the Group’s IFRS 9 provisioning methodology (2024: primarily costs relating to the acquisition of JBR) (see Note 10 of the Financial Statements).
* IPO related costs: costs incurred in relation to the listing of the Group on the London Stock Exchange main market and recognised in the income statement. A further £2.5 million was recognised in equity (2024: £nil).
* IFRS 2 modification: following the IPO, this cost relates to the share scheme which vested upon listing in 2025 (2024: £nil). The total profit and loss charge of £29.8 million includes £26.1 million recognised as a credit to equity in respect of share-based payment awards, with the balance relating to employers’ national contributions on those awards (see Consolidated Statement of Changes in Equity in the Financial Statements).

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Financial commentary

Profit growth driven by disciplined execution

Underlying profit before tax increased by 16% to £340.5 million (2024: £293.8 million), reflecting continued momentum across our specialist diversified proposition and disciplined cost management. This performance delivered an underlying return on tangible equity of 17.2% (2024: 17.5%), demonstrating the strength and efficiency of our business model. Underlying net operating income increased to £684.4 million (2024: £609.8 million), supported by strong net lending with the loan book growing by 16% ¹ to £19.2 billion (2024: £15.9 billion), underpinned by a targeted origination strategy and expanding market share. The acquisition of ThinCats in September 2025 brings an experienced lending team into Shawbrook, increasing our share of the SME market.

Funding costs declined during the period, reflecting a lower interest rate environment following four reductions in the Bank of England base rate to 3.75%. While asset repricing in response to market dynamics resulted in a reduction in gross asset yield to 9.00% (2024: 9.84%) the impact was offset by a reduction in underlying liability yield to 4.77% (2024: 5.57%), resulting in a stable net interest margin of 4.23% (2024: 4.27%).

Operating leverage improved through efficiencies of scale

Underlying administrative expenses of £267.4 million (2024: £248.8 million), remain broadly stable year on year when excluding post-acquisition operating costs for ThinCats, Playter, JBR and employee-related exit costs. The Group exited the year with a favourable cost trajectory, reflecting the normalisation of one-off and integration-related costs and the increasing benefits from previously implemented efficiency initiatives. This provides a foundation for continued cost optimisation in line with our mid-30s cost to income ratio medium-term guidance, with further optimisation opportunities identified beyond that range. Strategic investment in AI, digital and data remains a key priority as we continue to enhance our premium proposition, improve efficiency, and support long-term sustainable growth. Despite these ongoing investments, operating leverage improved, with the underlying cost to income ratio improving to 39.0% (2024: 40.8%) and the underlying cost to APE efficiency ratio reducing to 1.65% (2024: 1.74%).

Factoring in the latest developments for Motor Finance, we have taken a provision for the Group of £1.0 million (2024: £nil) representing our minimal exposure to Motor business historically. No additional provision was taken during the period in relation to Timeshare liabilities, with existing provision levels considered appropriate at this stage and anticipated material mitigation of exposure via insurance.

Stable credit performance supported by prudent risk management

Our data-driven approach to risk management continues to support stable credit performance, with loan book oversight remaining a core area of focus. Following a review of our impairment models, we retained the weightings applied as of 31 December 2024, with combined probability of downside and severe downside scenarios remaining at 40%. Underlying cost of risk remained stable at 47bps (2024: 47bps), including 31bps relating to loan write-offs (net of recoveries) (2024: 24bps). The arrears ratio was broadly stable at 1.6% (2024: 1.5% 2 ), with stage 3 balances, including POCI loans, falling from 3.7% in 2024 to 3.4% due to certain write-offs and refinances in SME and Real Estate. Underlying impairment losses on financial assets were £76.7 million (2024: £67.2 million), broadly stable in the context of portfolio growth and reflecting the continued strength of our credit underwriting and asset quality.Statutory impairment losses were £83.0 million (2024: £67.2 million), including a £6.3 million day one expected credit loss charge recognised on the acquisition of ThinCats, which has been excluded from underlying results as it relates to the initial fair value recognition of the acquired £0.6 billion loan book.

1 The growth rate of 16% represents the loan book including originate to distribute (OTD) assets growing to £19.2 billion, however excludes the £0.6 billion loan book acquired through the ThinCats acquisition. Including this loan book represents a growth rate of 20%.
2 The arrears ratio has been updated to exclude Purchased or Originated Credit-Impaired (POCI) loans. Comparative figures have been restated on a consistent basis. The full definition of our arrears metric is provided on page 285.

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Robust capital position and diversified funding

Our capital-accretive model underpins sustainable growth, supported by conservative capital management and funding diversification that provides attractive options for future expansion. Our Common Equity Tier 1 ratio was 12.4% (31 December 2024: 13.0%), and our total capital ratio was 14.8% (31 December 2024: 15.9%). The decrease in capital ratios is primarily a result of growth in risk-weighted assets of £2,056.6 million, driven by an increase in organic lending and acquisitions during the year. This was partially offset by higher retained earnings and IPO proceeds of £50 million, before transaction costs, further supporting our capital position.

Total regulatory capital requirements, including CRD buffers, remained at 13.74%, including a Pillar 2A requirement of 1.24%. With total regulatory capital of £1,776.7 million, we remain comfortably above regulatory requirements and well positioned to support our customers, deliver on our strategic priorities, and absorb expected potential future changes to regulatory capital requirements under Basel 3.1.

During the period, we successfully refinanced our £75 million subordinated Tier 2 note under the Euro Medium Term Note Programme, maintaining an optimised and efficient capital structure.

Our balance sheet remains predominantly funded by retail and SME deposits, providing a stable deposit base of £18.4 billion (31 December 2024: £15.8 billion), representing 16% growth year on year. Continued investment in technology and data, combined with our trusted brand and high service quality, continues to help attract and retain depositors. Beyond the digitalisation of our Savings Platform, we continued to further diversify our funding sources through partnerships with leading digital platforms. During the period, we strengthened our distribution network through a new relationship with Raisin and partnered with Hargreaves Lansdown to deliver its first branded savings product.

Our wholesale funding was primarily sourced through the Bank of England’s TFSME programme during the first half of 2025, with the remaining balance fully repaid in July 2025. To support liquidity management, we maintain access to the Bank of England’s Sterling Monetary Framework, including a reserves account.

We completed two additional securitisations during the year, totalling £0.9 billion of property assets in our Retail Mortgage Brands business, bringing our cumulative total to 12 transactions to date. In May 2025, we completed a securitisation of £0.6 billion TML buy-to-let and owner-occupied assets, followed by a securitisation of £0.3 billion predominantly owner-occupied BML assets in December 2025. These transactions form part of our Retail Mortgage Brands’ originate to distribute strategy and reinforce our ability to raise funding efficiently through the wholesale markets. Retention of the Class A notes provides further diversification of liquidity sources while generating a combined gain on sale of c.£35 million.

We continue to maintain a prudent liquidity position, with our liquidity coverage ratio (LCR) at 147.2% (31 December 2024: 176.0%), comfortably above the regulatory minimum. The reduction primarily reflects the proactive reconstitution of our liquidity pool to include Bank of England eligible non-cash collateral. While this high-quality collateral enhances operational flexibility by being quickly convertible to cash if required, it is not recognised as High Quality Liquid Assets under the LCR regime.

Looking ahead

We enter 2026 with a robust balance sheet and a clear focus on disciplined execution. Our scalable platform, specialist expertise and proven track record give us confidence in our ability to deliver attractive returns in line with our medium-term targets. As a listed company, we will continue to invest in our technology and talent, strengthen our position in core markets and expand selectively where aligned with our strategic and returns criteria, supporting UK businesses and households while creating long-term value for all stakeholders.

Dylan Minto
Chief Financial Officer

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Business review Commercial


£4.4bn loan book SME	£7.6bn loan book Shawbrook Real Estate

Our Commercial offering combines our SME and Shawbrook Real Estate lending propositions, supporting UK businesses and experienced professional property investors to seize growth opportunities and finance key events. Through a relationship-led approach, deep sector expertise and a blend of innovative technology and human talent, we deliver tailored financial solutions that address the often complex needs of our customers, helping them to achieve sustainable, long-term success. Additional financial information regarding the performance of each reportable segment can also be found in Note 11 of the Financial Statements.

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Business review Commercial SME

Our proposition

Structured lending
* Unitranche, event-driven finance targeting the sponsor market to fund investment in established SMEs.
* Annual recurring revenue finance provides finance to sponsor-backed SMEs, leveraging reliable, contracted revenue streams.

Speciality finance:
* Wholesale finance and block discounting provide committed and uncommitted lending to UK non-bank specialist lenders within defined eligibility criteria.
* Fund finance offers a range of bespoke debt solutions including net asset value and investor call bridge lending to specialist debt and equity funds.

Corporate leverage:
* Commercial loans offer senior secured debt term loans and revolving credit facilities to owner-managed SMEs to support acquisitions, refinancing and other strategic events.
* Healthcare finance provides a range of funding solutions to regulated healthcare providers.
* Transitional capital provides flexible debt packages across the capital structure to reduce equity requirements and support increased investor returns.

Asset based lending
* Asset based lending provides funding secured against a range of business assets to support working capital, strategic investment and change of ownership.

Development finance
* Development finance provides funding to experienced property developers for the build or refurbishment of residential, semi-commercial and commercial property assets for sale or hold.

Competitive and structural advantages
* Long-standing market and credit experience: customers value our lending expertise and insights.
* Broad range of funding solutions to support multiple stages of customer growth: underpinned by deep knowledge of the underlying asset classes.
* Dedicated credit and portfolio management oversight: combining ‘always on’ oversight with early and extensive support.
* Broad introducer network: strong relationships with a broad network of specialist advisers, introducers and brokers.
* Digital application and fulfilment with embedded credit decisioning: fast decisioning enabling slick customer journeys through our Digital SME offering.
* Provides technology-enabled finance solutions to established SMEs through term lending products. Our model combines deep credit expertise, disciplined underwriting and active portfolio management, which supports strong asset quality and resilience through the cycle.

Our markets and customers

The SMEs we support make a significant contribution to the UK economy, including regional housebuilders, specialist non- bank lenders and established businesses which account for less than 1% of businesses in the UK, but collectively drive nearly a third of SME turnover and support over two million jobs. The segments we focus on benefit from embedded repeat demand, particularly among property developers, financial sponsors and speciality finance providers who value the certainty, structuring expertise and relationship-led approach we deliver.

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Business review Commercial SME

2025 achievements

We strengthened our SME platform during 2025 through targeted acquisitions, capability enhancements and continued focus on disciplined execution.# Strengthening and expanding our propositions

Expanded coverage, origination capability and talent through the strategic acquisition of ThinCats, adding a £0.6 billion loan book to our existing SME portfolio.
Strengthened our digital SME proposition with new technology and specialist talent through the acquisition of Playter, an AI-enabled fintech lending platform.
Enhanced our Digital SME proposition, extending eligibility criteria and increasing the maximum loan size to £350,000 within defined risk parameters, supported by data-led decisioning.
Embedded our risk distribution strategy, supporting capital efficiency and enabling longer-term support for SME clients as they scale.
Completed the roll-out of a new Credit Management Platform, enhancing portfolio oversight and strengthening credit decision-making across all areas of structured lending.

Advancing our digital, data and platform capabilities

Maintaining discipline and portfolio resilience

Looking ahead

We enter 2026 well positioned, supported by a healthy pipeline and sustained demand across our SME markets. Our expanded SME proposition, strengthened by the acquisitions of ThinCats and Playter, enhances our capabilities across specialist lending and digital channels. In 2026 we are investing in enhanced CRM capabilities to empower our expert teams to deliver more for our customers, deepen relationships and scale efficiently. A range of macroeconomic and political factors will shape the SME market during 2026. Public policy and government support for SME growth, including access to finance initiatives; inflationary pressures and monetary policy; and broader market dynamics will influence business confidence and borrower appetite. We continue to monitor the market closely and maintain a prudent approach to credit and capital allocation. Our focus remains on sustainable, disciplined growth, deepening relationships with existing clients while selectively expanding our presence across SME markets where we have expertise and strong risk visibility.

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Business review

Commercial Real Estate markets

Our Real Estate proposition delivers specialist funding solutions to portfolio landlords and experienced property professionals who generate diversified income from multi-property portfolios across residential buy-to-let and commercial investment. We offer a broad range of residential, commercial and short-term loan products through an established network of commercial brokers. Our distribution reach, combined with deep real estate expertise and disciplined underwriting, enables us to serve a range of property investors and loan sizes. Continued investment in our digital and data capabilities supports consistent and efficient execution across the lending lifecycle, from origination to complex product transfers.

Specialist credit underwriting: combining experienced judgment with structured risk management.
Deep market expertise: leverage deep expertise to structure, underwrite and manage facilities for larger and more sophisticated cases.
Range of funding solutions: supporting professional investors across different stages of their portfolio and business development.
Digital and data capabilities: enables efficient and consistent execution, reducing application to completion times for customers.
Extensive intermediary network: strong and long-standing relationships with a broad range of specialist intermediaries.

Our markets and customers

Competitive and structural advantages
Targeting professional property investors and experienced landlords often operating at scale. Primarily distributed through specialist brokers, leveraging our deep understanding of professional borrower requirements and portfolio management.	Buy-to-let	Bridging
Commercial investment

Short-term secured lending for professional property investors and landlords undertaking refurbishment, conversion or asset repositioning. Our lending spans residential, commercial and semi-commercial properties. Where appropriate, customers may refinance onto a long-term mortgage following completion of works, supporting continuity of funding.
Designed to support experienced property investors across semi- commercial and commercial assets with an average property value of c.£0.6 million. Our customers typically have established portfolios and seek funding to manage and reposition their assets over the long-term.

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Business review

Commercial Real Estate 2025 achievements

We continued to develop our Real Estate proposition during 2025, enhancing capability, operational infrastructure and portfolio oversight.

Strengthening and expanding our propositions

Expanded our structured real estate proposition, onboarding customers requiring tailored facilities for larger and more complex portfolio transactions up to £44 million.
Launched a commercial trading proposition, providing SMEs with straightforward mortgage lending to refinance or acquire the premises which they trade from.
Extended our proprietary Lending Hub origination platform to include bridging finance, with the platform now managing 61% $^1$ of total Real Estate cases, supporting greater speed and consistency in origination.
Enhanced our product transfer proposition, with 99% $^2$ of eligible buy-to-let and commercial mortgage transfers offered within one working day of application, supporting a high-quality customer experience.
Further embedded automated decisioning, AVMs and digital underwriting across the digital buy-to-let customer journey, with 36% $^3$ of loans benefiting from an AVM.

Advancing our digital, data and platform capabilities

Maintaining discipline and portfolio resilience

$^1$ As at December 2025.
$^2$ 99% of product transfer offers were issued on the same day as application (AIP to FMO), since launch in 2025.
$^3$. 36% of buy-to-let loans originated in 2025 utilised an Automated Valuation Model (AVM).

Looking ahead

Our Real Estate proposition is positioned to build on the progress made in 2025, supported by continued investment in innovation, underwriting capability and deepening broker relationships. The commercial property market is continuing to recover following improvements in rents and capital values. Regulatory change in the buy-to-let market is accelerating consolidation, as landlords adapt to the Renters’ Rights Act 2025 and anticipated higher EPC standards, with property professionals evolving their business models and now representing an increased proportion of the market as amateur landlords continue to retrench. Focus remains on our structured real estate proposition, applying specialist expertise to support larger and more sophisticated financing needs, underpinned by a disciplined approach to growth and risk. Continued investment in proprietary technology, including Lending Hub, will also further enhance speed, consistency and service quality across our product range and throughout the end-to-end lending journey.

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£6.1bn $^1$ loan book	£1.0bn loan book
Retail Mortgage Brands	Consumer Finance

Business review

Retail

Our Retail offering comprises our Retail Mortgage Brands, Consumer Finance and savings products, providing a diversified mix of specialist lending and funding. Across our retail lending businesses we operate in specialist segments, supported by data and technology to deliver consistent underwriting, pricing and seamless customer journeys. Our savings proposition provides a stable and diversified funding base through a range of digitally supported products, available direct or through carefully selected distribution partners including wealth managers and online marketplaces.

Savings
$^1$ Including the carrying amount of all structured asset sales derecognised through our originate to distribute strategy. Key metrics and a review of each reportable segment is provided in Note 11..	£18.4bn deposits

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Data-informed decisioning supported by experienced underwriters: combining technology with human expertise to assess individual customer circumstances.
Established intermediary network: long-standing relationships and solid credibility with brokers across the UK, managed through data-driven customer relationship management capabilities.
Digital-led business model: enabling adjustments to pricing and criteria in line with market conditions.
Inclusive eligibility criteria: supporting customers with a range of income types and credit histories within defined risk parameters.

Our markets and customers

Competitive and structural advantages

Business review Retail

Retail Mortgage Brands markets

Our Retail Mortgage Brands, TML and BML, provide owner-occupied and buy-to-let mortgages to individuals and property professionals across the UK, distributed through a large and established network of intermediaries. Our proposition complements our broader Real Estate offering and enables us to serve a wide range of customers, including those with complex income and credit profiles.

TML buy-to-let

Provides buy-to-let mortgages to support retail landlords seeking efficient mortgage solutions.# TML and BML owner-occupied mortgages

• Provides owner-occupied mortgages to support customers looking to purchase their first property, move home or remortgage. Customers include employed, self-employed and those with non-standard income profiles or those with historical financial challenges.

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Business review Retail

Retail Mortgage Brands

2025 achievements

During the year, we progressed the integration of our Retail Mortgage Brands, leveraging shared data, technology and expertise to enhance operational consistency and capability across the specialist mortgage market.

• Consolidated in-life servicing technology across TML and BML, establishing a unified servicing model that improves consistency and efficiency across both brands.
• Introduced a dedicated broker contact line, improving access to relationship managers and streamlining broker support.
• Established the BML key client and specialist service team, to strengthen service delivery across the mortgage lifecycle.
• Advanced AI-driven automation within early-stage valuation and underwriting, improving decision speed, reducing manual effort and laying the foundations for more streamlined underwriting journeys.
• Implemented automated income verification within TML, for owner-occupied cases, reducing manual processing and completion times by 17% 1 .
• Continued to leverage the TML digital Customer Relationship Management Platform to support broker engagement through targeted communications.
• Refined owner-occupied lending criteria, including selective use of higher loan-to-income multiples within established affordability and stress-testing requirements.

1 Based on a comparison of total TML owner-occupied mortgage applications processed before and after the implementation of automated income verification during 2025.
2 Based on UK Finance Mortgage Market Forecast data 2026 to 2027.

Looking ahead

We expect continued demand across our specialist propositions in 2026, supported by refinancing activity as around 1.8 million fixed-rate mortgages mature 2 , alongside sustained demand from customers with non-standard income profiles. This environment presents an opportunity to grow efficiently, underpinned by the roll-out of our new origination platform and the targeted application of AI to enhance automation, consistency and processing times, contributing to a leaner operating model. We will continue to evolve our specialist propositions, broaden customer reach and enhance distribution and servicing capabilities, intended to deliver a consistently strong customer experience and improved retention. In parallel, we will continue to advance our OTD strategy, enabling on-demand securitisation and aligning profitability while reducing exposure to market volatility. Together, these priorities support sustainable growth and reinforce our position in the specialist mortgage market.

Strengthening and expanding our propositions Advancing our digital, data and platform capabilities Maintaining discipline and portfolio resilience

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Business review Retail

Consumer Finance markets

Our Consumer Finance proposition supports UK consumers and micro-business owners through a range of specialist lending products. Informed by market insight and data-driven underwriting, we operate a scalable distribution model underpinned by established partnerships with dealers, brokers and digital marketplaces.

• Data-informed assessment supported by experienced underwriters: combining specialist expertise with structured credit processes.
• Established multi-channel distribution: including dealer, broker and digital partnerships.
• Consistent service model: multiple customer touchpoints across the end-to-end journey enable a more tailored and responsive customer experience.
• Automated processes and data strategies: automation and advanced data strategies drive efficient, streamlined journeys.

Our markets and customers

Competitive and structural advantages
Motor finance
Unsecured personal lending

• Provides unsecured personal loans to UK consumers through a fully digital and intermediary driven distribution model, enabling us to adapt quickly to changing customer needs and market conditions.
• Through JBR we provide finance within the high-end vehicle segment, serving customers who are typically high net worth individuals such as entrepreneurs with strong credit profiles.

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Business review Retail

Consumer Finance

2025 achievements

During the year, we strengthened relationships with brokers and intermediaries and continued to develop our scalable, technology-enabled distribution model, supporting increased activity across the portfolio.

• Re-established the JBR brand in the high-end vehicle finance market, strengthening the proposition and increasing lending volumes.
• Streamlined motor finance onboarding for brokers and introducers, simplifying access and reducing onboarding times by 90% 1 .
• Completed the operational integration of JBR, delivering a scalable operating model that combines specialist expertise with the Group’s technology and data capabilities.
• Enhanced our customer dashboards to provide improved visibility of the end-to-end customer journey, supporting more targeted process improvements.
• Deployed cloud-based contact-centre technology across JBR, enabling AI-driven sentiment analysis to enhance customer experience and better identify potentially vulnerable customers.
• Improved efficiency within our unsecured personal loans proposition, introducing automated declines to streamline credit decisioning and support consistent customer outcomes.

1 Based on a comparison of average broker onboarding times for the period September to October 2025, prior to the implementation of onboarding enhancements, and November to December 2025, following implementation.

Looking ahead

Looking ahead to 2026, we expect continued demand across our specialist Consumer Finance business, supported by easing interest rate conditions and sustained demand for premium and high-value vehicles. This environment provides an opportunity to grow efficiently and further develop our presence in the specialist motor finance market, building on the strengthened proposition following the integration of JBR. We will continue to deepen relationships across the introducer and dealer channels, supported by our enhanced sales structure and distribution capability. Ongoing investment in JBR’s lending platform and data capabilities will support greater automation and consistency across processes, contributing to sustainable growth while maintaining established underwriting standards and operational resilience.

Strengthening and expanding our propositions Advancing our digital, data and platform capabilities Maintaining discipline and portfolio resilience

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• Diverse range of products: designed to meet a wide range of savings preferences.
• Extensive digital marketplace partnerships and distribution: expanding distribution and diversifying funding sources.
• Streamlined online banking experience: enabling straightforward account management and self-service functionality.
• Exceptional customer service: providing access to dedicated support when required.

Our markets and customers

Competitive and structural advantages
Business review Retail Savings markets

Our Savings proposition provides a diversified and stable funding base through a range of savings products supported by digital infrastructure and established distribution partnerships.

Savings

• We offer a diverse range of savings products for both consumers and businesses, including ISAs, easy access, notice and fixed term accounts. Our digital platform and marketplace partnerships support efficient account opening and servicing while broadening access to a diversified depositor base.

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Business review Retail

Savings

2025 achievements

Our Digital Savings Platform continues to strengthen our customer relationships by delivering a more intuitive and seamless experience, underpinned by advanced data capabilities.

• Expanded our savings product range, launching a bonus easy access account and a new branded offering with Hargreaves Lansdown, strengthening flexibility, competitiveness and distribution reach.
• Launched Whiteaway Laidlaw as a savings-focused brand available exclusively via a small number of carefully selected wealth platforms and digital marketplaces, demonstrating our ability to leverage and adapt our distribution capabilities.
• Strengthened our distribution network through a partnership with Raisin, further diversifying and broadening our funding base.
• Delivered in-life customer journey enhancements, including improved product comparison tables, downloadable transaction histories and clearer notifications, driving stronger digital engagement with 81% 1 of customer instructions now completed digitally.
• Enhanced onboarding and digital journeys across personal and business savings, improving accessibility, usability and conversion.
• Implemented AI-driven enhancements to our contact-centre technology, enabling automated capture of key call information, improving efficiency and supporting automated quality control.• Completed the full roll-out of our proprietary Digital Savings Platform, transitioning 100% $^2$ of new customers, including business savers, to a more streamlined online experience.
• Established a data-led experimentation framework across digital journeys, enabling continuous optimisation of website performance and guiding customers through the most effective and valuable pathways.

$^1$ Average digital adoption for applying for maturity in January 2026.
$^2$ 100% of all eligible customers have been migrated to the Digital Savings Platform.

Looking ahead

Looking ahead to 2026, the savings market remains highly competitive. The slower pass through of base rate reductions has tempered the pace of deposit repricing, while pricing remains elevated due to continued competition for liquidity from banks, fintechs and platforms. At the same time, the continued growth of investment platforms is changing how customers allocate their savings and how deposits are distributed across the market. Against this backdrop, our opportunity is to diversify and scale our funding base efficiently, supported by the expansion of our product suite and the successful launch of the Whiteaway Laidlaw savings brand onto marketplaces. This will broaden our reach, enhance funding flexibility, and support sustainable growth across a more diversified deposit portfolio.

Strengthening and expanding our propositions
Advancing our digital, data and platform capabilities
Maintaining discipline and portfolio resilience

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Sustainability Report

Our sustainability strategy is embedded within our business strategy and plays an important role in how we build resilience and long-term value. For investors, regulators and other stakeholders, sustainability has become a key lens through which governance quality, risk discipline and long-term performance are assessed. Our approach is therefore focused on supporting strong risk management and ensuring continued confidence in how the Group is run. By supporting customers who are often underserved by mainstream lenders, we play a meaningful role in the UK economy while delivering an experience built on flexibility, certainty, technology and specialist expertise. Our sustainability approach also ensures we remain well governed, proportionate in our management of risk, and prepared for evolving regulatory, environmental and societal expectations.

Anchored in this context, our refreshed sustainability strategy focuses on Empowering our People, Strengthening Society and Securing a Sustainable Future. These priorities reflect both our commercial strengths and our responsibility to manage long- term risks and opportunities in a way that supports resilience and sustainable value creation. Over the past year, we have made progress against these priorities. We have continued to invest in our people, through leadership capability, specialist underwriting and digital and AI development, supporting growth in our diversified lending businesses. We have also strengthened our responsible business practices and our approach to climate and environmental risks, improving data, governance and integration into decision- making to support long-term resilience. This report summarises our progress alongside our priorities for the year ahead, as we continue to evolve our approach in line with the expectations of a listed environment and deliver sustainable value for all stakeholders.

“Sustainability is fundamental to Shawbrook’s strategy and long-term success, and the Board is fully committed to its delivery. We have refreshed our sustainability strategy to reflect the increased expectations that come with being a listed company and to ensure clear alignment with our wider business strategy and growth plans. By combining disciplined growth with strong governance and a clear purpose, we are building a resilient business that delivers lasting value for our customers, colleagues, shareholders and the wider UK economy.”

John Callender Chairman

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Our sustainability strategy

Pillars	Priorities
Empowering our People	• Strengthening an entrepreneurial culture that drives ownership and accountability at every level.
	• Continue building an inclusive environment that attracts and retains exceptional talent.
Strengthening Society	• Driving economic opportunity and resilience by widening access to finance for current and future customers.
	• Maximising measurable social impact beyond lending.
Securing a Sustainable Future	• Protecting financial resilience by addressing climate and nature-related risks and opportunities.
	• Continue evolving and embedding responsible business practices and robust governance.

Our Climate Report, included on pages 183 to 205 has been prepared in order to comply with the non-financial and sustainability-related requirements of the Companies Act 2006 and FCA Listing Rule 9.8.6R(8). The report is consistent with the Task Force on Climate-related Financial Disclosures (TCFD) 2017 recommendations and 2021 Annex 1 across all four TCFD pillars. Our sustainability strategy is aligned to eight of the United Nations Sustainable Development Goals (SDGs), where we believe we can have the most impact and positively contribute.

$^1$ The 2021 TCFD Annex provides both general and sector-specific guidance on implementing the Task Force’s disclosure recommendations. Updates reflect the evolution of disclosure practices, approaches and user needs.

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Empowering our People

A high-performance and entrepreneurial culture drives innovation, resilience and sustainable growth

Our people are fundamental to Shawbrook’s success. Their expertise, agility and entrepreneurial mindset enable us to deliver a premium customer proposition, underpinned by specialist expertise and high-quality service, while responding effectively to changing market conditions and operating within a robust risk and control framework. We invest in leadership capability, digital and AI skills, specialist underwriting expertise and an inclusive culture to ensure we have the skills and capacity required to deliver our long-term strategy. Strong people capabilities underpin innovation, disciplined risk-taking and operational excellence, all of which are critical to sustaining long-term growth and resilience.

Strengthening an entrepreneurial culture that drives ownership and accountability at every level

Continue building an inclusive environment that attracts and retains exceptional talent

A culture that supports innovation, accountability and sustainable growth

Our culture is defined by entrepreneurial thinking, clear accountability and ambition, underpinning our ability to innovate and grow sustainably. We encourage colleagues to think and act like owners of the business to challenge convention and collaborate across functions to deliver solutions tailored to the needs of our customers. This culture is reflected in strong colleague engagement, measured through our quarterly employee engagement survey, where we cover topics such as communications, recognition and ways of working. In the latest survey completed in 2025, we achieved an engagement score of 78%, with an 88% participation rate. Accountability is reinforced through mechanisms that enable colleagues to raise concerns confidently and without fear of retaliation. Our grievance policy provides clear informal and formal pathways for resolution and our Speak Up scheme enables concerns to be raised anonymously and confidentially. We also invest in digital, data and AI-enabled tools to enhance productivity, deepen risk insights and strengthen operational efficiency. This supports effective and well-informed decision-making within a disciplined yet agile risk framework. This culture of continuous innovation and improvement underpins how our people help the business scale efficiently, execute strategic mergers and acquisitions and support responsible long-term growth. During 2025, this was demonstrated through the successful acquisitions of both ThinCats and Playter.

Our strategic priorities
1 2

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Building an inclusive environment that attracts and retains exceptional talent

We remain committed to strengthening our talent and capability to ensure we have the right people and skills to deliver our long-term strategy. Our approach to attracting and retaining talented people combines structured learning pathways, strong cultural alignment and a competitive reward and ownership proposition. This enables our people to build meaningful careers while sharing in the success they help to create. Reflecting the strength of this approach, our average employee turnover in 2025 was 10.7% $^1$.

Training, development and progression

We invest in the development of our people throughout the colleague lifecycle, combining mandatory regulatory learning with structured performance and development processes to build capability and support progression.We maintain a comprehensive annual training framework designed to protect both the Group and its customers ensuring colleagues understand their regulatory obligations, deliver good customer outcomes and uphold high standards of ethical conduct. The programme supports strong governance, consumer protection and strong risk management across the Group. All employees, including full-time and part-time employees, complete mandatory annual training covering a range of areas such as conduct, Consumer Duty, financial crime prevention, data protection and customer outcomes. This training equips colleagues to identify and manage risks, safeguard customers and act in line with our values and regulatory responsibilities. Content is refreshed regularly and embedded within the induction pathway for new joiners. Additional role-specific training is delivered to colleagues with enhanced regulatory or customer responsibilities, including Code of Conduct and Complaints training. This risk-based approach ensures training is proportionate to role and strengthens the consistent delivery of good customer outcomes. Role-specific training is also refreshed regularly and incorporated into induction programmes where relevant. Alongside mandatory learning, all colleagues participate in the annual performance and development cycle, supported by ongoing coaching and development discussions. Beyond these foundations, colleagues have access to flexible learning through digital platforms, mentoring and coaching, and study support for professional qualifications aligned to business needs and individual career aspirations. We continue to build future capability by strengthening our apprenticeship offering, expanding the breadth and level of qualifications available, and investing in future-focused skills such as digital and AI to enhance productivity and innovation. Overall, our approach supports progression, retention and long-term capability across the Group.

Valuing our people

We take a holistic approach to valuing and supporting our colleagues through a competitive reward package (see the Directors’ Remuneration Report on pages 82 to 101 for further details), and a broad range of benefits that support financial, physical and mental wellbeing. These include private medical insurance with digital GP access, meditation and mindfulness support, financial wellbeing support provided by our pension provider through a series of webinars and one-to-one review sessions, and a network of trained Mental Health First Aiders who offer confidential support and signposting to mental wellbeing resources. Hybrid and flexible working arrangements also form an important part of our proposition, with most roles operating on a hybrid basis. In 2025, we continued to prioritise colleague wellbeing and workplace safety, reporting an average accident frequency rate of 1.0, with three recorded work-related injuries (2024: 3) and zero work-related fatalities (2024: 0). We also enhanced our Peppy Healthcare offering to include diabetes and hormone support, neurodiversity services, support for parents of teenagers and weight management. Following our IPO, we awarded colleagues with free shares to foster a strong sense of ownership, reinforcing a long-term mindset aligned with Shawbrook’s success. We recognise and celebrate exceptional contributions through quarterly employee recognition awards that celebrate behaviours aligned to our culture and values. In 2025, over 40 colleagues were recognised through the awards.

Key highlights from 2025

400 coaching and mentoring sessions completed through established platforms.
>250 line managers participated in a structured development programme covering building effective relationships, coaching skills, unconscious bias and managing mental health in the workplace.
>100 leaders completed training aligned to our Leadership Framework, supporting effective succession planning and talent management.
>30% of vacancies were filled by internal candidates, reflecting the strength of our development and progression approach.

1 Voluntary turnover only.

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Fostering an inclusive workforce

A diverse and inclusive workforce is essential for innovation, effective risk management and responsible decision-making. Oversight of our diversity and inclusion agenda sits at Board level with our Chairman serving as the sponsor. This supports our commitment to maintaining a workforce that reflects the customers and communities we serve, supported by clear accountability, transparent reporting and targeted action. Since 2016, we have been a signatory to HM Treasury’s Women in Finance Charter and continue to take targeted action to improve gender balance, particularly in senior roles. In 2025, we increased transparency by expanding our definition of Senior Management to include roles two layers below the Executive Committee. While this reduced our reported percentage of women in Senior Management, it provides a more representative view of our leadership population and supports progress towards our 2030 target of 35% female leadership representation across the Group.

Gender pay gap and bonus:

We also participated in the Parker Review for the first time for the 2025 reporting year, submitting our Board and senior leadership ethnicity data in line with its requirements$^1$. The Parker Review is an independent, business-led initiative that promotes improved ethnic diversity on UK corporate boards and annually evaluates FTSE-listed companies against its expectations. We meet one of the Review’s six recommendations by having at least one director from a minority ethnic background on our Board, in line with expectations for FTSE 250 companies, supporting diverse perspectives and effective challenge. We are also signatories to the Race at Work Charter, committing to improving racial equality in the workplace. As a newly listed FTSE 250 company, our focus this year has been on establishing a robust baseline and strengthening data quality to inform future commitments such as an ethnic minority representation target within senior leadership. We foster an inclusive working environment through employee-led groups focused on engagement, mental health, AI adoption, charity, neurodiversity and LGBTQ+ inclusion. We also contribute to wider industry efforts on inclusion through our membership of Progress Together, the government commissioned taskforce on progression, retention and socioeconomic diversity. We participated in its 2024 Data Report, where we were positioned at the median across key measures, and submitted data to its 2025 annual survey. In addition, we invest in social mobility through initiatives such as apprenticeship programmes and partnerships with the Saracens Foundation and Future First, which support young people from underrepresented backgrounds. We are also members of the Disability Business Forum, a collaborative network advancing disability inclusion and accessibility in the workplace. Our participation informs practical actions to remove disability-related barriers and improve inclusion for colleagues and customers.

	Mean	Median
2025	2024	2025
Gender Pay Gap	29.3%	30.9%
Gender Bonus Gap	49.9%	51.6%

	2025$^2$	2024
Female employee as percentage of total workforce	43.0%	45.4%
Female senior managers as percentage of total Senior Management	24.4%	28.4%
Female Executive Committee members	22.2%	22.2%

See our full 2025 Gender Pay Gap Report here: shawbrook-gender-pay-equality-report-2025.pdf

$^1$ Data covering the Group excluding recent acquisitions of ThinCats and Playter.
$^2$ Data as at 31 December 2025 covering the Group including recent acquisitions of ThinCats and Playter.

Gender split for the Group:

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Strengthening Society

Making a positive difference in the communities where our people, customers and stakeholders live and work

We play an active role in building stronger and more resilient communities across the UK through our lending, partnership and community programmes, both economically and socially. We support the growth of the UK economy by widening access to finance to many customer groups, often underserved by mainstream lenders, and invest in social impact to address key societal issues. Strong communities support economic resilience and long-term opportunity, benefiting both society and the Group.

Driving economic opportunity and resilience by widening access to finance for current and future customers

Maximising measurable social impact beyond lending

Our strategic priorities Further detail is set out in our Sustainable Finance Framework: shawbrook.co.uk/about-us/sustainability/ securing-a-sustainable-future/

1 2 Spotlight

Financing essential social infrastructure

We support projects that deliver positive social outcomes by financing essential community infrastructure across the UK. In 2025, our funding included expanding access to high-quality early years education and elderly residential care homes to support the needs of growing and diverse communities. We worked with Fennies Day Nursery Group through a two-bank club financing arrangement to support the expansion of early years childcare across Greater London. This funding enabled the development of new nursery settings which increases capacity at a time of growing demand for childcare placements for working families. We also provided funding to LNT Care Developments to support the development of sustainable, purpose-built residential care homes across the UK.These modern facilities are designed to meet the increasing demand for elderly care while embedding strong sustainability principles, including energy-efficient construction, improved environmental performance and supportive living environments for residents. Our funding contributes to building a resilient and socially responsible care and education infrastructure.

Widening access to finance

We provide access to finance for a wide range of customers, many of whom are underserved by mainstream lenders due to complex histories, non- standard incomes, specialist business models or unique property needs. In 2025, we supported over £0.7 billion of lending to individuals, including first-time buyers, later-life borrowers and customers with complex or irregular income profiles, enabling access to homeownership for those who may otherwise be excluded. During the year, we signed up to the Freedom to Buy scheme, supporting borrowers with smaller deposits to purchase their first home and further widening access to home ownership. For SMEs and specialist businesses, we provided over £1.6 billion of funding, enabling access to capital that allows them to innovate, hire and grow. For property developers and landlords, our support contributes directly to the health of the UK housing market through increasing supply of high- quality homes and rental options with over £2.2 billion of lending provided during the year. We also provide accessible savings products for both individuals and businesses, supporting customers to build financial resilience for the future. Through these activities, we support economic growth and deliver positive financial outcomes for our customer groups. Alongside this wider activity, we provided over £0.2 billion of socially-focused sustainable finance, targeted at customer segments and business activities where social impact is clearly defined. Our social criteria are intentionally narrower and aligned with industry standards. By applying these targeted criteria, we are able to identify lending that delivers enhanced and demonstrable social impact.

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1. Customer understanding

Customer segmentation and persona creation enable us to understand our customers and tailor our strategy to meet their evolving needs. These insights have been overlaid onto large-scale Real Estate survey results, to gain a deeper understanding of customer sentiment and desired services.

2. Customer satisfaction

We maintain a thorough understanding of customer experience through our Voice of the Customer programme, using consistent methods to gather qualitative and quantitative data. This programme was expanded during the year to include SME and the new Digital Savings platform. Customer dashboards for each business area are reported to respective committees with Board-level oversight. These dashboards include customer outcome metrics that are used to drive thematic research where appropriate.

Listening to our customers

Customer insight and experience

Analysing and interpreting customer data, behaviours and feedback is key to shaping our strategy. By understanding our customers’ needs, preferences and experiences, we can design products and services that deliver excellent customer experiences and help us to optimise and scale our operations efficiently.

Customers in vulnerable situations

We maintain and continually strengthen a culture that empowers our customer-facing colleagues to support customers in vulnerable situations. Colleagues are supported by a clear policy and Group-wide guidance, which provide a strong foundation for consistent and appropriate treatment. A mandatory training programme is in place for all colleagues, and we continue to evolve bespoke training for customer-facing colleagues. Our approach is built on strong foundations and is subject to ongoing review and enhancement. We recognise the importance of robust oversight and governance and are continuing to develop our management information suite to provide greater visibility of customer outcomes. Enhanced management information will support informed decision-making, enable more effective monitoring, and help identify opportunities for improvement. By leveraging data and insight, we aim to refine processes and ensure support remains appropriate and proportionate. We continue to focus on Consumer Duty by regularly assessing our products, customer journeys, and communications to ensure they deliver fair value and meet customer needs. As part of this, we have reviewed and enhanced our product management templates to embed vulnerable customer considerations throughout the product lifecycle, strengthening our ability to identify and address potential risks early.

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Social impact and community investment

We are committed to investing in communities in ways that deliver measurable social impact. Our strategic partnerships with the Saracens Foundation and Future First are designed to deliver positive and lasting impact, with our current focus on social mobility and gender equality. Through these partnerships, we aim to transform the lives and future potential for young people from under-represented and economically disadvantaged backgrounds by improving access to education, career pathways and personal development. These programmes enable us to contribute directly to a more inclusive society.

Saracens Foundation partnership 2025 highlights

“We are delighted to have Shawbrook supporting both Empower Her and Go Forward for another year. These projects provide innovative and effective solutions to challenges facing young people today, and the collaborative approach that Shawbrook brings to this partnership enhances the impact we can deliver. Shawbrook’s support helps ensure that young people are equipped with the tools to succeed and progress towards obtaining their personal and sporting goals, creating positive impact in their communities and beyond.”
Benjamin Lawrence Head of Operations, Saracens Foundation

Saracens High School engagement: Hosted a partnership lunch at our London office, delivered an apprenticeship awareness session and invited students to participate in the Shawbrook Futures Work Experience Week, providing insight into career pathways and the world of work.
Empower Her programme: Now in its fifth year, the programme uses sport as a platform to inspire and develop the next generation of female leaders. The programme combines mentoring, workshops, networking and work experience to build career and leadership skills, supporting participants to develop professional capability and industry connections.
Go Forward programme: Continued support for secondary school students at risk of permanent exclusion through personalised mentoring and guidance. The programme supported 286 young people, contributing to a 67% reduction in behavioural incidents, with over 60% of participants reporting positive behavioural change.

Future First partnership 2025 highlights

Expanding school partnerships: Established relationships with three schools in London and expanded into three schools in Glasgow, broadening our reach and impact. Our apprenticeship engagement was concentrated in Glasgow to raise awareness of, and access to, early career opportunities.
Work experience: Welcomed 14 students from partner schools to Shawbrook Futures Week, providing practical exposure to the workplace.
Financial literacy: Delivered financial education sessions across all partner schools and reached over 200 students.

Our colleagues’ passions and commitments play a significant role in shaping our community impact. Through Make a Difference volunteering days and donations, colleagues support causes meaningful to them. This colleague-led contribution strengthens our culture of responsibility and empowers colleagues to drive impact beyond their day-to-day roles.

In 2025, our collective efforts delivered wider positive community impact:
* >£250,000 donated to 56 individual charities, supported by match-funding and volunteering initiatives.
* >1,200 hours of volunteering recorded by colleagues.

All colleagues are entitled to two Make a Difference days annually.

Spotlight

Making a difference in our community

Colleagues came together to support the West Ham United Foundation x Ripple Suicide Prevention Charity Tournament, led by Shawbrook colleague Mark Hedley. The event brought together 20 teams and more than 170 participants to The Foundry, the Foundation’s new community hub, for a day of spirited competition and conversation around mental wellbeing. More than 20 colleagues volunteered both on and off the pitch, using their volunteering time and match-funding entitlements to support both charities. The event combined teamwork and fundraising to raise awareness of mental health and suicide prevention, with Shawbrook’s match-funding programme significantly extending the impact.

“Shawbrook’s volunteering and match-funding initiatives enabled colleagues to make a meaningful contribution to the West Ham Foundation and Ripple Suicide Prevention. Through dedicated volunteering days and match-funding, we were able to significantly extend our fundraising efforts, raising £38,500 and delivering greater support for both charities.”
Mark Hedley Development Finance Relationship Director

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Securing a Sustainable Future

Playing our part in creating a sustainable future for our business, our economy and our environment by taking a long-term view

We have a role to play in shaping a more sustainable future, not only for our stakeholders today, but for future generations.# Securing a sustainable future means protecting the environment, strengthening governance, managing risk responsibly and ensuring that our business is resilient, adaptable and positioned for long-term success. Sustainability is therefore not solely an environmental consideration, but a core component of building a resilient and well-governed organisation. Protecting financial resilience by addressing climate and nature-related risks and opportunities Continue evolving and embedding responsible business practices and robust governance Our strategic priorities

Climate and nature-related risks and opportunities

Climate and nature-related risks pose significant challenges not only to our organisation but also society more widely. These risks present material financial, operational and strategic risks, ranging from the resilience of property assets to regulatory expectations, investor scrutiny and changing customer needs. Managing these risks effectively, while supporting the transition to a low-carbon and nature-positive economy, is fundamental to our long-term success. Our ambition is to manage climate and nature-related risks that impact our customers and operations, whilst identifying and responding to opportunities arising from the transition to a low carbon economy. We have committed to achieving net zero ¹ by 2050 ² , and by 2035 ³ for our own operations. Our priorities are to:
* Support the transition
* Reduce our environmental impact
* Embed environmental considerations into our corporate DNA

Spotlight Supporting High-Efficiency Rental
We continue to support the delivery of more energy-efficient homes to address local rental demand. The transaction related to a newly built block of six flats in Cambridge, developed by our borrower and designed to achieve an EPC rating of A across all units. The building incorporates solar panels, electric underfloor heating and air circulation pumps that promote heat recovery and energy efficiency, helping to lower long-term running costs. This not only reduces environmental impact but also enhances the appeal of the homes. This transaction reflects the objectives of our discounted Arrangement Fee incentive for high-EPC housing. By combining competitive funding with a high-quality service, we are able to support energy-efficient developments in progressing smoothly from application to completion.

¹ We use the term ‘net zero’ to describe a reduction in GHG emissions coupled with carbon removal for residual emissions.
² Covers Scope 1 and Scope 2, Scope 3 category 3 fuel-and-energy related activities, category 5: waste, category 6: business travel, category 7: employee commuting and category 15: financed emissions for the Group’s Property Lending Portfolios, SME portfolios and Motor Finance portfolio. This excludes Scope 3 Category 1: purchased goods and services.
³ Covers Scope 1 and Scope 2 emissions using location-based methodology. This excludes all relevant Scope 3 emission categories.

1 2 Shawbrook Group plc | Annual Report and Accounts 2025 40 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Climate Report: summary

Our Climate Report can be found on pages 183 to 205 and provides detailed information on our strategy and progress made during the year. This report is consistent with the Task Force on Climate-related Financial Disclosure’s (TCFD) 2017 Recommendations across all four pillars and, where feasible, incorporates the 2021 Annex to the Implementing Guidance. This report complies with both Financial Conduct Authority (FCA) Listing Rule 9.8.6R(8) and amendments made to the Companies Act 2006 requirements by The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022.

Strategy

Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material
- a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term.
- b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning.
- c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2° or lower scenario. See pages 184 to 193.

Governance

Disclose the organisation’s governance around climate-related risks and opportunities
- a. Describe the board’s oversight of climate-related risks and opportunities.
- b. Describe management’s role in assessing and managing climate-related risks and opportunities. See pages 194 to 195.
Our strategy is built on three priorities, addressing climate-related risks and opportunities across different time horizons through our transition plans embedded within our Group Property Portfolios, SME portfolios and own operations.
During 2025, we made good progress in delivering against our strategic priorities. This included providing over £0.7 billion of sustainable financing through existing lending products. We also invested in enhancing our data capabilities to better support our customers’ climate transition and agreed our approach to assessing climate risk across our SME portfolios, including methodology for emissions measurement.
The Board is accountable for setting and overseeing the Group’s approach to climate-related risks and opportunities, while Management delivers the climate strategy. In 2025, the Board reviewed progress against key metrics, targets and transition plans and approved new climate metrics and targets for 2026–2028, with Management leading strategy development and disclosures.
In January 2025, the Audit Committee received externally facilitated training to enhance members’ climate-related skills and knowledge to assist when reviewing and challenging the Group’s external climate disclosures. Separately, Management received comprehensive external training in early 2026 on developing a realistic base case to further support our transition plans and deliver plans to meet the PRA’s supervisory statement 5/25 requirements on managing climate-related risks.
Mandatory climate training is part of the new joiner induction programme, building foundational climate knowledge to support the embedding of our strategy.

2025 progress summary Shawbrook Group plc | Annual Report and Accounts 2025 41 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Risk management

Disclose how the organisation identifies, assesses, and manages climate-related risks
- a. Describe the organisation’s processes for identifying and assessing climate-related risks.
- b. Describe the organisation’s processes for managing climate-related risks.
- c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. See pages 196 to 199.

Metrics and targets

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material
- a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process.
- b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related risks.
- c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. See pages 200 to 205.
Climate risk is a principal risk in our risk taxonomy. This ensures that climate-related risks are embedded throughout our Risk Management Framework and processes.
We identify and assess climate-related risks in six stages: identification, measurement, management, monitoring, reporting, and challenge. We manage climate risks through the selection of one of four strategies: accept, avoid, transfer, or mitigate, with the chosen strategy informing our business decisions.
We manage climate-related credit risks proportionally, using four customer-specific strategies: data-led, policy/process-driven, individual counterparty assessments, and exclusions for loans with limited physical or transition risk.
Our climate risk appetite is approved by the Board and includes qualitative statements and quantitative triggers and limits.
Our climate-related metrics, covering operations, supply chain, financed emissions, and sustainable finance, are monitored frequently and reported at least annually to the Board for oversight.
We continued to improve our data quality and measurement process for our Scope 1, Scope 2 and relevant Scope 3 emissions related to our operations. We have seen an increase in our overall operational carbon footprint compared to 2024, attributed to business expansion and enhanced measurement approaches.
We have continued to utilise Partnership for Carbon Accounting Financials (PCAF) methodology to measure our emissions associated with the Group Property Portfolios. We have reduced our financed emissions intensity across our property portfolios relative to our 2021 baseline, achieving a 17% reduction in Residential Properties emissions intensity and a 36% reduction in Commercial Properties emissions intensity. This progress has been driven by higher-rated EPC properties within new originations, improving the overall energy efficiency of our lending, with 50.8% of the buy-to-let portfolio and 50.3% of the owner-occupied portfolio now rated EPC C or above.
We continued to strengthen engagement with our supply chain, with 57.5% of our top suppliers now aligned to net zero targets, supporting the management of climate-related risks across our value chain.# 2025 progress summary Shawbrook Group plc | Annual Report and Accounts 2025 42

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Streamlined energy and carbon reporting (SECR)

Reporting period: 1st January 2025 – 31st December 2025

In 2025, our total operational carbon footprint was calculated to be 12,434.3 tonnes of carbon dioxide equivalent (tCO2e), which includes emissions from purchased goods and services.

	2025	2024
Energy
Total energy use for Scope 1 and 2 emissions (kWh)	903,622.0	782,547.4
Emissions (tCO2e)
Emissions from heating and own transport (Scope 1)	10.0	10.8
Emissions from the use of purchased electricity: Location-based (Scope 2) ${^2}$	147.2	149.6
Emissions from the use of purchased Heat and Steam - Location-based (Scope 2) ${^3}$	5.0	2.3
Emissions from the use of purchased electricity: Market-based (Scope 2) ${^5}$	0	5.0
Total emissions (Scope 1 and 2 ${^6}$)	162.2	162.7
Scope 3: Category 1: Purchased goods and services (PG&S)	10,883.1	8,842.6
Scope 3: Category 3 (Fuel-and energy-related activities)	55.3	47.7
Scope 3: Category 5 (Waste)	15.4	12.2
Scope 3: Category 6 (Business travel)	410.9	377.5
Scope 3: Category 7 (Employee commuting)	907.4	356.3
Total Scope 3 emissions	12,272.1	9,636.3
Total Scope 1, 2 ${^6}$ and 3 emissions	12,434.3	9,799.0
Intensity
Scope 1 and 2 emissions (kgCO2e) per full time equivalent (FTE)	102.4	103.9
Change from previous year	-1.4%

${^1}$ Figures have been restated to include emissions from company cars following the acquisition of JBR in 2024, and to exclude gas-related emissions (see further rationale in footnote 3).
${^2}$ The location-based approach reflects average emissions for electricity supplied through the UK grid. This is based on figures published by the UK Government.
${^3}$ Natural gas consumption in landlord-managed buildings was previously reported as Scope 1. Following a methodology review aligned to the GHG Protocol, this has been reclassified as Scope 2 (purchased heat) where we control the temperature within our leased space but do not operate the boiler. Prior year figures have been restated accordingly. This change reflects reporting alignment only and does not affect underlying energy consumption.
${^4}$ Where consumption data was unavailable, figures have been estimated using estate-level consumption information and the building square footage.
${^5}$ The market-based approach reflects the emissions from the electricity that the Group has purchased and derives emission factors from contractual agreements.
${^6}$ Location-based approach is used to measure our total Scope 1 and Scope 2 emissions.
${^7}$ This includes Shawbrook Bank Limited, BML, TML, JBR, ThinCats and Playter covering 10 office locations and those working remotely with a total of 1,584 FTE as at 31 December 2025.
${^8}$ The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.
${^9}$ Exiobase is a Multi-Regional Environmentally Extended Input-Output Table, a global multi-regional input-output (MRIO) application. We used UK specific MRIO emission factors for our measurement.

Our greenhouse gas (GHG) reporting follows the GHG Protocol, specifically under the operational control approach, for all facilities owned by the Group ${^7}$, reported in tCO2e. This is in line with our obligations under the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the SECR regulation ${^8}$. Our reporting year is from 1 January 2025 through to 31 December 2025.

Methodology

All GHG calculations were performed using the 2025 Department for Environment, Food and Rural Affairs (DEFRA) emission factors, other than spend-based calculations. We used Exiobase 3.8.2 ${^9}$ for all spend-based calculations. The data used was based on operational data gathered and prepared internally with emissions calculated utilising a climate management and accounting platform.

Comparison to 2024

SECR Emissions from energy consumption (Scope 1 and Scope 2) decreased year-on-year, primarily due to UK grid decarbonisation, which offset higher underlying energy consumption across our sites due to higher occupancy rates and expanded London footprint. Scope 3 emissions also increased, reflecting business growth, acquisitions and higher occupancy across our operational footprint. Emissions from purchased goods and services rose in line with increased spend but underlying data quality improved, with 60% of emissions now based on supplier-reported data (2024: 50%), reducing reliance on conservative spend- based methodologies. Employee commuting emissions increased following a methodology update. The 2025 approach applies UK DEFRA emission factors and a more conservative additive model for homeworking energy use, replacing the prior room size–based method and International Energy Agency (IEA) factors. Methodology refinements reflect improved data and evolving carbon accounting practices. Overall, the increase in Scope 3 emissions is primarily attributable to business expansion and enhanced measurement approaches.

Energy efficiency measures

Throughout 2025, we reviewed our estate portfolio to identify opportunities for reducing energy consumption. Additionally, all remaining sites were transitioned to renewable electricity tariffs, as part of our continued collaboration with landlords to enhance the energy efficiency of our properties.

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Effective Board and Management structures

Board and Management

The Board is responsible for setting the Group’s strategic aims to drive long-term sustainable success, while Management is responsible for implementing and delivering sustainability-related priorities. Our comprehensive sustainability governance framework, embedded within our existing structures, comprises a dedicated Sustainability Sub-Committee and associated working groups. During 2025, sustainability related matters continued to feature as regular Board agenda items, with Directors engaging and challenging on these issues.

Board effectiveness

We continually review the composition of our Board to ensure it maintains an appropriate balance of skills, experience and perspectives to support effective stewardship and delivery of the Group’s strategic ambitions. Women represent 40% of our Board, reflecting our commitment to board diversity in line with expectations for a FTSE 250 company. The Board continues to promote an inclusive culture in which all Directors’ contributions are valued, and bias and discrimination are not tolerated. Further information on Board diversity is set out on page 104. Building on this foundation, the Board’s effectiveness is regularly evaluated. Further detail on how effectiveness is assessed can be found on page 65.

Sustainability-linked executive pay

In 2025, the Group’s annual bonus scheme design continued to include performance measures relating to sustainability-linked factors, including climate and community-linked metrics. These measures support alignment between executive performance, risk management and the Group’s sustainability priorities. The Directors’ Remuneration Report on page 97 provides further detail on the proposed introduction of a sustainability element within our forward- looking PSP design, applicable to our most senior executives.

Responsible business practices and robust governance

A sustainable future begins with the fundamentals of effective governance, robust risk management and a culture of responsibility that runs throughout the organisation. Our governance framework ensures we operate with integrity and proactively identify and manage emerging risks, from credit and conduct risks, to climate, operational and regulatory risks. We actively enhance our risk capabilities and processes, integrate environmental and social considerations into decision-making and strengthen the resilience of our business model. This disciplined approach enables us to grow sustainably, protect customer and shareholder value and meet the expectations of regulators, investors and society.

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Sustainable Development Goals (SDGs) alignment

The United Nations SDGs comprise 17 interconnected global objectives to guide nations, governments and companies towards a sustainable future. Our 2025 annual review reaffirmed our continued focus on eight of these SDGs. This focus reflects where our activities, products and partnerships have the greatest potential to deliver positive impact across our stakeholder groups. The table below provides examples of how we contribute to these eight priority SDGs through our activities, aligned to our key stakeholder groups:

SDG	Employees	Customers	Communities	Suppliers
...	✓	✓	✓	✓
...	✓	✓	✓
...	✓	✓
...	✓
...		✓	✓
...		✓	✓
...			✓	✓
...			✓

Data protection and privacy

We are committed to ensuring personal data is handled in a compliant manner in accordance with the UK General Data Protection Regulation (GDPR) and Data Protection Act 2018. We have a comprehensive suite of policies and processes to manage risk related to data privacy, overseen by our Group Data Protection Officer. During 2025, JBR adopted the Group-wide policy framework with ThinCats and Playter to follow suit in 2026. All colleagues completed mandatory annual training to refresh their knowledge and awareness on this topic and we invested in specialist development for the data protection team with colleagues responsible for data protection compliance completing a training course recommended by the International Association of Privacy Professionals. We have also undertaken a further internal review of the effectiveness of our privacy framework, identifying additional enhancements to be implemented in 2026. This will include enhancing our approach to privacy to support compliant adoption of new technologies.This builds on progress made during the year which included the introduction of our International Transfer Risk Assessment process.

Robust governance and risk management

Sustainable financing

We recognise the environmental and social impacts of our customers’ activities and incorporate sustainability considerations into our financing decisions. Our credit policy is guided by sustainability principles that align lending with our broader sustainability strategy. We identify certain sectors as ‘sensitive’ where activities have the potential to cause negative environmental and/or social impacts. These broadly include carbon intensive sectors such as energy, extractives and heavy industry, emission intensive manufacturing, transport and agriculture as well as selected sectors with elevated social and/or ethical risk exposure, such as gambling, defence and tobacco.

For financing within these sensitive sectors, we have exclusions for specific activities and enhanced due diligence (EDD) requirements for transactions not captured by our exclusion criteria. EDD helps to ensure we understand customers’ plans to reduce or eliminate their negative environmental and/or social impacts. EDD is undertaken by first-line business and risk teams and approved by the Chief Banking Officer and Chief Business Risk Officer, supporting informed decision-making and mitigating potential credit and reputational risks. The Sustainability Panel, comprising the Chief Executive Officer, Chief Risk Officer, and Chief Financial Officer, serves as an escalation and decision-making forum for transactions with potentially heightened environmental and/or social impacts.

We are also committed to providing financing with positive environmental and/or social impact. Our Sustainable Finance Framework outlines eligibility criteria for such lending and is guided by recognised industry standards 1 . Further details on our 2025 social and environmental lending are provided on pages 37 and 205 respectively. Further information on our Sustainable Finance Framework eligibility criteria can be found on the Group’s website: shawbrook.co.uk/about-us/sustainability/securing-a-sustainable-future/

1 The framework references the European Union (EU) Taxonomy and the ICMA and LMA Green and Social Principles to inform its eligibility criteria.

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Cyber and digital security

Cyber and digital security is critical to maintaining customer trust, regulatory compliance and the Group’s resilience. We adopt a holistic approach to information security, with controls aligned to the National Institute of Standards and Technology (NIST) Cybersecurity Framework and a tested Cyber Incident Response Plan to manage cyber incidents effectively.

Digital security underpins customer trust, regulatory compliance, operational resilience and the secure delivery of digital products and services, and remains central as we expand digital channels, adopt cloud-based technologies, and increase integration with third-party providers. A robust and adaptive digital security strategy is vital for growth in an increasingly complex threat environment.

Security oversight is embedded within the Group’s governance framework, with clear accountability through Board-level oversight and Senior Management ownership. This oversight is supported by formal policies, defined escalation pathways and mandatory annual training for all colleagues, supported by ongoing engagement and awareness activities to reinforce a strong security culture.

Our Adaptive Security Architecture Framework provides multi-layered capabilities and controls to protect, detect, respond to, identify and govern cyber and information security risks. All controls are recorded against relevant risks within the Group’s risk management system and are subject to regular assessment ensuring that digital security considerations are integrated into day-to-day operations and strategic decision-making. We also conduct periodic testing of perimeter controls with the support of external advisers and maintain a programme of visible colleague awareness. Findings from testing, threat intelligence, and internal reviews drive continuous improvement of the control environment.

In 2025, we continued to invest in our technology landscape, including the adoption of hybrid multicloud resources to improve resilience and strengthen security controls across core systems and critical third parties. We operate in an environment of evolving cyber, data protection and third-party risks driven by increasingly sophisticated threat actors, which could impact service availability, regulatory compliance and reputation. A strong digital security posture mitigates these risks while enhancing resilience, increasing customer confidence and enabling the secure adoption of new technologies. We also invested in additional cyber security-focused resources to establish a new cyber response team. Internal change initiatives and external developments, including evolving regulatory expectations and threat landscape, continue to shape our digital security priorities. These investments have enabled a more proactive security approach, strengthening incident readiness, investigative capability and overall response effectiveness.

Shawbrook maintains a comprehensive suite of documented controls aligned with ISO 27001 and the NIST Cybersecurity Framework (CSF) 2.0. In 2025, internal audits were completed on the Govern and Detect- and-Respond domains, with audits of the Identify and Protect domains scheduled in 2026.

Shawbrook’s Cyber Incident Response Plan follows the NIST incident response lifecycle. The Group employs a range of technical controls, including endpoint detection and response, email and web filtering, and network intrusion detection systems, to proactively reduce the risk of data breaches. These controls are operated by the in-house security operations team and supported by a 24/7 Security Operations Centre delivered by a managed service partner. When reactive measures are required, mitigations are coordinated across the Chief Technology Office under the oversight of a dedicated Cyber Response Team. Refer to the Risk Report page 173 for further detail on technology and cyber risk.

Operational resilience

Our approach to operational resilience is focused on ensuring the continuity of the critical services our customers rely upon. We regularly assess, improve and test our approach to minimise disruption and meet agreed service levels. The Group confirmed compliance with regulatory requirements ahead of the Operational Resilience Policy final rules milestone in March 2025. We continue to evolve our operational resilience roadmap to respond and adapt to new threats, improve awareness and enhance controls for our Important Business Services, ensuring we remain within our defined Impact Tolerances. In 2025, we increased live scenario testing and further digitalised key processes, improving connectivity with third-party and risk management data. This enabled a more detailed assessment and management of resilience risks. As a result, there were no impact tolerance breaches during the year. Refer to the Risk Report page 172 for further detail on operational risk.

Third party suppliers

Our third-party supply chain is an extension of the Group’s services, and we actively review and manage it to ensure suppliers act responsibly, reflect our values and comply with regulatory requirements. This approach applies throughout the supplier lifecycle and is supported by robust procurement, due diligence and risk management processes, with Board-level oversight. We operate a risk-based approach to enable efficient onboarding while maintaining strong safeguards. In 2025, we enhanced our third-party risk management framework by upgrading systems, introducing AI capabilities, and creating a centralised risk team to strengthen supplier engagement, improve internal processes and ensure rigorous control execution. Our Supplier Code of Conduct sets clear expectations for partners. We also continued to leverage the Financial Services Supplier Qualification System to streamline information sharing, reduce duplication in due diligence and benefit from shared resources. A full copy of our Supplier Code of Conduct can be found on the Group’s website: shawbrook.co.uk/about-us/sustainability/securing-a-sustainable-future/

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Compliance, conduct and ethics including Speak Up (whistleblowing)

Our policies and procedures are underpinned by a strong framework aligned to regulatory requirements and principles of good conduct, and are regularly updated to reflect internal developments, industry standards and regulatory change. The Risk Monitoring team conducts independent reviews to assess how effectively policies, processes and behaviours are embedded across the organisation, focusing on adherence to FCA Principles, Consumer Duty and wider regulation to ensure sound decision-making and good customer outcomes remain central to our culture.

In 2025, we further strengthened our framework through several key initiatives. We launched an externally hosted Speak Up portal to enhance colleague confidence and independence in raising concerns, alongside updating the policy in line with the UK Government’s “Review of the whistleblowing framework in Great Britain”. We also implemented an AI-powered horizon-scanning tool to monitor regulatory developments in real time, delivering actionable insights to support timely responses and inform thematic priorities and monitoring activity.Following our listing, we introduced a new Market Conduct framework, including updated policies, procedures and training to ensure compliance with the Market Abuse Regulation and Listing Rules. Refer to the Risk Report page 176 for further detail on conduct risk.

Human rights and modern slavery

We are committed to respecting human rights and have a zero- tolerance approach to modern slavery. During 2025, we reviewed our oversight of third-party relationships and shared case studies in the Modern Slavery Working Group to support continuous improvement. We also conduct horizon-scanning to ensure our approach evolves in line with industry developments and regulatory requirements.

Financial crime including anti-bribery and corruption

We are committed to meeting our legal and regulatory obligations through a robust, risk-based approach designed to deter, detect, prevent and report financial crime. To protect the Group, our customers and the wider financial system, we continue to invest in technology and specialist expertise to strengthen our financial crime control framework. Our financial crime risk assessment covers key risks including money laundering, terrorist financing, bribery and corruption, sanctions, proliferation financing, tax evasion, modern slavery and fraud. Mandatory training is provided to all colleagues with completion rates monitored to ensure consistent awareness and understanding across the organisation. We recognise that the financial crime threat landscape continues to evolve and grow in complexity. As such, we regularly review and adapt our risk-management strategies to ensure that they remain proportionate, effective and responsive to emerging risks. A consistent Group-wide approach to financial crime risk management has been implemented across all entities during 2025, with the exception of ThinCats and Playter, which will be integrated in 2026. These enhancements were supported by strengthened governance arrangements, improved controls and continued development of the overall financial crime framework. Additional oversight was provided through internal audit activity and independent assurance, ensuring our controls remain effective.

Within this framework, we are committed to conducting our business in an honest, transparent and ethical manner, with zero tolerance for bribery and corruption. We operate professionally, fairly and with integrity across all activities and relationships. This commitment is supported by robust systems, policies and governance frameworks, including our Gifts, Entertainment and Hospitality Standards and our Anti-Bribery and Corruption Policy, which form part of our broader financial crime policy suite. These arrangements are subject to Board oversight, with clear escalation pathways to ensure appropriate governance and accountability. Suppliers and third parties engaged by the Group are required to adhere to these standards and associated policies. Collectively, these measures promote ethical conduct, ensure legal and regulatory compliance, and mitigate bribery and corruption risks across the Group. Refer to the Risk Report page 179 for further detail on financial crime.

Tax strategy

The Group seeks to maintain its reputation as a fair contributor to the UK economy, applying tax law in good faith and in the intended spirit. We fulfil our tax obligations responsibly and transparently and seek to maintain an open, honest and constructive relationship with HMRC in relation to our tax dealings. We comply with HMRC’s Code of Practice on Taxation for Banks and in line with it, we have documented our tax governance process and publish our Tax Strategy annually. More information on our Tax Strategy can be found on the Group’s website: shawbrook.co.uk/about-us/sustainability/securing-a-sustainable- future/ A full copy of our Modern Slavery Statement can be found on the Group’s website: shawbrook.co.uk/information/modern-slavery-act/

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Creating value for our stakeholders (S172 statement)

This section explains how the Directors have fulfilled their duties under Section 172(1)(a) to (f) of the Companies Act 2006, having regard to the matters set out therein when promoting the success of the company for the benefit of its members as a whole.

Understanding what is important to our stakeholders is central to sustainable value creation. We remain closely connected to our stakeholders and use insights gathered through ongoing engagement to inform strategic and operational decision-making, enabling us to anticipate and respond to changing needs and expectations. Effective stakeholder engagement supports robust decision-making and long-term performance. In undertaking its duties, the Board remains mindful of the need to appropriately balance the interests and expectations of the Group’s various stakeholders. This statement summarises how the Board, including its committees, and the Executive Committee have continued to engage with, and have regard to the needs of key stakeholders in their decision-making throughout the year.

Customers

Delivering a high-quality proposition that meets the needs of our customers is a core component of the Group’s strategy. Our approach is underpinned by a strong understanding of what matters most to our customers, supported by ongoing engagement and insight across our diversified business. These insights enable us to prioritise improvements, helping us to anticipate customer needs, deliver tailored solutions and monitor and improve our service quality and expertise. The Board ensures that the voice of the customer remains central to its discussions. Oversight of customer outcomes, including those arising under the Financial Conduct Authority’s (FCA) Consumer Duty, continues to be supported by the Board Consumer Duty champion, Janet Connor. The Board receives regular customer insights, bringing together feedback and performance metrics from across the Group’s business to support effective challenge and decision-making. The Board oversees significant developments to the Group’s products and propositions, including initiatives aimed at enhancing customer journeys and overall experience. During 2025, this included the full roll-out of the Group’s proprietary Digital Savings Platform, ensuring 100% of savings customers benefit from enhanced digital functionality and more intuitive customer journeys. Customer-focused themes are also embedded within the business updates provided to Board. Ensuring that customer considerations remain central to both strategic and operational discussions.

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Distribution partners

Our distribution partners play a critical role in enabling the Group to deliver its specialist products and services efficiently and at scale. Through these relationships, the Group is able to access a broad range of markets, deepen its understanding of customer and partner needs, and support sustainable growth. The Board recognises the strategic importance of an effective and resilient distribution model and considers distribution partner matters as part of its oversight responsibilities. The Board and Executive Committee maintain a strong focus on building and maintaining trusted relationships with distribution partners. The Board receives regular updates on distribution performance, market developments and broker feedback, and provides support and constructive challenge to Management on the Group’s distribution strategy and approach. Through this structured oversight, the Board ensures that distribution considerations remain aligned with the Group’s strategic objectives and customer needs. The Board oversees investment in technology that supports an effective and efficient distribution partner experience. During the year, the Board was updated on the expansion of the Lending Hub origination platform to include bridging finance, enabling brokers to deliver more streamlined customer journeys across a wider range of products. The Board also noted the introduction of a dedicated broker contact line across the Group’s Retail Mortgage Brands, designed to improve the broker experience by providing faster and more efficient access to the appropriate business development manager. The Executive Committee maintains regular and open dialogue with the Group’s distribution network, including attendance at broker meetings and industry events by senior executives.

Employees

The Group’s performance and long-term success is driven by the skill, commitment and expertise of its people. Shawbrook’s culture, centred on accountability and an entrepreneurial mindset, is a key enabler of performance. The Board recognises that this culture is a critical enabler of innovation, performance and sustainable value creation. The Board is committed to supporting an inclusive environment in which colleagues are empowered to contribute effectively within clear risk and conduct standards. The Board, supported by the Nomination and Governance Committee and the Remuneration Committee, oversees the Group’s approach to employee engagement, reward, wellbeing and development, and receives updates on talent and succession planning, leadership capability and engagement. Feedback from our regular employee engagement surveys is reported to the Board enabling effective oversight and informed discussion on colleague sentiment and engagement priorities. In addition, insights from the People Engagement Forum are incorporated into updates presented to the Nomination and Governance Committee, further supporting the Board’s understanding of colleague perspectives during the year.Outside of formal Board meetings, during the year, Directors also took part in an AI demonstration session run by members of the Senior Management Team. The session included a run-through of illustrative use cases, helping to build understanding of how AI solutions are supporting colleagues and enhancing operational effectiveness across the Group. The Group continues to invest in its broader employee value proposition to support attraction, retention and development of talent. During the year, enhancements were made to learning and development opportunities, alongside further expansion of the Group’s internal coaching and mentoring offering, with over 400 coaching and mentoring sessions completed through established platforms. Following the listing, the Board approved the introduction of an employee share scheme. By enabling colleagues to directly participate in the Group’s long-term performance, the scheme reinforces an ownership mindset and a long-term approach to value creation aligned with shareholder interests.

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Suppliers

The Group relies on a diverse range of suppliers to deliver its operations and strategic objectives. Strong and well-managed supplier relationships are essential to operational resilience, service quality, cost control and continuity. The Board recognises the important role responsible supply chains play in underpinning the Group’s long-term success and sets clear expectations for high standards of conduct across the supplier base. The Group is committed to building and maintaining trusted relationships with high- quality suppliers that operate in a manner consistent with the Group’s values and standards. The Board receives regular updates on the management and performance of material third parties, including relevant management information, performance metrics and risk oversight, enabling effective challenge and supporting risk mitigation and operational resilience. The Group maintains a zero-tolerance approach to modern slavery. The Board approves the Group’s Modern Slavery Statement annually and oversees the actions taken to mitigate the risks of modern slavery and human trafficking within the supply chain. All suppliers are expected to comply with the Modern Slavery Act and to uphold high standards in relation to human rights, health and safety, and legal and regulatory compliance. Due diligence is undertaken on material suppliers at the outset of any contractual relationship and on an ongoing basis thereafter, including screening for criminal and regulatory breaches and assessment of financial resilience where appropriate.

Regulators

The Group operates within a comprehensive regulatory framework and is authorised and regulated by both the PRA and FCA. The Board recognises that effective regulatory engagement is critical to maintaining its licence to operate and is committed to maintaining open, constructive and transparent relationships with its regulators. The Board is regularly updated on key regulatory and legislative developments to ensure that the Group’s strategy, risk appetite and decision- making remain aligned with evolving regulatory expectations and capital requirements. During the year, the Chairman and Executive Directors engaged directly with the PRA and FCA to discuss matters including strategy, financial resilience, governance and conduct. The Board also has visibility of Management’s ongoing interactions with regulators through regular financial, risk and regulatory reporting. This provides appropriate oversight of regulatory matters and enables effective challenge where required. In addition, the Group’s Chief Risk Officer provides regular updates to the Risk Committee on regulatory engagement and horizon scanning, further strengthening the Board’s understanding of emerging regulatory developments. Alongside the PRA and FCA, the Group engages with a range of other financial and non-financial regulatory bodies, including the Bank of England and the Financial Ombudsman Service.

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Investors

The Group’s investors comprise a broad range of equity shareholders and debt investors who provide the capital required to support the Group’s strategy, and long-term sustainability. Following the Group’s IPO, the shareholder base has diversified significantly, reflecting increased participation from institutional and retail investors. The Board recognises that effective engagement with investors is fundamental to strong corporate governance, stewardship and access to capital, and supports informed decision-making and the creation of long-term shareholder value. During the year, the Board was closely engaged throughout the IPO process, providing oversight and key approvals at each stage. As part of the listing process, Senior Management undertook an extensive programme of investor roadshows and meetings with prospective investors. Feedback from these engagements was shared with and considered by the Board. Further detail on stakeholder considerations in the context of the IPO is provided in the IPO spotlight on page 52. The interests of our majority Shareholders are represented at the Board by two appointed Non-Executive Directors. During 2025, our majority Shareholders and their teams were actively engaged in the Group’s decision-making, enabling Senior Management to draw on their expertise where appropriate. Their perspectives contribute constructively to Board discussions on strategic matters. The Chairman maintains regular dialogue with majority Shareholders to understand their views on governance and performance against strategy. We also regularly attend events hosted by our majority Shareholders, facilitating the sharing of insights and best practice across their wider investment portfolios. The Board receives regular updates on investor relations activity and market developments. The Group’s corporate brokers and Chief Financial Officer provide updates on investor sentiment, macroeconomic conditions and capital market dynamics, supporting the Board’s understanding of factors that may influence the Group’s valuation and market positioning. We also have an extensive programme for engaging with our debt investors. During 2025, we maintained regular engagements with our debt investor community to discuss topics such as our financial results, progress against our strategy and wholesale debt issuance, and participated in a number of relevant industry events.

Community

The Group’s community stakeholder group encompasses both the local communities in which we operate and the wider environment. During the year, we refined our approach to community engagement and charitable giving. This included refocusing charitable giving to better reflect causes that matter most to colleagues, alongside increased participation in our Make a Difference volunteering days, strengthening colleague involvement and local community impact. We continued to deliver targeted, high-impact programmes with our two strategic charity partners, Saracens Foundation and Future First, supporting initiatives focused on gender equality and social mobility. The Board oversees the development and delivery of the Group’s sustainability strategy, and is provided with regular updates. Further information on the Group’s community initiatives is set out in the Sustainability Report on pages 32 to 47.

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During the year, the Board considered the interests of the Group’s stakeholders in the context of the Group’s IPO, recognising it as an important step in supporting the long-term success and development of the Group. In evaluating the IPO, the Board focused on the Group’s positioning as a listed company, including enhanced market visibility, increased access to public capital markets and a broader shareholder base. The Board recognised the importance of ensuring colleagues were appropriately informed about the IPO and what it meant for the Group as it transitioned to public ownership. Engagement with all colleagues took place following the publication of public information, with communications designed to explain the rationale for the listing and the implications for the Group, including an all-employee call led by the Chairman. Following the listing, the Board approved the introduction of employee share schemes, enabling colleagues to participate directly in the Group’s future performance and further reinforcing an ownership mindset aligned to long-term value creation. In overseeing the IPO, the Board was mindful of the need to maintain continuity and resilience across key supplier relationships. Management engaged with critical suppliers to support business continuity during the process, and the Board recognised this engagement as integral to maintaining operational stability throughout the transaction. The IPO resulted in a more diversified shareholder base, with participation from both institutional and retail investors. The Board was actively engaged throughout the process, providing oversight and approvals at key stages. Feedback from investors, obtained through roadshows led by the Chief Executive Officer and Chief Financial Officer, was shared with and considered by the Board as part of its broader assessment of the Group’s strategy and long-term positioning. The Board also supported the inclusion of a retail offering as part of the IPO, viewing this as an opportunity to broaden participation and engagement with the Group upon becoming a publicly listed company.The Chairman and Chief Executive Officer also maintained open and constructive dialogue with regulators throughout the process. IPO spotlight Shawbrook Group plc | Annual Report and Accounts 2025 52 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Non-financial and sustainability information statement

Our non-financial and sustainability information statement has been prepared in order to comply with the requirements contained in sections 414CA and 414CB of the Companies Act 2006. The information listed is incorporated by cross-reference to relevant content.

Reporting requirement	Relevant policies, principles and statements that govern our approach (please see pages 54 to 55 for a description of each policy)	Information necessary to understand our approach, impact and outcomes	Pages
Our employees	• Code of Conduct and Ethics Policy • Training and Development Policy • Dignity at Work Policy • Speak Up Policy • Facilities Policy	Creating value for our stakeholders (S172 statement)	49
		Sustainability Report	32-47
Our suppliers	• Group Procurement Policy • Third Party Risk Management Policy	Sustainability Report	46
		Creating value for our stakeholders (S172 statement)	50
Environmental matters	• Facilities Policy • Group Credit Risk Standards Policy	Sustainability Report	40-43
		Risk Report	178
		Climate Report	183-205
Social matters	• Dignity at Work Policy • Equal Opportunities Policy • Sustainability Policy • Complaints Handling Policy	Sustainability Report	32-47
Human rights and modern slavery approach	• Pursuant to the UK Modern Slavery Act, we produce an annual modern slavery statement shawbrook.co.uk/information/modern- slavery-act/ • Group Procurement policy	Sustainability Report	47
Anti-bribery and corruption	• Anti-bribery and Corruption Policy	Sustainability Report	47

Reporting requirement	Information necessary to understand our approach, impact and outcomes	Pages
Description of our business model	Our business model	5
Non-financial key performance indicators	Our strategy	4
	Sustainability Report	32-47
Principal risks and uncertainties	Risk Report	128-180
Climate-related disclosures	Climate Report	183-205

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In relation to the requirements relating to policies, we have included a summary of all the key policies in the table below$^1$.

Policy	Description
Anti-bribery and Corruption	Sets out the Group’s approach to managing the risk of bribery and corruption and to ensure we conduct business in an honest and ethical manner, taking a zero-tolerance approach to bribery and corruption. It applies to all Group employees$^2$, is owned by the Money Laundering Reporting Officer and is subject to at least annual review with Board oversight.
Code of Conduct and Ethics	Provides the framework for the standards expected of employees in their daily decision-making, including guidance on appropriate conduct when dealing with customers, suppliers and other external parties. It applies to all Group employees$^2$, is owned by the Chief HR Officer and is subject to review at least every two years.
Complaints Handling	Establishes the Group’s approach to ensuring that complaints relating to the services provided to customers are handled fairly, effectively and promptly, with the aim of minimising unresolved complaints and delivering good customer outcomes. It applies to all Group employees$^2$ and anyone who conducts work on behalf of the Group. It is owned by the Chief Compliance Officer and is subject to at least annual review.
Dignity at Work	Sets out our commitment to creating a work environment free of harassment and bullying, where everyone is treated with dignity and respect. It applies to all Group employees$^2$, is owned by the Chief HR Officer and reviewed at least every two years.
Equal Opportunities	Demonstrates our commitment to equal opportunities in employment and opposition to all forms of unlawful discrimination in employment and against customers. It applies to all individuals who interact with the Group, including current and former employees. It is owned by the Chief HR Officer and reviewed at least every two years.
Facilities	Sets out our duty as an employer to comply with relevant regulation and legislation under the remit of facilities management and to ensure the health, safety and welfare of all employees and our commitment to improving environmental performance across all our estates. It applies to all Group employees$^2$ and third parties working on Group sites, is owned by the Head of Financial Control and Reporting and is subject to at least annual review.
Group Credit Risk Standards	Outlines our approach and appetite for climate-related matters, and wider environmental, social and ethical issues associated with the sectors and customers we support. It sets out when exclusions apply or when enhanced due diligence is required where there is potential for high adverse, environmental, social and/or ethical impact linked to lending proposals. It applies to all Group employees$^2$ involved in acquiring or managing credit risk, is owned by the Chief Credit Officer and is subject to at least annual review.
Group Procurement	Provides rules and guidance to ensure that procurement, contracting and supplier management activities are risk averse, meet all regulatory and legal obligations and align with our wider strategy and purpose. It applies to all Group employees$^2$ involved in procuring suppliers that provide goods and services to Shawbrook, is owned by the Chief Operating Officer and is subject to at least annual review.
Speak Up	Encourages colleagues to disclose information, in good faith and without fear of unfair treatment, when they suspect any illegal or unethical conduct or wrongdoing affecting the Group. It applies to all current and former Group employees$^2$, as well as anyone acting on behalf of the Group. It is owned by the Chief Compliance Officer and is reviewed at least every two years.
Sustainability	Sets out our approach to sustainability and realising opportunities and managing risks across sustainability issues. The purpose is to communicate our sustainability strategy to employees and help to embed this across the organisation. It applies to all Group employees$^2$, is owned by the Head of Sustainability and is reviewed at least every two years.
Third Party Risk Management	Contains the relevant rules and guidance to ensure that procurement, contracting and supplier management activities are undertaken in line with relevant regulatory standards. It applies to all Group employees$^2$, is owned by the Chief Risk Officer and is subject to at least annual review.
Training and Competence	Sets out our approach to encouraging training and development, acknowledging that it helps to improve the Group’s performance and contributes to the retention and development of talent. It applies to all Group employees$^2$, is owned by the Chief HR Officer and reviewed at least every two years.

$^1$ A transition period is expected for newly acquired entities as they are incorporated into the Group’s policy framework as part of the annual refresh cycle.
$^2$ Refers to the full-time and part-time employees.

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Policy	Description
Group Procurement	Provides rules and guidance to ensure that procurement, contracting and supplier management activities are risk averse, meet all regulatory and legal obligations and align with our wider strategy and purpose. It applies to all Group employees$^2$ involved in procuring suppliers that provide goods and services to Shawbrook, is owned by the Chief Operating Officer and is subject to at least annual review.
Speak Up	Encourages colleagues to disclose information, in good faith and without fear of unfair treatment, when they suspect any illegal or unethical conduct or wrongdoing affecting the Group. It applies to all current and former Group employees$^2$, as well as anyone acting on behalf of the Group. It is owned by the Chief Compliance Officer and is reviewed at least every two years.
Sustainability	Sets out our approach to sustainability and realising opportunities and managing risks across sustainability issues. The purpose is to communicate our sustainability strategy to employees and help to embed this across the organisation. It applies to all Group employees$^2$, is owned by the Head of Sustainability and is reviewed at least every two years.
Third Party Risk Management	Contains the relevant rules and guidance to ensure that procurement, contracting and supplier management activities are undertaken in line with relevant regulatory standards. It applies to all Group employees$^2$, is owned by the Chief Risk Officer and is subject to at least annual review.
Training and Competence	Sets out our approach to encouraging training and development, acknowledging that it helps to improve the Group’s performance and contributes to the retention and development of talent. It applies to all Group employees$^2$, is owned by the Chief HR Officer and reviewed at least every two years.

Shawbrook Group plc | Annual Report and Accounts 2025 55 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Group viability statement

The Directors have assessed the outlook for the Group over a longer period than the 12 months required by the going concern statement that is set out in provision 31 of the UK Corporate Governance Code. In accordance with provision 31 of the UK Corporate Governance Code, the Directors have assessed the outlook for the Group over a longer period than the 12 months required by the going concern statement. The Board considers a three-year period to be an appropriate length of time for the viability assessment, reflecting the Group’s strategic planning cycle and the period over which the Board reviews, approves and monitors the Group’s strategy and financial forecasts. Given the inherent uncertainty involved in forward-looking assumptions, the Board considers this period to be appropriate. The three-year period is also consistent with the horizon used in the Group’s capital planning processes.

In assessing viability, the Board considered the following:
* updates to the Group’s business plans and financial performance during the year;
* the Group’s current and forecast liquidity and funding plans supporting its strategic objectives;
* the Group’s principal and emerging risks, including the effectiveness of the overall control environment, as reported regularly to the Board;
* the Group’s strategy and longer-term plan, including stressed scenarios demonstrating continued operation within regulatory capital and liquidity requirements;
* the quantity and quality of capital resources available to support the Group’s objectives, including the potential impact of regulatory developments and recovery planning arrangements; and
* the outcomes of the Group’s ICAAP and ILAAP.

In addition, the Board considered the outcomes of stress testing and reverse stress testing performed by the Group, which were informed by the Group’s principal and emerging risks and presented to the Board.Stress testing has enabled the Board to assess the resilience of the Group’s business model under a range of severe but plausible scenarios. The Group has identified a number of credible management actions, which can be implemented to manage and mitigate the impact of stress scenario. Each action is evaluated against criteria including impact, speed of implementation, impact on the segment, and market conditions. This statement is made to comply with Provision 31 of the 2018 UK Corporate Governance Code which requires the Board to assess the viability of the Group over a stated time horizon. Management actions are used to inform capital, liquidity and recovery planning under stress conditions In addition, the Group identifies a number of reverse stress testing scenarios, which could result in the failure of its strategy and business model. Reverse stress testing supported the identification of key vulnerabilities, early warning indicators and potential mitigating actions. Reverse stress testing plays an important role in helping the Board 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 including fire drill tests to assess the impact of cyber scenarios. The Board considered that the risks relevant to the Group were appropriately reflected in the stress testing scenarios used. Following due consideration of the areas outlined above, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over a period of at least three years. The Strategic Report was approved by the Board on 11 March 2026 and signed on its behalf by the Chief Executive Officer. Marcelino Castrillo Chief Executive Officer Shawbrook Group plc | Annual Report and Accounts 2025 56 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 57 Shawbrook Group plc | Annual Report and Accounts 2025 Corporate Governance Report 58 Chairman’s introduction 59 Board of Directors 62 Corporate Governance 73 Audit Committee Report 78 Risk Committee Report 82 Directors’ Remuneration Report 102 Nomination and Governance Committee Report 105 Directors’ Report FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 58 Shawbrook Group plc | Annual Report and Accounts 2025 Chairman’s introduction

“On behalf of the Board, I am pleased to present the Corporate Governance Report for the year ended 31 December 2025.”

Our commitment to good corporate governance
We continue to maintain high standards of corporate governance within the Group. This report explains how the Board and its committees have ensured that the corporate governance arrangements within the Group are effective and continue to support disciplined decision-making, risk management and the creation of long-term sustainable value for all our stakeholders. The Board endorses the Financial Reporting Council’s UK Corporate Governance Code 2024 (the Code) and, since listing in November 2025, fully complies with all its principles. Whilst we did not formally adopt the Code prior to our listing, we have reported against the principles and provisions for the full year ended 31 December 2025. Further details on our compliance with the Code, including those areas where we previously did not fully comply, can be found on page 62.

Board succession planning
We continue to monitor the membership of the Board and its committees to ensure that there is a suitable balance of diversity, skills and experience. Following a structured handover process with the previous Risk Committee Chair, Derek Weir was appointed as Chair of the Risk Committee on 21 January 2025. Following our listing in November 2025, we made changes to the membership of the Risk Committee, the Audit Committee and the Remuneration Committee, in order to comply with the requirements of the Code, with Lindsey McMurray and Cedric Dubourdieu stepping down as members of those committees. Paul Lawrence retired from the Board in March 2025. I would like to thank Paul for his significant contribution as a Director and as Chair of the Risk Committee.

Looking forward
As a newly listed company, the Board recognises the importance of continually strengthening its governance framework. In the year ahead, our focus will be on ensuring continued alignment between our purpose, culture, strategy and governance arrangements, while maintaining high standards of accountability and oversight.

John Callender Chairman

Board meetings and activity
In 2025, the Board considered several key areas, which can broadly be categorised into the following themes: strategy and execution, financial performance, risk management, regulatory and corporate governance. Further details on how the Board operated during 2025, including the areas of Board focus, can be found on page 69. In addition, the Board spent considerable additional time outside meetings on preparations for our listing. The Board’s committees also continued to play a critical role in the governance and oversight of the Group, by ensuring adherence to strong governance practice and principles. In addition, two Independent Non-Executive Directors, Janet Connor and Derek Weir, continued to ensure Board engagement and oversight through their respective sponsorship of the Consumer Duty and our data-led culture through Model Risk working groups. This section contains a report from each of the Board’s principal Committees, setting out their approach and considerations.

Effectiveness and evaluation
The Board regularly reviews its own effectiveness and performance. Further details can be found on page 65.

Purpose and culture
The Group’s success is reliant on our commitment to maintaining high standards of corporate governance, as well as a strong purpose and a productive, engaged and talented workforce. In support of this, the Board is committed to promoting an inclusive culture that encourages innovation, accountability and long-term sustainable success. The Board receives updates throughout the year regarding the Group and its stakeholders, including details of our Group-wide employee engagement survey which was conducted in October 2025. In addition, members of the Board attend all-staff calls, site visits, strategy days, and community events.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 59 Shawbrook Group plc | Annual Report and Accounts 2025

John Callender Chairman
Dylan Minto Chief Financial Officer
Marcelino Castrillo Chief Executive Officer
Lan Tu Senior Independent Director


Skills and experience	External appointments
Appointed to the Board in February 2017.
Skills and experience Dylan joined Shawbrook in 2013 from KPMG LLP, where he spent 11 years in their Financial Services practice advising large UK and European banks. Dylan was appointed permanent CFO in February 2017. He is a Fellow of the ICAEW and holds a dual BA Honours degree in German and Business Studies from Sheffield University.	External appointments None.

Skills and experience	External appointments
Appointed to the Board in June 2021.
Skills and experience Marcelino has a wealth of financial services experience across both retail and commercial banking, including senior leadership roles at NatWest and Santander in retail and commercial banking. Building on his experience at The Boston Consulting Group, working across multiple sectors and geographies, Marcelino has overseen significant digital and customer-centric transformation during his time at Shawbrook. Marcelino holds an MBA from MIT Sloan School of Management and a Masters in Industrial Engineering (ETSII, Madrid).	External appointments Marcelino is a Director of UK Finance Limited.

Skills and experience	External appointments
Appointed to the Board in March 2022.
Skills and experience Lan has over 30 years’ experience in financial services, starting her career at McKinsey & Co., before holding a number of executive positions at American Express, Standard Life Aberdeen and Virgin Money Investments. Between 2015 and 2021, Lan was also a Non-Executive Director of Arrow Global, WNS (Holdings) and Kings College London University. She has a particular depth of experience in payments, digital/technology and organisational design. Lan was also previously an advisor to the Board of Mental Health @Work, a company that promotes mental health in the workplace.	External appointments Lan is Chair of Queen Mary, University of London and is the Senior Independent Director of Paypoint plc.
R N RI A N R
Board of Directors	Committee
Audit Committee	A
Nomination and Governance Committee	N
Remuneration Committee	R
Risk Committee	RI

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 60 Shawbrook Group plc | Annual Report and Accounts 2025


N	RI	A	R

Appointed to the Board in October 2019.
Skills and experience Michele has comprehensive experience in operations, transformation, IT and distribution leadership, with focus on the customer. She has operated across blue chip, mid-scale and start-up entities, including private equity backed banks. Michele previously held Executive and Chief Operating Officer roles at several banks, including Lloyds TSB, Harrods and Allica.	External appointments Michele is currently a Non-Executive Director and the Risk Committee Chair of Davies Broking Services Limited, Davies MGA Services Limited and Davies Intermediary Support Services Limited and a Non-Executive Director, and Chair of the Remuneration Committee of Northern Bank Limited.

Appointed to the Board in February 2017.
Skills and experience Andrew has extensive financial services experience.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 61 Shawbrook Group plc | Annual Report and Accounts 2025He is a fellow of ICAEW, having enjoyed a successful career at KPMG LLP, becoming a partner in 1990, and subsequently as Group Finance Director of the international Rothschild investment banking group. Andrew also served as a Non-Executive Director on the Boards of the listed companies, Jardine Lloyd Thomson Group plc and Charles Stanley plc, including appointment as Chair of Charles Stanley and Co Limited. External appointments Andrew is currently an Executive Vice-Chairman for Rothschild and Non-Executive Director of each of IG Group Holdings plc, IG Index Limited, IG Markets Limited, IG Trading and Investments Limited and Non-Executive Chairman of GCP Infrastructure Ltd. Committee Chair Audit Committee A Nomination and Governance Committee N Remuneration Committee R Risk Committee RI RI A Andrew Didham Independent Non-Executive Director Michele Turmore Independent Non-Executive Director Appointed to the Board in May 2022. Skills and experience Janet has over 30 years’ experience in consumer-facing financial services, latterly in insurance. Starting her career at Abbey National (now Santander), she went on to hold a number of managing director positions at RIAS plc, Royal & Sun Alliance (in its More Than business) and most recently The AA Group, where she was a Managing Director of Automobile Association Insurance Services Limited. External appointments Janet is a Non-Executive Director and Chair of AA Insurance Services Limited and Chair of Domestic and General Insurance plc. Janet Connor Independent Non-Executive Director RI A Derek Weir Independent Non-Executive Director Appointed to the Board in July 2024. Skills and experience Derek has over 35 years of financial services experience in corporate and commercial banking, both in the UK and internationally, including senior leadership roles at Royal Bank of Scotland and Barclays, with deep expertise in business growth and transformation across multiple sectors, including financial services, retail, construction, transport and sport. Derek has held a number of Non-Executive roles including Chair of the Board Risk Committee and Senior Independent Director at the Co-operative Bank. Derek has invested in a number of early-stage companies. External appointments Derek is currently a Director of Halo Urban Regeneration Limited and is Chair of Basketball Scotland Limited. RI A N R FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 61 Shawbrook Group plc | Annual Report and Accounts 2025 Committee Chair Audit Committee A Nomination and Governance Committee N Remuneration Committee R Risk Committee RI Andrew Nicholson Company Secretary N N Appointed as Company Secretary in January 2023. Skills and experience Andrew has over 20 years’ experience in corporate governance roles. Andrew has previously held Head of Corporate Governance roles at Revolut and Ulster Bank and was Assistant Company Secretary of the Royal Bank of Scotland / NatWest Group. External appointments None. Appointed to the Board in September 2017. Skills and experience Cédric has 24 years of private equity experience, having led several investments in a variety of sectors across Europe. He holds a degree from Ecole Polytechnique, Paris. External appointments Cédric is a Partner of private equity firm BC Partners and sits on BC Partners’ Investment Committee for relevant investment opportunities. Outside of the Group, Cédric is also a board member of Davies Group, a leading provider of services to the insurance sector and other regulated sectors and Havea Group, Europe’s natural health leader. Appointed to the Board in April 2010. Skills and experience Lindsey has been a private equity investor for over 25 years with a particular focus on the financial services sector. She has a First-Class Honours degree in Accounting and Finance and studied for an MPhil in Finance from Strathclyde University. Lindsey is Managing Partner of Pollen Street Capital and is Chair of their Investment Committee. Outside of the Group, Lindsey is also a Non-Executive Director of several Pollen Street Capital portfolio companies. External appointments Lindsey is Managing Partner of Pollen Street Capital and is Chair of their Investment Committee. Lindsey is also a Non-Executive Director of several portfolio companies. Lindsey McMurray Institutional Director Cédric Dubourdieu Institutional Director FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 62 Shawbrook Group plc | Annual Report and Accounts 2025 This report explains the Board’s role and activities and how corporate governance operates throughout the Group.

The UK Corporate Governance Code

As a result of becoming a listed entity in November 2025, the Company is required to adopt the ‘comply or explain’ approach of the Code published by the Financial Reporting Council. Following a full review and subsequent update of corporate governance arrangements at the point of listing, including Board Reserved Matters, Terms of Reference and Policies, the Company currently fully complies with all Code principles. Although the Code did not directly apply to the Company prior to November 2025, the Company recognises the value of a strong approach to corporate governance and has again elected to report against the principles and provisions within the Code for the full financial year. The Company has complied with all the principles and provisions of the Code throughout the financial year and up until the date of this report, except as explained below:

Audit, Risk and Remuneration Committee Membership (Code Provisions 24, 25 and 32)

The membership of these committees comprised a majority of Independent Directors, however two Institutional Directors were also members during the year, up until both stepped down as members of each of the Audit, Risk and Remuneration Committees in November 2025.

Shareholding requirement for Directors (Code Provision 36)

The Group had not adopted a formal policy regarding post-employment shareholding requirements for Directors given leaver provisions in existing incentive arrangements. This deviation was remediated in November 2025.

Executive pensions (Code Provision 39)

Executive Directors may participate in the Group’s workplace pension arrangement or receive a cash allowance in lieu (in full or part) of pension contributions. During the year, each Executive Director received a pension contribution and/or allowance to a combined value of 15% (8% wider workforce) of salary per annum. However, this was remediated in November 2025 following the IPO. Each Executive Director currently receives 8%, in line with all employees.

Preparing for Code Provision 29

The Board recognises that Provision 29 of the Code will apply as of 1 January 2026. As a first step towards compliance with this provision, the Board reviewed and approved the definition of its material controls during 2025. The Controls Testing team within Risk Services will test the majority of material controls, while Finance and the Technology functions will conduct their own testing using the same standards. Reporting will be coordinated centrally through the Controls Testing team, with outcomes presented to Management and the Board. Group Internal Audit will provide assurance over the adequacy of the material controls framework, including the robustness of controls testing and reporting arrangements. In addition, Group Internal Audit will undertake its own risk-based testing of selected Material Controls, either through planned audit reviews or targeted assurance activity. The outcomes of this work will be reported to the Audit Committee to support effective oversight and the Board’s declaration under Provision 29.

Corporate Governance FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 63 Shawbrook Group plc | Annual Report and Accounts 2025

The Board

The Board takes account of the views of the Group’s shareholders and has regard to wider stakeholder interests and other relevant matters in its discussions and decision-making. The Board recognises that stakeholders’ interests are integral to the promotion of the Group’s long-term sustainable success. Further information about how the Board considers the interests of its stakeholders can be found on pages 48 to 51. A Framework Agreement was in place with the Group’s sole Shareholder, which included a formal schedule of matters reserved for the Board and those matters which required recommendation to the Shareholder for approval, up to the point of listing in November 2025. This document was supported by a Memorandum of Understanding, which preserved the Board’s independence when making significant decisions. Relationship Agreements are now in place with the Group’s controlling shareholders, PSC Marlin Holdco Limited and Marlinbass Limited. These agreements regulate the relationship between the Company and the controlling shareholders, including the right to appoint Representative Directors, provision of information and processes relating to transactions in shares. The Board delegates specific powers for some matters to Board committees with the outputs from each committee meeting reported to the Board regularly, thus ensuring the Board maintains the necessary oversight. More detail on the committees and their work is described in the separate committee reports on pages 73 to 104. Other than those items specified by statute or regulation, there are no items currently reserved for shareholder approval.

Composition, Board balance and time commitment

The Board currently consists of 10 members, namely the Chairman, five Independent Non-Executive Directors, two Executive Directors and two Institutional Directors. Biographical details of all Directors are on pages 59 to 61.The Independent Non-Executive Directors have substantial experience across all aspects of banking, including relevant skills in financial management, regulatory matters, credit assessment and pricing, liability management, technology, operational and conduct matters. The Independent Non-Executive Directors are considered to be of sufficient calibre and experience to influence the decision- making process. The Board considers that the balance of skills and experience is appropriate to the requirements of the Group’s business and that the balance between Executive and Independent Non-Executive Directors allows it to exercise objectivity in decision-making and proper control. Each member of the Board has had access to all information relating to the Group, the advice and services of the Company Secretary (who is responsible for ensuring that governance procedures are followed) and, as required, external advice at the expense of the Group. The Board, with the assistance of the Nomination and Governance Committee, keeps under review the structure, size, and composition of the Board (and undertakes regular evaluations to ensure it retains an appropriate balance of skills, knowledge and experience). The membership of the various Board committees and the expected time commitment of the Directors is closely monitored. The terms of appointment of the Independent Non-Executive Directors specify the amount of time they are expected to devote to the Group’s business. They are currently required to commit at least five days per month, which is calculated based on the time required to prepare for, and attend, Board and committee meetings, meetings with shareholders and with the Executive Committee, and training.

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Notes
1 Meetings were held from January to December 2025.
2 Due to other commitments Lan Tu was unable to attend one Board meeting during 2025.
3 Due to other commitments Janet Connor was unable to attend one Board meeting during 2025.
4 Due to other commitments Lindsey McMurray was unable to attend one Board meeting, two Audit Committee meetings, two Risk Committee meetings, two Remuneration Committee meetings and one Nomination and Governance Committee meeting during 2025.
5 Due to other commitments Cedric Dubourdieu was unable to attend one Board meeting, one Audit Committee meeting and one Nomination and Governance Committee meeting.
6 Due to other commitments Andrew Didham was unable to attend one Board meeting and three Nomination and Governance Committee meetings. Andrew’s commitments were in place prior to Andrew having been appointed to the Nomination and Governance Committee.

Director	Board	Audit Committee	Risk Committee	Remuneration Committee	Nomination and Governance Committee
John Callender	7/7	6/6	6/6	4/4	3/3
Marcelino Castrillo	7/7	6/6	6/6	4/4	3/3
Dylan Minto	7/7	6/6	6/6	-	-
Lan Tu	6/7 $\text{}^{2}$	6/6	6/6	4/4	3/3
Janet Connor	6/7 $\text{}^{3}$	6/6	6/6	-	3/3
Lindsey McMurray	6/7 $\text{}^{4}$	4/6	4/6	2/4	2/3
Cédric Dubourdieu	6/7 $\text{}^{5}$	5/6	6/6	4/4	2/3
Andrew Didham	6/7 $\text{}^{6}$	6/6	5/6	-	0/3
Michele Turmore	7/7	6/6	6/6	4/4	3/3
Derek Weir	7/7	6/6	6/6	4/4	3/3
Paul Lawrence	2/2	3/3	2/2	-	1/1

The attendance above reflects the number of scheduled Board and committee meetings held during 2025. During the year there were also a number of ad-hoc Board and committee meetings to deal with matters arising outside of the usual meeting schedule. The majority of Directors made themselves available at short notice for these meetings.
* John Callender, Marcelino Castrillo and Dylan Minto are not members of the Audit and Risk Committees but attend committee meetings.
* Marcelino Castrillo is not a member of the Remuneration and Nomination and Governance Committees but attends the committee meetings.
* Linsdey McMurray and Cedric Dubourdieu ceased to be members of the Audit, Risk and Remuneration Committee meetings in November 2025 but continued to attend meetings.
* Paul Lawrence retired from all Board and Committee roles on 31 March 2025.

Meetings and attendance

The Board holds joint meetings of Shawbrook Group plc and Shawbrook Bank Limited, the Group’s principal subsidiary, at regular intervals, at which standing items such as the Group’s financial and business performance, risk, compliance, human resources, and strategic matters are reviewed and discussed. A comprehensive Board pack including an agenda is circulated beforehand allowing Directors to consider the issues to be discussed. Detailed minutes and any actions arising out of discussions are documented. The Board and its committees held a number of scheduled meetings during 2025 at which senior executives, external advisors and independent advisors were invited, as required, to attend and present on business developments and governance matters. In addition, a Board Strategy Day was held in November 2025. The Company Secretary and/or his deputy attended all Board meetings and he, or his nominated deputy, attended all committee meetings. The table opposite sets out the attendance by Directors at scheduled Board and committee meetings during 2025.

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Board effectiveness review

Externally facilitated review

At the end of 2024, the Board agreed that it would be beneficial to bring forward an externally facilitated review, the previous one having been carried out in 2022. The review was facilitated by Manchester Square Partners and the findings from the review were discussed with the Board during the May 2025 Board meeting. Manchester Square Partners have no connection with the Company or its Directors. The review concluded that the Board and its committees remained effective and that governance was strong. A specific skills review was undertaken, with a view to ensuring that the Board had the right mix of skills and experience which would be required in the event that a subsequent listing took place. The review concluded that the Board had a breadth and depth of complementary skills, intellect and experience, with good diversity of insight, thinking, gender and ethnicity. It concluded that the Board was well placed to lead the organisation in a listed environment. The review highlighted the strong level of collaboration which had been built between the Board and Executive Management, which facilitated open dialogue and constructive challenge and debate. The review also noted that there was clarity and alignment on the role of the Board and its priorities, including the key oversight role it plays in risk management, people and culture, talent and succession, and delivery against strategy. There was also clarity on the key challenges and risks facing the Company. A number of actions were agreed as a result of the recommendations included within the review, which were focused on deeper engagement with stakeholders, particularly with emerging talent in the organisation. These actions have been closely tracked throughout 2025 and will be a particular area of focus for the Nomination and Governance Committee in 2026.

Internal effectiveness review

An internal review will be carried out beginning in March 2026, facilitated by the Company Secretary by way of questionnaire. This will build on the key themes arising from the recent external review. The outcomes from the review and any proposed actions will be discussed with the Board in May 2026.

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Structure of the Board, Board Committees and Executive Committee

The diagrams on this and the following page summarise the role of the Board, its committees and the separate responsibilities of the Chairman, the Senior Independent Director, the Non-Executive Directors, the Chief Executive Officer, and the Executive Committee. The Board and Board committees have unrestricted access to the Executive Committee to help discharge their responsibilities. The Board and Board committees are satisfied that, in 2025, sufficient, reliable, and timely information was received to enable them to perform their responsibilities effectively. Each committee plays a vital role in helping the Board to operate efficiently and consider matters appropriately. At the end of 2025 a review was carried out to confirm the extent to which the committees complied with their terms of reference throughout the year. The review concluded that each of the committees had materially complied with their terms of reference. The Board Committees’ terms of reference can be found at: https://www.shawbrook.co.uk/about-us/investors/corporate-governance/

Board Leadership

The Board has clear divisions of responsibility and seeks the long-term sustainable success of the Group.

Stakeholder engagement

The Board organises and directs the Group’s affairs in a way that it believes will help the Group succeed for the benefit of its shareholders and in consideration of the Group’s wider stakeholders. More information about the Group’s stakeholders can be found on page 51

Operations

The Board supervises the Group’s operations, with a view to ensuring that they are effectively managed, that effective controls and IT systems are in place and that risks and operational resiliency are assessed and monitored appropriately.

Financial performance

The Board sets the financial plans, annual budgets and key performance indicators and monitors the Group’s results and levels of capital and liquidity against them.

Strategy

The Board oversees the development of the Group’s strategy, and monitors performance and progress against the strategic aims and objectives.# Culture and Purpose

The Board develops and promotes the collective vision of the Group’s purpose, culture, values, and behaviours.

Information and support

The Board accesses assistance and advice from the Company Secretary. The Board may seek external independent professional advice at the Company’s expense, if required to discharge its duties.

Board committees

Audit Committee

Monitors the integrity of the Group’s internal and external financial reporting, including review and challenge of the critical accounting estimates and judgements.
Oversees and challenges the effectiveness of the Group’s financial controls.
Monitors the work and effectiveness of the Group’s internal and external auditors.
Ensures whistleblowing policies remain adequate and effective to support and encourage employees to raise confidentially any concerns of impropriety.

Risk Committee

Provides oversight and advice to the Board in relation to current and potential future risk exposures of the Group and the future risk strategy, including determination of risk appetite and tolerance.
Responsible for reviewing and approving various formal reporting requirements and promoting a risk awareness culture within the Group.

Remuneration Committee

Oversees how the Group implements its remuneration policy.
Monitors the level and structure of remuneration arrangements for the Board, Executives and material risk takers, approves share incentive plans and recommends them to the Board and shareholders.

Nomination and Governance Committee

Reviews the Board’s structure, size, composition, and balance of skills, experience, independence and knowledge of the Directors.
Leads the process for Board appointments and Senior Management Function holder appointments and makes recommendations to the Board.
Oversees and ensures that adequate provision is made for succession planning.
Oversees and monitors the corporate governance framework of the Group.
Reviews and monitors the Group’s approach to subsidiary governance.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 67 Shawbrook Group plc | Annual Report and Accounts 2025

Board and Executive Committee roles

Each Director brings different skills, experience and knowledge to the Group, with the Non-Executive Directors contributing additional independent thought and judgement. There is a clear division of responsibilities between the Chairman, Senior Independent Director, Non-Executive Directors and Chief Executive Officer, and a summary of these responsibilities can be found at shawbrook.co.uk/investors. Their roles have been clearly defined in writing and agreed by the Board.

Chief Executive Officer

As authorised by the Board, the Chief Executive Officer manages the Group’s day-to-day operations and delivers its strategy. The Chief Executive Officer delegates certain elements of his authority to members of the Executive Committee to help ensure that Executive Management are accountable and responsible for managing their respective businesses and functional units. The Chief Executive Officer chairs the Executive Committee, which meets on a weekly basis.

Executive Committee

The Executive Committee is responsible for developing the business and delivering against a Board approved strategy, putting in place effective monitoring, control mechanisms and setting out a framework for reporting to the Board.

Chief Executive Officer
Chief Operating Officer
Chief Technology Officer
Chief Financial Officer
Chief Risk Officer
Chief of Staff
Chief Banking Officer
Chief Banking Risk Officer
Chief HR Officer
General Counsel

Chairman

Guides, develops and leads the Board, ensuring its effectiveness in all aspects of its role as well as being responsible for its governance.
Helps to ensure effective communication and information flows with the Group’s stakeholders (such as employees, regulators and investors).
Sets the tone for the Group and ensures effective relationships between Management, the Board and stakeholders.
Helps to ensure effective communication and flow of information between Executive and Non-Executive Directors.
Chairs the Board, Nomination and Governance Committee and the Acquisitions and Divestments Committee.

Senior Independent Director

Acts as a sounding board for the Chairman and serves as an intermediary for the other Directors when necessary.
Is available to the controlling shareholders if they have any concerns, which the normal channels of Chairman, Chief Executive Officer or other Executive Management have failed to resolve, or for which such contact is appropriate.
Leads the planning for the succession of the Chairman of the Board.
Meets with the other members of the Board to appraise the Chairman’s performance.
Provides feedback to the Chairman, controlling shareholders and Executive Directors on the Non-Executive Directors’ views.

Non-Executive Directors

Provide constructive challenge to the Executive Committee and bring experience to the Board’s discussions and decision-making.
Monitor the delivery of the Group’s strategy against the governance, risk and control framework established by the Board.
Ensure the integrity of financial information and ensure that the financial controls and systems of risk management are effective.
Led by the Senior Independent Director, the Non-Executive Directors are also responsible for evaluating the performance of the Chairman and Executive Management.

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Executive Risk Committee

Purpose: The Executive Risk Committee has the primary responsibility in overseeing the implementation of the Group’s risk appetite and establishment of appropriate systems and controls to oversee/manage the following risks: Credit, Strategic, Market, Liquidity & Capital, Operational Risk & Resilience, Technology & Cyber, Conduct, Compliance & Regulatory, Financial Crime, Model and Climate.

Frequency and membership: The Executive Risk Committee meets on a monthly basis and is chaired by the Chief Risk Officer. Other key members include the Chief Executive Officer, the Chief Financial Officer, the General Counsel, the Chief Banking Officer – Commercial and the Chief Banking Officer – Retail.

Sustainability Sub-Committee

Purpose: The Sustainability Sub-Committee has the primary responsibility for overseeing the development, implementation and monitoring of the Group’s sustainability strategy. It reports and escalates to the Executive Committee, which appoints its members.

Frequency and membership: The Sustainability Sub-Committee meets on a quarterly basis and is chaired by the Chief of Staff. Other key members are the Head of Sustainability, Chief Prudential Risk Officer, Group Company Secretary, Group Marketing Director, Deputy Chief Financial Officer, and Head of Culture and Capability.

Product Sub-Committee

Purpose: The Product Sub-Committee has the primary responsibility for reviewing, discussing and approving spending of budget towards product or technology initiatives. The Sub-Committee reports and escalates to the Executive Committee, which appoints its members.

Frequency and membership: The Product Sub-Committee meets on a weekly basis and is chaired by the Chief Technology Officer. Other key members include the Deputy Chief Financial Officer, and the Chief Compliance Officer.

Retail Strategy and Product Sub-Committee

Purpose: The Retail Strategy and Product Sub-Committee has the primary responsibility for overseeing the design, development and ongoing management and monitoring of the Bank’s products intended for customers within the Retail Franchise. It reports and escalates to the Executive Committee, which appoints its members. In the case of new products, product variations, product withdrawals and escalations from annual product reviews, the Sub-Committee reports and escalates to the Executive Committee via the Chief Banking Officer for Retail.

Frequency and membership: The Retail Product Sub-Committee meets monthly and is Co-Chaired by the Managing Director, Consumer and the Commercial Director of Retail Mortgage Brands. Other key members are the Chief Banking Officer- Retail, Retail Risk Director, Retail Strategy Director and the Retail Mortgages – Head of Products.

Assets and Liabilities (ALCo) Sub-Committee

Purpose: The Asset and Liability Sub-Committee oversees asset, liability and other solvency risks, specifically market risk, treasury wholesale credit risk, liquidity risk and capital risk.

Frequency and membership: The Asset and Liability Sub-Committee meets monthly and is chaired by the Chief Financial Officer, or either of the Chief Executive Officer or Chief Risk Officer as their alternate, each of whom are members. Other key members are the Deputy Chief Financial Officer, Group Treasurer, Head of Financial Planning and Analysis and Head of Market and Liquidity Risk.

Senior Managers and Certification Regime (SM&CR) Sub-Committee

Purpose: The SM&CR Sub-Committee has the primary responsibility for overseeing the management and operation of the Senior Managers & Certification Regime framework for Shawbrook Bank Limited (the Bank). It reports, and escalates, to the Executive Committee, which appoints its members.

Frequency and membership: The SM&CR Sub-Committee meets on a bi-monthly basis and is chaired by the Director of Compliance & Conduct with membership comprising of; the Retail Risk Director, Group Company Secretary, Group Head of Reward and Senior Compliance Manager.

Commercial Product Sub-Committee

Purpose: The Commercial Product Sub-Committee has the primary responsibility for overseeing the design, development and ongoing management and monitoring of the Bank’s products intended for customers within the Commercial Franchise. It reports and escalates to the Executive Committee, which appoints its members.In the case of new products, material product variations, product withdrawals and escalations from annual product reviews, the Sub-Committee reports and escalates direct to the Executive Committee via the Chief Banking Officer for Commercial. Frequency and membership: The Commercial Product Sub-Committee meets monthly and is Chaired by the Chief Banking Officer – Commercial. Other key members include the Commercial Group Risk & Operations Director, the Product Officer - Commercial, the Director of Compliance & Conduct and Head of Financial Crime Compliance and Deputy MLRO.

Executive Committee

The Board delegates daily management responsibility for the Group to the Chief Executive Officer, who discharges this responsibility through the Executive Committee. The Executive Committee is responsible for developing the business and delivering against a Board approved strategy, putting in place effective monitoring, control mechanisms and setting out a framework for reporting to the Board. There are currently ten members of the Executive Committee, (including the Chief Executive Officer) and their biographical details can be viewed on the Group’s website at www.shawbrook.co.uk/ about-us/investors/corporate-governance/ As a result of a re-organisation of the business in January 2026, a number of changes were made to Executive Committee roles. Neil Rudge, formerly Chief Banking Officer, Commercial, was appointed as Chief Banking Officer. Miguel Sard, previously Chief Banking Officer, Retail, was appointed to the role of Chief Operating Officer. Chris Fallis joined the Committee as Chief Banking Risk Officer and Daniel Rushbrook retired as General Counsel and was replaced by Sam Foskett. To discharge its duties, the Executive Committee operated seven Executive level committees during 2025. Details of these Committees (as at 31 December 2025, including references to job titles) and their responsibilities are set out here.

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Board meetings and activity in 2025

Board meetings

The activities undertaken by the Board in 2025 were intended to help promote the long-term sustainable success of the Group. The scheduled Board meetings focused on six main themes in 2025:

Strategy and execution, including approving and overseeing the Group’s key strategic targets and monitoring the Group’s performance against these targets; reviewing and approving key projects aimed at developing the business; and reviewing the strategy of individual businesses.
Financial performance, including setting financial plans, annual budgets and key performance indicators and monitoring the Group’s results against them; approving financial results for publication; and monitoring and approving the approach to the Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP).
Risk management, regulatory and other related governance, including reviewing and agreeing the Group’s key policies; scanning for future risks; setting risk appetites; reviewing the Group’s solvency position and forecast; and monitoring the Group’s approach to financial crime and climate change. The Board also approved the approach to the Recovery Plan and Resolution Pack. Additionally, the Board continued to review customer data which supported compliance with the Consumer Duty.
Spotlights, including deep dives on different parts of the business as well as sessions on customer insights, cyber risk, technology change and the digital roadmap.
Board and Board Committee governance, including receiving reports and escalations from the Board’s Committees and reviewing the terms of reference for the committees.
Preparation for IPO , including Board training, market updates, legal briefings, review of financial reports, governance documentation reviews and monitoring investor feedback.

In addition to routine business, the Board considers and discusses key issues that impact on the business as they arise. Members of the Executive Management team spend a considerable amount of time with the different businesses and functions, ensuring that the Board’s strategy is being implemented effectively throughout the Group, and that our employees’ views and opinions are reported back to the Board and Board committees.

Board Strategy Day

The Board sets aside time each year outside the annual Board calendar to give the Directors the opportunity to focus solely on strategic matters relating to the Group. In November 2025, the Board, the Executive Committee and representatives of the controlling shareholder met to discuss key themes on the financial plans of the Group, the competitive landscape, inorganic opportunities and the Group’s future strategy.

Board effectiveness review

More information on Board effectiveness reviews can be found on page 65.

Conflicts of interest

All Directors have a duty to avoid situations that may give rise to a conflict of interest (in accordance with Section 175 of Companies Act 2006). Formal procedures are in place to deal with this. Directors are responsible for notifying the Chairman and the Company Secretary as soon as they become aware of any actual or potential conflict of interest for discussion. This will then be considered by the Board, which will take into account the circumstances of the conflict when deciding whether to permit it (and whether to impose any conditions). Any actual or potential conflicts of interest are recorded in a central register which the Board formally reviews on a six-monthly basis and Directors are also required, on an annual basis, to confirm that they are not aware of any circumstances that may affect their fitness and propriety, and therefore their ability, to continue to serve on the Board. In addition, Directors are required to seek the Board’s approval of any new appointments or material changes in external commitments. The Directors are satisfied that the procedures in place to deal with any conflicts are operating effectively.

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Induction, training and professional development

On appointment, all new Directors receive a comprehensive and tailored induction, having regard to any previous experience they may have as a director of a financial services company. The Group also provides additional induction materials and training for those Directors who are also Committee Chairs. The content of our Director induction programmes are tailored, with input from the new Director. The induction information is delivered in a variety of formats, including face to face meetings with the Chairman, Board Directors, the Executive Committee and key employees, and input from external advisers as appropriate. This is supplemented by the provision of key governance documents as reading material, including policies, procedures, Board and committee minutes, the Board meeting schedule, the Group structure chart, the FCA Handbook, regulatory codes/ requirements and information on directors’ duties and responsibilities under the Companies Act 2006 and other relevant legislation. An ongoing programme of training is available to all members of the Board, which includes professional external training and bespoke Board training on relevant topics such as regulatory and governance developments, changes to the Companies Act 2006 or accounting requirements. Directors are also encouraged to devote an element of their time to self-development, including attendance at relevant external seminars and events. This is in addition to any guidance that may be given from time to time by the Company Secretary. Each year an annual Board training schedule is agreed. In 2025, the Board received training in respect of Director’s Duties, UK Listing Rules, UK Corporate Governance Code, Insider Information, Market Abuse Regulations and The Takeover Code. The Chairman is responsible for reviewing the training needs of each Director and for ensuring that Directors continually update their skills and knowledge of the Group. All Directors are advised of changes in relevant legislation, regulations and evolving risks, with the assistance of the Group’s advisers where appropriate. The Board receives detailed reports from the Executive Committee on the performance of the Group at its meetings and other information as necessary. Regular updates are provided on relevant legal, corporate governance and financial reporting developments. The Board frequently reviews the actual and forecast performance of the business compared against the annual plan, as well as other key performance indicators.

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Risk management and system of internal controls

The Board has overall responsibility for the Group’s system of internal controls and for monitoring its effectiveness. The Audit Committee and Risk Committee have been in operation throughout the relevant period and oversee the Group’s system of internal controls. Material risk or control matters are reported by the Audit Committee and Risk Committee to the Board. The Board monitors the ongoing process by which top risks affecting the Group are identified, measured, managed, monitored, reported and challenged. This process is consistent with both the Group Risk Management Framework and with internal controls, and related financial and business reporting guidance issued by the Financial Reporting Council. The key elements of the Group’s system of internal controls include regular meetings of the Executive Committee and risk governance committees, together with annual budgeting and monthly financial and operational reporting for all businesses within the Group.Conduct and compliance are monitored by Management, the Group Risk function, Internal Audit and, to the extent it considers necessary to support its audit report, the external auditor. The Board assesses the effectiveness of the Group’s system of internal controls (including financial, operational and compliance controls and risk management systems) based on:
* established procedures, including those already described, which are in place to manage perceived risks;
* reports from the Executive Committee to the Audit Committee and Risk Committee on the adequacy and effectiveness of the Group’s system of internal controls and significant control issues;
* under the direction of the Chief Risk Officer, the continuous Group-wide process for formally identifying, evaluating and managing the significant risks to the achievement of the Group’s objectives; and
* reports from the Audit Committee on the results of Internal Audit reviews and work undertaken by other departments.

The Group’s system of internal controls is designed to manage, rather than eliminate, the risk of failure to achieve the Group’s objectives and can only provide reasonable, and not absolute, assurance against material misstatement or loss. In assessing what constitutes reasonable assurance, the Board considers the materiality of financial and non-financial risks and the relationship between the cost of, and benefit from, the system of internal controls. During 2025, the Group continued to strengthen its risk management and internal controls capability to ensure that it remained relevant, appropriate and scalable to support the Group’s objectives over the duration of the strategic plan and continued to invest further in its risk management capability. Lines of responsibility and delegated authorities are clearly defined. The Group’s policies and procedures are regularly updated and distributed throughout the Group. The Audit Committee and Risk Committee receive reports on a regular basis on compliance with the Group’s policies and procedures. Shawbrook Bank Limited (the principal operating subsidiary of the Group) is subject to regulation by the PRA and the FCA and as such undertakes an ILAAP and ICAAP on an annual basis. The ICAAP process involves an assessment of all the risks that the Group faces, in its operating environment, the likelihood of those risks crystallising, their potential materiality and the effectiveness of the control framework in mitigating each risk. This includes a thorough evaluation of how the Group would be impacted by severe, but plausible, periods of stress in its stress testing programme. The purpose of the process is to establish the level and quality of capital resources that the business should maintain, both under current market conditions and under a range of stressed scenarios, to ensure that financial resources are sufficient to successfully manage the effects of any risks that may crystallise.

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Cyber resilience

The Group recognises the importance of cyber resilience. The Board oversees the Group’s cyber resilience approach and the level of investment into cyber security, providing robust challenge and scrutiny to ensure that the Group is adequately mitigating the threats it faces. The Board recognises that specialist knowledge is required in this area and therefore seeks relevant advice from third parties where appropriate. The cyber resilience strategy is routinely monitored by the Risk Committee and reviewed by the Board across a series of engagements throughout the year. These engagements consider the latest cyber threat intelligence assessments, the specialist nature of cyber threats, any outsourcing risks faced by the Group in this area and the protective controls we have in place via our Adaptive Security Architecture. This ensures that the strategy remains fit for purpose to combat the potential cyber threats the Group may face.

Remuneration

The Board has delegated responsibility to the Remuneration Committee for the remuneration arrangements of the Group’s Executive Directors, certain individuals considered to be material risk takers and the Group’s Chairman. You can find out more about this in the Directors’ Remuneration Report which starts on page 82.

Relationship with Shareholders

The Group is committed to maintaining a constructive relationship with shareholders, whilst not compromising the independence of the Board. Up to November 2025, the Company’s sole Shareholder was Marlin Bidco. The Chief Executive Officer, Chief Financial Officer and other members of the Executive Committee met with the Shareholder and their representatives on a regular basis outside of Board and Committee meetings. The Shareholder also regularly met with the Chairman and had the option to meet with other Non-Executive Directors on request. To ensure that governance arrangements with the Shareholder were formalised, a Framework Agreement and Memorandum of Understanding, outlining the responsibilities of each party, was established. This was revoked in November 2025 following the IPO. The Framework Agreement ensured that information flows were clear, that the independent judgement of the Board was not impacted and that the Board retained its oversight of the business in respect of strategy, performance, risk appetite and assessment of the control framework and governance arrangements. The Memorandum of Understanding sought to support and protect the independence of the Board, particularly in relation to the appointment of Non-Executive Directors to the Board and its committees. As set out in the Framework Agreement, the Shareholder appointed two Directors to the Board, both of whom were considered Institutional Directors. The Company currently has Relationship Agreements in place with its two controlling shareholders, PSC Marlin Holdco Limited and Marlinbass Limited. Under the terms of these agreements, each controlling shareholder is entitled to appoint a Director to the Board above an agreed ownership percentage threshold. Therefore, the Institutional Directors have remained in their positions on the Board post-listing. The Group recognises the importance of ensuring effective communication with all of its stakeholders. This report, together with a wide range of other information, including financial reports and regulatory announcements are made available on the Investor section of the Group’s website at www.shawbrook.co.uk/about-us/investors/

Other Committees

The Board has delegated authority to its principal committees to carry out certain tasks as defined in each committee’s respective terms of reference. The written terms of reference in respect of the Audit, Risk, Remuneration and Nomination and Governance Committees are available on the Group’s website. In addition to the principal committees, the Board is supported by the work of the Acquisitions and Divestments Committee and the Disclosure Committee, which meet on an as needed basis. The Acquisitions and Divestments Committee is chaired by the Board Chairman and its membership is made up of the full Board plus the Chief Risk Officer. The Committee reviews and provides recommendations to the Board on all aspects, including commercial, risk and financial, of proposed material acquisitions and divestments. The Disclosure Committee’s membership comprises the Chief Executive Officer, Chief Financial Officer, Chief of Staff and the General Counsel. The Committee’s role is to ensure timely and accurate disclosure of all information that is required to be disclosed to meet the legal and regulatory obligations and requirements arising from the Company’s listing and to oversee the maintenance of insider lists and the management of inside information concerning the Company, in line with Market Abuse Regulations.

Annual General Meeting

Shawbrook Group plc’s Annual General Meeting will be held on 21 May 2026.

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The Committee’s annual work plan is framed around the Group’s financial reporting cycle, which ensures that the Committee considers all matters delegated to it by the Board. In discharging these responsibilities, the Committee has spent time considering the impacts on credit risk as a result of changes in inflation and interest rates and on the critical accounting and auditing judgements. The Committee has considered the Group’s governance of its expected credit losses model and continues to review all new guidance issued to ensure transparency in the financial statements. The Committee continues to focus on the issues relevant to the Group’s financial reporting and considers emerging trends and best practice. This includes overseeing the effectiveness of the Group’s internal control framework to ensure it remains robust and fit for purpose, with particular focus given to its IT control environment. In addition, the Committee has considered, and continues to closely monitor, developments relating to future audit and corporate governance reform.

Andrew Didham
Chair of the Audit Committee
11 March 2026

Membership, attendance, and responsibilities of the Committee can be found on pages 64 and 66. The terms of reference for the Committee can be found on the Group’s website at: www.shawbrook.co.uk/about-us/investors/corporate-governance/

Audit Committee Report

“I am pleased to present the Audit Committee Report, which describes the work undertaken by the Committee to discharge its responsibilities.The Committee and its members bring together a diverse range of skills across multiple disciplines including finance, audit, risk and the business, with many years of experience operating across the financial services sector.

Main activities during the year

Throughout the year, the Committee discussed a range of topics including financial reporting, internal controls and financial risk management, internal audit, external audit and whistleblowing (Speak Up), as detailed on the next page.

Effectiveness Review

The externally facilitated Board Effectiveness Review also considered the effectiveness of the Board’s committees. The review concluded that the Audit Committee continued to operate effectively.

Financial reporting

The Committee considered the integrity of the Group’s financial statements and all external announcements in relation to its financial performance. In 2025, this included the Group’s 2024 Annual Report and Accounts and the 2025 Interim Financial Statements. Significant financial reporting issues and judgements were considered together with any significant accounting policies and proposed changes to them.

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In addition to the matters described above, the Committee considered papers on the impact of Accounting Standards changes, accounting implications of the amendments to the 2025 Share Plan, a change in methodology for completing the geographical concentration and the performance of the external auditors as well as the key changes to the reporting requirements impacting the 2025 Annual Report and Accounts following the IPO. During the year, Audit Committee members received updates via Board meetings in relation to the acquisition of ThinCats and Playter. Accounting papers were presented to the Audit Committee in 2026 detailing the accounting treatment of the acquisitions and the resulting impact on the Group’s financial statements for 2025, in addition to key areas of judgement such as accounting treatment, calculation of fair value of assets and liabilities and the resulting goodwill. For further details see Note 10. The Committee also discussed the implementation of the effectiveness of material controls under the UK’s corporate governance reform.

Significant areas of judgement

During 2025, the key judgement areas were largely unchanged from the previous year. As a result of ThinCats acquisition two new areas have been identified as critical accounting judgment areas: Fair value of loans measured at fair value through profit and loss and Deferred tax asset.

The main areas of focus were as follows:

Significant financial and reporting issue	How the Committee addressed the issue
Impairment losses on financial assets	During the year, the Committee met and challenged the IFRS 9 judgements and models used to calculate the underlying expected credit losses and impairment recognition. This included reviewing the IFRS 9 judgements, post-model adjustments and macroeconomic assumptions used in the model to ensure that modelled outcomes were reasonable and in line with guidance. The regulatory and accounting guidance issued also extends to transparency for external reporting and the Committee reviewed all external disclosure notes. The Committee also discussed reporting disclosures and best practice with the external auditor. The Committee also reviewed the movements in impairment coverage ratios and non-performing loan ratios throughout the year and concluded that these had been appropriately monitored. The Committee concluded that the impairment provisions, including Executive Management’s judgements, were appropriate. Refer to Note 7(u) of the Financial Statements for further details.
Securitisations	Securitisations involve the transfer of customer loans to structured entities. In determining the accounting treatment to be applied for each securitisation transaction, complex assessments must be performed, which necessitates the application of judgement. The Committee received accounting opinion papers from Executive Management on securitisation transactions. The papers outlined the structure and compared this to the relevant accounting standards to confirm whether it met the requirements to be de-consolidated or, if not, whether it would be consolidated into the Group as a subsidiary by virtue of control. During 2025, securitisation transactions were classified by management as part of the ordinary course of business, serving to diversify funding sources and support the Group’s liquidity management strategy. This was ratified by the Committee and is classified as ‘other judgement’ in the 2025 Annual Report and Accounts. Refer to Note 7(i) of the Financial Statements for further details.
Fair value of debt instruments measured at fair value through other comprehensive income	The Group’s loan book includes some mortgage loans that are measured at fair value through other comprehensive income (FVOCI). In order to value these loans, the Group makes use of ‘unobservable inputs’, which brings with it a level of estimation uncertainty. An ‘unobservable input’ refers to information that is not based on observable market data. To calculate the fair value of these loans, the Group used the discounted cash flow method. The significant assumption used in this calculation is the risk-adjusted discount rate, which is derived from cost of replacement assets based on period end closing swap rates. Changes in the assumptions applied could have a material impact on the calculated fair value of these loans.
Provisions for customer remediation and conduct risk	The Group’s Consumer Lending franchise is exposed to risk under Sections 75 and 140 of the Consumer Credit Act, in relation to any misrepresentations, breaches of contract or other failings by suppliers of goods and services to customers where the purchase of those goods and services is financed by the Group. The Committee continues to receive regular updates with key focus in 2025 around Motor Finance redress, and the emerging developments, and managements conclusions, in connection with Timeshare. Further information on these matters can be found in Notes 7(q) and 35. The Committee reviewed that the disclosure notes were appropriate.
Fair value of loans measured at fair value through profit and loss	As part of the ThinCats acquisition, the Group acquired a portfolio of specialist business loans that do not meet the SPPI criteria and are therefore measured at fair value through profit or loss (FVTPL). To calculate the fair value of these loans, the Group uses the discounted cash flow method. The key assumptions used in this calculation are unobservable inputs: the risk-adjusted discount rate. Changes in the assumptions applied could have a material impact on the calculated fair value of these loans.
Deferred tax asset	Recognition of the Deferred tax asset requires judgement in assessing whether it is probable that sufficient future taxable profits will be available to utilise the losses. The Group’s assessment of recoverability is based on forecasts of future taxable profits prepared on a consistent basis with other recoverability assessments and consideration of relevant tax legislation, including loss utilisation restrictions.

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Going concern and long-term viability

The Committee reviewed a paper from Executive Management setting out the assumptions underlying the going concern and viability statement as detailed in the statement on pages 106 and 56. The Committee considered a wide range of information relating to present and future conditions, including the Group’s current financial position, future projections of profitability, cash flows and capital resources. In addition, the Directors have considered the Group’s risk assessment framework and the possible impacts from the top and emerging risks, as highlighted in the Risk Report, on the longer-term strategy and financial position of the business. The Committee concluded that as both capital and liquidity forecasts remained within regulatory requirements over the going concern period of 12 months and over a longer-term horizon (3 years) for the viability assessment from the date of approval of the financial statements that it is appropriate to adopt the going concern basis in preparing the Annual Report and Accounts. The Committee reported accordingly to the Board and recommended the viability statement for approval as set out on page 56.

Fair, balanced and understandable

The Committee reviewed and concluded that the Annual Report and Accounts taken as a whole is fair, balanced, and understandable and provides enough information to enable the reader to assess the Group’s position and performance, business model and strategy. When considering the Annual Report and Accounts, the Committee focused on the significant judgements and issues that could be material to the financial statements. This included the matters set out in the table on page 74. The Committee challenged the judgements being made and discussed these matters with the external auditor.

Internal controls and risk management

The Committee annually assesses principal risks and uncertainties on a financial control basis. Details of the risk management systems in place and principal risks and uncertainties are provided within the Risk Report which starts on page 109. The Group’s system of internal control has been designed to manage risk and, whilst risk cannot be eliminated, the systems assist with the provision of reasonable assurance against material misstatement or loss.The Risk and Internal Audit functions review the extent to which the system of internal control is effective, is adequate to manage the Group’s principal risks, safeguards the Group’s assets and, in conjunction with the Company Secretary and the Group’s legal and compliance functions, ensures compliance with legal and regulatory requirements.

Internal Audit

The Committee reviews, challenges and approves the annual internal audit plan and monitors progress against the plan during the year. The Chief Internal Auditor agrees the programme of work and reports directly to the Committee on its outcomes. The Committee also oversees that Internal Audit has unrestricted access to all Group documentation, premises, functions, and employees as required to enable it to perform its functions. The Committee reviews and challenges the proposed approach and areas of focus of Group Internal Audit.

The Internal Audit function has continued to mature during the year, with additional headcount whilst using targeted co-source support where subject matter expertise was needed and delivery of various transformation and innovation activities. Group Internal Audit in 2025 provided the Committee with coverage of key regulatory and industry topics whilst also aligning its assurance programme to the Group’s strategic priorities.

Group Internal Audit delivered 29 audits from the 2025 Internal Audit plan of varying size and complexity. Internal audit reports are circulated to the Committee members, with the Chief Internal Auditor reporting at each Committee and the Committee monitoring progress against actions identified in those reports. The Committee monitors and reviews Internal Audit’s effectiveness and independence using feedback obtained from the Board and other stakeholders.

In 2025 the Internal Audit function was subject to an External Quality Assessment review and achieved a “Generally Conforms” rating against the Institute of Internal Auditors Global Standards. These results were formally presented to the Committee meeting in November 2025. The Chief Internal Auditor confirms to the Committee, on an annual basis, that Internal Audit remains independent. Additionally, the Committee ensures that there are sufficient resources available to Group Internal Audit to complete its remit. The appointment and removal of the Chief Internal Auditor is the responsibility of the Audit Committee.

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External audit

The Committee oversees the relationship with its external auditor, KPMG, including the engagement terms, remuneration, the audit effectiveness and auditor independence and objectivity. The Committee also considers the audit plan and audit strategy (including the planned levels of materiality). The external auditor attends Committee meetings as appropriate. The Committee members have the opportunity to meet privately with the external auditor upon request.

KPMG was first appointed as the Group’s external auditor in 2011. The Committee acknowledges the provisions contained in the Code in respect of audit tendering and followed a tender process for external audit services in 2017. The Group is in compliance with the requirements of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014, which relates to the frequency and governance of tenders for the appointment of the external auditor. As at the date of this report, there are currently no plans to conduct a tender for external audit services. However, the Group has a mandatory requirement for the 2028 financial year end.

During the year, the Committee received regular detailed reports from the external auditor, including formal written reports dealing with the audit objectives and reports on the auditor’s qualifications, expertise, and resources; the effectiveness of the audit process; procedures and policies for maintaining independence; and compliance with the ethical standards issued by the Auditing Practices Board. The external auditor’s management letter is reviewed, as is Executive Management’s response to issues raised, and progress is monitored against actions identified in those reports.

The Committee monitors the provision of non-audit services by the external auditor throughout the year, to ensure compliance with the Non-Audit Services policy. The Committee is responsible for reviewing the independence of the Group’s external auditor and monitors the latest ethical guidance regarding audit partner rotation. KPMG has a policy of partner rotation, which complies with regulatory standards. Maintaining an independent relationship with the Group’s external auditor is a critical part of assessing the effectiveness of the audit process.

The Committee has a formal policy on the use of the auditor for non-audit services. It ensures that work is only awarded when permissible and if the external auditor’s knowledge, skills or experience are a decisive factor and therefore clearly preferred over alternative suppliers. Each year, the Committee receives and reviews an analysis of all non-audit work and reviews the level of audit and non-audit fees paid to KPMG. This oversight ensures that significant assignments are not awarded without first being subject to the scrutiny of the Committee. The fees paid to KPMG for audit and non-audit services are set out in Note 16.

The Committee is satisfied with the performance of the external auditor in 2025 and the policies and procedures in place to maintain their objectivity and independence. The effectiveness of the external auditor was assessed by way of a questionnaire during the reporting period. The questionnaire, which sought the views of members of both the Committee and Executive Management, focused on, amongst other things, the scope of the audit, as well as the external auditor’s technical expertise, governance and independence. This assessment concluded that the external audit process was effective. The Committee has recommended to the Board that KPMG be re-appointed as the Group’s external auditor at the forthcoming 2026 Annual General Meeting, at which resolutions concerning the re-appointment of KPMG and its audit fee will be proposed.

External Audit: Minimum Standard

The Committee has prepared this report being cognisant of the FRC “Audit Committees and the External Audit: Minimum Standard”. This report (in particular, the section headed “External Audit”) sets out how the Committee has taken steps to comply with the provisions of the Minimum Standard as far as possible during the reporting period. No shareholders requested that the audit for the reporting period address certain matters. There were no regulatory inspections relating to the quality of the external audit. An explanation of the Group’s accounting policies is provided on pages 223 to 232.

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Speak Up

The Committee annually reviews the arrangements by which employees may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. Where appropriate, the Committee also reviews reports relating to areas of concern, including anonymised cases, to ensure arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action.

In 2025, the Group moved to a fully anonymous and enhanced automated solution, to enable people to speak up in absolute confidence. The Committee probed Executive Management and was satisfied that the process met the necessary standards and that it was adequately designed, operated effectively and adhered to regulatory requirements.

Sustainability

The Board received periodic updates from internal subject matter experts on climate topics throughout the year. Externally facilitated climate training was provided to the Audit Committee in 2025, focusing on sustainability reporting requirements and key areas for the Committee to focus on when reviewing the externally disclosed sustainability and climate reports. This was designed to help enhance Directors’ climate-related knowledge and give the Committee a better-informed perspective when shaping and challenging the Group’s external disclosures.

Priorities for 2026

The key priorities in 2026 include:
* the impacts of the UK corporate reporting and audit reform;
* review the effectiveness of Material Controls;
* oversight and review of the 2026 internal audit plan including IT effectiveness and third-party audits;
* ongoing review and monitoring of all conduct issues and provision adequacy;
* ensuring all additional reporting requirements are adhered to following the IPO in November 2025;
* ensuring that the Group’s financial reporting complies with all legislative requirements and accounting standards; and
* staying aware of evolving sustainability reporting standards and regulations given the rapidly changing landscape.

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 Chair reports on matters dealt with at each Committee meeting to the subsequent Board meeting. The Board reviewed and approved this report on 11 March 2026.

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78 Shawbrook Group plc | Annual Report and Accounts 2025

Risk Committee Report

“I am pleased to present the Risk Committee Report for the year ended 31 December 2025.The Committee’s key role is to provide oversight and advice to the Board on the management of risk across the Group, balancing the agenda between risk exposure, emerging risks and future risk strategy. Membership, attendance, and responsibilities of the Committee can be found on pages 64 and 66. The terms of reference for the Committee can be found on the Group’s website at: www.shawbrook.co.uk/about-us/investors/corporate-governance/ The Committee provided oversight of the operation of the Group’s Risk Management Framework (‘RMF’) and the continued collaboration between the first and the second line risk management teams, receiving regular updates on progress against respective deliverables. This included the oversight of performance against risk appetite and any resulting actions required throughout the year. In order to support the Committee, a number of additional Committee working groups were held during the year, with these meetings ensuring sufficient time was allocated to meet both the regulatory agenda and oversee the risk management response to existing and emerging risks. These working groups supported the Committee in the review and recommendation. During the year, the Committee continued to focus on the oversight of existing risks, whilst also ensuring emerging risks were appropriately identified and addressed. The RMF supports the management of new risks and controls and embeds an appropriate culture across the Group, by providing consistent challenge to the suitability of scenarios and stress testing given the challenging macroeconomic environment and resultant impact on the Group’s risk profile and appetite. This included oversight of the management of Interest Rate Risk in the Banking Book and the adequacy of the risk appetite in relation to the changing economic environment. The Committee also monitored the performance of the Asset and Liability Committee, ensuring the Group maintained appropriate levels of liquidity through 2025, and the Vulnerable Customer Policy which supported the needs of customers. The Committee monitored the completion of two securitisations of portfolios of mortgages originated by The Mortgage Lender and Bluestone Mortgages Limited as part of the Group’s ‘originate to distribute’ model. The Group’s approach to cyber resilience and information security was reviewed to ensure it remained suitable for the size and scale of the Group and prevailing risks and supported management’s recommendation to make further improvements to the cyber perimeter. The Committee reviewed and recommended to the Board for approval the annual review of the RMF and considered the 2025 risk deliverables, across both the first and second lines of defence risk teams. It also reviewed progress against the risk deliverables during the year. The Committee also received a summary of the capability that the Group needs to develop over the strategic plan alongside a summary attestation of compliance with the RMF. The Committee regularly considered external challenges, including those arising from climate risk, the embedding of the Group’s approach to climate risk within the broader ESG agenda and regulatory changes. The Committee recommended to the Board for approval: the annual Money Laundering report, the annual report from the Group’s Data Protection Officer, the annual review of the Group Risk Appetite, the ICAAP, ILAAP, Recovery Plan and Solvent Exit Analysis. The Committee continues to focus on the continued enhancement and effectiveness of financial crime controls and the performance of, and reporting from, the Money Laundering Reporting Officer who oversees the Group’s financial crime controls. The Committee also regularly received updates on the operational resilience framework and customer experience including complaints. FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 79 Shawbrook Group plc | Annual Report and Accounts 2025 At each Committee meeting the credit risk profile of the Group was reviewed. This included detailed portfolio reviews periodically during the year, oversight of customers in arrears, credit risk management information, and received regular reports on forward-looking early warning indicators and external tools to support the early identification of potential problem loans. The Committee also reviewed the outputs from additional stress testing exercises and suggested additional MI from management. The Committee received a demonstration of the Group’s new Governance, Risk and Controls system which showed how risks, controls, and assurance will coexist in a single system, covering all Principal Risks. The Committee received regular updates on the embedding of controls and the focus on automating manual controls. During the year, the Committee oversaw the delivery of enhancements to the RMF, including impacts arising from changes in regulation and the risk review of the annual budget process. In 2026, the Committee will continue to monitor and assess the risks facing the Group.

Derek Weir
Chair of the Risk Committee
11 March 2026

Main activities during the year

Risk monitoring and oversight

During 2025, the Committee considered a wide range of risks facing the Group, both existing and emerging, across all areas of risk management. At each scheduled meeting, the Committee received regular reports from the Chief Risk Officer detailing the key activities undertaken by the Risk function to oversee the embedding of risk management across the Group and was provided with outputs of regular risk monitoring and details of specific risk issues. The Committee has also received details of the Group’s current and forward-looking capital solvency position and monitored performance against the Group’s risk appetite statement.

Effectiveness Review

The externally facilitated Board Effectiveness Review also considered the effectiveness of the Board’s committees. The review concluded that the Risk Committee continued to operate effectively.

Risk management and controls

Throughout the year, the Committee monitored the effectiveness of the Group’s risk management and control systems and reviewed their effectiveness through the RMF. The RMF sits across the business with a particular focus on risk monitoring and control. The Committee received and reviewed an attestation of compliance with the RMF from the Chief Risk Officer, divisions, and functions, which included a capability assessment to ensure the Group has the resources it needs to deliver its objectives.

Top and emerging risks

The Group’s top and emerging risks are considered regularly by the Committee. Further information about the Group’s top and emerging risks can be seen in the Risk Report starting on page 117.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 80 Shawbrook Group plc | Annual Report and Accounts 2025

Significant risks and primary areas of focus

Risk Committee review
Group risk management	• The Group approved the annual review of the Risk Management framework.
	• The Committee reviewed the 2025 Annual Risk Plan, which included the key areas of focus for the first and second line risk functions.
	• The Committee received regular summaries of the overall risk profile of the Group through the Chief Risk Officer’s Report.
	• The Committee reviewed the effectiveness of the RMF throughout the year through the Chief Risk Officer’s Report and updates on the Risk Plan.
Risk appetite	• The Committee reviewed progress on the annual review of the Board’s risk appetite, including material risk appetite limits.
	• The Committee received regular updates on the evolving risk appetite framework, including the provision of a monthly risk appetite dashboard that accompanies the Chief Risk Officer’s Report at each meeting.
	• The Committee reviewed the development of new risk appetite triggers and limits for financial crime and liquidity and market risk.
Credit risk	• The Committee received a number of updates to the Group Affordability Policy to ensure that it remained appropriate to the environment.
	• The committee considered the results of its internal stress testing and received additional reports on the credit risk profile of the group.
	• The Committee received updates on policy changes, reflecting updates and enhancements to the Group Policy Framework.
	• The Committee received updates to Credit Risk Appetite, including updates on capacity in collections in advance of any potential increase in arrears and potential problem loans.
	• The Committee received regular updates on targeted portfolio reviews, including any actions taken.

Significant risks and primary areas of focus

Risk Committee review
Operational risk	• The Committee received regular reports across the spectrum of operational risks, information security and cyber risk resilience.
	• The Committee reviewed performance of Important Business Services and associated Impact Tolerances and the Group’s Operational Resilience Framework.
	• The Committee also reviewed the outcome of testing of impact tolerances.
	• The Committee also received updated policies in relation to the risk management approach to third parties.
	• The Committee received an update on key controls and progress on the automation of key controls.
Conduct, legal and compliance risk	• The Committee reviewed the Group’s risk management approach to reflect the regulatory and legal environment in which the Group operates.
	• The Committee received updates on various conduct risk and legal liability risk matters.
	• The Committee received regular updates on the Group’s investment in financial crime controls including the approach to the new system and received the annual Money Laundering Reporting Officer’s report and the annual Data Protection Officer’s report.
	• The Committee received regular updates on the implementation of the Consumer Duty including managements attestation of compliance and ongoing monitoring arrangements.

• The Committee reviewed enhancements to the Group’s Vulnerable Customers Policy and associated management information.

Liquidity and market risk
• The Committee reviewed and recommended to the Board approval of the ILAAP.
• The Committee reviewed and recommended to the Board the approval of updated liquidity risk appetite and recommendations on the quantity and quality of liquidity resources.
• The Committee received a report on the feedback arising from a fire drill test of the Liquidity Contingency Plan as part of the Group’s rolling programme of fire drill tests.
• The Committee reviewed and recommended changes to the Group’s Interest Rate Risk in the Banking Book appetite.

Stress testing and capital
• The Committee reviewed and recommended to the Board approval of the ICAAP.
• The Committee also reviewed a number of alternative scenarios through which to assess the strategy and business model including a reverse stress test scenario.
• The Committee reviewed and recommended to the Board the approval of the Recovery Plan.
• The Committee reviewed and recommended to the Board the approval of the Solvent Exit Analysis.

Significant risks and primary areas of focus
During 2025, the following significant risks and primary areas of focus were considered by the Committee:

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 81 Shawbrook Group plc | Annual Report and Accounts 2025

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. During the year, the Committee held at least one scheduled meeting with the Chief Risk Officer without Executive Management being present. The Chair reports on matters dealt with at each Committee meeting to the subsequent Board meeting. The Board reviewed and approved this report on 11 March 2026.

Priorities for 2026
The key projects that the Risk function is accountable for delivering in 2026 include:
• Testing of material controls through the Group’s governance, risk, and controls system in advance of the requirements of the corporate governance code. Focus on the automation of manual controls where it is appropriate to do so.
• Simpler, automated systems and processes including the implementation of a group-wide financial crime platform.
• Integrating of AI into the credit process together with embedding of climate risk.
• Compliance with Basel 3.1.
• Embed the requirements of SS5/25 on climate risk management.
• Leveraging of models to improve the granularity of customer behaviour in Asset and Liquidity management in advance of new systems capability.
• Accelerate the implementation of AI and machine learning together with new data sources to enhance efficiency and support originations.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 82 Shawbrook Group plc | Annual Report and Accounts 2025

Directors’ Remuneration Report

Introduction
2025 was a year of significant progress for Shawbrook, with the Company’s strong financial performance underpinned by disciplined growth and strategic execution. The IPO and subsequent inclusion in the FTSE 250 represent important milestones for the Company reflecting the strength of our business and the confidence of our stakeholders in our strategy and future. During 2025, the Committee oversaw its usual cyclical and governance responsibilities while also addressing a broad set of remuneration related matters. The Committee also considered the treatment of IPO related variable remuneration and determined the Directors’ Remuneration Policy to be submitted for shareholder approval. In addition, the Committee reviewed and approved this Directors’ Remuneration Report and prepared the remuneration related disclosures included within the Admission Prospectus. This report provides a comprehensive overview of how the Committee has aligned and continues to align remuneration outcomes with the Company’s performance and strategy.

2025 Business Performance and variable pay outcomes
Given the timing of the Admission, the Committee felt comfortable that the outcome of bonus awards in respect of the year ended 31 December 2025, including for Executive Directors, should continue to be based on the design set at the start of the year. The Committee assessed the financial and risk management performance of the Company as well as achievement of its strategic priorities. Recognising the strong overall performance, the Committee agreed to awards equivalent to 120% of salary for both Marcelino Castrillo (Chief Executive Officer) and Dylan Minto (Chief Financial Officer). The basis of how these awards were determined is included in this report. In conjunction with the Lead Investors of Marlin Bidco Limited, the ultimate parent company of Shawbrook Group plc prior to Admission, the Committee also considered the vesting outcome of incentive awards relating to the IPO; details of which are included in this report in respect of the Executive Directors. In order to retain and incentivise certain key employees and support the Company’s long term ambitions, the Committee also approved a Performance Share Plan award with a value equivalent to 100% of annual salary at Admission for the two Executive Directors. The performance conditions applicable to this award are also disclosed in this report.

Looking ahead - Our new Directors’ Remuneration Policy
The key features of our new Directors’ Remuneration Policy were outlined in our Admission Prospectus. Since Admission, we have finalised the details of our Directors’ Remuneration Policy, informed by:
• Relevant regulations and market best practice;
• The views of major shareholders;
• Our strategic aims; and
• Insights from the wider workforce.

The Directors’ Remuneration Policy is intended to:
• Promote our long-term success;
• Attract, motivate and retain Directors of the necessary calibre and capability to evolve and deliver our strategy;
• Align the interests of the Executive Directors with the interests of our employees, shareholders and other stakeholders; and
• Comply with the relevant regulatory obligations and market best practice.

The Committee will continue to monitor Shawbrook’s Proportionality Level in accordance with the PRA/ FCA requirements and the associated remuneration requirements. In the event of any anticipated change in Proportionality Level, the Committee will review the associated remuneration requirements and assess Shawbrook’s approach to remuneration to ensure compliance with any regulatory expectations.

Closing remarks
Overall, the Committee is satisfied that its historical remuneration approach operated as intended during 2025 and that our new Directors’ Remuneration Policy will help us reward for strong, sustainable performance in the future. On behalf of the Committee and the Board, I would like to thank our shareholders for their continued support and engagement, and my fellow Committee members for their contributions throughout the year. Together, we are well positioned to build on our achievements and deliver long-term value for all stakeholders.

Michele Turmore
Chair of the Remuneration Committee
11 March 2026

On behalf of the Board, I am delighted to present the first Directors’ Remuneration Report for Shawbrook Group plc, following our Admission to the London Stock Exchange in November 2025. This Report includes the new Directors’ Remuneration Policy, which will be subject to a binding shareholder vote at the 2026 AGM. Membership, attendance and responsibilities of the Committee can be found on pages 64 and 66. The terms of reference for the Committee can be found on the Group’s website at www.shawbrook.co.uk/about-us/investors/ corporate-governance/

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 83 Shawbrook Group plc | Annual Report and Accounts 2025

Directors’ Remuneration Policy

The Directors’ Remuneration Policy (the ‘Policy’) will be subject to a binding shareholder vote at the 2026 Annual General Meeting and will take effect from that date. Subject to shareholder approval, it is intended that the Policy will then operate for three years until the 2029 Annual General Meeting, unless prior shareholder approval is sought for an amendment to the Policy before that time. The Policy is consistent with the summary of the Company’s intended Directors’ Remuneration Policy disclosed in the Prospectus published ahead of the Company’s Admission to the London Stock Exchange. The Committee retains the discretion to amend the structure and terms of the Directors’ remuneration to align with the Company’s regulatory obligations from time to time. The Committee will engage with major shareholders prior to implementing any material changes and will disclose these changes and their rationale in the Annual Report.

Policy for Executive Directors
The table below summarises each element of the Policy for the Executive Directors and how it links to the corporate strategy.

Base Salary	Purpose and link to strategy
• To support the attraction and retention of the best talent with the capability to deliver the Company’s strategy.	Operation
	• Base salaries will normally be reviewed on the same basis as for the wider workforce.
	• The Committee will consider a number of factors when setting base salaries including (but not limited to):
	– Pay increases for other employees across the Group. Where increases are awarded in excess of the wider employee population, an explanation for this will be provided in the relevant year’s Directors’ Remuneration Report.
	– Sound and effective risk management for the Group.
	– The Company’s performance.
	– The individual’s skills and responsibilities.

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84 Shawbrook Group plc | Annual Report and Accounts 2025

Benefits

Purpose and link to strategy
• To provide market competitive and cost-effective benefits to enable the attraction and retention of the best talent for delivery of the Company’s strategy.

Operation
• The benefits package may include insurance coverage, such as life, medical, dental and income protection insurance, an annual health check and other benefits provided more widely across the Group from time to time.
• The Committee has the discretion to offer additional allowances or benefits to Executive Directors, if considered appropriate and reasonable. These may include the provision of a company car or car allowance and, where an Executive Director has to relocate from their home location as part of their appointment, relocation expenses, expatriate or housing allowances and school fees.

Maximum potential value
• As the cost of benefits will depend on an individual’s personal circumstances, there is no specific monetary maximum although the benefit provision will not exceed what the Committee considers a reasonable market level.

Performance metrics
• Not applicable.

Retirement benefits

Purpose and link to strategy
• To provide retirement benefits to support the attraction and retention of the best talent for delivery of the Group’s strategy, in line with the Group’s objectives, values and long-term interests.

Operation
• The Company will provide market-competitive pension arrangements (through a defined contribution pension plan or similar arrangement), or a cash alternative based on a percentage of base salary.
• The approach to pension arrangements for the Executive Directors is in line with the wider workforce.

Maximum potential value
• Executive Directors are eligible to participate in the Group’s defined contribution pension scheme, with a maximum Company contribution, currently 8% of base salary (which is subject to periodic review carried out with reference to the pension arrangements for the wider workforce), which they may opt to receive fully or in part as a cash allowance in lieu of employer pension contributions.

Performance metrics
• Not applicable.

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Annual Bonus Plan

Purpose and link to strategy
• To incentivise and reward the achievement of annual financial and non-financial corporate targets in line with the Company’s short-term financial and strategic objectives.
• To align with shareholders’ and wider stakeholders’ interests.

Operation
• Executive Directors are eligible to participate in the Company’s Annual Bonus Plan (‘ABP’) at the discretion of the Committee.
• Measures and targets are determined in respect of each financial year of the Company by the Committee and may vary from year to year to ensure alignment with the Company’s business plan and strategy.
• The level of award is determined by the Committee with reference to the Company’s overall financial and strategic performance and is paid out after the end of the relevant financial year. Bonuses will be normally deferred into an award of shares under the Company’s Deferred Bonus Plan (‘DBP’) such that 50% of any bonus amount above £100,000 will usually be deferred over three years in equal tranches (i.e. with a third of the deferred amount vesting each year over that period). Changes may be made to this bonus deferral to align with the Company’s regulatory requirements.
• Awards granted under the DBP may incorporate the right to receive an amount of cash or shares equal in value to the dividends payable during the deferral period on the shares that vest. This amount may assume re-investment of dividends.
• The Committee has discretion to adjust the level of payment to an Executive Director if it is not deemed by the Committee to reflect appropriately the Executive Director’s contribution, the financial situation of the Group as a whole, the underlying performance of the Company and other factors the Committee considers relevant.

Maximum potential value
• 200% of base salary in respect of any financial year.
• For threshold performance, up to 50% of base salary may be earned, with up to 100% of base salary earned for on-target performance.

Performance metrics
• The Committee will determine the performance metrics and targets each year, taking into account the Company’s key strategic objectives at that time.
• Performance metrics may include financial, strategic, operational, sustainability and personal objectives, and may consider the performance both of the relevant individual and the Company as a whole.
• The majority of the award will be awarded based upon financial-related performance metrics.

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86 Shawbrook Group plc | Annual Report and Accounts 2025

All-Employee Share Plans

Purpose and link to strategy
• To encourage wider share ownership through ‘HMRC-approved’ plans (a Sharesave Plan and Share Incentive Plan) and to align with shareholders’ interests.

Operation
• Executive Directors are eligible to participate in all-employee share plans offered by the Group on the same basis as is offered to the Group’s other eligible employees.

Maximum potential value
• Limits for all employee share plans are set by HMRC. The Company may choose to set its own lower limits.

Performance metrics
• Not applicable.

Performance Share Plan (‘PSP’)

Purpose and link to strategy
• To incentivise and reward the delivery of long-term shareholder value through the achievement of long-term financial and strategic objectives.
• To align with shareholders’ interests and to create a long-term mindset.

Operation
• PSP awards will normally vest to the extent determined by the Committee in light of applicable regulatory requirements, taking into account the achievement of performance conditions measured by reference to a performance period of at least three years. The Committee will then also normally impose a further post-vesting holding period in compliance with UK Corporate Governance Code requirements and the Group’s retention policy.
• The level of vesting is determined by the Committee after the performance period, taking into account: the extent to which the performance conditions have been satisfied, the Executive Director’s contribution, the financial situation of the Group as a whole, the underlying performance of the Company and any other factors the Committee considers relevant.
• Awards may incorporate the right to receive an amount of cash or shares equal in value to the dividends that are payable during the vesting period and the holding period on the shares that vest. This amount may assume re-investment of dividends.

Maximum potential value
• The maximum award is 300% of base salary in respect of any financial year (valued at the time of grant by the Committee).
• There is a threshold vesting level of no more than 25% of maximum, with pro rata vesting of up to 100% at maximum.

Performance metrics
• Performance metrics will be determined by the Committee for each new award. The measures that may be considered include financial and shareholder value metrics, in addition to strategic non-financial measures.
• The majority of the award will be subject to financial-related performance metrics.

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87 Shawbrook Group plc | Annual Report and Accounts 2025

Policy for Chair of the Board and Non-Executive Directors (the ‘NEDs’)

The following table summarises the Policy for the Chair of the Board and NEDs.

Fees
Purpose	• To provide a competitive fee to support the attraction and retention of high- quality NEDs with skills and experience relevant to the Company.
Operation	• Fees are determined annually based on the responsibility and time commitment required. • NEDs are paid a base fee for membership of the Board, with additional fees being paid for chairing or membership of a Board committee, to reflect their additional responsibilities and the workload required. Where NEDs are appointed by virtue of their employing entity being a major investor in the Company, these fees may instead be paid to their employing entity. • The Company has the discretion to pay an additional fee to NEDs, should the Company require significant additional time commitment in exceptional or unforeseen circumstances. Any such fees will be time-limited in nature. • Fees are normally paid in cash, although the Committee retains the flexibility, in line with the UK Corporate Governance Code, to pay fees in the form of shares in the Company. • NEDs are not eligible to participate in the Company’s pension or incentive arrangements. • NEDs do not currently receive any benefits but may do if considered appropriate and consistent with roles at other listed companies. • Travel and other reasonable expenses incurred in the course of performing their duties are reimbursed. Any tax due on travel and accommodation benefits may be paid by the Company.
Maximum potential value	• The aggregate annual limit for fees payable to the NEDs is as set out in the Company’s Articles of Association.
• Not applicable as NEDs not eligible to participate in any performance-related elements of remuneration.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 88 Shawbrook Group plc | Annual Report and Accounts 2025

	£’000	Minimum Fixed	Target	Maximum	Maximum (with 50% share price growth)
ABP		£1,213	£4,013	£6,813	£8,493
CEO	100%
	42%
	28%
	30%
	18%
	33%
	49%
	60%
	26%
	14%
PSP	£1,000	£2,000	£3,000	£4,000	£5,000
	£500	£1,500	£2,500	£3,000	£3,500
	£4,000	£4,500	£5,000
	100%
	30%
	28%
	42%
	18%
	33%
	49%
	60%
	26%
	14%

	Minimum Fixed	Target	Maximum	Maximum (with 50% share price growth)
ABP	£651	£2,151	£3,651	£4,551
CFO	£1,000	£2,000	£3,000	£4,000
	£500	£1,500	£2,500	£3,500
	£1,500	£2,500	£3,000	£4,500
	£5,000

Policy considerations
Selection of performance metrics and targets
The Committee determines the performance metrics and targets for the ABP and PSP, taking into account the Company’s strategic priorities and internal and external forecasts. The measures and their weightings may change from year to year to reflect the needs of the Company. Performance targets are set to be stretching yet achievable.

Illustration of total remuneration scenarios
The charts provide an illustration of the level of remuneration that would be received by each Executive Director under the following four assumed scenarios.

Scenario Details
Minimum performance
• Fixed elements of remuneration only – base salary, benefits and pension for 2026.
Target performance
• Fixed elements of remuneration as set out above.
• 50% of maximum pay-out under the ABP.
• Assumed 50% of maximum vesting under the PSP.
Maximum performance
• Fixed elements of remuneration as above.
• 100% of the maximum pay-out under the ABP.
• 100% of vesting under the PSP.
Maximum performance plus share price growth
• Fixed elements of remuneration as above.
• 100% of the maximum pay-out under the ABP.
• 100% of vesting under the PSP with assumed 50% increase in the share price attributable to the PSP.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 89 Shawbrook Group plc | Annual Report and Accounts 2025

Legacy arrangements
Any remuneration payments and payments for loss of office not in line with the Policy may nevertheless be made where the terms of the payment were agreed (i) before the Policy came into effect or (ii) when the individual was not a Director at the time and the payment, in the Committee’s opinion, was not in consideration for becoming a Director of the Company.

Malus and clawback provisions
In certain circumstances, the Committee may at any time prior to the fifth anniversary (or such longer period as may be required by applicable regulations from time to time) of either the date of payment of an annual bonus in cash or the date of grant of a PSP award or a DBP award (or, if an investigation into the conduct or actions of any participant or any member of the Group has started, such later date as the Committee may determine in order to allow the investigation to be completed) reduce a bonus, PSP award or DBP award (to zero if appropriate); impose additional conditions on the payment of a bonus or a PSP award or DBP award; or require that the participant either return some or all of the shares acquired under a PSP award or a DBP award, or make a cash payment to the Company in respect of the bonus paid or shares delivered under a PSP award or a DBP award. The Committee may only invoke these malus and clawback provisions where it considers there to be exceptional circumstances, such as:
(a) a material misstatement in the published results of the Group or a Group member;
(b) the assessment of performance conditions relating to, or the determination of the bonus relating to, or the calculation of the number of Shares subject to, the award being based on an error or inaccurate or misleading information;
(c) the participant’s gross misconduct, misbehaviour, material error, failure to meet appropriate standards of fitness and propriety or breach of their restrictive covenants;
(d) insolvency or similar corporate failure;
(e) serious reputational damage to a Group member or its censure by a regulatory body;
(f) a material failure of risk management by, or a material downturn in financial performance of, a Group member or a business unit within the Group; and/or
(g) where the Committee determines that the participant has caused a material financial loss to the Group.

Shareholding requirements
The Committee has adopted shareholding requirements that will require the Executive Directors to build up over a five-year period, and then subsequently hold, a shareholding in the Company equivalent to a percentage of salary. This is to ensure that the interests of Executive Directors and those of shareholders are closely aligned. Unvested DBP awards that are not subject to performance conditions, and vested PSP awards that are subject to a holding period, will count towards these shareholding requirements on a net-of tax basis. The minimum shareholding requirement is 200% of salary. Executive Directors will normally be expected to maintain the same holding of shares in the Company for a two-year period after leaving the Group.

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Element	Policy and operation
Base Salary	Base salary will be determined with reference to the individual’s role and responsibilities, experience and skills, relevant market data and internal relativities. Salaries may be set at a level lower than the prevailing market rate on appointment to reflect experience, with increases made at a higher level than usual as the individual develops in the role.
Pension	Will be in line with that offered to the wider workforce, as described in the Policy table.
Benefits	These will be in line with the Policy. On appointment of an Executive Director, the Committee will have the discretion to cover their reasonable legal costs and certain relocation expenses.
Annual Bonus	The structure described in the Policy table will normally apply for new appointees with the relevant maximum typically pro-rated to reflect service during the year.
PSP	PSP awards will be operated in line with the approach described in the Policy table.
Buy-out awards	The Committee recognises that it may be necessary in some circumstances to provide compensation for amounts foregone from a previous employer (“Buyout Awards”). Any Buyout Awards would be limited to what is considered by the Committee to be a fair estimate of the value of remuneration foregone when leaving the former employer and would be structured so as to be, to the extent possible, no more generous in terms of the fair value and other key terms (e.g. vesting and performance metrics) than the entitlements they are replacing. The Committee has the discretion to determine the type of award (i.e. cash, shares or options and whether or not performance metrics would apply). Any such award would be fully disclosed and explained in the following year’s Directors’ Remuneration Report.

Recruitment of Directors – approach to remuneration
Consistent with best practice, and with the principles set out in the Dual- regulated Firms Remuneration Code published by the FCA and PRA, any new Executive Director will be offered a remuneration package in line with the Policy in force at the time. The Committee will ensure that the package on recruitment is sufficient to attract the appropriate individual, having regard to the calibre, skills and experience required, whilst keeping in mind the principle of paying no more than is necessary to attract an Executive Director of the calibre needed to shape and deliver the Group’s business strategy. When determining remuneration on recruitment, the principles that will be applied by the Committee are as follows:
Where a new Executive Director is promoted internally, any variable remuneration or benefit awarded in respect of the previous role may be allowed to continue on its original terms, adjusted where relevant to take into account the new appointment.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 91 Shawbrook Group plc | Annual Report and Accounts 2025

Executive Director service contracts
The Executive Directors are employed under rolling service agreements with Shawbrook Bank Limited. Each Executive Director’s service agreement is effective from the date of admission to trading on the Main Market of the London Stock Exchange with a notice period of 12 months from the Company and the Executive Director. The Executive Directors’ service agreements are available for inspection by shareholders at the Company’s registered office.

Non-Executive Director letters of appointment
All independent NEDs are on three-year terms which are expected to be extended up to a total of approximately nine years. The dates of initial appointment to the Board are shown in the table below. The appointments continue on a rolling basis until terminated by either party on three written months’ notice.

Non-Executive Director	Date of appointment	Date of expiry of current term
John Callender	8 March 2018	31 May 2027
Lan Tu	10 March 2022	10 March 2028
Janet Connor	1 May 2022	1 May 2028
Derek Weir	1 July 2024	1 July 2027
Andrew Didham	1 February 2017	1 February 2027
Michele Turmore	1 October 2019	1 October 2028
Lindsey McMurray ¹	30 April 2010	N/A
Cédric Dubourdieu ¹	5 September 2017	N/A

Remuneration for the wider workforce
When reviewing and determining the Policy for the Executive Directors, the Committee takes into account the remuneration and related policies for the wider workforce, including the level and structure of remuneration, as well as salary budgets for other employees in the Group.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 92 Shawbrook Group plc | Annual Report and Accounts 2025More specifically, the Committee reviews annual salary increase budgets for the general employee population, as well as the remuneration structure and policy for the senior management population. Remuneration arrangements throughout the Group are based on the same high-level principles as for the Executive Directors. Annual salary reviews take into account individual contribution, Group performance, local pay and market conditions and salary levels. All senior employees are eligible to participate in annual bonus schemes; opportunities vary by organisational level and an individual’s role. Bonus awards take into account personal and Group performance. All UK employees are eligible to participate in the Sharesave Plan and the Share Incentive Plan on the same terms.

Differences in remuneration policy for the Executive Directors and employees in general

All senior Group employees participate in the ABP, which is operated on similar terms to Executive Directors albeit with an element based on personal performance with an increasing weighting on Company performance based on seniority. The PSP operates for members of the wider executive team on similar terms to those for Executive Directors.

Consideration of shareholder views

The Committee will consider shareholder feedback received in relation to the Annual General Meeting each year and guidance from shareholder representative bodies more generally. Prior to Admission on the London Stock Exchange, the views of major shareholders on fixed and variable pay were taken into account when establishing the packages offered to the Executive Directors and in determining the overall Policy. If the Committee were to consider changes to the Policy, it would be subject to prior consultation with major shareholders and their representative bodies as appropriate. Employees are not formally consulted on the formulation of the Policy, but may become shareholders through the Company’s all- employee share plans or through acquiring shares independently on the market and express their views on executive remuneration in the same manner as the other shareholders.

1 Lindsey McMurray and Cédric Dubourdieu are both institutional Directors, and were both appointed by and represent the interests of Pollen Street Capital and BC Partners, respectively, both of which have been major shareholders both before and after Admission.

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Policy for departing Executive Directors

Where an Executive Director leaves, they will receive fixed remuneration (salary, benefits and employer pension contributions) for the proportion of the notice period for which they remain employed and any untaken holidays pro-rated to the leaving date (including the balance of any notice period). Payment in lieu of notice may be made for an Executive Director’s basic salary for the unexpired portion of the notice period, either as a lump sum or in phased payments which are in monthly instalments and subject to mitigation. The Company may require the Executive Director to work their notice period or may choose to place the individual on ‘garden leave’ if this is considered by the Committee to be the most commercially sensible approach.

The variable remuneration (ABP, DBP and PSP awards) due to an Executive Director in these circumstances depends on whether the Executive Director is leaving as a “good leaver” (i.e. their departure is as a result of their ill health, injury or disability, the sale of their employing company or business out of the Group, retirement (with the Committee’s agreement), redundancy (within the meaning of the Employment Rights Act 1996), or in other circumstances at the discretion of the Committee). There is no entitlement to a bonus payment for the year of departure, but the Committee may exercise its discretion to pay a bonus depending on the circumstances of the departure. If the Executive Director leaves during a bonus year or after the year but prior to the normal bonus payment date, they will be eligible to receive a bonus which is pro-rated for the period worked during the financial year and subject to performance assessment in the usual way. The Committee has the discretion to decide what proportion of the bonus will be delivered in cash and DBP awards and whether the bonus deferral continues to apply after departure.

Unvested DBP and PSP awards will usually lapse when an Executive Director leaves, unless they qualify as a “good leaver”. Unvested awards held by a “good leaver” will normally continue to vest (and be released from any applicable holding period) on the original timetable, unless the Committee determines they should vest (and be released) early. If a participant dies, their DBP and PSP awards will vest (and, in the case of an award subject to a holding period, be released) on the date of their death on the basis set out for other “good leavers”. Alternatively, the Committee may decide that an unvested award will vest (and, in the case of an award subject to a holding period, be released) on the date it would have if the participant had not died on the basis set out for other “good leavers”. The extent to which PSP awards normally vest in these circumstances will be determined by the Committee, taking into account the satisfaction of any relevant performance conditions, the Executive Director’s contribution, the financial situation of the Group as a whole, the underlying performance of the Company and such other factors the Committee considers, in its opinion, relevant. Unless the Committee decides otherwise, the extent to which an Award vests will also normally take into account the proportion of the performance period which has elapsed when the Executive Director left. If an Executive Director leaves during a holding period in respect of an award for any reason other than summary dismissal, their award will normally be released at the end of the holding period, unless the Committee determines that it should be released when the Executive Director leaves. If an Executive Director dies during the holding period, their award will be released on the date of their death (unless the Committee decides it will be released at the end of the normal holding period). Disbursements such as legal costs and outplacement fees may be payable as appropriate and the Committee will have the authority to make payments to settle any actual or potential legal claims against the Company that might arise on termination (e.g., for unfair dismissal).

Corporate events

In the event of a takeover of the Company, PSP and DBP awards will normally vest (and be released from any holding periods) early. The proportion of any unvested PSP awards which vest will be determined by the Committee, taking into account the extent to which any performance conditions applicable to the awards have been satisfied, the Executive Director’s contribution, the financial situation of the Group as a whole, the underlying performance of the Company, such other factors the Committee considers, in its opinion, relevant, and, unless the Committee determines otherwise, the proportion of the performance period which has elapsed. DBP awards will vest in full. Alternatively, the Committee may require that on a takeover awards are exchanged for equivalent awards either: (a) over shares in the acquiring company (subject to the acquiring company’s consent); or (b) if necessary to comply with regulatory obligations, to be settled in cash, with the value of the cash-settled award calculated by reference to the price per share offered in connection with the takeover. In these circumstances, awards will be treated (and their terms may be amended) so as to ensure compliance with regulatory requirements.

If the Company is wound up or other corporate events occur such as a variation of the Company’s share capital, a demerger, special dividend or other transaction which, in the Committee’s opinion, would materially affect the value of the Company’s shares, the Committee may determine that PSP and DBP awards will vest (and be released) on the same basis as for a takeover. If there is a variation of the Company’s share capital or in the event of a demerger, special dividend or other transaction which, in the Committee’s opinion, would materially affect the value of the Company’s shares, the Committee may make such adjustments to the number or class of shares subject to awards and/or the exercise price applicable to awards as it considers appropriate. The Committee may also decide to satisfy a PSP or DBP award with a cash payment equal to the market value of the shares (less any exercise price payable in the case of an option) that the participant would have received had the award been satisfied with the Company’s shares.

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Notes to the single total figure table for Executive Directors

Pension:

Executive Directors are eligible to participate in the Group’s workplace pension arrangement, but they may opt to receive a cash allowance in lieu of employer pension contributions. Since Admission in November 2025, the contribution level is set at a maximum contribution of 8% of base salary and the approach to pension arrangements for the Executive Directors is in line with the wider workforce. Marcelino Castrillo received part of his pension by way of a contribution into the workplace pension arrangement and part by way of a cash allowance. Dylan Minto received his contribution by way of a cash allowance.

Directors’ remuneration for the year ended 31 December 2025

This section details remuneration received by Executive and Non Executive Directors in respect of financial year ended 31 December 2025. Information in this section has been audited.# Single total figure of remuneration for Executive Directors

Executive Directors	Marcelino Castrillo		Dylan Minto
Element	2025 £000	2024 £000	2025 £000	2024 £000
Salary	957	900	490	433
Pension	132	135	67	65
Taxable Benefits	16	2	12	2
Total fixed remuneration	1,105	1,037	568	501
Annual Bonus	1,230	1,000	720	420
Total variable remuneration	1,230	1,000	720	420
Total	2,335	2,037	1,288	921
Legacy share plans	7,613	-	5,586	-
Total (inc. Legacy share plans)	9,948	2,037	6,874	921

Please note that ‘Total’ figures in the tables may not add up to the sum of the component parts due to rounding.

Remuneration Committee

The Committee met on four occasions during 2025. In addition to annual agenda items, the Committee considered the following activities:
* Remuneration of Executive Directors’, Senior Managers’ and Material Risk Takers’ remuneration;
* Wider workforce remuneration;
* Monitoring significant changes to the regulatory landscape;
* Approving the Material Risk Taker identification methodology and process and overseeing its implementation on an ongoing basis;
* The treatment of IPO related variable remuneration;
* Determining the Directors’ Remuneration Policy for shareholder approval at the 2026 AGM; and
* Preparation of remuneration related information contained within the Admission Prospectus.

The Committee members are outlined on page 64. Additional input is provided by the Chief Executive Officer, Chief Financial Officer, Chief Risk Officer, Chief HR Officer and Head of Reward whose attendance at Committee meetings is by invitation from the Chair. During 2025, no Director was present for any discussions that related directly to their own remuneration. The Committee is also supported by Ernst & Young LLP (‘EY’), who advised the Committee on remuneration matters on Admission and on a continuing basis throughout the year. EY was appointed by the Committee following a formal competitive tender process. The Committee exercises appropriate judgement when considering the work of its external advisers and is satisfied that the advice it received during the year under review was objective and independent. Fees payable to EY for advice provided during 2025 were £55,000 (excluding VAT) on a part fixed fee and a part time and materials basis. EY also provided advisory services relating to consulting, internal audit and outsourced services to the Group during the year. EY have no other connection with the Group or individual Directors.

Annual Report on Remuneration

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94 Shawbrook Group plc | Annual Report and Accounts 2025

Category	Weighting	Target	Actual Outcome
Financial Underlying PBT	40%	£338.3m	£340.5m
Underlying RoTE (calculated using actual TNAV)	20%	16.1%	16.3%
Risk Management	20%	A qualitative assessment by the Remuneration Committee as informed by the CRO Risk Review.	The Committee considered that Shawbrook had demonstrated continued maturity across the Risk Management Framework during the year and awarded the maximum weighted outcome.
Strategic Priorities	20%	A qualitative assessment by the Remuneration Committee of achievement of the strategic priorities for the year.	Alongside the success of the IPO, the Committee recognised strong performance against customer, people, technology, sustainability and growth focused priorities during the year and awarded the maximum weighted outcome.
Total payout as a % of maximum opportunity.	100%

Taxable Benefits: This includes private medical cover and, for 2025, the benefit of one-off, IPO-related transitional loans to facilitate the winding-up of the Shawbrook’s pre-Admission holding company.

Annual bonus: The Committee agreed that the structure of the annual bonus for the year ending 31 December 2025 would operate in line with the remuneration policy in place prior to Admission. Executive Directors were eligible to participate in the annual bonus in 2025, with a maximum annual opportunity of 120% of salary. When determining the bonus pool outcome, the Committee carefully reviewed performance against each of the relevant financial and non financial measures as set out below, whilst also taking into account broader considerations relating to overall Group and business area performance; and the impact of the listing. Overall, the Committee considered that the Group had delivered strong financial and non-financial performance over the course of 2025 against the performance targets and in the context of listing. As a result of this and in recognition of their individual performance, the Committee awarded a bonus of 120% of salary to Marcelino Castrillo and 120% of salary to Dylan Minto. In accordance with the remuneration policy in force prior to Admission, 50% of any amount in excess of £100,000 payable to the individual will be subject to deferral in cash and released in three equal tranches after one, two and three years.

Legacy share plans: Both Marcelino Castrillo and Dylan Minto held shares and options over shares in Marlin Bidco Limited (‘Marlin’), Shawbrook’s pre-Admission holding company. These legacy share plans comprised: (i) an arrangement under which Marcelino Castrillo and Dylan Minto subscribed for shares in Marlin at their prevailing market value. The value of the shares held was calculated (on the same basis as all shareholders of the class) by reference to the equity valuation of Shawbrook at IPO; (ii) an employee share plan under which nil-cost option awards were granted over a pool of shares in Marlin with an aggregate value linked to the equity valuation of Shawbrook implied by the IPO. The value of the awards held by Marcelino Castrillo and Dylan Minto was calculated (on the same basis as all participants in this plan) by reference to the equity valuation of Shawbrook at IPO. The vesting of these nil-cost option awards was conditional upon the occurrence of the IPO; and (iii) an employee share plan under which a nil-cost option award was granted to Dylan Minto over shares in Marlin with the award’s value calculated by reference to his annual bonus in respect of Shawbrook’s 2017 financial year that he gave up in exchange for being granted the award. The vesting of this nil-cost option award was conditional upon the occurrence of the IPO and calculated by reference to the equity valuation of Shawbrook at IPO. All shares and options over shares in Marlin vested on the IPO and all options over Marlin shares were then exercised shortly following the IPO. As a result of the IPO, all shareholders in Marlin subsequently received a pro-rata share of the cash assets and Shawbrook shares held by Marlin. The value of these cash assets and Shawbrook shares (upon vesting of all shares and options over shares under the legacy share plans) is shown in the single total figure table. Their value is calculated by reference to the share price on Admission and does not include any share price appreciation thereafter. Adjustments have been made to the values disclosed to take account of the subscription price paid for shares.

Malus and clawback: The circumstances in which the Committee may apply malus and/or clawback to annual bonuses or PSP awards are set out in the Directors’ Remuneration Policy. The Committee considers the clawback period is appropriate on the basis that it provides, given the nature of the Company’s business, sufficient time for any relevant circumstances to come to light. The Committee has not exercised any malus or clawback powers during 2025.

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95 Shawbrook Group plc | Annual Report and Accounts 2025

Performance Share Plan (PSP) Awards granted during the year ended 31 December 2025

Following Admission, both Executive Directors were granted long term incentive awards in the form of nil cost options under the PSP. The aim of this award was to incentivise and reward the delivery of long-term shareholder value through the achievement of long-term financial and strategic objectives.

Executive Director	Salary £000	Percentage of Salary subject to award	Number of Shares subject to award	Face Value £000
Marcelino Castrillo	1,025	100%	277,027	£1,025
Dylan Minto	600	100%	162,162	£600

Non Executive Directors

	2025 Fees £000	2024 Fees £000
John Callender	351	275
Lan Tu	135	124
Janet Connor	107	96
Derek Weir	3	137
Andrew Didham	129	118
Michele Turmore	132	121
Paul Lawrence	4	32
Lindsey McMurray	5	-
Cédric Dubourdieu	5	-

Performance Metric	Measurement Period	Weighting	Threshold (25% of Maximum Vesting)	Maximum Vesting
Relative TSR	From Grant to Vest	35%	Median	Upper Quartile
Underlying PBT growth CAGR between financial years 2024 and 2027	35%	7.5%	17.6%
Risk Management	From Grant to Vest	30%	Qualitative assessment (informed by CRO review prepared each year) of risk management performance taking into account key risk appetite areas alongside a broader assessment of the risk management framework embedding in line with strategy.

These awards broadly align with the PSP structure outlined in the proposed Directors’ Remuneration Policy and will vest on 1 April 2028 subject to the achievement of the performance conditions below and will be subject to a post vesting holding period. Individual performance and conduct will also be assessed over the period.

Relative TSR measure: The comparator group for the purposes of the relative TSR condition for this particular award is Arbuthnot Banking Group plc; Barclays PLC; Close Brothers Group plc; Funding Circle Holdings plc; LendInvest plc; Lloyds Banking Group plc; Metro Bank Holdings plc; NatWest Group plc; OSB Group plc; Paragon Banking Group PLC; S&U plc; Secure Trust Bank plc; and Vanquis Banking Group plc, as varied from time to time.Payments to Past Directors and for Loss of Office
Ian Cowie, who stepped down from the Board in 2021, also participated in the legacy share plans that vested on IPO in respect of his service as a Director. The value he received in respect of his shares and share awards was £2,535k. There were no other payments to former Directors or payments for loss of office during the year.

Single total figure of remuneration for the Chair of the Board and Non Executive Directors
1 Awards were calculated based on the IPO share price of £3.70.
2 During 2025, additional fees were paid to the Chair of the Board and Non Executive Directors to recognise the significant additional time commitment required as a consequence of the IPO. Such amounts are included in the table above.
3 Derek Weir was appointed on 1 July 2024.
4 Paul Lawrence’s appointment ended on 31 March 2025.
5 Lindsey McMurray and Cédric Dubourdieu are both Institutional Directors, and were both appointed by and represent the interests of Pollen Street Capital and BC Partners, respectively, both of which have been controlling shareholders before and after the Group’s Admission. Whilst not paid directly to the individual, up until Admission, the Group incurred fees of £50,000 plus VAT per annum in relation to each Institutional Director appointed to the Board by the ultimate parent company, as set out and agreed within the Framework Agreement with Pollen Street Capital and BC Partners. Following Admission, this amount was increased to £77,000 per annum as set out and agreed within the relevant letters of appointment.

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Statement of Directors’ shareholdings and share interests
As outlined in the Directors’ Remuneration Policy, during employment, Executive Directors are expected to build up over a five-year period, and then subsequently hold, a shareholding in the Group equivalent to 200% of base salary. Post-employment, Executive Directors are expected to retain the lower of (i) their actual shareholding on cessation of employment or (ii) 200% of base salary for a period of two years. The interests of the Executive Directors (including those held by their connected persons) in the shares of the Group as at 7 January 2026, immediately following the distribution of Shawbrook shares from Shawbrook’s pre-Admission holding company following Admission were as below (at 31 December 2025, neither Executive Director held shares in Shawbrook). Information in this section has been audited.

Executive Directors Shareholdings
| | Marcelino Castrillo (Number of shares) | Dylan Minto (Number of shares) |
| :--- | :--- | :--- |
| Unvested Awards subject to performance conditions | 277,027 | 162,162 |
| Unvested Awards not subject to performance conditions | - | - |
| Shares beneficially held | | |
| Acquired through Legacy Share Plans | 1,308,767 | 979,515 |
| Total shares held counting towards requirements | 1,308,767 | 979,515 |
| Current Shareholding as % of Salary 1 | 621% | 793% |
| Shareholding Guidelines met? | Yes | Yes |

Marcelino Castrillo and Dylan Minto were also both awarded 418 free shares under the Share Incentive Plan on 12 January 2026 on the same basis as all other employees. The interests of the Non Executive Directors in the shares of the Group as at 31 December 2025 (including those held by their connected persons) were as below.

Non-Executive Director Shares beneficially held
| | |
| :--- | :--- |
| John Callender | - |
| Lan Tu | 6,756 |
| Janet Connor | - |
| Derek Weir | 5,405 |
| Andrew Didham | 5,405 |
| Michele Turmore | - |
| Lindsey McMurray | - |
| Cédric Dubourdieu | - |

As at 10 March 2026, the last practicable date prior to this report being approved, the Company had not been advised of any other changes to the interest of the directors (and their connected persons) as set out above.
1 Based on the closing share price of 486p and base salaries as at 31 December 2025.

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2026 Policy Implementation for Directors
This section details the proposed changes to the directors’ remuneration and intended application in 2026 of the new Directors’ Remuneration Policy. The Policy will be subject to a binding shareholder vote at the 2026 Annual General Meeting.

Executive Directors Fixed Pay
Having carefully considered market levels and reflected on the skills and experience that he brings to the role of CEO and to support Shawbrook’s strategic ambitions, the Committee agreed to exceptionally award Marcelino Castrillo a salary increase of 9.3%, which is above the average increase applicable to the wider workforce. This increase will take effect on 1 March 2026. No salary increase was awarded to Dylan Minto given that an exercise was undertaken to re-align his remuneration to market during 2025. Going forward, base salaries of Executive Directors will normally be reviewed on the same basis as for the wider workforce in accordance with the Policy. Pension and benefits will operate in line with the Directors’ Remuneration Policy.

Annual Bonus
In line with the Policy, the maximum bonus opportunity for the 2026 financial year will be 200% of salary. In combination with the PSP, the bonus will be delivered in line with regulatory requirements applicable at that time. The 2026 scorecard will be based 70% on financial measures and 30% on non-financial measures. The financial element will include PBT, RoTE and cost measures (all on an underlying basis). The non-financial element will include risk management and personal performance aligned to strategic priorities. The Committee has elected not to disclose the precise targets associated with these measures in advance, given their commercially sensitive nature. Full retrospective disclosure will however be provided in next year’s Annual Report on Remuneration.

PSP
A PSP award of 300% of salary will be made to the Chief Executive Officer and Chief Financial Officer in 2026, with performance measured over the three-year period to 31 December 2028. The intended performance conditions and weightings are set out below, which have been determined to provide a balanced assessment of business performance over the three- year period taking into account financial performance alongside strong controls and a focus on building a resilient business that creates long term value for shareholders and wider stakeholders. Individual performance and conduct will also be assessed over the period. There is no vesting for below Threshold performance. For financial measures, vesting rises from 25% at Threshold to 100% at maximum on a straight-line basis. For the other measures, any outcome between 0% and 100% may be achieved, based on a qualitative assessment of performance.

Name	Salary from March 2026	Salary as at November 2025 (Admission)
Marcelino Castrillo	£1,120,000	£1,025,000
Dylan Minto	£600,000	£600,000

Relative TSR: Following the Group’s inclusion in the FTSE 250, the Committee has chosen to adopt a hybrid approach to assessing Relative TSR, whereby 50% of the outcome will be determined relative to performance against the FTSE 250 index and 50% will be assessed against the bespoke financial services comparator group used for the PSP grant made in 2025. This will ensure that performance is assessed relative to sector and non sector specific companies.

Performance Measure	Weighting	Threshold (25% of Maximum Vesting)	Maximum Vesting
Financial
Relative TSR	35%	Median	Upper Quartile
Underlying EPS in 2028 (p)	35%	58	72.5
Risk Management	15%	Qualitative assessment (informed by Chief Risk Officer review prepared each year) of risk management performance focusing on risk appetite measures, risk management framework and regulatory, audit and control effectiveness.
Sustainability	15%	Qualitative assessment of progress around Talent and Culture (including succession, engagement and EDI) and Climate strategy, addressing risks and opportunities.

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98 Shawbrook Group plc | Annual Report and Accounts 2025

Chair of the Board and Non-Executive Director fees
The fee payable to the Chair of the Board was reviewed by the Committee and the Board and the fees payable to NEDs were reviewed by the Board (excluding the NEDs). Having considered market insights and in recognition of the increased governance related accountabilities and complexities of each role following Admission, it was agreed that the Chair of the Board fee and the NED base fee would be exceptionally increased by 9.9% and 7.8% respectively with effect from 1 March 2026. The Remuneration Committee Chair fee will also be increased with effect from 1 March 2026 to ensure alignment with other Committee Chair fees. No other changes will be made to wider Committee Chair and membership fees.

Name	Fee from March 2026	Fee as at November 2025 (Admission)
Chair of the Board Fee	£310,000	£282,000
Non-Executive Director base fee	£83,000	£77,000
Senior Independent Director fee	£20,000	£20,000
Audit and Risk Committee Chair fee	£30,000	£30,000
Remuneration Committee Chair fee	£30,000	£25,000
Audit, Risk and Remuneration Committee membership fee	£8,000	£8,000
Nomination and Governance Committee membership fee	£5,000	£5,000

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99 Shawbrook Group plc | Annual Report and Accounts 2025

Additional Information
This section provides information related to remuneration across the Group to provide further context as to how the remuneration of Directors aligns with the interests of wider stakeholders. The table below summarises the Chief Executive Officer single figure for total remuneration, annual bonus pay-outs and long-term incentive vesting levels as a percentage of maximum opportunity during 2025.# 2025 Chief Executive Officer single figure total remuneration (£000) 9,948 (2,335 excluding legacy share plans)
Annual bonus payout (% of maximum opportunity) 100%
LTIP vesting out-turn (% of maximum opportunity) 1 N/A

Relative Importance of Spend on Pay

The table below shows the Group’s total employee remuneration. The Group did not make any distributions by way of dividend or share buy back (or any other significant distributions) in either year.

Relative Importance of Spend	2025 £m	2024 £m
Total employee costs (See Note 17)	191.5	150.3
Distributions to shareholders	-	-

Performance Graph and Table

The chart below shows the TSR performance of £100 invested in Shawbrook from Admission in November 2025 to December 2025 (Year End) compared to the FTSE 250 index, which is considered to be the most appropriate comparator index given its comparable size to Shawbrook.

04 Nov 2025 31 Dec 2025
70 80 90 100 110 120 130
Value (£)
Shawbrook Group Plc
FTSE 250

1 Please note that the pre-Admission legacy share plans have been excluded as they were not designed with a maximum opportunity.

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2025	2024	Name	Salaries and fees
6%	7%	Marcelino Castrillo	23%
13%	17%	Dylan Minto	71%
28%	-	John Callender	-
9%	-	Lan Tu	-
12%	-	Janet Connor	-
10%	-	Andrew Didham	-
9%	-	Michele Turmore	-
5%	10%	Average Employee	13%

Comparison of annual change in directors pay compared with the average employee

The table below shows the percentage change in the salary, benefits and bonuses of each of the directors (excluding the institutional directors) who held office during the entirety of 2024 and 2025 using the information disclosed in the single figure tables. This is compared with the percentage change in each of those components of pay for an average employee based on those who were employed for the entirety of 2024 and 2025. The year on year differences to salaries and pension, allowances and benefits for both Executive Directors was impacted by an adjustment to pension contribution levels at Admission to ensure alignment with the wider workforce, as well as the benefit of one-off, IPO-related transitional loans made in 2025 to facilitate the winding-up of Shawbrook’s pre-Admission holding company. In 2025, additional fees were paid to the Chair of the Board and Non-Executive Directors to recognise the significant additional time commitment required as a consequence of the IPO. Such amounts are included in the comparison above.

Calculation Basis	Lower Quartile	Median	Upper Quartile
Pay Ratio without legacy share plans	50:1	33:1	21:1
Pay ratio with legacy share plans	214:1	143:1	89:1

Remuneration Element	CEO single figure	Lower Quartile Employee	Median	Upper Quartile
Base Salary (£’000)	957	37	54	87
Total Remuneration without legacy share plans (£’000)	2,335	46	70	112
Total Remuneration with legacy share plans (£’000)	9,948	46	70	112

The base salaries and total remuneration for the CEO and relevant identified employees are shown below. The Committee recognises that the legacy share plans had a significant impact on the pay ratio in 2025 and is comfortable that the underlying ratio (excluding the legacy share plans) is consistent with our remuneration principles for the employees as a whole.

Chief Executive Officer Pay Ratio

UK regulations require companies with more than 250 UK employees to publish a ratio to show Chief Executive Officer pay compared to that of other UK employees. In line with these regulations, we have provided the ratio for the year ended 2025, which has been calculated using “Option A”, as the Committee feels that this is the most statistically accurate option under the regulations. The employee pay figures were calculated by reference to the year ending 31 December 2025, consistent with the period used for the Single Figure Table remuneration calculated for the Directors. Salaries, variable compensation, taxable benefits and pensions were annualised for employees who have not been with the Group for the full financial year or grossed up on a full-time equivalent basis for part-time employees.

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Wider workforce remuneration

In line with our guiding reward principles, the Group rewards all its employees fairly for their contribution and to motivate them to deliver the best outcomes for all our stakeholders.
* Salaries are set with reference to the size and scope of an individual’s role, the external market as well as the individual’s skills and experience.
* We provide a competitive pension arrangement, alongside a comprehensive suite of benefits designed to support the wellbeing of our employees. Following our Admission to the London Stock Exchange, we made an all-employee free share award to our colleagues in January 2026 to celebrate Admission and are looking forward to being able to provide them with the opportunity to participate in the Sharesave Plan from 2026.
* Employees are eligible to be considered for an annual bonus as appropriate to their role. Long-term incentives are also considered for selected senior individuals and key talent to reward their contribution to the delivery of our long-term strategy.

The Committee receives and considers internal and external information as appropriate to guide decisions on remuneration, including but not limited to, the results of employee engagement surveys as well as feedback sought from the People Engagement Forum and other internal (such as the Chief HR Officer and Head of Reward) and external stakeholders. The Committee will also consider progress against the Group’s EDI initiatives, details of which can be found on our website. In 2025, we made progress in strengthening our diverse leadership. As part of this, we expanded our Women in Finance (WIF) senior manager definition to include two layers below the Executive Committee. This provides us a more robust and transparent picture to measure the progress of our female talent pipeline. While the reported figure of 28.1% female representation in senior leadership is lower than in previous years, it reflects genuine improvement across the expanded cohort.

Statement of Voting at General Meeting

As the 2026 AGM will be the Company’s first as a publicly listed entity, there is no historical voting on Directors’ remuneration to report. Future reports will include AGM voting outcomes. The Board has reviewed and approved this report on 11 March 2026

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Nomination and Governance Committee Report

Shawbrook remains committed to EDI and continues to be a signatory of the HM Treasury Women in Finance Charter, Business in the Community Race at Work and Progress Together. Our Executive team sponsor this work, much of which is delivered by our highly engaged and passionate employee inclusion groups, covering all areas of EDI. Developing and hiring great talent remains a key focus and the Committee supports the Executive team in delivering good outcomes. During 2025 the Committee reviewed progress in relation to the People Strategy, including senior leadership succession, ongoing leadership capability development and overall employee engagement, to set us up for long term success. Looking ahead, the Committee will continue to keep the structure, size and composition of the Board and its Committees under review, as well as overseeing succession of the Executive Management team and the Group’s corporate governance arrangements. The Committee will also monitor progress on embedding actions arising from the Board effectiveness review. Further information about the activities of the Committee is provided in the following report.

John Callender
Chair of the Nomination and Governance Committee
11 March 2026

“I am pleased to present the 2025 report as Chair of the Nomination and Governance Committee. The Committee continued to focus on Board and Executive succession planning, ensuring a desired mix of skills and expertise is maintained across the Board, its Committees, the Executive and senior management to support the delivery of the Group’s strategy.“

Main activities during the year

Throughout the year, the Committee considered the composition of the Board and its committees, Board succession planning, appointments to subsidiary boards, extent of compliance with the principles within the UK Corporate Governance Code 2024, Executive Management succession planning, the Group’s leadership programme, SM&CR appointments and EDI.

Effectiveness Review

The externally facilitated Board Effectiveness Review also considered the effectiveness of the Board’s committees. The review concluded that the Nomination and Governance Committee continued to operate effectively.

Board composition and succession planning

The Committee monitors the membership of the Board and its committees to ensure that there is a suitable balance of diversity, skills and experience. Consideration to the length of service of the members is also undertaken. This ensures that appropriate succession and development plans are in place for appointments to the Board. During the year, this work was complemented by a 360-degree review of the independent Non-Executive Directors carried out by the Chair. The Committee is satisfied that the succession planning structure in place is appropriate for the size and nature of the Group.There are currently no external firms engaged in relation to Non-Executive Director recruitment. The Committee was pleased to have recommended to the Board further three year extensions to the terms for Lan Tu, Janet Connor and Michele Turmore. Short term extensions were also approved for both John Callender and Andrew Didham, in order to support timely recruitment and handover processes. Whilst Andrew has now served in excess of the 9 years recommended in the UK Corporate Governance Code, the Board continues to believe that he remains Independent. Paul Lawrence retired from the Board in March 2025.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

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Non-Executive Director time commitment

The Committee continued to keep under review the time commitment of each Non-Executive Director to help ensure that the Board and its committees had the appropriate representation and that the Non-Executive Directors were able to commit the appropriate time to their respective roles. This is on average at least five days per month depending on business needs.

Re-electing Directors

Before recommending the proposed re-election of Directors at the 2025 Annual General Meeting, the Committee reviewed the independence of the Non-Executive Directors and concluded that Andrew Didham, Derek Weir, Michele Turmore, Lan Tu and Janet Connor met the criteria for independence. John Callender was independent when he was appointed as Chairman. Lindsey McMurray and Cédric Dubourdieu’s re-election as Institutional Non-Executive Directors was made in line with the Framework Agreement which was in place at the time.

Non-Executive Director contracts

Subject to annual re-election at each Annual General Meeting, the contracts for Non-Executive Directors are reviewed every three years. All appointment letters were reviewed and updated in line with best practice upon listing in November 2025.

Executive and Non-Executive Director induction

All new Directors are required to undertake an induction programme, which includes comprehensive training on their Senior Managers and Certification Regime responsibilities. In addition, Directors are required to undertake training in the regulatory and compliance frameworks and are also required to gain an understanding of relevant legal requirements, such as money laundering legislation. Inductions include sessions with the Chairman, Directors, Executive Management and external advisors to gain insight into the Group. Training is tailored to the requirements of each Director’s role, knowledge and experience.

Executive succession

We have a strong, talented and resilient Executive Management team for whom we have 100% emergency succession cover in place. Through transparent discussions and the deployment of development plans, we continually invest in our Senior Management to ensure we create internal candidates for Executive Management roles in the future we create internal candidates for Executive Committee roles where appropriate. We also always ensure that we have an eye on the external market, to enable us to add talent and experience beyond what we have today, particularly where we are evolving into new markets. This ensures that we take a best talent approach at all times. The Committee supported the changes to the Executive Committee in January (see page 68) and were particularly pleased to see two new internal appointments in Chris Fallis as Chief Banking Risk Officer and Sam Foskett as General Counsel. The Committee noted the retirement of Daniel Rushbrook as General Counsel on 31 January 2026. We thank Daniel for his long and significant contribution to the Group’s success to date.

Culture

Our success in 2025 was driven by a high-performance culture and a talented workforce, which the Committee continues to assess and monitor. We have focused on recruiting top talent, enhancing employee propositions, investing in leadership development and fostering a supportive environment which is reflected in an employee engagement score of 78%. We continue to recognise exceptional contributions through recognition awards and creating a culture of inclusion and belonging through our employee led EDI groups. We have repledged to the Women in Finance Charter, the Race at Work Charter and Progress Together and have joined the Parker Review as part of our ongoing commitment to EDI.

Senior Management Function appointment process

The Committee is also responsible for overseeing the appointment of Senior Management Function holders, pursuant to the Senior Managers and Certification Regime. Prior to such appointments, the Committee evaluates the balance of skills, knowledge and experience required for the role and provides suitable oversight of the selection and appointment process. The Committee is pleased with the appointments made in 2025, which will help the Group to achieve its strategic aims.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

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Gender Diversity Reporting as at 31 December 2025	Board Members		Executive Management
	Number	Percentage	Number of senior positions on the Board (CEO,CFO, SID and Chair)	Number
Men	6	60.00%		7
Women	4	40.00%	1	2
Other Categories	0	0%	0	0
Not specified/prefer not to say	0	0%	0	0

Ethnic Diversity Reporting as at 31 December 2025	Board Members		Executive Management
	Number	Percentage	Number of senior positions on the Board (CEO,CFO, SID and Chair)	Number
White British or White (including minority-white groups)	7	70.00%	2	7
Mixed/Multiple Ethnic Groups	0	0%	0	0
Asian/British Asian	1	10.00%	1	1
Black/African/Caribbean/Black British	0	0%	0	0
Not specified/prefer not to say	2	20.00%	1	1

Diversity Statistics

The Committee gives careful consideration to how it can promote ethnic and gender diversity as part of ensuring an appropriate Board composition. The tables here show the current composition of Board and Executive Management (gender and ethnicity) as at 31 December 2025. Data relating to the gender identity and ethnic diversity of the Board was collected by way of a questionnaire. This questionnaire asked all individual Board members to disclose their gender identity and ethnic background, on a voluntary self reporting basis, by selecting options matching those in the table. There was an option not to specify an answer. Employees (including Executive Management, as defined in the table) are asked to confirm their gender and ethnicity on a voluntary basis. Data relating to gender, and ethnic diversity through self-identification, of executive management (as defined) was sourced from this existing data. The Board meets the ethnic diversity target of the Parker Review of having at least one director from an ethnic minority group.

Additional information

The Committee has unrestricted access to the Executive, Senior Leadership 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 Board reviewed and approved this report on 11 March 2026.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

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Dividends

The Directors are not recommending a final dividend in respect of the year ended 31 December 2025 (2024: £nil).

Employees with disabilities

Applications for employment by people with disability are given full and fair consideration, bearing in mind the respective aptitudes and abilities of the applicant concerned and our ability to make reasonable adjustments to the role and the work environment. In the event of an existing employee becoming disabled, all reasonable effort is made to ensure that appropriate training is given and their employment with the Group continues. Training, career development and promotion of a disabled person is, as far as possible, identical to that of an able-bodied person.

Appointment and retirement of Directors

The Company’s Articles of Association set out the rules for the appointment and replacement of Directors and expects that all Directors shall retire from office and may offer themselves for re-appointment at the Annual General Meeting.

Powers of Directors

The Directors’ powers are conferred on them by UK legislation and by the Company’s Articles of Association. Changes to the Company’s Articles of Association must be approved by the Shareholder passing a special resolution and must comply with the provisions of the Companies Act 2006. The Company’s Articles of Association were last updated in November 2025 and can be viewed on the website: www.shawbrook.co.uk/investors/

Directors’ interests

A summary of Directors’ interests can be found on page 96.

Directors’ indemnities

The Company’s Articles of Association provide that, subject to the provisions of the Companies Act 2006, the Group may indemnify any Director or former Director of the Company, or any associated Company, against any liability and may purchase and maintain for any Director or former Director of the Company, or any associated Company insurance against any liability. The Directors of the Group have entered into individual deeds of indemnity with the Group, which constitute ‘qualifying party indemnity provisions’ entered into by the Directors and the Company. The deeds of indemnity protect the Directors to the maximum extent permitted by the law and by the Articles of Association of the Company, in respect of any liabilities incurred in connection with the performance of their duties as a Director of the Company and any associated Group company, as defined by the Companies Act 2006. The Group has maintained appropriate Directors’ and Officers’ liability insurance throughout 2025.Company Secretary
All Directors have access to the services of the Company Secretary in relation to the discharge of their duties. Andrew Nicholson can be contacted at the Company’s registered office, details of which are on page 222.

Directors’ Report
Section 414 of the Companies Act 2006 requires the Directors to present a Strategic Report in the Annual Report and Accounts. The information can be found on pages 2 to 56. The Group has chosen, in accordance with Section 414C (11) of the Companies Act 2006, and as noted in this Directors’ Report, to include certain matters in its Strategic Report that would otherwise be disclosed in this Directors’ Report.

Corporate governance statement
The Directors of the Company present their report, together with the audited financial statements, for the year ended 31 December 2025. Other information that is relevant to the Directors’ Report, and which is incorporated by reference into this report, can be located as follows:

Subject	Pages
Business activities and future development	20
Charitable donations	39
Corporate Governance Report	57
Directors’ biographical details	59 to 61
Employees	49
Employee share schemes	243
Environment	40
Events after the reporting period	281
Internal controls and financial risk management	71
Relationship with suppliers	50
Relationship with the shareholders	51
Results for the year	216
Risk management	110
Use of financial instruments	222 to 272

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Going concern
The financial statements are prepared on a going concern basis. To assess the appropriateness of this basis, the Directors considered a wide range of information relating to present and future conditions, including the Group’s current financial position and future projections of profitability, cash flows and capital resources. The Directors also considered the Group’s Risk Management Framework and potential impacts that the top and emerging risks identified (see page 117 of the Risk Report) may have on the Group’s financial position and longer-term strategy. The Directors have reviewed the Group’s capital and liquidity plans under the Group’s approved budget and considered the results of stress testing and scenario analysis performed as part of the going concern assessment and the ILAAP and ICAAP processes. The stress testing included a range of severe but plausible scenarios designed to assess resilience across differing macroeconomic and interest rate environments, together with additional idiosyncratic and balance sheet stresses relevant to the Group. The assessment also considered the effect of management actions that are within the control of the Group. Based on the assessment performed, including the outcomes of base case forecasts and severe but plausible stresses, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements and to continue to meet its regulatory capital and liquidity requirements. Accordingly, the Directors have concluded that it is appropriate to adopt the going concern basis in preparing these financial statements.

Political and charitable donations
The Group did not make any political donations during the year (2024: £nil). Further information on charitable donations made by the Group can be found on page 39.

Research and Development
The Group develops new products and services from time to time as part of the ongoing activities of its different business franchises.

Share capital
The Group is a listed public company limited by shares. Details of the Company’s issued share capital, together with details of any movements in the Company’s issued share capital during the year, are shown in Note 41 of the Financial Statements. The Company’s share capital comprises one class of ordinary share with a nominal value of £0.005 each. At 31 December 2025, 519,687,271 ordinary shares were in issue. On 20 October 2025, the Company carried out a share split whereby the ordinary share capital of 253,086,879 shares of £0.01 was divided by a factor of two resulting in 506,173,758 shares of £0.005 each. On 4 November 2025 a further 13,513,513 new ordinary shares of £0.005 each were allotted resulting in a total of 519,687,271 ordinary shares of £0.005 each. The Company’s shares began conditional dealing on the London Stock Exchange on 30 October 2025, with full admission taking place on 4 November 2025.

Restrictions on the transfer of shares
According to the Articles of Association and prevailing legislation there are no specific restrictions on the transfer of shares of the Company. Shares may be held in either certificated or uncertificated form. Certificated shares may be transferred in writing in any usual form signed by or on behalf of the transferor and (in the case of a partly paid share) the transferee. Transfers of uncertificated ordinary shares may be made by means of a relevant system in the manner provided for, and subject as provided in, the uncertificated securities. The Board is not bound to register a transfer of any share which is not a fully paid share. The Board may also decline to register an instrument of transfer of certificated ordinary shares unless (i) it is duly stamped, deposited at the prescribed place and accompanied by the share certificate(s) and such other evidence as reasonably required by the Board to evidence right to transfer, (ii) it is in respect of one class of shares only, and (iii) it is in favour of a single transferee or not more than four joint transferees (except in the case of executors or trustees of a member).

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Rights attaching to shares
On a show of hands, each member has the right to one vote at General Meetings of the Company. On a poll, each member would be entitled to one vote for every share held. The shares carry no rights to fixed income. No one person has any special rights of control over the Company’s share capital and all shares are fully paid.

Purchase of own shares by the Company
Under Section 701 of the Companies Act 2006, the Group may make a purchase of its own shares if the purchase has first been authorised by a resolution of the Shareholder.

Substantial shareholdings
PSC Marlin Holdco Limited and Marlinbass Limited each own 37.56% of the issued share capital. Each are regarded as a “controlling shareholder” of the Company under the UK Listing Rules as each holds more than 30% of voting rights in the Company. The Board confirms that the Company continues to be able to carry on its main business activity independently from each of the controlling shareholders. As at 31 December 2025, the Company had not been notified under Rule 5 of the DTRs of any changes in holdings of voting rights in its shares. Between 31 December 2025 and 11 March 2026 the Company has not received any additional notifications pursuant to Rule 5 of the DTRs.

UK Listing rule 6.6.1 R
The information to be disclosed in the Annual Report and Accounts under Listing Rule 6.6.1 R is set out or cross-referenced in this Directors’ Report.

Auditor
Resolutions to reappoint KPMG LLP as the Group’s auditor and to give the Directors the authority to determine the auditor’s remuneration will be proposed at the Annual General Meeting.

Disclosure of information to the auditor
The Directors confirm that:
• so far as each of the Directors is aware, there is no relevant audit information of which the auditor is unaware; and
• the Directors have taken all the steps that they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of the Companies Act 2006.

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Directors’ responsibility statement
The Directors are responsible for preparing the Annual Report and Accounts and the Group and Parent Company financial statements in accordance with applicable law and regulations. Company Law requires the Directors to prepare such financial statements for each financial year. Under that law, the Directors must prepare the Group financial statements in accordance with UK- adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and have elected to prepare the Parent Company financial statements on the same basis. Under company law, the Directors must not approve the accounts 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 that period.In preparing the Group and Parent Company’s financial statements, the Directors are required to:
* properly select and apply 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 UK adopted international accounting standards;
* present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
* provide additional disclosures when compliance with the specific requirements of the relevant accounting standard is insufficient to enable an understanding of the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance;
* assess the Group’s ability to continue as a going concern, disclosing as applicable, matters related to going concern; and
* Use the going concern basis of accounting unless they either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy, at any time, the financial position of the Company, enabling them to ensure that its financial statements comply with the Companies Act 2006. Additionally, the Directors are responsible for safeguarding the Group’s assets and, hence, take reasonable steps to prevent and detect fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. The Directors are responsible for maintaining and ensuring the integrity of the corporate and financial information included on the Group’s website at www.shawbrook.co.uk. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. In accordance with Disclosure Guidance and Transparency Rule (“DTR”) 4.1.16R, the financial statements will form part of the annual financial report prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report on these financial statements provides no assurance over whether the annual financial report has been prepared in accordance with those requirements.

Responsibility statement of the Directors in respect of the annual financial report

Each of the Directors, whose names and functions are listed on pages 59 to 61, confirms that, to the best of their knowledge:
* 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 Group and the undertakings included in the consolidation taken as a whole;
* the Strategic Report (on pages 2 to 56) and the Directors’ Report (on pages 105 to 108) include a fair review of: (i) the business’s development and performance and (ii) the position of the Group and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face;
* the Annual Report and Accounts, taken as a whole, are fair, balanced and understandable, and provide the information necessary for shareholders to assess the Group’s position and performance, business model and strategy.

This Directors’ Report was approved by the Board of Directors on 11 March 2026.
By order of the Board.
Andrew Nicholson
Company Secretary

Risk Report 110
Approach to risk management 113
Risk governance and oversight 117
Top and emerging risks 128
Principal risks 181
ICAAP, ILAAP and stress testing 182
Solvent Exit Analysis, Recovery Plan and Resolution Pack

Contents

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT

109 Shawbrook Group plc | Annual Report and Accounts 2025

Approach to risk management

Shawbrook Group plc and its subsidiaries (together, the ‘Group’) seek to manage the risks inherent within its business activities and operations through close and disciplined risk management. This aims to quantify the risks taken, manage and mitigate them as far as possible and price for them in order to produce an appropriate commercial return through the cycle. The Group’s risk management approach is continuously evolving to reflect changes in its business model, product range, customer engagement preferences, and external factors such as sustained high interest rates and cost-of-living pressures affecting refinance risk. Throughout 2025, further investment was made in key areas of risk management. Notable activities and changes include the following:

The annual review of the Group’s Risk Management Framework (RMF) and risk appetite were approved in April 2025. During the year, the Group strengthened the Risk Function with the appointment of a new Chief Compliance Officer, MLRO (SMF17), and Director of Conduct & Compliance (SMF16).
The Group has continued to evolve its sustainability strategy, focusing on those areas in which it can deliver the greatest impact. This includes its climate strategy where the Group has continued to invest in climate data in key areas such as a new climate base case scenario to improve data quality and transform this into actionable insights to support with physical and transition risk assessments and opportunities across its portfolios. The Group completed the design of its approach to lending emissions in SME using a Partnership for Carbon Accounting Financials (PCAF) aligned approach to increase coverage of the lending portfolio which will help in setting net zero targets and transition plans. The Group also approved some changes to its collateral and valuation policy to ensure that physical risk is reflected consistently in all valuation tools. The Group also added to its scenario analysis with the implementation of a Pillar 2A assessment in its ICAAP.
Enhancements to the Group’s financial crime control environment have continued with the Group’s financial crime and compliance platform being embedded across all segments including acquisitions to drive consistency and efficiency. The Group implemented new financial crime risk appetite measures in November 2025 to reflect the increase and size and complexity of the bank.
The Group continued to embed its unified and connected risk, control, and assurance system and throughout 2025 has progressed testing of design and operating effectiveness where the key controls have operated. The Group approved its most material controls where testing will support the Board in attesting to the new requirements of the corporate governance code.
The Group has not sought an IRB permission to use its own models for regulatory capital purposes but has continued to implement SS1/23 ‘Model risk principles for banks’ in line with best practice given the growth in size and complexity of the Group. This included the further embedding of its digital Model Vault to manage the development, monitoring, and validation of its new and existing models and support the ongoing assessment of post model adjustments.
The Group understands the potential opportunities and risks attached to Artificial Intelligence (AI) and has developed and implemented an AI use case policy with applications included within the model vault. A sub-committee of the Model Risk Management Committee has been established to oversee the implementation of AI applications to support ongoing governance.
The Group completed a reverse stress testing exercise across all of its loan portfolio which has been used to inform risk appetite and has led to the development of additional Board MI.
The Group completed the acquisition of ThinCats Group Limited (ThinCats) in September 2025, a UK-based alternative finance provider specialising in mid-sized businesses (SMEs) across the UK. ThinCats is a wholly owned subsidiary of Shawbrook Bank Limited. The acquisition is not material to the risk profile of the Group in 2025 but included access to a proprietary credit grading and Loss Given Default (LGD) model for this market which will support growth in SME lending in 2026.
The Group completed its first Solvent Exit Analysis (SEA) which was Board approved in September and in advance of the 1 October 2025 compliance deadline.
Following completion of the IPO the Group implemented mandatory role specific UK Market Abuse Regulation (UK MAR) training to cover insider dealing, unlawful disclosure, market manipulation, and closed periods. The Group maintained a number of controls from its prior listing but has also updated its Pillar 3 disclosures and Task Force on Climate-related Financial Disclosures (TCFD) to align with the requirements of listed firms.
Within its Retail segment, the Group has signed up to the Freedom to Buy scheme to support borrowers with small deposits to purchase their first home. The Group also signed up new savings partners and co-developed a tracker product with one of its largest savings partners to diversify its funding strategy.
Within its Commercial segment, the Group has continued to implement its end-to-end credit risk management platform as part of its investment in its credit risk capability. The Group has continued to implement risk distribution through a credit insurance swap solution to help SME customers continue to grow beyond its hold levels. The Group has also extended its participation of the Enable Guarantee Programme to support its Development finance customers.
In response to the ongoing changes in the economic environment, the Group continues to maintain a focus on affordability, ensuring its models and policies remain appropriate and closely aligned to customer behaviour.The Group has continued to conduct regular portfolio reviews, with the benefit of external information to ensure that its risk appetite remains appropriate.

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Risk strategy

The risk strategy is an integral part of the Group’s strategy. It sets out the strategic risk management objectives that will support the achievement of the Group’s commercial goals and the operation and activities of each customer segment that will facilitate the delivery of those aims. Short and medium-term objectives outlined in the Group’s Risk Plan, which is approved annually by the Board in January. The Group’s Risk Plan includes the risk priorities for the Group’s risk function, together with the risk plans for the customer segments and central functions. The strategic risk management objectives are to:
* Identify material risks arising in the day-to-day activities and operations of the Group;
* Quantify the risks attached to the execution of the Group’s business plans;
* Set an appropriate risk appetite with calibrated measures and limits;
* Optimise the risk/reward characteristics of business written;
* Set minimum standards in relation to the acquisition and management of risk;
* Secure and organise the required level and capability of risk infrastructure and resources;
* Reflect the impact of internal controls;
* Undertake remedial action where any weaknesses are identified; and
* Scan the horizon for emerging risks.

Risk appetite

The level of risk that the Group is willing to tolerate in operating the various elements of its business are defined in the RMF. This articulates the qualitative and quantitative measures of risk that are cascaded across various areas of the Group’s operations, calibrated by reference to the Group’s risk appetite and absolute capacity for risk absorption. During the year ended 31 December 2025, the Group completed the annual review, together with interim updates, of the Group’s risk appetite where it was appropriate to do so. The Risk Appetite Statement is dynamic and evolves to support the Group’s business objectives, the operating environment and risk outlook. Whilst the Group Risk Appetite Report provides an aggregated measure of performance against risk appetite, it is not just a reporting tool. It also provides a framework that is used dynamically to inform strategic and operational management decisions, as well as supporting the business planning process. The Risk Appetite Statement is reviewed periodically by the Risk Committee and agreed with the Board on an annual basis, or more frequently if required. A dashboard with the status of each metric is monitored on a monthly basis by the Executive Risk Committee (ExRC), its sub-committees and the Assets and Liabilities Management Committee (ALCo). The ExRC, Risk Committee and the Board exercise their judgement as to the appropriate action required in relation to any threshold breach, dependent on the scenario at the time. As set out in the table on the following page, the risk taxonomy is organised into 11 Principal Risks and 35 level 2 risks. The Risk Appetite Statement identifies 11 risk appetite objectives aligned to each Principal Risk that are further subdivided into 29 unique risk appetite dimensions. The objective assessment of each risk appetite dimension is supported by qualitative statements and a series of quantitative measures that are weighted by their importance to the overall appetite.

Approach to risk management

Key elements to risk management

Effective risk management is recognised as being key to the execution of the Group’s strategy. The Group’s approach to risk management is underpinned by five key elements:
* Risk strategy
* Risk appetite
* Risk Management Framework
* Governance
* Culture

The following information provides further details about each of these key elements.

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Approach to risk management

Risk Management Framework

All of the Group’s business and support service activities, including those outsourced to third-party providers or originated via brokers and other business intermediaries, are managed within the parameters of a single comprehensive RMF. This sets out minimum requirements and ensures consistent standards and processes are set across the Group. Risks are identified, measured, managed, monitored, reported and controlled using the RMF. The design and effectiveness of the framework is overseen and reviewed by the Risk Committee. Responsibility for risk management sits at all levels across the Group. The Board sets the ‘tone from the top’ and all colleagues are expected to adopt the role of ‘risk manager’ in all aspects of their role. The RMF describes various activities, techniques and tools that are mandated to support the identification, measurement, management, monitoring, reporting and control of risk across the Group. It is designed to provide an integrated, comprehensive, consistent and scalable structure that is capable of being communicated to and clearly understood by all of the Group’s employees. The RMF also incorporates the organisational arrangements for managing risk with specific responsibilities distributed to certain functions. This ensures that there is clear accountability, responsibility and engagement at appropriate levels within the Group. Operationally, the RMF is organised around a number of Principal Risks (see page 128).

Governance

All of the Group’s risk activities are subject to detailed and comprehensive governance arrangements that set out how risk-based authority is delegated from the Board to the various risk management committees and individuals. Risk governance and oversight is detailed further below, starting on page 113.

Culture

The Group is led by an experienced management team with a combination of significant underwriting expertise, institutional and regulatory banking experience at various major financial institutions and specialist lenders, and product engineering expertise. This heritage provides the platform for a set of values and behaviours where the customer is at the heart of the decision-making process, and the customer segments are held fully accountable for risk performance. At the individual level, this process begins with the induction programme and job descriptions and is carried into the setting of individual objectives and performance reviews which is ultimately reflected in the compensation and reward structure. The Group conducts regular surveys across all of its employees, to help identify any emerging risks and promote ongoing engagement.

Principal Risks

Level 2 risks
Strategic risk	• Equality, diversity and inclusion risk	• Governance risk
	• Sponsorships and partnerships risk	• Communication
Transformation risk	• Transformation risk
Credit risk	• Concentration risk	• In-life management risk
	• Losses due to default on contractual obligations	• Losses due to inadequate security/collateral
	• Underwriting quality risk
Market, liquidity and capital risk	• Capital adequacy risk	• Funding risk
	• Liquidity risk	• Market risk
Operational risk and resilience	• Data quality and governance risk	• Operational resilience risk
	• People risk	• Physical assets availability, safety and security risk
	• Statutory reporting and tax risk	• Third party risk
	• Transaction processing risk
Technology and cyber risk	• Technology availability risk	• Technology infrastructure risk
Conduct risk	• Culture and market risk	• Customer conduct risk
	• Lending to other lenders risk
Compliance and regulatory risk	• Data privacy risk	• Regulatory management risk
	• Legal risk
Financial crime risk	• Financial crime risk	• Fraud risk
Model risk	• Model design and implementation risk	• Model governance risk
	• Model usage risk
Climate risk	• Environmental and climate risk

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 112
Shawbrook Group plc | Annual Report and Accounts 2025

The monitoring and control of risk is a fundamental part of the management process within the Group. Risk governance describes the architecture through which the Board allocates and delegates primary accountability, responsibility and authority for risk management across the Group. Responsibility for risk oversight is delegated from the Board to the Risk Committee and Audit Committee. However, ultimate responsibility for risk remains with the Board. An abbreviated Board and Executive Committee structure is set out in the Corporate Governance Report on pages 57 to 108, which further describes their roles and responsibilities. Accountability, responsibility and authority for risk management is delegated to the Chief Executive Officer and Chief Risk Officer, who in turn allocate responsibility for oversight and certain approvals across a number of management committees. The Chief Banking Officer is assigned the designated role of SMF18 (‘other overall responsibility function’). In January 2026, the Group appointed a Chief Banking Risk Officer to ExCo to bring together the oversight of all first line risks. Authority and responsibility for material operational risk management, decision-making and risk monitoring is vested in the Chief Risk Officer and the risk function. Lesser levels of authority are cascaded to Senior Management within the first line. These bodies and senior officers are accountable and responsible for ensuring that the day-to-day risks are appropriately managed within the agreed risk appetite and in accordance with the requirements of the RMF. Individuals are encouraged to adopt an open and independent culture of challenge, which is important in ensuring risk issues are fully surfaced and debated, with views and decisions recorded.# Risk governance and culture

Risk governance and culture is reinforced by the provisions of the Senior Managers and Certification Regime. Formal risk escalation and reporting requirements are set out in risk policies, individual committee terms of reference and the approved risk appetite thresholds and limits. Oversight of principal risks is illustrated as follows.

Oversight of Principal Risks	First line	Second line	Third line
Risk governance and oversight
Compliance and regulatory risk	Compliance	Non-Financial Risk Oversight Committee
Conduct risk	Compliance	Non-Financial Risk Oversight Committee
Technology and cyber risk	Technology and cyber risk	Non-Financial Risk Oversight Committee
Operational risk	Operational risk	Non-Financial Risk Oversight Committee
Operational risk and resilience	Operational risk	Non-Financial Risk Oversight Committee
Market, liquidity and capital risk	Treasury	Asset and Liability Committee
Credit risk	All customer segments and central functions	Credit Risk Oversight Committee
Transformation risk	All customer segments and central functions	Executive Risk Committee
Strategic risk	All customer segments and central functions	Executive Risk Committee
Principle risk Oversight	All customer segments and central functions	Risk Committee
Board	Executive Directors and Senior Management		Audit Committee
Internal audit	Executive Directors and Senior Management
Credit management in customer segments	All customer segments
Financial crime risk	Financial crime	Non-Financial Risk Oversight Committee
Model risk	Prudential risk	Model Risk Oversight Committee
Climate risk	Prudential risk	Credit Risk Oversight Committee

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 113 Shawbrook Group plc | Annual Report and Accounts 2025

Risk governance and oversight

Additional information regarding the three lines are provided in the following sections.

First line

Responsibility for risk management resides in the frontline customer segments together with the central functions. Line management is directly accountable for identifying and managing the risks that arise in their business or functional area. They are required to establish effective controls in line with the Group’s risk policies and act within the risk appetite parameters set and approved by the Board. The first line comprises the customer segments and the central functions. The central functions include:
* the finance function led by the Chief Financial Officer;
* the first line risk function led by the Chief Banking Risk Officer;
* the technology function led by the Chief Technology Officer;
* the human resources and marketing function led by the Chief People and Marketing Officer; and
* the legal function led by the General Counsel.

The Group created a Risk Services function in H1 2025 which brought together financial crime operations, collections and recoveries, control testing, third party risk management and operational resilience to promote consistency of process and automation across all parts of the business and sits within the Risk Function. Each functional area operates to set risk policies to ensure that activities remain within the Board’s stated risk appetite for that area of the Group. The risk policies are approved by the appropriate committee in accordance with their terms of reference and are reviewed annually, with any material changes requiring approval at committee level. The first line has its own operational policy, process and procedure manuals, and controls to demonstrate and document how it conforms to the approved policies. Likewise, it develops quality control programmes to monitor and measure adherence to and effectiveness of procedures. All employees within a customer facing unit are considered first line. Each employee is aware of the risks to the Group of their activity, and the customer segment and central function leadership teams are responsible for ensuring there is a ‘risk aware’ culture within the first line. For certain key policies, employees within the customer segments complete regular online training programmes to ensure knowledge is refreshed and current.

Three lines model

The RMF is underpinned by the three lines model, which is summarised in the illustration below:

Risk strategy
Market, liquidity and capital risk	Technology and cyber risk	Conduct risk
Climate risk	Model risk	Credit risk
Operational risk and resilience	Strategic risk	Compliance and regulatory risk
Financial crime risk	Transformation risk
Internal audit	Risk function
Led by the Chief Internal Auditor	Led by the Chief Risk Officer
Second line
• Designs, interprets and develops overall Risk Management Framework and monitors business as usual adherence
• Reviews and provides oversight of top risks
• Develops compliance policies, leads requirements for regulatory change and monitors horizon risks and regulatory issues.
Third line
• Operates independently to provide an objective evaluation of governance, risk management and internal controls across the Group
• Provides independent and objective assurance to the Board and Executive Management that the risk management arrangements are operating as designed
First line
• Owns the risk management process and regulatory compliance
• Identifies, measures, manages, monitors and reports on risks

Central functions	Customer segments	External audit	Regulator

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 114 Shawbrook Group plc | Annual Report and Accounts 2025

Risk governance and oversight

Second line

The second line comprises the Group’s independent risk management function led by the Chief Risk Officer. The Chief Risk Officer reports to the Chief Executive Officer and laterally to the Chair of the Risk Committee. The Chief Risk Officer is also provided with unfettered access to the Chairman of the Board. The second line also includes the General Counsel, who reports to the Chief Executive Officer. The second line is necessarily and deliberately not customer facing and has no responsibility for any business targets or performance. It provides independent challenge and control of the first line, which is delivered through the following:
* the design and build of the various components of the RMF and embedding these, together with the risk strategy and risk appetite, across the Group;
* independent monitoring of the Group’s activities against the Board’s risk appetite and limits, and provision of monthly analysis and reporting on the risk portfolio to the ExRC (or appropriate sub-committee), the Risk Committee, and the Board;
* issuing and maintaining the suite of Group risk policies and associated standards;
* in relation to outsourced services, the setting of policies and subsequent assessment of policy conformance;
* undertaking physical reviews of risk management, controls and capability in the first line and providing risk monitoring reports to the ExRC (or appropriate sub-committee), the Risk Committee and the Board on all aspects of risk performance and compliance with the RMF;
* providing advice and support to the first line in relation to risk management activities;
* credit approvals between delegated authority and the threshold for Credit Approval Committee; and
* undertaking stress testing exercises and working with the finance and treasury functions on the production of the Internal Capital Adequacy Assessment Process (ICAAP), Internal Liquidity Adequacy Assessment Process (ILAAP), Recovery Plan, Resolution Pack, and Solvent Exit Analysis.

The Group’s high-level risk structure is illustrated below. ‘SMF’ references included in the below diagram refer to designated roles stipulated by the Senior Managers and Certification Regime.

Chief Executive Officer	SMF1 and SMF3
Chair of the Risk Committee
Prudential Risk	Credit Risk
SMF16 and SMF17	Operational Risk and Risk Services
Chief Risk Officer	SMF4

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 115 Shawbrook Group plc | Annual Report and Accounts 2025

Risk governance and oversight

Third line

The third line comprises the internal audit function, led by the Group’s Chief Internal Auditor. The third line provides independent assurance directly to the Audit Committee and Board on the activities of the Group, including governance, the effectiveness of the RMF, and internal controls. The internal audit function reports directly to the Chair of the Audit Committee, as well as the Chief Executive Officer, and is independent of the first and second lines. The third line has access to the activities and records of both the first and second lines. It can inspect and review adherence to policies and controls in the first line, the monitoring of activities in the second line and the setting of policies, standards and controls in the second line. The third line does not independently establish policies or controls itself, outside of those necessary to implement its recommendations with respect to the other two lines. The third line may in some cases use the reports and reviews compiled by the second line as a starting point but is not restricted to them or necessarily influenced by their findings. The scope of work of the third line is agreed with the Audit Committee and is designed to provide an independent assessment of the adequacy and effectiveness of governance, risk management and the internal control frameworks operated by the Group and to note the extent to which the Group is operating within its risk appetite. It does this by reviewing aspects of the control environment, key processes and specific risks and includes a review of the operation of the second line.# Risk policies and controls

The RMF is enacted through a comprehensive suite of policies and associated standards that set out the minimum standards in relation to the acquisition and management of lending assets and liabilities, as well as the control of risks embedded in the Group’s operations, activities and chosen markets. The Group’s policies and associated standards are overseen by the Group’s risk function, headed by the Chief Risk Officer and are approved by the Board or, where delegated, the appropriate risk oversight committee.

The suite of policies and standards is grouped according to importance and principal risk within a Board approved policy hierarchy and framework. Group-level policies and standards are supplemented, as required, by customer segment specific policies, guides, processes and procedures, which detail more specific and tailored criteria. The customer segment and central function specific processes and procedures are required to be compliant with Group policy and dispensations or waivers are required where gaps are identified. These process and procedure manuals provide employees at all levels with day-to-day direction and guidance in the execution of their duties.

The effectiveness of, and compliance with, risk policy frameworks are evaluated on a continuous basis through the monthly reporting requirements (including risk policy exceptions reporting). Additionally, regular risk and control self-assessments, supplemented by a programme of audits, thematic risk monitoring reviews and control testing, is undertaken by each of the three lines. During 2025, the Group ran an enhanced capability assessment to support the annual attestation process, which confirms compliance with the RMF and identifies risk management priorities over the duration of the strategic planning cycle.

Asset class policies

The Group controls its lending activities through an established Credit Risk Framework defined by eight Group credit policies and 18 individual asset class policies. This provides a stable, consistent risk standard and control across the Group’s portfolio of loan assets. Asset classes can also be aligned more readily with risk-weightings, probability of default (PD), loss given default (LGD) and expected credit loss (ECL) metrics, which facilitates risk reporting, risk adjusted profitability analysis and modelling for stress testing and capital adequacy purposes. During 2025, the Group continued to utilise a matrix that sits above the asset class policies to highlight the key criteria that are reserved for Board approval.

Asset class policies are structured on the basis of policy rules, which must be adhered to, and guidelines, where an element of controlled discretion is permitted. All planned exceptions to policy rules require approval at the Group risk level and both planned and unplanned exceptions to policy rules are reported monthly to the relevant risk management committee.

Risk governance and oversight

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Top and emerging risks

The Group’s top and emerging risks are identified through the process outlined in the RMF (see page 112) and are considered regularly by the risk oversight committees, ExRC and subsequently by the Board Risk Committee.

Top risks are those risks that could cause the delivery of the Group’s strategy, results of operations, financial condition and/or prospects to differ materially from expectations.
Emerging risks are those that have unknown components, the impact of which could crystallise over a longer period and could include certain other factors beyond the Group’s control, including escalation of terrorism or global conflicts, natural disasters, epidemic outbreaks and similar events.

As at 31 December 2025, the Group has identified nine top risks and one emerging risk. The nine themes identified as top risks are as follows:

Economic and competitive environment
Intermediary, outsourcing and operational resilience
Pace, scale of change and people risk
Credit impairment
Technology, information and cyber security risk
Financial crime
Geopolitical risk
Pace and scale of regulatory change
Climate risk

Information on the following pages provides a review of each of these themes. Links to key performance metrics provided in these reviews refer to those detailed in the ‘Shawbrook in numbers’ summary. In the following pages, the below symbols are used to illustrate the change in risk environment during the year for each of the Group’s top risks.

Symbol	Meaning
$\blacktriangle$	Risk increased
$\square$	No change
$\blacktriangledown$	Risk reduced
$\text{N}$	New

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Top risks

Economic and competitive environment

Overview

Business leaders remain concerned about the drag of weak productivity and competitive position of the UK economy. Higher personal taxes risk a further drag on consumer expenditure with growth in 2026 revised down to just over 1.2% despite the rise in government spending as firms look to pass on costs to customers which may drive inflation. The central view is that Bank Rate reduces to 3.25% in 2026 supported by a reduction in wages growth as the UK economy struggles for growth and elevated unemployment. The risk is that inflation lingers and the path to lower interest rates is slower than planned which impacts growth. Risks to residential and commercial property prices remain in a challenging market with the outlook for 0.6% growth for 2026 given the monthly cost of new mortgages. There are further concerns that political developments globally remain a key source of uncertainty. In the UK the lower private sector activity and the potential for unemployment as labour becomes more expensive remains a key risk.

Links to key performance metrics

Loan book
Profit before tax
Earnings per share
Cost to income
CET1 capital ratio
Total capital ratio

How this could impact our strategy or business model

Reduced gross lending from lower demand as customers defer major purchases and investment in light of higher interest rates and lower real income leading to lower buying power. This may be partly offset by lower early repayments of loans.
Increased impairments if a significant number of SMEs experience financial distress or insolvency, or if consumers experience an increase in unemployment.
A prolonged economic downturn may impact the Group’s ability to fund strategic investment to meet the needs of customers and improve operations.
Rising competition, or a sudden reduction in interest rates to support the economy, may compress Group margins and impact on target returns.

How we manage this risk

The Group continues its digital journey and, following the success of the launch of the MyShawbrook portal for buy-to-let, bridging and commercial investment product ranges have been included.
The Group completed the migration of Bluestone mortgages to the same platform as mortgages originated through TML to simplify the operation and drive consistency of customer outcomes for owner occupied mortgages and specialist buy to let.
The Group has completed the migration to its savings digital journey with enhanced self service capability aimed at improving customer experience.
The Group continues to deploy its proprietary portfolio management tool to provide powerful insights into monitoring loan book risk and performance across its Retail and Commercial segments. The Group has continued to evolve its early warning indicators within its interactive dashboard, which now provides a daily update on key emerging risk indicators.
The Group continues to consider its risk appetite in its selected markets. In 2025, the Group hosted regular in-focus sessions with external experts in its key markets and completed regular product and sector reviews to identify any early warning indicators. The Group completed the acquisition of ThinCats and Playter to expand its SME portfolio.
Investment in additional resources in the first and second lines of defence continues to strengthen the Group’s ability to identify and manage potential problem loans.
The Group undertakes a comprehensive assessment of its risk appetite under baseline and alternative scenarios to ensure that it can meet its objectives in plausible economic conditions.

Focus areas for 2026

Targeted application of risk appetite in carefully selected sectors to align with the economic outlook as it emerges.
Scale the business through the implementation of further automation in lending, customer management (particularly in SME lending), savings operations and digital self-service.
Utilisation of third parties and technology to increase capacity in originations, servicing and collections activities in order to position the Group to meet the needs of its customers.
Continue to invest in outsourcing controls and oversight to manage any additional risk that the Group may be exposed to.
Support the wider adoption of Agile methodologies through the embedding of the product and engineering model and additional transformation controls.
Investment in technology resources to deliver the engineering requirements of the accelerated digital strategy and internal controls.

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Top risks

Credit impairment

Overview

The Group’s growing loan book brings with it exposure to credit impairment if customers are unable to repay loans and any outstanding interest and fees. The economic outlook will play a key role in shaping the impairment profile in the foreseeable future. An environment of elevated interest rates and inflation increasing unemployment and persistently high living costs will likely continue to pressure real income and business profits.These factors could adversely affect affordability and liquidity for both individuals and businesses, which in turn, may place upward pressure on the Group’s cost of risk. Retail customers and SMEs are particularly vulnerable to higher interest rates, inflationary pressures and increased energy costs.

Links to key performance metrics
* Profit before tax
* Earnings per share
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model
* Increases in credit impairment could lead to a material reduction in profitability and retained earnings. In turn, this may impact the Group’s capital ratios and its ability to meet its objectives.
* Lack of preparation for the transition from origination to in-life management may lead to missed opportunities to support customers, potentially causing increased impairment and customer harm.

How we manage this risk
* The Group’s risk appetite is calibrated to facilitate achievement of the business strategy and is modified as required to reflect uncertainty in the economic and competitive landscape.
* The Group continually reviews its underwriting guidelines and affordability policy to ensure that it remains appropriate in the current and emerging environment. Asset class policies have also been reviewed to position the Group appropriately in the current economic climate. The Group implemented an end-to-end Credit Management Platform (CMP) to manage SME credit risk from origination, through in-life management, and potential problem loan management. The Group has also implemented a portfolio management approach for individually material counterparties.
* Additional investment in permanent employees to focus on potential problem loans has ensured continued robust and appropriate management of the watchlist and forbearance cases and will continue to respond proactively to uncertainty in the economic outlook.
* The impact on impairment models is regularly monitored and reported to internal committees and judgemental adjustments to modelled ECLs based on the options and scenarios by way of resolution, together with the probability attached to each are reviewed by the Model Management Sub-Committee and approved by the Group Impairment Committee.
* The Group has continued to support hold levels for existing customers through a credit insurance swap solution and has signed up to extend the Enable Guarantee programme to support its Development finance customers.

Focus areas for 2026
* Continued focus on product and sectoral risk to support the Group’s evolution of risk appetite in an uncertain economic environment.
* Continue to develop strategic and data-led credit management information to ensure timely and accurate reflection of risk in the Group’s lending segments, thus enhancing the Group’s ability to make proactive decisions.
* Following the successful implementation of the CMP in 2025 for SME lending we intend to further embed across all SME lending and consider for the Real Estate loan book.
* Continue to develop the granularity and accuracy of the Group’s stress testing capability.
* Regular review of the evidence supporting all key areas of judgement used in support of the model-based ECL.

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Top risks

Geopolitical risk

Overview
The global geopolitical environment remains highly volatile, with the ongoing conflict in Ukraine, significant fragility in parts of the Middle East, and growing tensions in East Asia. Recent policy actions by the U.S. Administration, including the introduction of selective tariffs, have the potential to disrupt global supply chains and impact existing trade agreements. Economic performance across key EU trading partners with low growth in countries such as Germany and France is contributing to continued uncertainty. In the UK, there is now more certainty following the Budget, but risks remain to the downside driven by the outlook for growth and prospects for the labour market on consumer spending. The Group operates predominantly in England, Wales, and Scotland and has no direct exposure to Russia, the Ukraine, the Middle East,or Asia. However, the Group is exposed to the second order impacts on supply chains and the impact of inflation, interest rates and unemployment on the real incomes of its customers. The Group continues to ensure all important business services are operationally resilient in the event of geopolitical uncertainty.

Links to key performance metrics
* Loan book
* Profit before tax
* Earnings per share
* Cost to income ratio
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model
* Stagnant or lower economic growth, labour shortages and disruption to supply chains could impact the level of private sector investment in the UK. In turn, this could negatively impact on demand for loans, funding and deposits.
* Continued heightened trade tensions and recently imposed selective tariffs by the U.S. Administration are increasing cost pressures, disrupting global supply chains and resulting in additional inflation. These inflationary pressures may prompt central banks, including the Bank of England, to keep interest rates higher for longer, which in turn could reduce borrowers’ repayment capacity and raise the risk of loan impairments. Credit spreads could widen leading to reduced investor appetite for the Group’s debt securities. This could impact the Group’s cost of and/or access to funding and the ability to grow its loan portfolios.
* The Group’s operational resilience may be impacted by the need to transition activities from non-UK firms.

How we manage this risk
* The Group undertakes a comprehensive assessment of its risk appetite and stress tests its lending and deposit portfolios to ensure that it can meet its objectives in plausible economic conditions.
* The Group regularly engages with its critical suppliers to foresee and mitigate any impact on services provided to the Group.
* The Group continues to strengthen and optimise its capital position and pursue a diversified funding structure. The Group maintained its Euro Medium Term Note (EMTN) programme to support capital issuance to optimise the capital stack, markets permitting.
* The Group monitors and screens for sanctions issued by the UK (The Office of Financial Sanctions Implementation) and USA (The Office of Foreign Assets Control).
* The Group has reviewed its register of outsource providers and has no gaps in EU General Data Protection Regulation Article 28 clauses.
* The Group has identified all cross border data transfers recorded within the Record of Processing Activities (ROPA) and issued contract variations to all suppliers who process data outside the EEA.
* The Group continues to test the resiliency of its key third parties through business impact assessments and test of exit plans.

Focus areas for 2026
* Ensure that all outsourcers and third parties are operationally resilient in the event of geopolitical uncertainty, including the review of business continuity plans and disaster recovery plans and regular tests of technology resilience using tools such as penetration testing.
* Continue to develop a range of mitigating actions, including the use of robust stress tests that contain the risk of geopolitical risk by comparing the economic scenarios assessed in IFRS9 with those used in the ICAAP.
* Continue to closely monitor the geopolitical situation. Although the Group does not have any direct exposure, beyond the UK, it does have indirect exposure, for example the impacts of rising oil and energy prices, cost of living and inflation, potential supply chain issues faced by customers and increased cyber security threats. The Group regularly assesses its affordability policy and will continue to monitor to ensure that its lending remains appropriate. The Group will continue to closely monitor the cyber perimeter and information security risks, as detailed on page 46, and will continue to engage with key third parties.

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Top risks

Intermediary, outsourcing and operational resilience

Overview
The Group’s ability to maintain resilient operations is fundamental to delivering its strategic objectives and meeting customer and regulatory expectations through its Important Business Services. We continue to enhance resilience capabilities and strengthen our ability to prevent, respond and recover within impact tolerances, protecting customers, investors and stakeholders from disruption. The Group uses a number of material third parties to support the delivery of its objectives. The availability and resilience of its services, core customer facing systems and ability to operate in line with regulatory requirements play a key role in supporting the Group’s reputation in its chosen markets. Although the Group is not directly responsible for the regulatory compliance of its intermediaries and brokers, inadequate oversight can result in poor customer outcomes and potential breaches of the Group’s own systems and controls requirements. The Group relies on intermediaries and brokers to provide sufficient information to enable compliance with its own regulatory obligations, including the FCA’s Consumer Duty, MCOB, financial crime prevention, and data protection legislation. Within Consumer Finance, distribution through intermediaries also increases the risk of mis-selling or unfair customer relationships under the Consumer Credit Act.Links to key performance metrics
* Loan book
* Cost to income ratio

How this could impact our strategy or business model
* Inability to recover Important Business Services (IBS) within impact tolerances could result in causing intolerable customer harm and a risk to the safety and soundness of the Group with regulatory and reputational impact.
* Failure of material third parties to deliver on the Group’s policies and regulatory obligations which may lead to increased complaints, customer harm, redress costs and damage to the Group’s reputation through regulatory censure. This may also lead to increased contingent liabilities in certain areas where the Group is exposed, which impacts on the Group’s profitability and capital resources.
* The Group, as a deposit taker, could be impacted if a systems failure prevented a significant number of payments being made, which may lead to financial stability being undermined. Failures by brokers and intermediaries can damage customer confidence and undermine the Group’s reputation. Dependence on intermediaries for information increases operational complexity and may affect data integrity and compliance oversight. Deterioration in intermediaries’ standards could impact the ability for the Group to scale safely and reduce exposure to regulatory risk under the Consumer Credit Act 1974.

How we manage this risk
* The Group manages intermediary risk through strong governance, clear contractual obligations, and ongoing oversight. Intermediaries are subject to due diligence, monitoring and quality reviews covering conduct, data protection and customer outcomes.
* The Group continues to prioritise important business service resilience investing in resources to improve controls and develop contingency solutions and plans to help mitigate service disruption. External threat monitoring and severe but plausible scenario testing, including live testing of contingency solutions remain key features of the annual operational resilience roadmap to identify emerging risks and further opportunities to enhance service resilience.
* The Group has further invested in both cloud and on-premise technologies to increase the resilience of its core systems, provide backup for core information and automate its key management information. This has also included the onboarding of climate related management information.
* The Group has continued to invest in its relationships with its third parties, with a focus on good customer outcomes, particularly as customers deal with heightened cost of living pressures. This has included increased reporting on the performance of material third parties across Bank governance committees.

Focus areas for 2026
* The annual operational resilience roadmap for 2026 seeks to expand live scenario testing across the IBS with greater emphasis on more advanced cyber, artificial intelligence, third party disruption and change delivery. Involvement in material IT change projects will continue to ensure resilience by design is considered as the Group continues to grow and evolve.
* Continue to drive process simplification and automation in third party risk management to on-board suppliers quickly but safely and ensure in-life service delivery meets expectations and emerging risks are mitigated.
* Continue to accelerate investment in digital enhancements across the Group, including tools to manage third party risk, and automation of key controls.
* The Group will enhance intermediary oversight through automation and analytics to identify emerging intermediary risks in real time, while fully integrating intermediary management into the wider third-party risk framework to strengthen operational resilience and compliance.

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Top risks

Technology, information and cyber security risk

Overview
The cyber threat remains significant and high profile across all industries. Cyber security and information risk continues to be a focus area for regulators and is increasingly assessed as an integral part of operational resilience. This includes an increase in public awareness on cyber risk in the face of increasingly targeted, destructive ransomware attacks experienced over recent years in the market. Information and cyber security risk is further heightened by the continued conflict in Ukraine and the Middle East.

Links to key performance metrics
* Loan book
* Customers served
* Cost to income ratio
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model
* Customer demand could exceed the Group’s ability to provide highly reliable and widely available systems and services, leading to a fall in confidence and customer attrition.
* The evolving nature and scale of criminal activity could increase the likelihood and severity of attacks on the Group’s systems.
* Customer segment value and customer trust could be significantly eroded by a successful attack on the Group’s systems, leading to a denial of access to systems, a diversion of funds or the theft of customer data.

How we manage this risk
* The Group continually reviews its control environment for information security to reflect the evolving nature of the threats to which the Group is exposed.
* The Group’s strategy for mitigating information security risk is comprehensive, including: a documented cyber strategy, ongoing threat assessments, regular penetration testing, the wide deployment of preventative and detective controls and a programme of cyber awareness education and training.
* The Group continues to invest in its technology layer, including the use of hybrid multi cloud computing resources to improve resilience and the implementation of additional controls to support the security of its core systems including continuous security monitoring of critical third parties.
* The Group has invested in additional Cyber Security focussed resources to create a new Cyber Response Team. This has enabled a more proactive approach and has provided the capacity to deliver continuous security improvements in addition to providing the initial support for any cyber event investigation. The team is managed by the Head of Cyber Response, reporting directly into the CISO, with technical security engineers in the broader CTO teams providing expertise in Cloud, Systems & Network and Desktops.
* In response to continued geopolitical tensions and the increase in security threats, the Group’s Information Security team continues to operate at a heightened state of awareness in response to threat intelligence and security alerts. This includes regular communications with employees to enhance vigilance and raise cyber awareness and engagement with critical third parties to understand their action plans in light of the increased risk.

Focus areas for 2026
* Continue to invest in capabilities to enhance the Group’s cyber resilience position and reduce the exposure to a cyber-attack. This includes performing more cyber scenario testing with a focus on higher severity impacts.
* Continue to embed the Chief Technology Office and information security controls within the Group’s outsourcers and third parties, utilising the Group’s third-party security perimeter monitoring.
* Continue to evaluate and deploy new and emerging technology tools to identify and / or mitigate cyber threats as well as to increased awareness culturally.
* Continue to mature the existing strong, multi-faceted security testing programme, with the addition of new tools and processes.

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Shawbrook Group plc | Annual Report and Accounts 2025

Top risks

Pace and scale of regulatory change

Overview
The prudential and conduct regulatory regimes are subject to change and could lead to either an increase in the level and quality of financial resources or change in policies and processes to meet regulatory requirements. The FCA continues to prioritise the importance of effective culture and controls, and this is referenced in their 2025 priorities. In relation to financial risk, the final rules on the implementation of Basel 3.1 were published in 2025 with an implementation date of 1 January 2027. The UK is entering a period of significant conduct regulatory flux. The combined effect of the FCA’s work represents the most comprehensive recalibration of retail lending regulation in over a decade. These initiatives collectively increase compliance and conduct risk exposure through 2026, demanding greater agility in governance, product oversight, and regulatory change management The financial sector will also continue to embed climate risk regulation and industry standards, which are subject to evolve over the coming years and will form a key part of the business strategy. These include the expected impact of ISSB regulations, which will require additional disclosures on the path to net zero and interim targets. The PRA published SS5/25 which provided further guidelines on its expectations for managing climate change. In relation to non-financial risks, implementation of operational resilience and third party and outsourcing regulations will continue, along with other high priority regulatory initiatives as published in the Regulatory Initiatives Grid, including regulatory reviews following the implementation of the new Consumer Duty.

Links to key performance metrics
* Loan book
* Cost to income ratio
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model
* An increase in minimum regulatory capital requirements may directly impact on the Group’s risk appetite and its ability to support its lending to current and potential future customers.• Changes in regulatory capital requirements may lead the Group to change its business mix, exit certain business activities altogether, or not expand in areas despite otherwise attractive potential.
• An increase in minimum regulatory capital requirements may restrict distributions on capital instruments. This may impact upon the Group’s ability to issue new, or refinance existing, capital instruments.
• Frequent change in regulation could also have wide ranging impacts beyond financial resources reflected through changes in internal policies and processes, people and systems resources, product offerings and the markets and customers served by the Group

How we manage this risk
• The Group engages with regulators, industry bodies and advisors to actively engage in consultation processes. The Group reviews regulatory publications to assess their implications for the business and oversees the impact analysis through its horizon scanning tools. Key regulatory updates are then cascaded to relevant stakeholders throughout the business.
• The Group restarted its programme to implement Basel 3.1 on 1 January 2027.
• The Group follows its prudential programme to update its ICAAP, ILAAP, Recovery Plan and Resolution Pack, and Solvent Exit Analysis and considers the conclusions in the regular business planning processes that have taken place during the year.
• Completion of £0.6 billion securitisation of Buy to let and owner-occupied mortgages originated by TML in May 2025 and completion of a £0.3 billion securitisation of owner-occupied mortgages originated through BML in December 2025 to further optimise the capital stack.
• Following completion of the IPO, the Group implemented mandatory role specific UK Market Abuse Regulation (UK MAR) training to cover insider dealing, unlawful disclosure, market manipulation, and closed periods. The Group maintained a number of controls from its prior listing but has also updated its Pillar 3 disclosures and Task Force on Climate-related Financial Disclosures (TCFD) to align with the requirements of listed firms.

Focus areas for 2026
• Basel 3.1 implementation in advance of implementation on 1 January 2027 including the data requirements for an out of cycle C-SREP.
• Implementation of additional regulations to reflect the Group’s status as a listed entity.
• Ongoing stress testing of the Group’s lending portfolios to quantify the impact of any changes on the strategy and business model.
• Completion of the annual review of the ICAAP and Recovery Plan and the Capital Supervisory Review and Evaluation Process.
• Ongoing monitoring of controls to support compliance with the Consumer Duty and the treatment of customers in Financial Difficulty. Investment in the maturity and automation of internal controls and monitoring to support the Corporate Governance Code.
• Consideration of the Consumer Credit Act reform, engagement in consumer duty thematic reviews, consultation on the motor finance commission redress scheme and thematic review of mortgage lending and affordability.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
123 Shawbrook Group plc | Annual Report and Accounts 2025

Top risks
Pace, scale of change and people risk

Overview
The Group needs to deliver a range of strategic and regulatory related projects over the duration of its 2026 plan in order to deliver on its objectives. Failure to deliver the required change may lead to disruptions in the delivery of its objectives. Sustainability is a key pillar of the Group’s purpose-led strategy and reflects the importance of sustainability, and equality, diversity and inclusion (EDI) in driving the long-term strategy and business model.

Links to key performance metrics
• Loan book
• Cost to income ratio
• CET1 capital ratio
• Total capital ratio

How this could impact our strategy or business model
• Delivering what customers need and in the way that they want to engage with the Group is essential to delivering the Group’s objectives and failure to do this may have an impact on originations, customer retention and profitability.
• People risk remains a key factor. Improvement in technology continues to create options for people to live and work from a place of their choice and firms that lag behind in their employee value proposition might find it difficult to attract the right talent.
• Failure to protect employees and promote mental health and wellbeing could lead to higher absence and lead to a reduction in employee engagement. This in turn could impact upon the Group’s ability to look after its existing customers.
• A clear and purposeful sustainability strategy is key to supporting long-term sustainable performance, including strong engagement from all employees.

How we manage this risk
• The Group has further matured its technology and product change model in 2025, centralising delivery within the Chief Technology Office, strengthening governance and risk oversight, and embedding agile methodologies through an updated Change Delivery Policy.
• Product Officers aligned to segments are now well established, with Product and Technology teams fully integrated (including Engineering, QA and Delivery) to optimise collaboration across Product, Data and Experience Design.
• The Group continues to strengthen its employee value proposition through hybrid working, expanded wellbeing support (including a wellbeing app and online GP access), workplace assessments, and reasonable adjustments to attract and retain talent.
• Employee engagement remains strong at 78% (October 2025), with ongoing focus on EDI through the Sustainability Sub-Committee and external commitments such as the Women in Finance Charter, Progress Together and the Business Disability Forum.
• The Group partners with external organisations, including Saracens and the Saracens Foundation, and Future First, to support community impact and improve opportunities for disadvantaged young people.

Focus areas for 2026
• The Group has organised its strategic change priorities into a roadmap through which to prioritise its resources. Delivery of this roadmap is key to the Group’s objectives and will continue throughout 2026.
• Continue to advance the digital strategy through investment in people, governance and delivery framework, and technological resources to deliver the Group’s objectives.
• Continue to work with external partners to further create opportunities to create future leaders.
• Continue to support colleagues with leveraging AI safely in their roles.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
124 Shawbrook Group plc | Annual Report and Accounts 2025

Top risks
Financial crime

Overview
Financial crime is any kind of criminal conduct relating to money or to financial services or markets. This includes any offence involving:
• fraud or dishonesty;
• misconduct in, or misuse of information relating to, a financial market;
• handling the proceeds of crime; or
• the financing of terrorism.

Although the risk has always been present in the financial services industry, the increased use of digital channels has elevated the risk profile. With the development of technology, the type and impact of financial crime activities is likely to increase over the coming years.

Links to key performance metrics
• Loan book
• Cost to income ratio

How this could impact our strategy or business model
• An inadequate control environment for financial crime could lead to increased operational losses, credit impairment, increased manual reviews and potentially regulatory enforcement, restrictions on business growth and acquisitions, penalties and/or censure.
• The reputational damage associated with financial crime could cause loss of customers and intermediaries, impacting the Group’s revenues and financial position and/or regulatory standing.
• The current hybrid working environment and the transition of resources to new work activities may impact the effectiveness of existing controls and increase internal fraud opportunities.

How we manage this risk
• The Group continues to enhance its control environment with respect to financial crime. This is closely monitored by the Non- Financial Risk Oversight Committee, ExRC, and Risk Committee.
• An automated customer due diligence and in life management tool is now fully embedded. The tool provides enhanced financial crime management information and is supported by control testing.
• The Group conducts a Group-wide financial crime risk assessment to assess compliance with Group policies. This focuses on the following risk categories: money laundering and terrorist financing risk, bribery and corruption risk, sanctions risk, tax evasion risk and fraud risk.
• The Group uses a combination of mandatory reads of policy, online training and communications to increase awareness of best practice.

Focus areas for 2026
• Continue to focus on adherence to economic sanctions and the shifting regulatory environment, in line with new and updated UK financial crime regulations.
• Monitor the increasing complexity of financial crime threats and any potential or actual changes to the legislative framework to manage the emerging threats.
• Fully integrate subsidiaries into the Group Financial Crime Framework ensuring enhanced controls, resources and automation are in place to mitigate the risk of regulatory breach. Continue to leverage the capabilities of the business intelligence platform to ensure effective fraud and financial crime management information across the Group enabling identification and monitoring of key trends and better support impacted customers. Continue to invest in relevant technology to ensure our financial crime framework remains relevant to the risks faced by the Group.FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 125
Shawbrook Group plc | Annual Report and Accounts 2025

Top risks

Climate risk

Overview

Climate change and society’s response to it, presents financial risks which impact the Group’s objectives. The risks arise through two primary channels: the physical effects of climate change and the impact of changes associated with the transition to a lower carbon economy. Climate risk is an ongoing risk and a continued area of focus for the Group. The impact of climate risk on the Group’s policies, customers, markets and products will be closely linked to the UK Government’s policies on the transition to Net Zero and how other financial institutions embed climate risk in their business models. The PRA published SS5/25 to update supervisory statement SS3/19 in December 2025 which sets out its expectations for firms in relation to the management of climate risk.

Links to key performance metrics
* Loan book
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model

Physical risks could lead to real impacts on the economy through business disruption, asset destruction and migration. This may drive market and credit losses to the Group through lower property and corporate asset values, lower household wealth and lower corporate profits. It may also result in potential for litigation where products do not deliver good outcomes for customers or there is a risk of greenwashing.
The transition to a lower carbon economy could lead to lower growth and productivity and the potential for operational risks and underwriting losses.
The transition to a low carbon economy presents an opportunity for the Group and inadequate preparations or delayed actions could impact on the Group’s reputation with investors and the market, presenting a strategic risk to the Group through adverse selection.

How we manage this risk

The Group considers the embedding of climate related matters to be a key initiative and, as such, has appointed the Chief Executive Officer and Chief Risk Officer as the responsible executives to oversee delivery of the Climate Change Plan.
Climate risk is a principal risk in the RMF, with a focus on high materiality areas including strategic risk and credit risk, particularly within the Real Estate and Retail Mortgage Brands segment.
The Group has developed a proportionate approach to climate change in line with the requirements of SS3/19 and focuses its assessment on term loans in the Commercial and Retail segments.
The group has delivered £740m of sustainability lending in 2025 leading to a total of £1.8 billion over the period 2023 to 2025.
The Group has partnered with leading climate data providers and consultancies to develop its understanding of physical and transition risk and has used this to develop its risk appetite statement and measures together with metrics, measures and sustainability required disclosures.
During 2025, the Group has continued tracking lending emissions measures within its Real Estate and Retail Mortgage Brands businesses and has completed the design of a PCAF aligned methodology for an emissions intensity baseline for SME lending for the first time. The Group has also further developed its quantitative scenario analysis for its Commercial and Retail segments and has included a climate risk assessment within its ICAAP together with establishing a climate base case.
The Group has enhanced its collateral and valuation policy, particularly in the application of physical risk and where models are used to support the valuation.

Focus areas for 2026

Extending climate measurement into all lending within scope of the Group’s proportionate approach to climate change. Further embed climate risk into its lending policy and strategy.
Continue to consider the Group’s approach to support financing to a low carbon economy and how those plans align to meeting net zero targets.
Deliver towards the £2 billion of sustainable finance target for the period 2026 to 2028.
Delivery of a PRA SS5/25 implementation plan by June 2026 and ongoing monitoring of the FCA consultation on ISSB-aligned reporting requirements for listed companies.

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Shawbrook Group plc | Annual Report and Accounts 2025

Emerging risks

Artificial Intelligence (AI)

Overview

Artificial Intelligence (AI), including generative AI, is rapidly advancing and is being utilised more widely across the financial services industry. Shawbrook supports innovation and recognises the value of AI and machine learning in improving pricing, credit, and operational efficiency. However, AI has the potential to heighten risks to the Group’s objectives if not properly governed or data is inadequately secured.

Links to key performance metrics
* Loan book
* Cost to income ratio
* Profit before tax
* Earnings per share
* CET1 capital ratio
* Total capital ratio

How this could impact our strategy or business model

AI has the potential to improve operational efficiency, enhance the credit process, and improving pricing.
AI could be used by fraudsters to impersonate customers leading to additional operational losses. It could also lead to behavioural change which could have implications for credit risk, and internal risks linked to uncontrolled or inappropriate use of AI capabilities across the Group.

How we manage this risk

Shawbrook has established a responsible AI policy, which controls the use and deployment of AI technology across the Group.
The Group has expanded its model risk management framework to include AI and machine learning (ML) and all applications are reviewed as part of a specific Model Risk Oversight Committee which also draws membership from the Chief Compliance Officer and the Data Protection Officer.

Focus areas for 2026

The Group is rolling out GPT licenses to all staff in a controlled environment to manage the risk of data loss through the use of AI.
The Group is actively managing a number of initiatives using AI with an element of a human in the loop to ensure consistency of outcomes whilst leveraging efficiency benefits.

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Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks

Principal risk	Definition	Principal sources of exposure
Credit risk (Audited) See pages 130 - 159	The risk that a borrowing client or treasury counterparty fails to repay some, or all, of the capital or interest advanced to them, due to lack of willingness to pay and/or lack of ability to pay. This can include credit risks that materialise during the life of the asset such as refinance risk or elevate due to deteriorating security/collateral value. Credit risk can be further divided into customer credit risk (from core lending activity) and treasury credit risk (from treasury activity). Credit risk also includes credit concentration risk, which is the risk of exposure to particular groups of customers, sectors or geographies that, uncontrolled, may lead to additional losses that the Shareholder or the market may not expect.	The principal source of customer credit risk is the Group’s loans and advances to customers. Treasury credit risk exposure is limited to short-term deposits placed with leading UK banks, repo and reverse repo exposures and high-quality liquid assets purchased for inclusion in the Group’s liquidity buffer.
Market, liquidity and capital risk (Partially audited) See pages 160 to 171	Market risk: The risk of financial loss through unhedged or mismatched asset and liability positions that are sensitive to changes in interest rates or currencies. Exposure to market risk arises from the Group’s core activities of offering loans and deposits to customers. All financial assets held by the Group are non-trading. Liquidity risk: The risk that the Group is unable to meet its current and future financial obligations as they fall due and maintain stakeholder confidence or is only able to do so at excessive cost. Liquidity risk includes funding risk, which is the risk that the Group is unable to maintain diverse funding sources and manage retail funding risk that can arise from concentrations of higher risk deposits. The principal source of liquidity risk is the Group’s retail and wholesale deposits, as well as affinity partnerships and bilateral/public securitisations. Capital risk: The risk that the Group has insufficient quantity and quality of capital to absorb losses over the cycle, cover regulatory requirements and/or to support its own growth plans. Exposure to capital risk could arise due to a depletion of the Group’s capital resources as a result of the crystallisation of any of the risks to which it is exposed or an increase in minimum capital requirements.

Principal risks refer to the key risks the Group is exposed to. Policies and associated standards are maintained to support principal risks and provide guidance on how to achieve strategic objectives whilst managing the risk within defined risk appetite limits. The Group has identified eleven principal risks. These are summarised in the following table and signposts are provided to indicate where additional information can be found. Oversight of the Group’s principal risks is outlined on page 113. Certain information in the principal risks section is audited. Sections that are specifically marked as ‘audited’ are covered by the Independent Auditor’s Report starting on page 207. All other sections are unaudited.FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
128 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks

Principal risk	Definition	Principal sources of exposure
Operational risk	The risk of loss resulting from inadequate or failed internal processes, people, data and management information availability, system failures, or from external events.	The principal sources of operational risk, as per the year-end risk and control self-assessment, are data, information, third-party suppliers and process execution.
Technology and cyber risk	The risk of loss arising from disruption to a business service or process due to an IT asset or service becoming unavailable or due to malicious activity (including a cyber-attack). The risk to business objectives or future growth trajectory by failing to ensure that system requirements are aligned and fit for purpose.	The principal sources of technology and cyber risk are technology availability and infrastructure risk.
Strategic risk	The risk that the Group is unable to meet its objectives through the inappropriate selection or implementation of strategic plans. This includes the ability to ensure that the proposition, products and services remain relevant, the embedding of appropriate governance, change prioritisation, management of external partnerships and successful embedding of equality, diversion and inclusion (EDI).	The principal sources of strategic risk are lending growth, governance, management of partnerships and products and propositions.
Transformation risk	The risk that the Group is unable to effectively deliver or implement business change and fails to appropriately manage change governance, prioritisation or oversight.	The principal sources of transformation risk relate to ineffective governance / oversight, inadequate scope, lack of appropriate resourcing, increased delivery timelines, reduced quality of delivered products and increased levels of spend.
Conduct risk	The risk that the Group’s behaviour will result in poor customer outcomes through the delivery of the Group’s products, propositions and services. Conduct risk can manifest itself in a variety of ways including misconduct by employees, culture, the provision of products and services that fail to meet customers’ needs in a fair manner, and failure to address customer detriment quickly and fairly.
Compliance and regulatory risk	The risk of regulatory enforcement and sanction, material financial loss, or loss of reputation the Group may suffer as a result of its failure to identify and comply with applicable laws, regulations, codes of conduct and standards of good practice. The Group conducts its activities in a highly regulated market, and the principal sources of exposure are linked to its lending and savings activities, data privacy, legal risk, and regulatory management.
Climate risk	The risk of financial loss, or loss of reputation, as a result of the Group’s failure to successfully embed physical risk, transition risk, litigation risk and relevant industry standards.	The principal sources of exposure relate to financial and operational risks arising from physical risks, and the transition risk to a lower carbon economy within its lending portfolios.
Financial crime risk	The risk that the Group’s processes may be used to commit financial crime. Financial crime risk arises when the Group’s systems and controls are circumvented for the purposes of perpetrating financial crime, including bribery and corruption, money laundering, sanctions, tax evasion, and the financing of terrorist activity.
Model risk	The risk of financial loss due to the failure to appropriately design, implement, monitor, validate, and use of models for their intended purpose.	The principal sources of exposure to model risk include the implementation of credit strategy in the lending portfolios, the risk of inadequate impairment coverage arising, and reputation risk arising from model design and implementation, model governance, and model usage.

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Principal risks: Credit risk (audited)

Key aspects relating to the management of credit risk are the implementation of robust credit risk approval processes and the execution of credit monitoring processes. These are detailed further below.

Credit risk approval processes

To manage credit risk, the Group operates a hierarchy of lending authorities based principally upon the size of the aggregated credit risk exposure to counterparties, groups of connected counterparties or, where applicable, a portfolio of lending assets that are subject to a single transaction. In addition to maximum amounts of credit exposure, sole lending mandates may stipulate sub-limits and/or further conditions and criteria.

During the year ended 31 December 2025, the Group continued to implement new controls to support the management of credit risk. These included the implementation of additional early warning indicators to support the identification of potential problem loans, key portfolio review meetings and the implementation of additional processes to support capacity planning in collections and the non-performing loans team to support the evolving economic environment. The Group implemented a new end to end CMP within the Commercial segment and further implemented its risk distribution capability to support additional lending to existing customers through credit insurance. The Group also completed the acquisition of ThinCats to expand the Group’s SME portfolio and provided access to a proprietary credit grading and LGD model for SME exposures in this segment.

Lending is advanced subject to the Group lending approval policy and specific credit criteria. When evaluating the credit quality and covenant of the borrower, significant emphasis is placed on the nature of the underlying collateral. This process also includes the review of the Board’s appetite for concentration risk.

The Group is a responsible lender, and affordability remains a key area of focus for the Group. The Group’s approach to affordability is set out in the Group’s affordability policy, which is embedded within each of the customer segments lending guides and systems. This policy has been updated several times to ensure that it remains appropriate in the current environment and adequately reflects the increase in inflation, interest rate changes and expenditure updates seen during the year. The Group also uses a number of external systems to check affordability and has the ability to refer to Open Banking information, subject to policy and customer consent. Open Banking is mandatory for certain lending within the Consumer Finance business.

Credit monitoring

Approval and ongoing monitoring controls are exercised both within the customer segments and through oversight by the Group’s credit risk function. This applies to both individual transactions, as well as at the portfolio level, by way of monthly credit information reporting, measurement against risk appetite limits and testing through risk monitoring reviews. The Group’s risk function oversees collections and arrears management processes, which are managed internally or by selected third parties. The Group has also implemented cloud contact centre technology that uses AI to increase the Group’s data- driven capability to support early identification of potential problem loans and identify vulnerability. Throughout 2025, the Group continued to invest in its collection’s strategies and potential problem loan management teams to ensure that the Group is well positioned for a more challenging environment.

Impairment of financial assets (audited)

To reflect the potential losses that the Group might experience due to credit risk, the Group recognises impairment provisions on its financial assets in the financial statements. In accordance with the Group’s accounting policy (Note 7 of the Financial Statements), impairments are calculated using a forward-looking ECL model. ECLs are an unbiased probability-weighted estimate of credit losses determined by evaluating a range of possible outcomes. The Group calculates ECLs and recognises a ‘loss allowance’ in the statement of financial position for its financial assets measured at amortised cost and at fair value through other comprehensive income (FVOCI) and for its loan commitments. At 31 December 2025, the Group recognised a provision of £0.3 million for lending attached to its lending pipeline where there is a probability of completion. The following sections provide additional information regarding the measurement and calculation of ECLs, the application of judgemental adjustments to modelled ECLs, analysis of the loss allowance recognised in the statement of financial position and an assessment of the critical accounting judgements and estimates associated with the impairment of financial assets.

Principal risks: Credit risk
In the following sections, information under headings marked as ‘audited’ is covered by the Independent Auditor’s Report. All other information is unaudited. This section specifically provides information about:
* Managing credit risk
* Impairment of financial assets
* Exposure to credit risk
* Concentrations of credit risk
* Use of collateral to mitigate credit risk
* Forbearance

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Principal risks: Credit risk

Measurement of expected credit losses (audited)

Measurement of ECLs depends on the stage the financial asset is allocated to.Stage allocation is based on changes in credit risk when comparing credit risk at initial recognition to credit risk at the reporting date, as follows:

Stage 1: When a financial asset is first recognised it is assigned to Stage 1. If there is no significant increase in credit risk (SICR) from initial recognition the financial asset remains in Stage 1. For financial assets in Stage 1, a 12-month ECL is recognised.
Stage 2: When a financial asset shows a SICR it is moved to Stage 2. A financial asset in Stage 2 can be ‘cured’ and reclassified back to Stage 1 when there is no longer a SICR and any probation period has been completed. For financial assets in Stage 2, a lifetime ECL is recognised.
Stage 3: When there is objective evidence of impairment and the financial asset is considered to be in default, or otherwise credit-impaired, it is moved to Stage 3. A financial asset in Stage 3 can be ‘cured’ and reclassified back to Stage 2 when it is no longer in default, or otherwise credit-impaired, and any probation period has been completed. For financial assets in Stage 3, a lifetime ECL is recognised.

For loan commitments, where the loan commitment relates to the undrawn component of a facility, it is assigned to the same stage as the drawn component of the facility.

In relation to the above:
* Lifetime ECL is defined as ECLs that result from all possible default events over the expected behavioural life of a financial instrument.
* 12-month ECL is defined as the portion of lifetime ECL that will result if a default occurs in the 12 months after the reporting date, weighted by the probability of that default occurring.

Assessing whether an asset shows a SICR and determining whether an asset is considered to be in default, or otherwise credit impaired, or is considered to be ‘cured’, are all identified as areas involving critical judgement and are detailed further starting on page 144.

Financial assets may be separately allocated as purchased or originated credit-impaired (POCI). POCI assets are financial assets that are credit-impaired on initial recognition. Once a financial asset is assigned as POCI, it remains in this category until derecognition irrespective of its credit quality. For POCI assets, the ECL is always measured on a lifetime basis. ECLs are only recognised (or released) to the extent the ECL has changed from the amount of credit impairment recognised on initial recognition.

Calculation of expected credit losses (audited)

ECLs are the discounted product of the probability of default (PD), exposure at default (EAD) and loss given default (LGD). Each of these components are detailed further below. ECLs are determined by projecting the PD, EAD and LGD for each future month for each exposure. The three components are multiplied together and adjusted to reflect forward-looking information. This calculates an ECL for each future month, which is then discounted back to the reporting date and summed. The discount rate used in the ECL calculation is the current effective interest rate, or the original effective interest rate if appropriate.

Probability of default

PD is an estimate of the likelihood of default over a given time horizon. A default may only happen at a certain time over the assessed period if the facility has not been previously derecognised and is still in the portfolio. In relation to loans and advances to customers and loan commitments, the PD is based on internal and external individual customer information that is updated for each reporting period. The Group operates both a model-based PD and a slotting approach. The model-based PD is used for high volume portfolios such as those in Consumer Finance and for mortgages within Real Estate and Retail Mortgage Brands. Statistical modelling techniques are used to determine which borrower and account performance characteristics are predictive of default behaviour based on supportable evidence observed in historical data that is related to the group of accounts to which the model will be applied. The slotting approach has been developed and implemented for the low volume and high value obligors in SME and large ticket Real Estate loans. Slotting in Real Estate lending applies to facilities over a set threshold. Both processes deliver a point-in-time measure of default. During 2025, the Group developed a new credit grading model for all Buy to Let mortgages originated through Real Estate and the Retail Mortgage Brands segment. This means that a coverage ratio method is now only used for certain other acquired mortgages in Real Estate. A credit grading approach has also been embedded for motor finance loans originated through JBR and through a platform loan agreement in Consumer Finance.

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Principal risks: Credit risk

For the model-based portfolios, the measure of PD is based on information available to the Group from credit reference agencies and includes information from a broad range of financial services firms and internal product performance data and is applied at the borrower level. For the slotted portfolios, the measure of PD relates to attributes relating to financial strength, political and legal environment, asset/transaction characteristics, strength of sponsor and security. The Group has implemented new slotting models for each of its SME lending categories in 2025. The Group does not expect this to lead to a material impact in ECL and will take 12 months to cover all loans through the annual review, with any impact considered a 2025 event and implemented through a Post Model Adjustment (PMA). For each asset class, the Group has a proprietary approach to extrapolate its best estimate of the point-in-time PD from 12 months to behavioural maturity to derive the lifetime PD. This uses economic response models that have been developed specifically to forecast the sensitivity of PD to key macroeconomic variables.

Exposure at default

EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the reporting date, including repayments of principal and interest, whether scheduled by contract or otherwise, expected drawdowns on committed facilities, and accrued interest from missed payments. EAD is designed to address increases in utilisation of committed limits and unpaid interest and fees that the Group would ordinarily expect to observe to the point of default, or through to the point of realisation of the collateral. The Group determines EADs by modelling the range of possible exposure outcomes at various points in time, corresponding to the multiple scenarios.

Loss given default

LGD is an estimate of the loss arising in the case where a default occurs at a given time. It is based on the difference between the contractual cash flows due and those that the lender would expect to receive, including from the realisation of any collateral. It is usually expressed as a percentage of the EAD. In relation to loans and advances to customers and loan commitments, the Group segments its lending products into smaller homogenous portfolios based on the Group’s lending segments as detailed on the following page. In all cases the LGD or its components are tested against recent experience to ensure that they remain current.

Real Estate and Retail Mortgage Brands: the LGD is generally broken down into two parts. These include the Group’s estimate of the probability of possession given default (PPGD), combined with the loss given possession. The Group has continued to focus on the proportion of accounts that have not cured over an emergence period, rather than the proportion of accounts that enter possession in line with market best practice. During 2025, the Group further segmented its models for PPGD by LTV. The loss given possession is based on the Group’s estimate of a shortfall, based on the difference between the property value after the impact of a forced sale discount plus a scenario specific market value decline and sale costs, and the loan balance with the addition of unpaid interest and fees and any first charge claims with regards to second charge residential mortgages.
SME: the LGD is based on experience of losses on repossessed assets where the Group has collateral, or management judgement in situations where the Group has minimal experience of actual losses. For cases in Stage 3, the Group uses an individual impairment that considers a weighted average of alternative recovery options.
Consumer Finance: the LGD for unsecured loans uses an estimate of the expected write-off based on an established debt sale agreements supplemented by analysis of recoveries for loans terminated or charged-off and the expected write-off for loans held for deceased and vulnerable customers or customers where there are outstanding complaints. There is no recovery portfolio. For motor finance the LGD reflects the shortfall expected following the recovery of the asset and net of any costs of recovery.

Basis of calculation

A number of complex models are used in the calculation of ECLs, which utilise both the Group’s historical data and external data inputs. The Group uses a bespoke calculation engine to estimate ECLs on either a collective or individual basis depending on the nature of the underlying portfolio and financial instruments. The collective assessment groups loans with shared credit risk characteristics through lines of business. The engine captures model outputs from the 12-month PD, Lifetime PD, LGD, EAD, macroeconomic models and staging analysis to calculate an estimate for each account.Asset classes where the Group calculates ECLs on an individual basis include:
* Stage 3 and POCI assets where individual impairments are reviewed and approved by the customer segment specific impairment committees and Group Watch and Impairment Committee;
* large and unique slotted Stage 1 and Stage 2 loans in the Commercial segment; and
* treasury and interbank relationships (such as cash and balances at central banks, loans and advances to banks and investment securities).

Asset classes where the Group calculates ECLs on a collective basis include:
* Stage 1 and Stage 2 loans and certain Stage 3 exposures within the Commercial segment (except as identified above);
* mortgages originated through Retail Mortgage Brands; and
* all loans within Consumer Finance.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
132 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Using forward-looking information in the calculation of expected credit losses

ECLs are required to reflect an unbiased probability-weighted range of possible future outcomes. In order to do this, the Group has developed a proprietary approach to assess the impact of the changes in economic scenarios on the obligor level ECL. The Group has mapped each asset class to an external long-run benchmark series that is believed to behave in a similar way to the Group’s portfolio over the economic cycle. For some low default portfolios, internal data has been used to support this assessment. The Group has developed econometric models to establish how much of the historical series can be explained by movements in UK macroeconomic factors. The models deliver an estimate of the impact of a unit increase in default arising from a 1% increase in the underlying macroeconomic factors. The models are developed in line with the Group’s Model Risk Governance Framework and are subject to review at least every six months. The models are tested across multiple sets of scenarios to ensure that they work in a range of scenarios, the output of the scenarios is a series of scalars by asset class and a scenario that can be applied to the underlying PDs to deliver a forward-looking ECL. During 2025, the Group implemented additional benchmarking to ensure that its economic response models were sufficiently sensitive to macroeconomic factors with any additional risk included as a PMA pending the development of new models. The Group has developed a proprietary approach to extrapolating its 12-month PDs over the behavioural maturity of the loans that the scalars can be applied to. The nature of the scenarios means that there will be an impact on both the PD and the number of obligors moving from Stage 1 to Stage 2 in line with the SICR criteria.

Judgemental adjustments to modelled ECLs (audited)

Limitations in the models used to calculate ECLs may be identified through the ongoing performance monitoring and assessment and validation of the outputs from the models. Consequently, in certain circumstances, the Group makes judgemental adjustments to the modelled output to ensure the overall loss allowance recognised adequately reflects the risk in the portfolio. Judgemental adjustments take the form of post-model adjustments (PMAs) and overlays:

Post model adjustments: PMAs are calculated at a granular level through data driven analysis to take into account particular attributes of the portfolio that have not been adequately captured by the models.
Overlays: overlays are adjustments to the modelled outputs that do not meet the definition of a PMA. These include adjustments that are not calculated through modelled or data driven analysis.

All judgemental adjustments are carefully monitored and are reviewed and approved at least every six months by the Group Impairment Committee, ExRC, and the Audit Committee, along with other key impairment judgements. Where appropriate, the attributes that drive the judgemental adjustments are incorporated into future model development. In the current environment, judgemental adjustments have the potential to significantly impact the loss allowance recognised and involve the application of significant management judgement. Judgemental adjustments to modelled ECLs are therefore considered to be an area of critical judgement (see page 144).

During the period the Group updated its PMA that reflects the risk of future interest rate rises at the maturity of the mortgage product. The PMA is assessed over a 36-month period in line with industry best practice. The overall impact is due to a reduction in the number of customers at risk reflecting the interest rate environment and product transfers. For Buy to Let the impact also reflects the benefit of future rental growth in the assessment.

The PMA for segment risk has increased by £0.3m from £2.7m to £3.0m in the reporting period. Segment risk represents specific areas of the lending segments where the models would not expect to pick up the additional risk. The increase in Retail Mortgage Brands is to reflect the implementation of an LTV based PPGD of £0.6m, offset by the removal of the PMA for unsatisfied arrears (£0.1m) which is addressed within the PD calibration. The reduction in Real Estate is due to the removal of a PMA for slotting effectiveness. The increase in SME of £0.3m reflects a reduction in uncollateralised lending during the period offset by a new PMA for the implementation of a new slotting model for Development finance which was calibrated to a higher PD. The reduction of £0.1m in Consumer Finance reflects a reduction in the test and learn segment as the loans have continued to amortise or redeem.

A new PMA of £0.9 million for Retail Mortgage Brands to reflect an increase in economic sensitivity in the downside and severe downside scenarios in our new benchmarking group when compared to all market UK Finance data.

	As at 31 December 2025					As at 31 December 2024
	Commercial Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m	Commercial Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Fixed rate expiry	0.2	-	-	0.2	0.4	0.2	-	-	0.9	1.1
Segment risk	-	1.7	0.7	0.6	3.0	0.4	1.4	0.8	0.1	2.7
Economic sensitivity	-	-	-	0.9	0.9	-	-	-	-	-
Total judgemental adjustments to modelled ECLs	0.2	1.7	0.7	1.7	4.3	0.6	1.4	0.8	1.0	3.8

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
133 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Analysis of the loss allowance recognised (audited)

Analysis of loans and advance to customers and loss allowance

A summary of the loss allowance recognised in the statement of financial position in relation to each financial asset class is provided in the following tables. Except where noted, the loss allowance is recognised as a deduction from the gross carrying amount of the asset. Shawbrook POCI loans in combination with ThinCats POCI loans have been presented separately from Stage 3 loans as at 31 December 2025. Accordingly, all prior-year comparatives, where POCI balances were previously included within Stage 3, have been restated to align with the current year’s presentation.

	Modelled ECL £m	Judgemental adjustments (See page 133) £m	Total £m	Of which: As at 31 December 2025
				Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m
Cash and balances at central banks	<0.1	-	<0.1	<0.1	-	-	-
Loans and advances to banks	<0.1	-	<0.1	<0.1	-	-	-
Loans and advances to customers at amortised cost	186.4	3.0	189.4	59.8	31.5	93.3	4.8
Loans and advances to customers at FVOCI (recognised in FVOCI reserve)	12.1	1.3	13.4	5.7	3.0	4.7	-
Investment securities	<0.1	-	<0.1	<0.1	-	-	-
Loan commitments (recognised as a provision)	0.6	-	0.6	0.5	0.1	-	-
Total loss allowance recognised	199.1	4.3	203.4	66.0	34.6	98.0	4.8

	Modelled ECL £m	Judgemental adjustments (See page 133) £m	Total £m	Of which: As at 31 December 2024 ¹
				Stage 1 £m	Stage 2 £m	Stage 3 (restated) £m	POCI £m
Cash and balances at central banks	<0.1	-	<0.1	<0.1	-	-	-
Loans and advances to banks	<0.1	-	<0.1	<0.1	-	-	-
Loans and advances to customers at amortised cost	156.6	2.8	159.4	48.0	33.4	73.2	4.8
Loans and advances to customers at FVOCI (recognised in FVOCI reserve)	11.0	1.0	12.0	6.6	2.5	2.9	-
Investment securities	<0.1	-	<0.1	<0.1	-	-	-
Loan commitments (recognised as a provision)	0.6	-	0.6	0.5	0.1	-	-
Total loss allowance recognised	168.2	3.8	172.0	55.1	36.0	76.1	4.8

Principal risks: Credit risk FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
134 Shawbrook Group plc | Annual Report and Accounts 2025

$^1$ 2024 comparative report restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

For loans and advances to customers at amortised cost, loans and advances to customers at fair value through other comprehensive income (FVOCI), and loan commitments, additional analysis of the loss allowance recognised is provided starting on pages 138, 141 and 143, respectively. For cash and balances at central banks, loans and advances to banks and investment securities, the loss allowance is immaterial, totalling less than £0.1 million in both reported years. Accordingly, no additional analysis is provided.

The following tables provide a summary of the loss allowance recognised in the statement of financial position in relation to loans and advances to customers. The increase in ECL is due to loan growth in all segments, the acquisition of ThinCats and Playter, and the impact of loans migrating through the ECL stages. Stage migration includes certain Development Finance loans originated in 2021 (£20.6m) and were underwritten before the sharp increases in building costs and interest rates which impacted developers from Q4 2022. These loans have continued to experience more challenges as they have been worked out but outside of the loans currently in Stage 3 only 8% of the original lending remains.The increase is offset by certain write-offs in SME lending and the completion of a £0.6 billion and a £0.3 billion OTD trade consisting of loans originated through TML and BML that were derecognised.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 135
Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Total loans and advances to customers

	Commercial Retail
As at 31 December 2025	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Stage 1	7,080.4	3,797.5	963.2	4,036.7	15,877.8
Stage 2	380.6	421.6	75.7	504.1	1,382.0
Stage 3	202.3	167.2	14.8	176.8	561.1
POCI	13.9	20.4	1.3	4.7	40.3
Gross carrying amount	7,677.2	4,406.7	1,055.0	4,722.3	17,861.2
Stage 1	(11.8)	(31.2)	(16.4)	(6.6)	(66.0)
Stage 2	(4.3)	(17.3)	(8.9)	(4.1)	(34.6)
Stage 3	(34.1)	(49.4)	(6.7)	(7.8)	(98.0)
POCI	(4.2)	(0.1)	(0.4)	(0.1)	(4.8)
Loss allowance	(54.4)	(98.0)	(32.4)	(18.6)	(203.4)
Loss allowance coverage
Stage 1	0.2%	0.8%	1.7%	0.2%	0.4%
Stage 2	1.1%	4.1%	11.8%	0.8%	2.5%
Stage 3	16.9%	29.5%	45.3%	4.4%	17.5%
POCI	30.2%	0.5%	30.8%	2.1%	11.9%
Total loss allowance coverage	0.7%	2.2%	3.1%	0.4%	1.1%

	Commercial Retail
As at 31 December 2024$^1$	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Stage 1	6,271.9	2,604.3	826.4	3,882.8	13,585.4
Stage 2	405.9	362.5	70.4	414.7	1,253.5
Stage 3 (restated)	184.3	187.2	14.8	153.9	540.2
POCI	14.2	5.1	4.0	5.7	29.0
Gross carrying amount	6,876.3	3,159.1	915.6	4,457.1	15,408.1
Stage 1	(10.1)	(21.3)	(16.4)	(7.3)	(55.1)
Stage 2	(6.2)	(15.3)	(11.0)	(3.5)	(36.0)
Stage 3 (restated)	(23.4)	(40.0)	(6.5)	(6.2)	(76.1)
POCI	(4.6)	(0.2)	-	-	(4.8)
Loss allowance	(44.3)	(76.8)	(33.9)	(17.0)	(172.0)
Loss allowance coverage
Stage 1	0.2%	0.8%	2.0%	0.2%	0.4%
Stage 2	1.5%	4.2%	15.6%	0.8%	2.9%
Stage 3 (restated)	12.7%	21.4%	43.9%	4.0%	14.1%
POCI	32.4%	3.9%	-	-	16.6%
Total loss allowance coverage	0.6%	2.4%	3.7%	0.4%	1.1%

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 136
Shawbrook Group plc | Annual Report and Accounts 2025
$^1$ 2024 comparative has been restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

Additional analysis of loans and advances to customers at amortised cost

For loans and advances to customers at amortised cost, the loss allowance is £189.4 million (31 December 2024: £159.4 million). The loss allowance is recognised as a deduction from the gross carrying amount of the asset (see Note 24 of the Financial Statements). The following tables provide an analysis of loans and advances to customers at amortised cost by lending segment and the year-end stage classification:

	Commercial Retail
As at 31 December 2025	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Stage 1	7,080.4	3,797.5	963.2	394.4	12,235.5
Stage 2	380.6	421.6	75.7	186.8	1,064.7
Stage 3	202.3	167.2	14.8	90.4	474.7
POCI	13.9	20.4	1.3	4.7	40.3
Gross carrying amount	7,677.2	4,406.7	1,055.0	676.3	13,815.2
Stage 1	(11.7)	(31.0)	(16.4)	(0.7)	(59.8)
Stage 2	(4.3)	(17.2)	(8.9)	(1.1)	(31.5)
Stage 3	(34.1)	(49.4)	(6.7)	(3.1)	(93.3)
POCI	(4.2)	(0.1)	(0.4)	(0.1)	(4.8)
Loss allowance	(54.3)	(97.7)	(32.4)	(5.0)	(189.4)
Carrying amount	7,622.9	4,309.0	1,022.6	671.3	13,625.8
Loss allowance coverage
Stage 1	0.2%	0.8%	1.7%	0.2%	0.5%
Stage 2	1.1%	4.1%	11.8%	0.6%	3.0%
Stage 3	16.9%	29.5%	45.3%	3.4%	19.7%
POCI	30.2%	0.5%	30.8%	2.1%	11.9%
Total loss allowance coverage	0.7%	2.2%	3.1%	0.7%	1.4%

	Commercial Retail
As at 31 December 2024$^1$	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Stage 1	6,271.9	2,604.3	826.4	574.3	10,276.9
Stage 2	405.9	362.5	70.4	184.5	1,023.3
Stage 3 (restated)	184.3	187.2	14.8	91.5	477.8
POCI	14.2	5.1	4.0	5.7	29.0
Gross carrying amount	6,876.3	3,159.1	915.6	856.0	11,807.0
Stage 1	(10.1)	(20.8)	(16.4)	(0.7)	(48.0)
Stage 2	(6.2)	(15.2)	(11.0)	(1.0)	(33.4)
Stage 3 (restated)	(23.4)	(40.0)	(6.5)	(3.3)	(73.2)
POCI	(4.6)	(0.2)	-	-	(4.8)
Loss allowance	(44.3)	(76.2)	(33.9)	(5.0)	(159.4)
Carrying amount	6,832.0	3,082.9	881.7	851.0	11,647.6
Loss allowance coverage
Stage 1	0.2%	0.8%	2.0%	0.1%	0.5%
Stage 2	1.5%	4.2%	15.6%	0.5%	3.3%
Stage 3 (restated)	12.7%	21.4%	43.9%	3.6%	15.3%
POCI	32.4%	3.9%	-	-	16.6%
Total loss allowance coverage	0.6%	2.4%	3.7%	0.6%	1.4%

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 137
Shawbrook Group plc | Annual Report and Accounts 2025
$^1$ 2024 comparative has been restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

The following table provides an analysis of loans and advances to customers at amortised cost by agreement type and the year-end stage classification:

	As at 31 December 2025
	Loan receivables £m	Finance lease receivables £m	Instalment credit receivables £m	Total £m
Stage 1	11,423.8	20.8	790.9	12,235.5
Stage 2	1,035.8	0.9	28.0	1,064.7
Stage 3	453.6	0.5	20.6	474.7
POCI	40.3	-	-	40.3
Gross carrying amount	12,953.5	22.2	839.5	13,815.2
Stage 1	(55.6)	(0.1)	(4.1)	(59.8)
Stage 2	(30.7)	(0.1)	(0.7)	(31.5)
Stage 3	(87.7)	(0.4)	(5.2)	(93.3)
POCI	(4.8)	-	-	(4.8)
Loss allowance	(178.8)	(0.6)	(10.0)	(189.4)
Carrying amount	12,774.7	21.6	829.5	13,625.8
Loss allowance coverage
Stage 1	0.5%	0.5%	0.5%	0.5%
Stage 2	3.0%	11.1%	2.5%	3.0%
Stage 3	19.3%	80.0%	25.2%	19.7%
POCI	11.9%	-	-	11.9%
Total loss allowance coverage	1.4%	2.7%	1.2%	1.4%

	As at 31 December 2024$^1$
	Loan receivables £m	Finance lease receivables £m	Instalment credit receivables £m	Total £m
Stage 1	9,544.4	21.3	711.2	10,276.9
Stage 2	1,006.8	0.8	15.7	1,023.3
Stage 3 (restated)	451.7	0.5	25.6	477.8
POCI	29.0	-	-	29.0
Gross carrying amount	11,031.9	22.6	752.5	11,807.0
Stage 1	(45.3)	(0.3)	(2.4)	(48.0)
Stage 2	(32.9)	0.0	(0.5)	(33.4)
Stage 3 (restated)	(66.4)	(0.4)	(6.4)	(73.2)
POCI	(4.8)	-	-	(4.8)
Loss allowance	(149.4)	(0.7)	(9.3)	(159.4)
Carrying amount	10,882.5	21.9	743.2	11,647.6
Loss allowance coverage
Stage 1	0.5%	1.4%	0.3%	0.5%
Stage 2	3.3%	0.0%	3.2%	3.3%
Stage 3 (restated)	14.7%	80.0%	25.0%	15.3%
POCI	16.6%	-	-	16.6%
Total loss allowance coverage	1.4%	3.1%	1.2%	1.4%

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 138
Shawbrook Group plc | Annual Report and Accounts 2025
$^1$ 2024 comparative has been restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

The following table provides an analysis of movements during the year in the loss allowance associated with loans and advances to customers at amortised cost. The table is compiled by aggregating the twelve individual monthly movement tables for the loss allowance and carrying value of the loans. Transfers between stages are deemed to have taken place where the loan is open at the start of the month and remains open at the end of the month with the transition based on the opening loss allowance or carrying amount, with all other movements shown in the stage in which the asset is held at the end of the month. Where loans have been added (including originations, purchases and acquisitions through business combinations) or removed (including derecognitions and disposals) during the year, the full year movement is reflected on the relevant addition/disposal row.

	2025					2024$^1$
	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m	Stage 1 £m	Stage 2 £m	Stage 3 (restated) £m	POCI £m	Total £m
As at 1 January	48.0	33.4	73.2	4.8	159.4	47.3	29.0	49.5	4.4	130.2
ECL charge/(credit) for the year
Transfer from Stage 1	(10.8)	10.5	0.3	-	-	(13.2)	12.9	0.3	-	-
Transfer from Stage 2	11.3	(34.1)	22.8	-	-	12.4	(35.5)	23.1	-	-
Transfer from Stage 3	0.6	13.7	(14.3)	-	-	8.0	7.3	(15.3)	-	-
New financial assets originated or purchased	21.9	0.1	-	-	22.0	20.6	0.1	-	-	20.7
Financial assets derecognised (excluding disposals)	(11.0)	(14.1)	(31.1)	(1.1)	(57.3)	(19.3)	(7.9)	(26.0)	0.2	(53.0)
Financial assets derecognised on disposal	-	(0.1)	(0.4)	-	(0.5)	-	-	-	-	-
Changes in credit risk	(0.2)	22.1	39.7	1.1	63.1	(7.8)	27.5	41.6	0.2	61.5
Net ECL charge for the year	12.2	(1.9)	17.0	-	27.3	0.7	4.4	23.7	0.4	29.2
Other movements
Financial assets derecognised on disposal	(0.4)	–	–	–	(0.4)	–	–	–	–	–
Other adjustments	–	–	3.1	–	3.1	–	–	–	–	–
Total other movements	(0.4)	–	3.1	–	2.7	–	–	–	–	–
Total movement in loss allowance	11.8	(1.9)	20.1	–	30.0	0.7	4.4	23.7	0.4	29.2
As at 31 December	59.8	31.5	93.3	4.8	189.4	48.0	33.4	73.2	4.8	159.4

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 139
Shawbrook Group plc | Annual Report and Accounts 2025
$^1$ 2024 comparative has been restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

Movements in the gross carrying amount of loans and advances to customers at amortised cost during the year that contributed to the changes in the associated loss allowance during the year are shown in the following table. The table is compiled using the same methodology as described for the loss allowance movement table on the previous page.# 2025 2024
| | Stage 1 £m | Stage 2 £m | Stage 3 £m | POCI £m | Total £m | Stage 1 £m | Stage 2 £m | Stage 3 (restated) £m | POCI £m | Total £m |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| As at 1 January | 10,276.9 | 1,023.3 | 477.8 | 29.0 | 11,807.0 | 9,281.0 | 997.5 | 322.0 | 30.1 | 10,630.6 |
| Movements in gross carrying amount | | | | | | | | | | |
| Transfer from Stage 1 | (1,150.4) | 1,046.9 | 103.5 | - | - | (1,128.5) | 1,074.3 | 54.2 | - | 0.0 |
| Transfer from Stage 2 | 564.7 | (864.4) | 299.7 | - | - | 538.1 | (887.5) | 349.4 | - | 0.0 |
| Transfer from Stage 3 | 3.4 | 188.7 | (192.1) | - | - | 27.2 | 97.2 | (124.4) | - | 0.0 |
| New financial assets originated or purchased | 5,232.5 | 0.7 | - | 18.5 | 5,251.7 | 3,865.5 | 7.0 | - | 10.8 | 3,883.3 |
| Financial assets derecognised (excluding disposals) | (2,207.8) | (257.0) | (147.9) | (3.2) | (2,615.9) | (1,770.9) | (217.8) | (73.6) | (8.7) | (2,071.0) |
| Financial assets derecognised on disposal | (18.1) | (14.0) | (8.3) | - | (40.4) | (19.1) | (4.2) | (1.2) | - | (24.5) |
| Net changes in lending ¹ | (465.7) | (59.5) | (58.0) | (4.0) | (587.2) | (516.4) | (43.2) | (48.6) | (3.2) | (611.4) |
| Total movement in gross carrying amount | 1,958.6 | 41.4 | (3.1) | 11.3 | 2,008.2 | 995.9 | 25.8 | 155.8 | (1.1) | 1,176.4 |
| As at 31 December | 12,235.5 | 1,064.7 | 474.7 | 40.3 | 13,815.2 | 10,276.9 | 1,023.3 | 477.8 | 29.0 | 11,807.0 |

The net ECL charge for the year represents the amount recognised in the statement of profit and loss within impairment losses on financial assets at amortised cost (see Note 20 of the Financial Statements). An analysis of this charge by lending segment is provided in the following table.

	2025 £m	2024 £m
Real Estate	7.8	7.2
SME	20.6	18.9
Consumer Finance	(1.5)	3.8
Retail Mortgage Brands	0.4	(0.7)
Net ECL charge for the year	27.3	29.2

The increase in SME includes certain Development finance loans originated in 2021 (£20.6m) and were underwritten before the sharp increases in building costs and interest rates which impacted developers from Q4 2022. These loans have continued to experience more challenges as they have been worked out but outside of the loans currently in Stage 3 only 8% of the original lending remains. The increase in Real Estate reflects book growth and some stage migration and the release in consumer reflects the pivot towards motor finance. The increase in Retail Mortgage Brands reflects an increase in the loan book and includes the securitisation of loans originated by TML and BML during the year.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT
140 Shawbrook Group plc | Annual Report and Accounts 2025

¹ Net changes in lending includes repayments, additional drawdowns and accrued interest.
² 2024 comparative has been restated to show POCI separately from Stage 3 balance.

Principal risks: Credit risk

Additional analysis of loans and advances to customers at FVOCI

For loans and advances to customers at FVOCI, the loss allowance is £13.4 million (2024: £12.0 million). The loss allowance does not reduce the carrying amount of these assets, which remain at fair value. Instead, the loss allowance is recognised in the FVOCI reserve. The following table provides an analysis of loans and advances to customers at FVOCI by year-end stage classification. All FVOCI loans are attributable to the Retail Mortgage Brands ¹ lending segment and all represent mortgage loan receivables.

	2025 £m	2024 £m
Stage 1	3,642.3	3,308.5
Stage 2	317.3	230.2
Stage 3	86.4	62.4
POCI	-	-
Carrying amount ¹	4,046.0	3,601.1
Stage 1	(5.7)	(6.6)
Stage 2	(3.0)	(2.5)
Stage 3	(4.7)	(2.9)
POCI	-	-
Loss allowance	(13.4)	(12.0)
Loss allowance coverage
Stage 1	0.2%	0.2%
Stage 2	0.9%	1.1%
Stage 3	5.4%	4.6%
POCI	-	-
Total loss allowance coverage	0.3%	0.3%

Loans originated from 1 January 2022 within Retail Mortgage Brands are considered under the Group’s originate to distribute strategy. The following table provides an analysis of movements during the year in the loss allowance associated with loans and advances to customers at FVOCI. The table is compiled in the same way as the amortised cost table and reflects the same change in methodology for the current year.

2025 2024

	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m
As at 1 January	6.6	2.5	2.9	-	12.0	3.4	2.2	1.1	-	6.7
ECL charge/(credit) for the year
Transfer from Stage 1	(1.3)	1.2	0.1	-	-	(0.6)	0.5	0.1	-	-
Transfer from Stage 2	1.5	(5.2)	3.7	-	-	2.2	(4.0)	1.8	-	-
Transfer from Stage 3	0.1	3.2	(3.3)	-	-	1.0	1.5	(2.5)	-	-
New financial assets originated or purchased	2.6	-	-	-	2.6	7.9	-	-	-	7.9
Financial assets derecognised (excluding disposals)	(0.3)	(0.1)	(0.5)	-	(0.9)	(0.9)	-	-	-	(0.9)
Changes in credit risk ²	(1.8)	2.3	2.7	-	3.2	(6.0)	2.5	2.8	-	(0.7)
Net ECL charge for the year	0.8	1.4	2.7	-	4.9	3.6	0.5	2.2	-	6.3
Other movements
Financial assets derecognised on disposal	(1.7)	(0.9)	(0.9)	-	(3.5)	(0.4)	(0.2)	(0.4)	-	(1.0)
Total other movements	(1.7)	(0.9)	(0.9)	-	(3.5)	(0.4)	(0.2)	(0.4)	-	(1.0)
Total movement in loss allowance	(0.9)	0.5	1.8	-	1.4	3.2	0.3	1.8	-	5.3
As at 31 December	5.7	3.0	4.7	-	13.4	6.6	2.5	2.9	-	12.0

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT
141 Shawbrook Group plc | Annual Report and Accounts 2025

¹ Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.
² Changes in credit risk includes changes resulting from net changes in lending, including repayments, additional drawdowns and accrued interest, and changes resulting from adjustments to the models used in the calculation of ECLs, including model inputs and underlying assumptions.

Principal risks: Credit risk

The net ECL charge for the year represents the amount recognised in the statement of profit and loss in the ‘impairment losses on financial assets’ line (see Note 20 of the Financial Statements) and in the statement of comprehensive income in the ‘change in loss allowance’ line. The higher net ECL charge in the current period is predominantly attributable to growth in the loan book due to originations and portfolio seasoning which is reflected in an increase in arrears particularly in loans originated through BML. Changes in the economic outlook included within the calculation of ECLs is another contributory factor. The other movements reflect the loans derecognised as part of a securitisation which were reclassified as part of the overall recognition of a gain on sale in the income statement.

Movements in the carrying amount of loans and advances to customers at FVOCI during the year (excluding fair value adjustments for hedged risk) are shown in the following table ¹ . The table is compiled using the same methodology as described for the loss allowance movement table above.

2025 2024

	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m
As at 1 January	3,308.5	230.2	62.4	-	3,601.1	2,546.4	239.3	26.3	-	2,812.0
Movements in gross carrying amount
Transfer from Stage 1	(302.0)	277.4	24.6	-	-	(294.1)	268.2	25.9	-	-
Transfer from Stage 2	176.9	(275.9)	99.0	-	-	276.0	(341.7)	65.7	-	-
Transfer from Stage 3	1.8	64.3	(66.1)	-	-	21.8	30.4	(52.2)	-	-
New financial assets originated or purchased	1,560.7	1.5	-	-	1,562.2	1,388.8	-	-	-	1,388.8
Financial assets derecognised (excluding disposals)	(213.3)	(16.1)	(12.3)	-	(241.7)	(245.2)	(4.7)	(3.6)	-	(253.5)
Financial assets derecognised on disposal	(794.4)	(35.3)	(20.5)	-	(850.2)	(350.6)	(9.8)	(8.7)	-	(369.1)
Net changes in lending ¹	(114.4)	71.2	(1.0)	-	(44.2)	(69.5)	48.0	8.8	-	(12.7)
Change in fair value	18.5	-	0.3	-	18.8	34.9	0.5	0.2	-	35.6
Total movement in carrying amount	333.8	87.1	24.0	-	444.9	762.1	(9.1)	36.1	-	789.1
As at 31 December	3,642.3	317.3	86.4	-	4,046.0	3,308.5	230.2	62.4	-	3,601.1

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
RISK REPORT
STRATEGIC REPORT
142 Shawbrook Group plc | Annual Report and Accounts 2025

¹ Net changes in lending includes repayments, additional drawdowns and accrued interest.

Principal risks: Credit risk

Additional analysis of loan commitments

The loss allowance for loan commitments is £0.6 million (2024: £0.6 million). The loss allowance is recognised as a provision (see Note 35 of the Financial Statements). The following table provides an analysis of movements during the year in the loss allowance associated with loan commitments. The table is compiled by comparing the position at the end of the year to that at the beginning of the year. Transfers between stages are deemed to have taken place at the start of the year, with all other movements shown in the stage in which the asset is held at the end of the year.

2025 2024

	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m	Stage 1 £m	Stage 2 £m	Stage 3 £m	POCI £m	Total £m
As at 1 January	0.5	0.1	-	-	0.6	2.3	0.5	1.0	-	3.8
ECL charge/(credit) for the year
Transfer from Stage 1	-	-	-	-	-	(0.4)	0.4	-	-	-
Transfer from Stage 2	0.1	(0.1)	-	-	-	-	(0.2)	0.2	-	-
Transfer from Stage 3	-	-	-	-	-	-	-	-	-	-
New loan commitments	-	-	-	-	-	-	-	-	-	-
Loan commitments derecognised	-	-	-	-	-	(0.3)	(0.2)	-	-	(0.5)
Changes in credit risk	(0.1)	0.1	-	-	-	(1.1)	(0.4)	(1.2)	-	(2.7)
Net ECL credit for the year	-	-	-	-	-	(1.8)	(0.4)	(1.0)	-	(3.2)
As at 31 December	0.5	0.1	-	-	0.6	0.5	0.1	-	-	0.6

The net ECL credit for the year represents the amount recognised in the statement of profit and loss within impairment losses on financial assets (see Note 20 of the Financial Statements).

Movements in the gross loan commitment during the year that contributed to the changes in the associated loss allowance during the year are shown in the following table. The table is compiled using the same methodology as described for the loss allowance movement table to the left.## FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

143 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Critical judgements relating to the impairment of financial assets (audited)

The measurement of ECLs requires the Group to make a number of judgements. The judgements that are considered to have the most significant effect on the amounts in the financial statements are:
* assessing whether there has been a SICR (resulting in the financial asset being transferred to Stage 2);
* determining whether a financial asset is in default or is credit-impaired (resulting in the financial asset being transferred to Stage 3);
* estimates and judgements used in setting individual impairments in Stage 3 (resulting in an increase or decrease in the ECL using a discounted cashflow approach); and
* determining whether a financial asset is ‘cured’ (and is therefore reclassified back to a lower stage).

These judgements have an impact upon the stage the financial asset is allocated to and therefore whether a 12-month or lifetime ECL is recognised. Additional details regarding each of these significant judgement areas are provided in the following sections. The impairment of cash and balances at central banks, loans and advances to banks and investment securities is immaterial. As such, the area where these judgements have the most significant effect specifically relates to the impairment of loans and advances to customers. A further area of judgement that is considered to have a significant effect on amounts in the financial statements is the application of judgemental adjustments to modelled ECLs. Judgemental adjustments are applied to the modelled ECL amount when the Group judges that the modelled ECL does not adequately reflect the expected risk in the portfolio, or where there is a risk that the model cannot be expected to pick up based on previous experience. Details of judgemental adjustments to the modelled ECL are provided on page 133. The Group reviews and updates these key judgements bi-annually, in advance of the Interim Financial Report and the Annual Report and Accounts. All key judgements are reviewed and recommended to the Audit Committee for approval prior to implementation.

Assessing whether there has been a significant increase in credit risk

If a financial asset shows a SICR, it is transferred to Stage 2 and the ECL recognised changes from a 12-month ECL to a lifetime ECL. The assessment of whether there has been a SICR requires a high level of judgement as detailed below. The assessment of whether there has been a SICR also incorporates forward-looking information (see page 133). For the purposes of the SICR assessment, the Group applies a series of quantitative, qualitative and backstop criteria:
* Quantitative criteria: this considers the increase in an account’s remaining lifetime PD at the reporting date compared to the expected residual lifetime PD when the account was originated. The Group segments its credit portfolios into PD bands and has determined a relevant threshold for each PD band, where a movement in excess of a threshold is considered to be significant. These thresholds have been determined separately for each portfolio based on historical evidence of delinquency.
* Qualitative criteria: this includes the observation of specific events such as short-term forbearance, payment cancellation, historical arrears or extension to customer terms (see following table for further details).
* Backstop criteria: IFRS 9 includes a rebuttable presumption that 30 days past due is an indicator of a SICR. The Group considers this to be an appropriate backstop measure and does not rebut this presumption.

144 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

As a general indicator, there is deemed to be a SICR if the following criteria are identified based on the Group’s quantitative modelling:

Real Estate: residential and commercial investment mortgages
* If external mortgage payments are in arrears in the last 12 months from the credit reference agencies. The external arrears information is statistically a lead indicator of financial difficulties and potential arrears on the loan book;
* if the loan account is forborne;
* if the loan enters on to amber watchlist;
* for short-term loans with a modelled PD: if the PD > 0.38% and the absolute movement in remaining lifetime PD is 1.5 or more times the estimate at origination;
* for term loans with a modelled PD since origination: if the PD > 0.38% and the absolute movement in remaining lifetime PD is two or more times the estimate at origination;
* for bullet repayment loans with a modelled PD since origination: if the PD > 0.38% and the absolute movement in remaining lifetime PD is 4 or more times the estimate at origination; or
* for all portfolios originated as slotted, or that have ever been slotted during its life: if the PD > 0.38% and the absolute movement in remaining lifetime PD is three or more times the estimate at origination.

Real Estate: residential owner-occupied mortgages
* All Real Estate exposures are graded under the modelled approach. If the modelled PD > 1.76% and the absolute movement in remaining lifetime PD is five or more times the estimate at origination;
* if the customer has ever been six or more payments in arrears on any fixed term account at the credit reference agency;
* if the customer has missed more than one mortgage payment in the last six months at the credit reference agency;
* if the customer has missed 2 or more mortgage payments; or
* if the loan account is forborne.

SME
* For accounts within the digital SME portfolio: if the absolute movement in the remaining lifetime PD is more than two times the estimate at origination;
* For accounts within the ABL portfolio: if the absolute movement in the remaining lifetime PD is more than three times the estimate at origination;
* if the customer has missed 2 or more payments where contractual repayments are expected;
* if the loan account is forborne; or
* if the loan enters onto amber watchlist.

Consumer Finance (excluding motor finance)
* Partner Finance: if the PD > 0.38% and the absolute movement in remaining lifetime PD is more than two times the estimate at origination;
* Personal loans: if the PD > 0.38% and the absolute movement in remaining lifetime PD is more than two times the estimate at origination;
* if there are county court judgements registered at the credit reference agencies of >= £150 in the last 12-months or > £1,000 in last three years;
* if the customer has missed 2 or more mortgage payments; or
* if the loan account is forborne.

Retail Mortgage Brands
* All exposures are graded under the modelled approach.
* If the modelled Bluestone PD > 0.76% and the absolute movement in remaining lifetime PD is five or more times the estimate at origination;
* If the modelled TML PD > 1.03% and the absolute movement in remaining lifetime PD is five or more times the estimate at origination;
* if the customer has missed 2 or more mortgage payments; or
* if the loan account is forborne.

145 Shawbrook Group plc | Annual Report and Accounts 2025

Stage 2 criteria are designed to be effective indicators of a significant deterioration in credit risk. As part of the bi-annual review of key impairment judgements, the Group undertakes detailed analysis to confirm that the Stage 2 criteria remain effective. This includes (but is not limited to):
* Criteria effectiveness: this includes the emergence to default for each Stage 2 criterion when compared to Stage 1, Stage 2 outflow as a percentage of Stage 2, percentage of new defaults that were in Stage 2 in the months prior to default, time in Stage 2 prior to default and percentage of the book in Stage 2 that are not progressing to default or curing.
* Stage 2 stability: this includes stability of inflows and outflows from Stage 2 and 3.
* Portfolio analysis: this includes the percentage of the portfolio that is in Stage 2 and not defaulted, the percentage of the Stage 2 transfer driven by Stage 2 criterion other than the backstops and back-testing of the defaulted accounts.

For low credit risk exposures, the Group is permitted to assume, without further analysis, that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the reporting date. The Group has opted not to apply this low credit risk exemption.

Determining whether a financial asset is in default or is credit-impaired

When there is objective evidence of impairment and the financial asset is considered to be in default, or otherwise credit-impaired, it is transferred to Stage 3. The Group’s definition of default is fully aligned with the definition of credit impaired. The Group applies a series of quantitative and qualitative criteria to determine if an account meets the definition of default.

Table showing movements in gross loan commitments:

	2025				2025	2024				2024
	Stage 1	Stage 2	Stage 3	POCI	Total	Stage 1	Stage 2	Stage 3	POCI	Total
	£m	£m	£m	£m	£m	£m	£m	£m	£m	£m
As at 1 January	1,343.7	54.2	16.5	-	1,414.4	1,208.1	57.1	15.6	-	1,280.8
Movements in gross loan commitments
Transfer from Stage 1	(9.2)	9.2	-	-	-	(46.7)	43.2	3.5	-	-
Transfer from Stage 2	12.3	(12.3)	-	-	-	0.7	(4.3)	3.6	-	-
Transfer from Stage 3	-	-	-	-	-	-	-	-	-	-
New loan commitments	168.6	1.4	-	-	170.0	498.2	2.3	-	-	500.5
Loan commitments derecognised	(372.5)	(30.6)	(16.1)	-	(419.2)	(339.4)	(29.5)	(3.3)	-	(372.2)
Net changes in commitments	313.9	(0.2)	0.3	-	314.0	22.8	(14.6)	(2.9)	-	5.3
Total movement in gross loan commitments	113.1	(32.5)	(15.8)	-	64.8	135.6	(2.9)	0.9	-	133.6
As at 31 December	1,456.8	21.7	0.7	-	1,479.2	1,343.7	54.2	16.5	-	1,414.4

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

143 Shawbrook Group plc | Annual Report and Accounts 2025These criteria include:
* when the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held);
* when the borrower is more than 90 days past due on any credit obligation to the Group; and
* when a credit obligation to the Group has gone past maturity or there is doubt that the exit strategy for the obligation is likely.

Inputs into the assessment of whether a financial asset is in default and their significance may vary over time to reflect changes in circumstances. The assessment of ECL on Stage 3 Commercial loans is performed on an individual basis. Significant management judgement is applied to determine the valuation of recoveries and timing of forecast cash flows on these loans in order to estimate the ECL. This includes the probability of individual recovery scenarios occurring.

Determining whether a financial asset is cured

The Group considers a financial asset to be ‘cured’, and therefore reclassifies back to a lower stage, when the assessed criteria that caused movement into the higher stage are no longer present. The following curing rules are applied by the Group:

For Stage 3 loans with forbearance arrangements in place: the loan must first successfully complete its 12-month curing period to be transferred to Stage 2. Following this, the loan must successfully complete a 24-month forbearance probation period before the forbearance classification can be discontinued and it can be returned to Stage 1.
For Stage 3 loans that have cured without forbearance: the loan must complete a 12-month probation in Stage 2 prior to returning to Stage 1.
For loans in Stage 2 as a result of arrears: the arrears must be cured for a period of 180 days prior to returning to Stage 1.
For loans in Stage 2 as a result of an increase in PD: a probation period of 90 days from entry must be completed prior to returning to Stage 1.
For Stage 2 loans with forbearance measures in place: the loan must complete a 24-month forbearance probation period before the forbearance classification can be discontinued and it can be returned to Stage 1.
For loan products such as revolving credit facilities: the loan must be in ‘amber watchlist’ (monitoring) for 180-days prior to returning to Stage 1 and, if it has forbearance measures in place, it must complete a 24-month forbearance probation period, throughout which it must remain in ‘amber watchlist’, before the forbearance classification can be discontinued and it can be returned to Stage 1.

The following table provides a breakdown of loans and advances to customers (including both loans measured at amortised cost and FVOCI) in Stage 2 and 3 to show the proportion that are in a cure period:

| | \multicolumn{2}{c}{Stage 2} | \multicolumn{2}{c}{Stage 3} |
| :--- | :---: | :---: | :---: | :---: |
| As at 31 December 2025 | Gross carrying amount £m | Loss allowance £m | Gross carrying amount £m | Loss allowance £m |
| Not in cure period | 1,241.7 | (33.1) | 588.6 | (89.8) |
| In cure period | 158.3 | (1.6) | 34.7 | (3.3) |
| Total | 1,400.0 | (34.7) | 623.3 | (93.1) |

| | \multicolumn{2}{c}{Stage 2} | \multicolumn{2}{c}{Stage 3} |
| :--- | :---: | :---: | :---: | :---: |
| As at 31 December 2024 | Gross carrying amount £m | Loss allowance £m | Gross carrying amount £m | Loss allowance £m |
| Not in cure period | 954.2 | (39.6) | 496.9 | (80.2) |
| In cure period | 133.9 | (1.8) | 35.8 | (4.4) |
| Total | 1,088.1 | (41.4) | 532.7 | (84.6) |

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 146 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Critical accounting estimates relating to the impairment of financial assets (audited)

The calculation of ECLs requires the Group to make a number of assumptions and estimates. The accuracy of the ECL calculation would be impacted by movements in the forward-looking economic scenarios used, or the probability weightings applied to these scenarios and by unanticipated changes to model assumptions that differ from actual outcomes. The key assumptions and estimates that, depending on a range of factors, could result in a material adjustment in the next financial year relate to the use of forward-looking information in the calculation of ECLs and the inputs and assumptions used in the ECL models. Additional information about both of these areas is set out below.

The impairment of cash and balances at central banks, loans and advances to banks, investment securities, assets held for sale and loan commitments is immaterial. As such, the area where the assumptions and estimates set out below could have the most significant impact specifically relates to the impairment of loans and advances to customers.

Forward-looking information

The Group incorporates forward-looking information into the calculation of ECLs and the assessment of whether there has been a SICR. The use of forward-looking information represents a key source of estimation uncertainty. The Group uses four forward-looking economic scenarios: a base case (central view), an alternative upside scenario, an alternative moderate downside scenario and an alternative severe downside scenario. Scenarios are developed to reflect the Group’s expectations based on information available at the time (which may differ to actual outcomes).

The central view used is informed by the HM Treasury Central forecast that is published quarterly and used as part of the Group’s corporate planning activity. Intra-quarter, the Group considers survey-based data and lead indicators to inform whether the central view continues to be appropriate. The Group focuses its view on the next five years as part of the narrative to the scenario but has rate paths that extend out beyond the planning period for the Group and up to 20 years. For the alternative scenarios, the Group is not large enough to have an internal economist and therefore works with a third party on the narrative of the scenarios and the rate paths to ensure that they are internally consistent using the UK Treasury model. The rate paths used in the scenarios are consistent with the core UK macroeconomic factors that are published by the Bank of England as part of the annual stress testing exercise. The nature and shape of the economic scenarios reflect the outlook of the UK economy.

As at 31 December 2025, the economic scenarios used reflected the Group’s expectations based on the information available at the time. Assumptions embedded in the scenarios reflect that the economy is expected to be 1.2% larger at 31 December 2026 than it was at 31 December 2025 boosted in the short term by government investment but offset by higher personal taxes that will be a drag on consumer expenditure. Inflation remains sticky and with increases in energy prices and the pass through of higher employment costs to customers means that inflation remains above target during 2026. The Bank of England reduced Bank Rate by 0.25% to 3.75% in December 2025 but there is sight to a potential future interest rate path that reduces to 3.25% at 31 December 2026. The peak in unemployment rate in the base case has risen to 5.2%. While most of the rise to date reflects more people looking for jobs rather than losing them, it appears that firms are still reducing costs. Recovery is also more prolonged, and the long-run equilibrium assumption is now 4.3% following a reflection on measures that make the UK’s labour market less flexible, and the recent large rise in the minimum wage for younger workers.

In the downside, the peak has been revised up to 6.2% given the compression with the base. But we still view 8% as consistent with a plausible but severe scenario. Affordability remains a key challenge for the housing market but is expected to be reflected in weaker activity than any significant fall in house prices. The downside scenario is a low inflation and low interest rate scenario. Consumers sharply reduce discretionary expenditure pushing the economy into recession and with inflation well below target Bank Rate, which reduces sharply in Q3 2026. In the severe downside scenario, a combination of shocks sees inflation rise sharply, hitting a peak of 7.1% in Q1 2026. The Bank of England raises interest rates to 6.25%, leading to a crash in asset prices. House prices fall 20% peak to trough, reflecting a return to fundamentals and forced selling. This reinforces the fall in spending through reduced household wealth and its indirect impact on confidence. The unemployment rate rises to 8.1%.

As at 31 December 2025, the economic scenarios used reflect that the UK economy grows by 1.2% in 2026. The scenarios reflect a path to lower interest rates in 2026 with Bank Rate expected to reduce to 3.25% in Q4 2026. The risk outlook is impacted by geopolitical tensions from the Middle East and Ukraine and the potential impacts of tariffs on trade particularly in the EU and China. The charts and tables that follow include longer term macroeconomic considerations used in the calculation of the ECL.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 147 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

A summary of the economic variables used in both reported years are detailed in the following charts and tables:

(Visual elements representing charts follow, which are described textually below as they appear in the raw input structure)

UK Real GDP (Indexed Dec 2025 = 100)

Time Period	Value (%)
Dec 21	Actual
Mar 22	Actual
Jun 22	Actual
Sep 22	Actual
Dec 22	Actual
Mar 23	Actual
Jun 23	Actual
Sep 23	Actual
Dec 23	Actual
Jun 24	Actual
Mar 24	Actual
Sep 24	Actual
Dec 24	Actual
Mar 25	Actual
Jun 25	Actual
Sep 25	Actual
Dec 25	Base
Mar 26	Base
Jun 26	Base
Sep 26	Base
Dec 26	Base
Mar 27	Base
Jun 27	Base
Sep 27	Base
Dec 27	Base
Mar 28	Base
Jun 28	Base
Sep 28	Base
Dec 28	Base
Mar 29	Base
Jun 29	Base
Sep 29	Base
Dec 29	Base
Mar 30	Base
Jun 30	Base
Sep 30	Base
Dec 30	Base

(Chart legend indicates: Actual, Base, Upside, Downside, Severe Downside)

UK Unemployment (%)

Time Period	Value (%)
Dec 21	3
Mar 22	4
Jun 22	5
Sep 22	6
Dec 22	7
Mar 23	8
Jun 23	9
Sep 23	...
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(Chart legend indicates: Actual, Base, Upside, Downside, Severe Downside)

UK Residential Property Prices (Indexed Dec 2025 = 100)

Time Period	Value (%)
Dec 21	...
Mar 22	...
Jun 22	...
Dec 22	...
Mar 23	...
Jun 23	...
Sep 23	...
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(Chart legend indicates: Value (%), Actual, Base, Upside, Downside, Severe Downside)22 Mar 23 Jun 23 Sep 23 Dec 23 Jun 24 Mar 24 Sep 24 Dec 24 Mar 25 Jun 25 Sep 25 Dec 25 Mar 26 Jun 26 Sep 26 Dec 26 Mar 27 Jun 27 Sep 27 Dec 27 Mar 28 Jun 28 Sep 28 Mar 29 Dec 28 Jun 29 Sep 29 Dec 29 Mar 30 Jun 30 Sep 30 Dec 30 80 90 100 110 120 130 Sep 22 Value (%) Base Upside Downside Severe Downside Actual

FINANCIAL STATEMENTS

CLIMATE REPORT

CORPORATE GOVERNANCE REPORT

RISK REPORT

STRATEGIC REPORT

148 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

As at 31 December 2025

	2026	2027	2028	2029	2030
GDP – % average change year-on-year
Base	1.2%	1.5%	1.6%	1.6%	1.6%
Upside	1.7%	2.3%	1.7%	1.8%	1.9%
Downside	(1.0%)	(0.8%)	2.2%	2.32%	2.2%
Severe downside	(2.0%)	(2.3%)	1.4%	2.1%	2.5%
Bank Rate (%)
Base	3.25%	2.75%	2.75%	2.75%	2.75%
Upside	3.25%	2.75%	2.75%	2.75%	2.75%
Downside	2.00%	2.50%	2.75%	2.75%	2.75%
Severe downside	5.75%	5.25%	4.25%	3.00%	2.75%
UK Unemployment (%)
Base	5.1%	4.8%	4.5%	4.3%	4.3%
Upside	4.1%	4.1%	4.1%	4.1%	4.1%
Downside	6.0%	6.0%	5.4%	5.0%	4.8%
Severe downside	6.9%	8.0%	7.7%	6.8%	5.8%
Consumer Price Index – % change year-on-year
Base	2.0%	2.0%	2.0%	2.0%	2.0%
Upside	1.4%	2.0%	2.0%	2.0%	2.0%
Downside	0.7%	1.8%	2.0%	2.0%	2.0%
Severe downside	6.3%	3.7%	3.2%	2.7%	2.0%
UK Residential House Price Index – % change year-on-year
Base	0.6%	1.3%	2.3%	2.8%	3.0%
Upside	4.9%	4.0%	3.9%	3.7%	3.9%
Downside	(7.8%)	(4.6%)	3.0%	3.6%	4.2%
Severe downside	(11.9%)	(9.0%)	3.6%	4.4%	4.3%

As at 31 December 2024

	2025	2026	2027	2028	2029
GDP – % average change year-on-year
Base	1.6%	1.5%	1.5%	1.6%	1.6%
Upside	2.2%	2.6%	1.5%	1.5%	1.8%
Downside	(0.3%)	(1.4%)	2.4%	2.9%	2.6%
Severe downside	(0.9%)	(2.8%)	1.4%	3.3%	3.0%
Bank Rate (%)
Base	4.00%	3.50%	2.75%	2.75%	2.75%
Upside	3.50%	3.00%	2.75%	2.75%	2.75%
Downside	2.00%	2.50%	2.75%	2.75%	2.75%
Severe downside	6.25%	5.25%	4.25%	3.00%	2.75%
UK Unemployment (%)
Base	4.3%	4.1%	4.1%	4.1%	4.1%
Upside	3.9%	3.8%	3.9%	3.9%	3.9%
Downside	5.7%	5.8%	5.0%	4.7%	4.6%
Severe downside	6.6%	8.0%	7.1%	6.3%	5.7%
Consumer Price Index – % change year-on-year
Base	2.3%	2.0%	2.0%	2.0%	2.0%
Upside	1.8%	1.8%	2.0%	2.0%	2.0%
Downside	0.8%	1.9%	2.0%	2.0%	2.0%
Severe downside	6.5%	2.8%	2.0%	2.0%	2.0%
UK Residential House Price Index – % change year-on-year
Base	0.0%	0.5%	1.3%	2.6%	3.0%
Upside	6.7%	4.0%	4.0%	3.3%	3.4%
Downside	(8.1%)	(4.7%)	3.9%	3.7%	4.0%
Severe downside	(12.1%)	(9.0%)	3.8%	4.1%	4.2%

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

149 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

The probability weightings applied to the above scenarios are another area of estimation uncertainty. They are generally set to ensure that there is an asymmetry in the ECL. The probability weightings applied to the four economic scenarios used are as follows:

	2025	2024
Base	50%	50%
Upside	10%	10%
Downside	30%	30%
Severe downside	10%	10%

In determining the probability weightings, the Group has regularly considered the nature and probability of the alternative downside scenarios. The forecasts have largely evolved as expected since 30 June 2025 and there has been no change in weighting approved for 2025. The Group undertakes a review of its economic scenarios and the probability weightings applied at least quarterly and more frequently if required. The results of this review are recommended to the Audit Committee and the Board prior to any changes being implemented.

The calculation of ECLs is sensitive to the assumptions made regarding the forward-looking scenarios used and the probability weightings applied. The Group performs sensitivity analysis to assess the impact on the loss allowance recognised on its loans and advances to customers. The following table shows the loss allowance as at 31 December 2025 for loans and advances to customers at amortised cost and FVOCI, and loan commitments based on the probability-weighted multiple economic scenarios, as recognised in the statement of financial position, and the impact on this loss allowance if each individual forward-looking scenario was weighted at 100%. In relation to the below analysis, in each of the scenarios, judgemental adjustments to modelled ECLs (PMAs, overlays, and individual impairments) are assumed to be constant and have been added back into each of the scenarios.

Probability – weighted loss allowance per statement of financial position | Increase/(decrease) in loss allowance if scenario weighted at 100%
| :--- | :--- | :--- | :--- | :--- | :--- |
| As at 31 December 2025 | Base £m | Upside £m | Downside £m | Severe downside £m |
| Real Estate | 54.4 | (6.7) | (12.8) | 8.3 | 21.3 |
| SME | 98.0 | (1.7) | (3.2) | 1.5 | 7.0 |
| Consumer Finance | 32.4 | (1.5) | (2.9) | 1.2 | 6.8 |
| Retail Mortgage Brands | 18.6 | (3.4) | (6.9) | 4.3 | 10.6 |
| Total | 203.4 | (13.3) | (25.8) | 15.3 | 45.7 |

Probability – weighted loss allowance per statement of financial position | Increase/(decrease) in loss allowance if scenario weighted at 100%
| :--- | :--- | :--- | :--- | :--- | :--- |
| As at 31 December 2024 | Base £m | Upside £m | Downside £m | Severe downside £m |
| Real Estate | 44.3 | (3.1) | (7.6) | 4.0 | 10.8 |
| SME | 76.8 | (1.6) | (3.4) | 1.7 | 6.3 |
| Consumer Finance | 33.9 | (0.7) | (1.2) | 0.7 | 2.6 |
| Retail Mortgage Brands | 17.0 | (1.2) | (2.5) | 1.5 | 3.9 |
| Total | 172.0 | (6.6) | (14.7) | 7.9 | 23.6 |

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

150 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Model estimations

ECL calculations are outputs of complex models with a number of underlying assumptions regarding the choice of variable inputs and their interdependencies. The Group considers the key assumptions impacting the ECL calculation to be within the probability of default (PD) and loss given default (LGD). Sensitivity analysis is performed by the Group to assess the impact of changes in these key assumptions on the loss allowance recognised on loans and advances to customers measured at amortised cost, FVOCI and loan commitments. A summary of the key assumptions and sensitivity analysis as at 31 December 2025 is provided in the following table. These represent reasonably possible outcomes within the next financial year for loans and advances to customers measured at amortised cost and FVOCI.

Assumption	Sensitivity analysis
PD	• A 10% increase in the PD for each customer would increase the total loss allowance on loans and advances to customers at FVOCI and amortised cost by £7.6 million (2024: £7.6 million).
LGD: Real Estate and Retail Mortgages Brands	• Property value • A 10% absolute reduction in property prices would increase the loss allowance on loans and advances to customers at amortised cost in the Real Estate segments by £11.4 million (2024: 11.7 million). • A 10% absolute reduction in property prices would increase the loss allowance on loans and advances to customers at FVOCI and amortised cost in Retail Mortgage Brands segments by £4.9 million (2024: £3.9 million).
	• Forced sale discount • A 5% absolute increase in the forced sale discount would increase the loss allowance on loans and advances to customers at amortised cost in the Real Estate segments by £7.6 million (2024: £8.3 million). • A 5% absolute increase in the forced sale discount would increase the loss allowance on loans and advances to customers at FVOCI and amortised cost in Retail Mortgage Brands segments by £3.2 million (2024: £2.6 million).
LGD: SME	• Absolute LGD value • A 5% absolute increase in the LGD applied would increase the total loss allowance on loans and advances to customers at amortised cost in SME by £7.7 million (2024: £6.2 million).
LGD: Consumer Finance	• Loss given charge-off • A 10% absolute increase in the loss given charge-off would increase the loss allowance on loans and advances to customers at amortised cost in Consumer Finance by £4.6 million (2024: 3.5 million).

Exposure to credit risk (audited)

The following table presents the Group’s maximum exposure to credit risk before taking into account any collateral held or other credit risk enhancements (unless such enhancements meet accounting offsetting enhancements). For financial assets, the maximum exposure to credit risk is the carrying amount. For the purposes of this disclosure, fair value adjustments for hedged risk recognised on loans and advances to customers are not included. For loan commitments, the maximum exposure to credit risk is the full amount of the committed facilities.

	2025 £m	2024 £m
Cash and balances at central banks	1,924.5	2,244.7
Loans and advances to banks	246.8	304.4
Loans and advances to customers at amortised cost	13,625.8	11,647.6
Loans and advances to customers at FVOCI	4,046.0	3,601.1
Investment securities at amortised cost	1,979.9	1,513.6
Investment securities at FVOCI	178.1	-
Derivative financial assets	87.5	227.1
Loan commitments	1,479.2	1,414.4
Maximum exposure to credit risk	23,567.8	20,952.9

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

151 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

To assess exposure to credit risk, the Group has developed a credit risk grading system, as set out in the table below, which maps to a common master grading scale. This credit risk grading system is applied to the Group’s financial assets for which a loss allowance is recognised, together with loan commitments. The grading system consists of 25 grades on a master grading scale, reflecting varying degrees of risk and default. Responsibility for setting risk grades lies with the approval point for the risk or committee, as appropriate. Risk grades are subject to regular reviews by the Group’s risk function. The grading system remains unchanged compared to that used in the year ended 31 December 2024.

Credit risk grading

Master grading scale	PD range
Low risk 1-10	<=0.38%
Medium risk 11-15	>0.38% to <= 1.76%
High risk 16-25	>1.76%

The following information provides an analysis of the Group’s exposures to credit risk by credit risk grade and year-end stage classification.The credit risk grade refers to the grades defined in the preceding table. The year-end stage classification refers to the IFRS 9 stage, as defined on page 131. It should be noted that the credit risk grading is a point-in-time assessment, whereas the year-end stage classification is determined based on the change in credit risk since initial recognition. As such, for non-credit impaired financial assets, there is not a direct relationship between the credit risk grade and stage classification. For cash and balances at central banks, loans and advances to banks and investment securities, all exposures are graded as low risk and are in Stage 1 in both reported years. For loans and advances to customers at amortised cost, FVOCI, and loan commitments, analysis is provided in the following tables.

Loans and advances to customers at amortised cost and at FVOCI

	2025			£m	2024			£m
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Total
Low risk	1,410.8	359.0	0.3	1,770.1	1,493.0	257.2	3.5	1,753.7
Medium risk	8,632.4	101.6	-	8,734.0	6,218.0	123.1	3.6	6,344.7
High risk	5,053.0	909.7	598.8	6,561.5	3,410.8	836.7	539.1	4,786.6
Ungraded	781.6	11.7	2.3	795.6	2,463.6	36.5	23.0	2,523.1
Gross carrying amount	15,877.8	1,382.0	601.4	17,861.2	13,585.4	1,253.5	569.2	15,408.1

Loan commitments

	2025			£m	2024			£m
	Stage 1	Stage 2	Stage 3	Total	Stage 1	Stage 2	Stage 3	Total
Low risk	1,077.3	-	-	1,077.3	764.6	-	1.0	765.6
Medium risk	227.3	20.3	-	247.6	346.9	-	0.1	347.0
High risk	152.2	1.4	0.7	154.3	232.2	54.2	15.4	301.8
Total amount committed	1,456.8	21.7	0.7	1,479.2	1,343.7	54.2	16.5	1,414.4

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Principal risks: Credit risk

Concentrations of credit risk (audited)

A concentration of credit risk exists when a number of counterparties or collateral are located in a geographical region or are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions. The Group monitors concentrations of credit risk and implements limits on concentrations where necessary in order to mitigate and control credit concentration risk. Additional analysis regarding concentrations of credit risk in relation to loans and advances to customers, the principal source of credit risk for the Group, is provided below. Amounts included in these tables present the combined carrying amount of the Group’s loans and advances to customers at amortised cost, and at FVOCI.

Concentrations of credit risk by geographic location

The following tables analyse the combined carrying amount of loans and advances to customers at amortised cost and FVOCI by lending segment and geographic location. The Group is predominantly a UK lender and continues to maintain a geographically diverse portfolio spanning across the UK. Outside of the UK, a small proportion of loans are attributable to counterparties domiciled in the Channel Islands, representing 0.5% of total loans (2024: 0.2% of total loans).

Commercial Retail
As at 31 December 2025

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
East Anglia	231.6	125.7	42.8	166.7	566.8
East Midlands	584.1	257.8	70.5	303.2	1,215.6
Greater London	2,191.6	1,290.4	149.9	1,210.0	4,841.9
Guernsey/Jersey/Isle of Man	-	53.7	-	-	53.7
North East	245.9	62.4	47.3	143.4	499.0
North West	974.0	659.3	131.7	544.0	2,309.0
Northern Ireland	1.5	3.9	2.0	-	7.4
Scotland	412.4	84.3	76.2	307.5	880.4
South East	1,354.0	663.5	201.4	971.2	3,190.1
South West	474.2	492.8	66.1	261.7	1,294.8
Wales	192.1	108.7	47.4	140.2	488.4
West Midlands	513.1	294.2	103.4	356.0	1,266.7
Yorkshire/Humberside	448.4	212.3	83.9	313.4	1,058.0
Carrying amount $\text{^1}$	7,622.9	4,309.0	1,022.6	4,717.3	17,671.8

Commercial Retail
As at 31 December 2024

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
East Anglia	182.6	110.6	33.5	157.7	484.4
East Midlands	404.0	177.8	59.8	278.0	919.6
Greater London	2,496.4	876.3	129.6	1,169.8	4,672.1
Guernsey/Jersey/Isle of Man	10.8	21.9	-	-	32.7
North East	127.3	26.8	39.4	122.9	316.4
North West	709.3	403.5	108.0	472.3	1,693.1
Northern Ireland	8.9	0.5	3.2	1.4	14.0
Scotland	310.1	35.0	76.6	292.9	714.6
South East	1,276.7	508.1	179.2	948.8	2,912.8
South West	410.6	413.7	59.4	259.8	1,143.5
Wales	149.6	63.8	38.1	132.4	383.9
West Midlands	430.8	244.7	84.3	335.5	1,095.3
Yorkshire/Humberside	314.9	200.2	70.6	280.6	866.3
Carrying amount $\text{^1}$	6,832.0	3,082.9	881.7	4,452.1	15,248.7

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$\text{^1}$ Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.

Concentrations of credit risk by loan size

The following tables present an analysis of the combined carrying amount of loans and advances to customers at amortised cost and at FVOCI by lending segment and loan size. The Group continues to manage concentration risk through product caps, restricting large exposures to higher credit graded customers, and through specific risk appetite limits on exposure to larger counterparties. Loans with a carrying amount exceeding £25.0 million represents 3.8% of total loans (2024: 1.5% of total loans), whilst 59.4% of total loans have a carrying amount of less than £1.0 million (2024: 63.2% of total loans).

Commercial Retail
As at 31 December 2025

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
0 – £50k	88.1	46.3	722.7	53.4	910.5
£50k – £100k	277.3	67.6	125.4	497.2	967.5
£100k – £250k	1,086.5	148.8	145.8	2,132.6	3,513.7
£250k – £500k	1,584.5	146.4	18.5	1,557.2	3,306.6
£500k – £1.0 million	1,166.0	238.2	4.9	404.7	1,813.8
£1.0 million – £2.5 million	1,491.1	584.0	5.3	66.8	2,147.2
£2.5 million – £5.0 million	707.0	719.7	-	5.4	1,432.1
£5.0 million – £10.0 million	491.9	718.3	-	-	1,210.2
£10.0 million – £25.0 million	563.3	1,135.2	-	-	1,698.5
> £25.0 million	167.2	504.5	-	-	671.7
Carrying amount $\text{^1}$	7,622.9	4,309.0	1,022.6	4,717.3	17,671.8

Commercial Retail
As at 31 December 2024

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
0 – £50k	105.8	36.5	663.1	45.7	851.1
£50k – £100k	304.5	62.4	100.4	451.5	918.8
£100k – £250k	1,041.8	108.7	98.5	2,089.4	3,338.4
£250k – £500k	1,379.8	113.1	17.8	1,429.9	2,940.6
£500k – £1.0 million	1,040.8	184.3	1.9	368.1	1,595.1
£1.0 million – £2.5 million	1,330.6	443.6	-	62.0	1,836.2
£2.5 million – £5.0 million	665.6	493.6	-	5.5	1,164.7
£5.0 million – £10.0 million	441.8	558.9	-	-	1,000.7
£10.0 million – £25.0 million	436.0	939.5	-	-	1,375.5
> £25.0 million	85.3	142.3	-	-	227.6
Carrying amount $\text{^1}$	6,832.0	3,082.9	881.7	4,452.1	15,248.7

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$\text{^1}$ Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.

Concentrations of credit risk by industry

The following tables present an analysis of the combined carrying amount of loans and advances to customers at amortised cost and at FVOCI by lending segment and industry. The industry segmentation of the Group’s loans and advances to customers remains focused on mortgages and real estate activities, which represents 72.2% of total loans (2024: 72.5% of total loans).

Commercial Retail
As at 31 December 2025

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Agriculture, forestry and fishing	0.4	2.8	0.1	-	3.3
Manufacturing	7.1	276.6	4.2	-	287.9
Transport, storage and utilities	15.3	422.6	10.7	-	448.6
Construction	604.1	705.1	14.4	-	1,323.6
Wholesale and retail trade	20.3	261.4	16.2	-	297.9
Real estate activities	5,284.7	945.0	31.5	1,635.7	7,896.9
Financial and insurance activities	49.5	900.6	3.3	-	953.4
Services and other	127.0	794.7	16.3	1.8	939.8
Personal: Mortgages	1,357.3	-	-	3,079.8	4,437.1
Other	157.2	0.2	925.9	-	1,083.3
Carrying amount $\text{^1}$	7,622.9	4,309.0	1,022.6	4,717.3	17,671.8

Commercial Retail
As at 31 December 2024

	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m	Total £m
Agriculture, forestry and fishing	0.4	3.2	0.5	-	4.1
Manufacturing	8.1	163.1	3.0	-	174.2
Transport, storage and utilities	16.2	409.4	8.1	0.2	433.9
Construction	577.9	602.8	11.9	-	1,192.6
Wholesale and retail trade	14.0	234.8	15.2	-	264.0
Real estate activities	4,509.5	688.0	22.0	1,379.9	6,599.4
Financial and insurance activities	40.1	698.3	2.8	-	741.2
Services and other	118.0	276.5	12.9	1.4	408.8
Personal: Mortgages	1,332.1	-	-	3,070.6	4,402.7
Other	215.7	6.8	805.3	-	1,027.8
Carrying amount $\text{^1}$	6,832.0	3,082.9	881.7	4,452.1	15,248.7

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$\text{^1}$ Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.

Collateral held and other credit enhancements (audited)

As a key method of mitigating credit risk, the Group holds collateral and other credit enhancements against certain of its financial assets. The Group operates internal policies governing the acceptability of specific classes of collateral or credit risk mitigation. The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. The Group’s policies regarding obtaining collateral have not significantly changed during the year and there has been no significant change in the overall quality of the collateral held by the Group since the prior year.Derivative financial assets All new eligible derivative transactions with wholesale counterparties are centrally cleared with cash posted as collateral to further mitigate credit risk. Residual and non-eligible trades are collateralised under a Credit Support Annex in conjunction with the ISDA Master Agreement.

Non-derivative financial assets For loans and advances to banks and investment securities, collateral is generally not held. However, at times, certain securities are held as part of reverse repurchase agreements. For loans and advances to customers, the Group obtains collateral for certain of its exposures. The types of collateral obtained is dependent upon the loan type:

Loan receivables: amounts may be secured by a first or second charge over commercial and residential property, or against debt receivables or other assets such as asset backed loans and invoice receivables. Certain loans may also be non-asset backed, for example loans secured by virtue of a guarantor, government guarantee (e.g. loans offered under the Coronavirus Business Interruption Loan Scheme and Recovery Loan Scheme) or business covenant.
Finance lease receivables and instalment credit receivables: amounts are secured against the underlying asset, which can be repossessed in the event of a default.

Collateral held in relation to secured loans is capped, after taking into account the first charge balance, at the carrying amount of the loan. The following tables set out the security profile of the Group’s loans and advances to customers by lending segment. Amounts included in the tables present the combined carrying amount of loans and advances to customers at amortised cost and at FVOCI. Other secured loans include loans secured by other assets and non-asset backed loans.

Commercial	Retail
As at 31 December 2025	Real Estate £m	SME £m	Consumer Finance £m	Retail Mortgage Brands £m
Secured on commercial and residential property	7,622.9	842.4	-	4,717.3
Secured on debt receivables	-	1,968.6	-	-
Secured on finance lease assets	-	21.6	-	-
Secured on instalment credit assets	-	473.3	356.2	-
Other secured loans	-	944.0	293.2	-
Total secured loans and advances to customers	7,622.9	4,249.9	649.4	4,717.3
Unsecured loan receivables	-	59.1	373.2	-
Carrying amount 1	7,622.9	4,309.0	1,022.6	4,717.3

Commercial	Retail
As at 31 December 2024	Real Estate £m	SME £m	Consumer Finance 2 £m	Retail Mortgage Brands £m
Secured on commercial and residential property	6,832.0	703.3	-	4,452.1
Secured on debt receivables	-	1,573.0	-	-
Secured on finance lease assets	-	21.9	-	-
Secured on instalment credit assets	-	474.2	269.0	-
Other secured loans 2	-	294.7	183.9	-
Total secured loans and advances to customers	6,832.0	3,067.1	452.9	4,452.1
Unsecured loan receivables	-	15.8	428.8	-
Carrying amount 1	6,832.0	3,082.9	881.7	4,452.1

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 156 Shawbrook Group plc | Annual Report and Accounts 2025
1 Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.
2 £183.9m of consumer finance balances previously classified as unsecured in 2024 should have been disclosed as other secured loans. The comparative has been restated accordingly.

Principal risks: Credit risk

Credit-impaired financial assets The Group closely monitors collateral held for financial assets considered to be credit-impaired (Stage 3 and POCI), reflecting the increased likelihood that the Group may need to take possession of such collateral to mitigate credit losses. The only asset categories with credit-impaired assets are loans and advances to customers (including those measured at amortised cost and at FVOCI). The below tables provide further information about the credit-impaired loans at amortised cost and the related collateral held by lending segment. The fair value of collateral is capped at the carrying amount of the loan.

	Gross carrying amount	Loss allowance	Carrying amount	Fair value of collateral held
£m As at 31 December 2025	Secured £m	Unsecured £m	Secured £m	Unsecured £m
Real Estate	216.2	-	(38.3)	-
SME	187.6	-	(49.5)	-
Consumer Finance	10.4	5.7	(2.3)	(4.8)
Retail Mortgage Brands	95.1	-	(3.2)	-
Total credit-impaired loans at amortised cost	509.3	5.7	(93.3)	(4.8)

	Gross carrying amount	Loss allowance	Carrying amount	Fair value of collateral held
£m As at 31 December 2024	Secured £m	Unsecured £m	Secured £m	Unsecured £m
Real Estate	198.5	-	(28.0)	-
SME	192.3	-	(40.2)	-
Consumer Finance	10.2	8.6	(0.8)	(5.7)
Retail Mortgage Brands	97.2	-	(3.3)	-
Total credit-impaired loans at amortised cost	498.2	8.6	(72.3)	(5.7)

Credit-impaired loans at FVOCI have a carrying amount of £86.4 million (2024: £62.4 million). These loans are fully secured with the fair value of collateral deemed to be at least equal to the carrying amount. The following tables show the distribution of loan-to-value ratios for the Group’s credit-impaired mortgage assets held in the Real Estate and Retail Mortgage Brands lending segments. The loan-to-value is calculated as the ratio of the customer loan balance to the value of the collateral at origination. Amounts in the following tables reflect the carrying amount of the credit-impaired mortgage assets.

As at 31 December 2025	Credit-impaired mortgage assets at amortised cost	Credit-impaired mortgage assets at FVOCI
Real Estate £m	Retail Mortgage Brands £m	Retail Mortgage Brands £m
Loan-to-value ratio
Less than 50%	3.6	3.6
50-70%	59.1	24.7
71-90%	115.1	63.6
91-100%	0.1	-
More than 100%	-	-
Total credit-impaired mortgage assets	177.9	91.9

As at 31 December 2024	Credit-impaired mortgage assets at amortised cost	Credit-impaired mortgage assets at FVOCI
Real Estate £m	Retail Mortgage Brands £m	Retail Mortgage Brands £m
Loan-to-value ratio
Less than 50%	9.5	3.5
50-70%	62.4	29.1
71-90%	98.4	61.3
91-100%	0.2	-
More than 100%	-	-
Total credit-impaired mortgage assets	170.5	93.9

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 157 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Credit risk

Repossessions The Group’s policy is to pursue the realisation of collateral in an orderly manner. As at 31 December 2025, the Group held 84 repossessed properties with a carrying amount of £92.1 million (2024: 52 repossessed properties with carrying amount of £64.1 million).

Forbearance (audited) The Group maintains a forbearance policy for the servicing and management of customers who are in financial difficulty and require some form of concession to be granted, even if this concession entails a loss for the Group. A concession may be either of the following:

modification of previous terms and conditions of an agreement, which the borrower is considered unable to comply with due to its financial difficulties, to allow for sufficient debt service ability, that would not have been granted had the borrower not been in financial difficulty; or
total or partial refinancing of an agreement that would not have been granted had the borrower not been in financial difficulty.

Forbearance in relation to an exposure can be temporary or permanent depending on the circumstances, progress on financial rehabilitation and the detail of the concession(s) agreed. The Group excludes short-term repayment plans that are up to three months in duration from its definition of forborne loans. The Group applies the European Banking Authority (EBA) Implementing Technical Standards on forbearance and non-performing exposures as defined in Annex V of Commission Implementing Regulation (EU) 2015/227. Under these standards, loans are classified as performing or non-performing in accordance with the EBA rules, as adopted by the PRA.

Principal risks: Credit risk. The EBA standards stipulate that a forbearance classification can be discontinued when all of the following conditions have been met:

the exposure is considered to be performing, including where it has been reclassified from the non-performing category, after an analysis of the financial condition of the debtor showed that it no longer met the conditions to be considered as non-performing;
a minimum two-year probation period has passed from the date the forborne exposure was considered to be performing;
regular payments of more than an insignificant aggregate amount of principal or interest have been made during at least half of the probation period; and
none of the exposures to the debtor is more than 30 days past due at the end of the probation period.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 158 Shawbrook Group plc | Annual Report and Accounts 2025
1 Excludes fair value adjustments for hedged risk recognised on loans and advances to customers.

Principal risks: Credit risk

The following tables provide a summary of the Group’s forborne loans and advances to customers by lending segment and year-end stage classification. This includes loans measured at amortised cost and those measured at FVOCI. For FVOCI loans, the gross carrying amount column represents the carrying amount of these loans (i.e. including fair value adjustments). The increase in forbearance reflects the growth in the loan portfolio and the Group’s proactive approach.# FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

159 Shawbrook Group plc | Annual Report and Accounts 2025

Managing market risk

The Group’s treasury function is responsible for managing the Group’s exposure to all aspects of market risk within the limits set out in the Group’s Market Risk Policy, with the overall objective of managing market risk in line with the Group’s risk appetite. The Board approves the Group Market Risk Policy and the Asset and Liability Committee approves the Group’s treasury policies and receives regular reports on all aspects of market risk exposure. Additional details about managing the specific forms of market risk that the Group is exposed to are provided in the following section.

Exposure to market risk (audited)

The forms of market risk that the Group is exposed to can be further divided into foreign exchange risk, basis risk and interest rate risk. Additional details regarding each of these is provided in the following sections.

Foreign exchange risk

Foreign exchange risk is the risk that the value of, or net income arising from, assets and liabilities changes as a result of movements in exchange rates. The Group has low levels of foreign exchange risk that is managed by appropriate financial instruments including derivatives. The tables below set out the Group’s exposure to foreign exchange risk:

As at 31 December 2025

	Euros £m	US Dollars £m	Australian Dollars £m
Loans and advances to banks	4.2	7.8	0.2
Loans and advances to customers	6.9	19.1	-
FX swap	(10.2)	(26.3)	(0.2)
Net exposure	0.9	0.6	-

As at 31 December 2024

	Euros £m	US Dollars £m	Australian Dollars £m
Loans and advances to banks	4.5	3.7	0.2
Loans and advances to customers	(1.5)	20.0	-
FX swap ¹	(3.7)	(23.5)	(0.2)
Net exposure	(0.7)	0.2	-

As illustrated by the preceding table, there are no currencies to which the Group has a significant exposure. Accordingly, foreign exchange sensitivity analysis is not provided, as the impact of foreign exchange movements, particularly after taking into account the impact of derivative financial instruments used to manage such risk, is not material.

Basis risk

Basis risk is the risk of loss arising from changes in the relationship between interest rates that have similar but not identical characteristics (for example, SONIA and the Bank of England Bank rate). This is monitored closely and regularly reported to the ALCo. This risk is managed within established risk limits by matching and, where appropriate and necessary, through the use of derivatives and via other control procedures.

Interest rate risk

Interest rate risk is the risk of loss arising from adverse movements in market interest rates. Interest rate risk arises from the loan and savings products that the Group offers. This risk is managed through the use of appropriate financial instruments, including derivatives, with established risk limits, reporting lines, mandates and other control procedures. The Group’s forecasts and plans take in to account the risk of interest rate changes and are prepared and stressed accordingly in line with PRA guidance.

Principal risks: Market, liquidity and capital risk

In the following sections, information under headings marked as ‘audited’ is covered by the Independent Auditor’s Report. All other information is unaudited. The ‘market, liquidity and capital’ principal risk comprises three components, each with specific disclosure requirements attached to them. As such, each of the components are presented in turn.

Market risk

This section specifically provides information about:
* Managing market risk
* Exposure to market risk
* Metrics used in assessing and monitoring market risk

160 Shawbrook Group plc | Annual Report and Accounts 2025

¹ Prior year comparative has been restated to show the impact of the FX swap.

Principal risks: Market, liquidity and capital risk

As at 31 December 2025

	Within 3 months £m	3 months but <6 months £m	6 months but <1 year £m	1 year but <5 years £m	>5 years £m	Non-interest bearing £m	Total £m
Assets
Cash and balances at central banks	1,921.7	-	-	-	-	2.8	1,924.5
Loans and advances to banks	192.3	-	-	-	-	54.5	246.8
Loans and advances to customers	5,499.3	563.2	1,610.0	9,727.0	562.7	(192.1)	17,770.1
Investment securities	2,148.7	-	-	-	-	9.3	2,158.0
Derivative financial assets	-	-	-	-	-	87.5	87.5
Non-financial assets	1.4	1.5	3.0	16.1	2.7	257.3	282.0
Total assets	9,763.4	564.7	1,613.0	9,743.1	565.4	219.3	22,468.9
Equity and liabilities
Amounts due to banks	(1,411.4)	-	-	-	-	(19.2)	(1,430.6)
Customer deposits	(9,680.3)	(2,247.1)	(3,177.7)	(2,995.0)	(15.3)	(238.1)	(18,353.5)
Derivative financial liabilities	-	-	-	-	-	(93.2)	(93.2)
Debt securities in issue	(411.3)	-	-	-	-	(1.0)	(412.3)
Lease liabilities	-	-	-	-	-	(24.8)	(24.8)
Subordinated debt liability	-	-	-	(165.0)	-	(6.5)	(171.5)
Non-financial liabilities	-	-	-	-	-	(140.5)	(140.5)
Equity	(56.5)	(65.0)	(156.0)	(1,351.3)	(190.0)	(23.7)	(1,842.5)
Total equity and liabilities	(11,559.5)	(2,312.1)	(3,333.7)	(4,511.3)	(205.3)	(547.0)	(22,468.9)
Notional values of derivatives	1,856.9	1,559.2	1,797.2	(4,895.3)	(318.0)	-	-
Interest rate sensitivity gap	60.8	(188.2)	76.5	336.5	42.1	(327.7)	-
Cumulative gap	60.8	(127.4)	(50.9)	285.6	327.7	-	-

Metrics used in assessing and monitoring market risk (audited)

The following tables provide a summary of the Group’s interest rate gap position. Items are allocated to time bands by reference to the earlier of the next contractual interest rate change and the maturity date. A behavioural assumption is applied to loans and advances to customers and customer deposits. Equity of the Group is matched against originated long-term fixed loans and the equity is spread across the time bands to match the profile of these assets.

161 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Market, liquidity and capital risk

As at 31 December 2024

	Within 3 months £m	3 months but <6 months £m	6 months but <1 year £m	1 year but <5 years £m	>5 years £m	Non-interest bearing £m	Total £m
Assets
Cash and balances at central banks	2,244.7	-	-	-	-	-	2,244.7
Loans and advances to banks	304.4	-	-	-	-	-	304.4
Loans and advances to customers	4,284.0	306.0	1,128.0	9,280.0	502.9	(324.3)	15,176.6
Investment securities	1,503.7	-	-	-	-	9.9	1,513.6
Derivative financial assets	-	-	-	-	-	227.1	227.1
Non-financial assets	1.7	1.4	3.0	12.4	0.9	236.9	256.3
Total assets	8,338.5	307.4	1,131.0	9,292.4	503.8	149.6	19,722.7
Equity and liabilities
Amounts due to banks	(1,359.9)	-	-	-	-	(16.2)	(1,376.1)
Customer deposits	(7,970.4)	(2,283.6)	(2,850.6)	(2,415.7)	(50.8)	(232.9)	(15,804.0)
Derivative financial liabilities	-	-	-	-	-	(117.1)	(117.1)
Debt securities in issue	(542.3)	-	-	-	-	(6.9)	(549.2)
Lease liabilities	-	-	-	-	-	(25.6)	(25.6)
Subordinated debt liability	-	-	(76.5)	(90.0)	-	(4.6)	(171.1)
Non-financial liabilities	-	-	-	-	-	(97.3)	(97.3)
Equity	(42.0)	(65.0)	(52.0)	(1,165.0)	(105.0)	(153.3)	(1,582.3)
Total equity and liabilities	(9,914.6)	(2,348.6)	(2,979.1)	(3,670.7)	(155.8)	(653.9)	(19,722.7)
Notional values of derivatives	2,296.4	1,745.6	1,451.0	(5,166.8)	(326.2)	-	-
Interest rate sensitivity gap	720.3	(295.6)	(397.1)	454.9	21.8	(504.3)	-
Cumulative gap	720.3	424.7	27.6	482.5	504.3	-	-

The Group considers a parallel 250 basis points (bps) movement in interest rates to be appropriate for scenario testing given the current economic outlook and industry expectations. The Group estimates that a +/- 250 bps movement in interest rates paid/received would impact the economic value as follows:
* + 250 bps: £3.2 million negative (2024: £4.7 million positive).
* - 250 bps: £16.4 million negative (2024: £35.0 million negative).

Gross amount of forborne loans Loss allowance on forborne loans As at 31 December 2025

	Number of loans	Gross amount of forborne loans £m	Loss allowance on forborne loans £m	Coverage %
	Performing	Non- performing	Total	Performing
Real Estate
Stage 2	94	5.6	0.5	6.1
Stage 3	296	-	17.1	17.1
Real Estate total	390	5.6	17.6	23.2
SME
Stage 2	17	85.4	-	85.4
Stage 3	86	-	65.9	65.9
SME total	103	85.4	65.9	151.3
Consumer Finance
Stage 2	426	0.6	2.7	3.3
Stage 3	592	-	2.9	2.9
Consumer Finance total	1,018	0.6	5.6	6.2
Retail Mortgage Brands
Stage 2	254	16.1	25.8	41.9
Stage 3	672	-	134.9	134.9
Retail Mortgage Brands total	926	16.1	160.7	176.8
Total Stage 2	791	107.7	29.0	136.7
Stage 3	1,646	-	220.8	220.8
Total	2,437	107.7	249.8	357.5

Gross amount of forborne loans Loss allowance on forborne loans As at 31 December 2024

	Number of loans	Gross amount of forborne loans £m	Loss allowance on forborne loans £m	Coverage %
	Performing	Non- performing	Total	Performing
Real Estate
Stage 2	91	5.7	2.6	8.3
Stage 3	468	-	40.5	40.5
Real Estate total	559	5.7	43.1	48.8
SME
Stage 2	59	54.5	-	54.5
Stage 3	105	-	44.5	44.5
SME total	164	54.5	44.5	99.0
Consumer Finance
Stage 2	296	1.2	1.1	2.3
Stage 3	606	-	2.6	2.6
Consumer Finance total	902	1.2	3.7	4.9
Retail Mortgage Brands
Stage 2	111	11.9	6.2	18.1
Stage 3	392	-	75.7	75.7
Retail Mortgage Brands total	503	11.9	81.9	93.8
Total Stage 2	557	73.3	9.9	83.2
Stage 3	1,571	-	163.3	163.3
Total	2,128	73.3	173.2	246.5

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 160 Shawbrook Group plc | Annual Report and Accounts 2025In addition, the effect of the same two interest rate shocks is applied to the statement of financial position at year end, to determine how net interest income may change on an annualised basis for one year (earnings at risk), as follows:
* + 250 bps: £57.2 million positive (2024: £58.1 million positive).
* - 250 bps £9.5 million negative (2024: £18.6 million negative).

In preparing the above, the Group makes certain assumptions (including floors where appropriate) consistent with expected and contractual repricing behaviour as well as behavioural repayment profiles of the underlying statement of financial position items in relation to the specific scenarios. In addition, equity is allocated to the specific reprice buckets consistent with the Group’s reserves investment strategy. The results also include the impact of hedge transactions.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 162 Shawbrook Group plc | Annual Report and Accounts 2025
Principal risks: Market, liquidity and capital risk

Liquidity risk

This section specifically provides information about:
* Managing liquidity risk
* Maturity analysis for financial assets and liabilities
* Metrics used in assessing and monitoring liquidity risk

Managing liquidity risk

The Group has developed comprehensive funding and liquidity policies to ensure that it maintains sufficient liquid assets to be able to meet all of its financial obligations and maintain public confidence. The Group’s treasury function is responsible for the day-to-day management of the Group’s liquidity and wholesale funding. The Board sets limits over the level, composition and maturity of liquidity and deposit funding balances, which are reviewed at least annually. Compliance with these limits is monitored on a daily basis by finance and risk personnel that are independent of the treasury function.

Stress testing is a major component of liquidity risk management, and the Group has developed a diverse selection of scenarios covering a range of market-wide and firm-specific factors. The Group performs liquidity stress tests to ensure that the Group maintains adequate liquidity for business purposes even under stressed conditions. The Group’s core liquidity stress test is performed on a daily basis by the finance function, with a further series of liquidity stress tests performed on a monthly basis that are formally reported to the ALCo and the Board. A comprehensive review of the Group’s Liquidity Risk Framework, including stress testing, is conducted at least annually through the ILAAP. The ALCo, Risk Committee and the Board is heavily involved in the full ILAAP life cycle, with all challenges clearly documented. The ILAAP is used to demonstrate the Group’s compliance with the PRA’s Overall Liquidity Adequacy Rule and assess funding and liquidity risk across the actual and budgeted statement of financial position.

Maturity analysis for financial assets and liabilities (audited)

The following tables segment the carrying amount of the Group’s financial assets and liabilities based on the final contractual maturity date. In practice, the Group’s assets and liabilities may be repaid, or otherwise mature, earlier or later than implied by their contractual tenor. Accordingly, this information is not relied upon by the Group in managing liquidity. In compiling these tables, the following points should be noted:
* The ‘less than 1 month’ maturity group includes amounts repayable on demand;
* For loans and advances to customers and customer deposits, the ‘more than 5 years’ maturity group also includes the fair value adjustment for hedged risk;
* Accrued interest is assigned to the maturity group based on when it is scheduled to be paid.

As at 31 December 2025

	Less than 1 month £m	1-3 months £m	3 months -1 year £m	1-2 years £m	2-5 years £m	More than 5 years £m	Total £m
Financial assets
Cash and balances at central banks	1,924.5	-	-	-	-	-	1,924.5
Loans and advances to banks	246.8	-	-	-	-	-	246.8
Loans and advances to customers	261.6	539.1	1,458.6	1,196.0	2,706.1	11,608.7	17,770.1
Investment securities	39.5	44.4	106.9	292.2	1,636.4	38.6	2,158.0
Derivative financial assets	3.2	2.1	17.7	35.7	22.1	6.7	87.5
Total financial assets	2,475.6	585.6	1,583.2	1,523.9	4,364.6	11,654.0	22,186.9
Financial liabilities
Amounts due to banks	(927.4)	(252.8)	(250.4)	-	-	-	(1,430.6)
Customer deposits	(7,724.2)	(1,883.1)	(5,960.5)	(1,477.5)	(1,296.8)	(11.4)	(18,353.5)
Derivative financial liabilities	(4.9)	(0.3)	(10.2)	(16.4)	(59.8)	(1.5)	(93.1)
Debt securities in issue	(0.1)	(1.6)	(0.6)	(1.1)	(3.8)	(405.1)	(412.3)
Lease liabilities	(0.1)	(0.2)	(0.7)	(2.4)	(8.3)	-	(24.8)
Subordinated debt liability	-	-	(7.7)	-	-	(163.8)	(171.5)
Total financial liabilities	(8,656.7)	(2,138.0)	(6,230.1)	(1,497.4)	(1,368.7)	(594.9)	(20,485.8)
Cumulative gap	(6,181.1)						1,701.1

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 163 Shawbrook Group plc | Annual Report and Accounts 2025
Principal risks: Market, liquidity and capital risk

As at 31 December 2024

	Less than 1 month £m	1-3 months £m	3 months -1 year £m	1-2 years £m	2-5 years £m	More than 5 years £m	Total £m
Financial assets
Cash and balances at central banks	2,244.7	-	-	-	-	-	2,244.7
Loans and advances to banks	304.4	-	-	-	-	-	304.4
Loans and advances to customers	427.4	444.2	1,180.9	1,055.7	2,251.7	9,816.7	15,176.6
Investment securities	127.9	9.9	–	83.0	868.7	424.1	1,513.6
Derivative financial assets	1.7	4.3	13.1	39.2	148.2	20.6	227.1
Total financial assets	3,106.1	458.4	1,194.0	1,177.9	3,268.6	10,261.4	19,466.4
Financial liabilities
Amounts due to banks	(325.8)	-	(1,050.3)	-	-	-	(1,376.1)
Customer deposits	(6,821.8)	(1,877.7)	(5,088.6)	(998.6)	(969.5)	(47.8)	(15,804.0)
Derivative financial liabilities	(6.6)	(3.1)	(16.2)	(20.3)	(69.3)	(1.6)	(117.1)
Debt securities in issue	(3.0)	(2.7)	(7.7)	(3.0)	(10.3)	(522.5)	(549.2)
Lease liabilities	(0.1)	(0.2)	(0.8)	(1.0)	(8.3)	-	(25.6)
Subordinated debt liability	-	-	(7.0)	-	-	(164.1)	(171.1)
Total financial liabilities	(7,157.3)	(1,883.7)	(6,170.6)	(1,022.9)	(1,057.4)	(751.2)	(18,043.1)
Cumulative gap	(4,051.2)						1,423.3

The following tables segment the gross contractual cash flows of the Group’s financial liabilities into relevant maturity groupings. Totals in the following table differ to the preceding tables, and do not agree directly to the statement of financial position, as the table incorporates all cash flows on an undiscounted basis, related to both principal and future coupon payments. Estimated future interest payments are derived using interest rates and contractual maturities at the reporting date.

As at 31 December 2025

	Less than 1 month £m	1-3 months £m	3 months -1 year £m	1-2 years £m	2-5 years £m	More than 5 years £m	Total £m
Amounts due to banks	927.6	252.8	250.4	-	-	-	1,430.8
Customer deposits	7,740.1	1,894.4	6,127.6	1,538.9	1,409.1	12.1	18,722.2
Derivative financial liabilities	4.9	0.3	10.2	16.4	59.8	1.6	93.1
Debt securities in issue	2.0	5.4	18.1	25.1	78.9	791.0	920.5
Lease liabilities	0.1	0.3	0.9	3.1	10.7	16.7	31.8
Subordinated debt liability	2.8	-	12.3	17.8	53.3	217.0	303.2
Total financial liabilities	8,677.5	2,153.2	6,419.5	1,601.3	1,611.8	1,038.4	21,501.7

As at 31 December 2024

	Less than 1 month £m	1-3 months £m	3 months -1 year £m	1-2 years £m	2-5 years £m	More than 5 years £m	Total £m
Amounts due to banks	325.8	9.5	1,072.6	-	-	-	1,407.9
Customer deposits	6,841.8	1,891.1	5,260.6	1,052.7	1,116.1	58.2	16,220.5
Derivative financial liabilities	6.6	3.1	16.2	20.3	69.3	1.6	117.1
Debt securities in issue	5.6	7.9	31.6	34.8	109.3	1,084.5	1,273.7
Lease liabilities	0.1	0.3	1.1	1.3	10.9	20.1	33.8
Subordinated debt liability	2.8	-	12.3	17.8	53.3	217.0	303.2
Total financial liabilities	7,182.7	1,911.9	6,394.4	1,126.9	1,358.9	1,381.4	19,356.2

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT 164 Shawbrook Group plc | Annual Report and Accounts 2025
Principal risks: Market, liquidity and capital risk

Metrics used in assessing and monitoring liquidity risk

Certain metrics that are used by the Group in assessing and monitoring liquidity risk are summarised below.

Liquidity buffer

The Group maintains a liquidity buffer of high-quality liquid assets, as defined by the EBA’s mandates and adopted by the PRA. These assets can be monetised to meet stress requirements in line with internal stress testing and the requirements of the Delegated Regulation on the Liquidity Coverage Ratio (LCR). The average liquidity buffer, calculated as the simple average of the month end observations for the preceding 12 months, is £3,009.7 million (2024: £3,480.5 million). The composition of the Group’s liquidity buffer as at 31 December is as follows:

	2025 £m	2024 £m
Cash and withdrawable central bank reserves (LCR level 1 assets)	1,880.4	2,241.0
Central government assets (LCR level 1 assets)	48.2	79.3
Extremely high quality covered bonds (LCR level 1 assets)	840.1	722.5
Asset backed securities (LCR level 2B assets)	207.0	118.7
Total liquidity buffer	2,975.7	3,161.5

Liquidity coverage ratio

The LCR is a regulatory metric that measures a set of standardised liquidity inflows and outflows over a period of 30 days. The Group calculates the LCR in accordance with the EBA’s LCR standards, as adopted by the PRA. The reduction in the LCR ratio reflects a change in the composition of the Group’s liquidity pool. During the year, the Group increased its holdings of Bank of England eligible collateral. While these assets are eligible for inclusion within the Bank’s internal Liquid Asset Buffer reporting, they do not qualify as High-Quality Liquid Assets (HQLA) for the purposes of the LCR calculation.| | 2025 | 2024 |
| :--- | :--- | :--- |
| Liquidity buffer (£m) | 2,975.8 | 3,161.5 |
| Total net cash outflows (£m) | 2,022.0 | 1,796.1 |
| Liquidity coverage ratio (%) | 147.2 | 176.0 |

Net stable funding ratio

The net stable funding ratio (NSFR) is a regulatory metric that measures the amount of stable funding available compared to the amount of stable funding required. From 1 January 2022, as part of the revised Capital Requirements Regulation (CRR II), it became a binding requirement that the NSFR must remain above the minimum level of 100%. The Group’s NSFR remains above this required level, with a ratio of 124.9% as at 31 December 2025 (2024: 134.3%).

Asset encumbrance (audited)

A proportion of the Group’s assets have the potential to be used as collateral to support central bank or other wholesale funding activities. Assets that have been committed for such purposes are classified as encumbered assets and cannot be used for other purposes. The Group has Board imposed limits setting out the percentage of assets that can be encumbered. All other assets are defined as unencumbered assets. These comprise assets that are potentially available to be used as collateral (‘available as collateral’) and assets that, due to their nature, are not suitable to be used as collateral (‘other’). The following tables and additional narrative set out the carrying amount of the Group’s encumbered and unencumbered assets. The disclosure is designed to illustrate the availability of the Group’s assets to support future funding and is not intended to identify assets that would be available in the event of a resolution or bankruptcy.

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165 Shawbrook Group plc | Annual Report and Accounts 2025
Principal risks: Market, liquidity and capital risk

Encumbered assets
| | Unencumbered assets | | |
| :--- | :--- | :--- | :--- |
| As at 31 December 2025 | Pledged as collateral £m | Other £m | Available as collateral £m | Other £m | Total £m |
| Cash and balances at central banks | - | - | - | 1,924.5 | 1,924.5 |
| Loans and advances to banks | 156.9 | 38.3 | 51.6 | - | 246.8 |
| Loans and advances to customers | 4,360.7 | - | 13,409.4 | - | 17,770.1 |
| Investment securities | 390.2 | 35.3 | 1,732.5 | - | 2,158.0 |
| Derivative financial assets | - | - | - | 87.5 | 87.5 |
| Non-financial assets | - | - | 24.5 | 257.5 | 282.0 |
| Total assets | 4,907.8 | 73.6 | 15,218.0 | 2,269.5 | 22,468.9 |

Encumbered assets
| | Unencumbered assets | | |
| :--- | :--- | :--- | :--- |
| As at 31 December 2024 | Pledged as collateral £m | Other £m | Available as collateral £m | Other £m | Total £m |
| Cash and balances at central banks | - | - | - | 2,244.7 | 2,244.7 |
| Loans and advances to banks | 191.8 | 49.2 | 63.4 | - | 304.4 |
| Loans and advances to customers | 4,561.8 | - | 10,614.8 | - | 15,176.6 |
| Investment securities | - | 64.3 | 1,442.9 | 6.4 | 1,513.6 |
| Derivative financial assets | - | - | - | 227.1 | 227.1 |
| Non-financial assets | - | - | 29.8 | 226.5 | 256.3 |
| Total assets | 4,753.6 | 113.5 | 12,150.9 | 2,704.7 | 19,722.7 |

Encumbered assets ‘pledged as collateral’ comprise:
* Loans and advances to banks totalling £156.9 million (2024: £191.8 million), of which:
* £156.9 million (2024: £191.8 million) is pledged as collateral against derivative contracts.
* Loans and advances to customers totalling £4,360.7 million (2024: £4,561.8 million), of which:
* £2,442.6 million (2024: £2,306.4 million) includes amounts encumbered through access to the Bank of England’s Sterling Monetary Framework.
* £1,918.1 million (2024: £2,255.4 million) is pledged to securitisation programmes.
* Investment securities totalling £390.2 million (2024: £nil), of which:
* £390.2 million (2024: £nil) includes amounts encumbered through access to the Bank of England’s Sterling Monetary Framework.

‘Other’ encumbered assets (assets that cannot be used for secured funding for legal or other reasons) comprise:
* £38.3 million (2024: £49.2 million) of securitisation cash, which represents cash balances of consolidated structured entities.
* £35.3 million (2024: £64.3 million) of investment securities, which represents restricted amounts invested in short-term money market funds by consolidated structured entities.

The above tables do not include collateral received by the Group that are not recognised on the statement of financial position, the vast majority of which the Group is permitted to repledge.

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166 Shawbrook Group plc | Annual Report and Accounts 2025
Principal risks: Market, liquidity and capital risk

Capital risk

This section specifically provides information about:
* Managing capital risk
* Regulatory requirements
* Regulatory developments
* Metrics used in assessing and monitoring capital risk

Managing capital risk (audited)

The Group’s objective in managing capital risk is to maintain appropriate levels of capital to support the Group’s business strategy and meet regulatory requirements. Capital risk is overseen by the ALCo, who monitor the capital position against the Capital Contingency Plan and Recovery Plan triggers and limits on a monthly basis. The ALCo also regularly review the forward-looking capital surplus in the context of its business plans and ensure that the Group has advance warning of any potential capital challenges. The Group’s risk function regularly reviews emerging regulatory changes that may impact on the capital surplus and undertakes impact assessments. The Group’s approach to capital management is driven by strategic and organisational requirements, whilst also taking into account the regulatory and commercial environments in which it operates. The principal objectives when managing capital are to:
* address the expectation of the Shareholder and optimise business activities to ensure return on capital targets are achieved through efficient capital management;
* ensure that sufficient risk capital is held. Risk capital caters for unexpected losses that may arise, protects the Shareholder and depositors and thereby supports the sustainability of the Group through the business cycle; and
* comply with capital supervisory requirements and related regulations.

The Group recognises the importance of allocating the correct risk- weighting to its assets. The Regulatory Reporting Committee has the oversight in respect of the application of risk weighted assets rules, and ensuring the effectiveness of the regulatory reporting and the related policies. The PRA supervises the Company on a consolidated basis, with capital requirements set for the Group as a whole and information on capital adequacy provided to the PRA at a consolidated Group level only. Shawbrook Bank Limited and its subsidiaries, The Mortgage Lender Limited, Bluestone Mortgages Limited, JBR Capital Limited are the only regulated subsidiaries within the Group. Shawbrook Bank Limited is supervised by the PRA and the FCA, whilst The Mortgage Lender Limited, Bluestone Mortgages Limited, and JBR Capital Limited are regulated by the FCA. The PRA has also identified the Company to be a ‘Financial Holding Company’.

Regulatory requirements

The Group applies the regulatory framework defined by the revised Capital Requirements Regulation (CRR II) and the Capital Requirements Directive (CRD V). Directive requirements are implemented in the UK by the PRA and supplemented through additional regulation under the PRA Rulebook. The aim of the regulatory framework is to promote safety and soundness in the financial system. The regulatory framework categorises the capital and prudential requirements under three pillars:
* Pillar 1: defines the minimum capital requirements firms are required to hold for credit, market and operational risks.
* Pillar 2: builds on Pillar 1 and incorporates the Group’s own assessment of additional capital required to cover specific risks that are not covered by the minimum regulatory capital requirement set out under Pillar 1. Under Pillar 2, the Group completes an annual self-assessment of these risks as part of its ICAAP. The ICAAP is reviewed by the PRA every three years (or earlier if required) and culminates in the PRA setting a firm- specific requirement of the level of capital required to be held, known as the ‘Total Capital Requirement’.
* Pillar 3: requires the Group to publish a set of disclosures that 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 www.shawbrook.co.uk/investors/

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Principal risks: Market, liquidity and capital risk

Minimum requirements set out by the regulatory framework are summarised in the following table. The minimum capital requirements increased between reporting periods following the outcome of the Capital Supervisory Review and Evaluation Process (C-SREP).

	2025		2024
Minimum capital requirements	CET1	Total capital	CET1	Total capital
Pillar 1	4.50%	8.00%	4.50%	8.00%
Pillar 2A	0.70%	1.24%	0.70%	1.24%
Total Capital Requirement	5.20%	9.24%	5.20%	9.24%
Regulatory capital buffers
Capital conservation buffer	2.50%		2.50%
Countercyclical capital buffer	2.00%		2.00%
Overall Capital Requirement	9.70%		13.74%

Additional systemic buffers provided for by CRD V do not apply to the Group. The regulatory minimum for the UK leverage ratio also remains unchanged compared to 31 December 2025 at 3.25%. Whilst the Group is not required to comply with the PRA’s UK Leverage Ratio Framework until its retail deposits exceed the £75 billion threshold, the PRA has stated its expectation that all UK firms should manage their leverage risk so that the ratio does not ordinarily fall below 3.25%. Consequently, the Group treats 3.25% as its minimum requirement. The Group (including its regulated subsidiaries) maintains an adequate capital base and has complied with all externally imposed capital requirements.The Total Capital Requirement set by the PRA has been met at all times and capital adequacy and leverage ratios are well in excess of the minimum regulatory requirements.

Regulatory developments

During the year ended 31 December 2025, the following regulatory changes came into effect:

PS3/25 was published on 20 February 2025 sets out how the PRA will make and communicate policy under the updated UK framework (FSMA).
PS8/25 was published on 3 July 2025 which is the final policy to streamline and amend the UK capital buffers framework which impacts capital planning and buffer-setting.
Solvent Exit Analysis (SEA) requirements became a regulatory requirement for non-systemic banks on 1 October 2025.
PS7/25 published 12 November 2025 sets out the PRAs approach to offset the SME and infrastructure lending adjustments through the capital stack. The PRA held an industry roundtable in October 2025 to introduce the changes.
PS13/25 published on 16 July 2025 sets out the PRA’s implementation of the Bank Resolution (Recapitalisation Act) which sets out the thresholds for migration to a partial transfer or bail-in resolution strategy.
PS19/25 published on 28 October 2025 restates the remainder of the CRR into the PRA rulebook with consequential changes tied to 2026/2027 implementations.
PS24/25 published on 8 November 2025 confirms the intent to increase the FSCS limit to £120k and recapitalisation for partial transfer firms.
PS22/25 published on 12 November 2025 sets out the increase in the retail deposits threshold for the application of the leverage ratio rules from £50 billion to £75 billion.
SS25/25 published on 3 December 2025 sets out the PRA’s expectations for firms’ approaches to managing climate-related risks to ensure that firms build the capabilities and resilience needed to effectively manage these risks.

Future regulatory changes that are relevant to the Group are as follows:

In January 2025, the PRA announced a delay to the implementation of Basel 3.1 in the UK by one year until 1 January 2027 to allow more time for greater clarity to emerge about plans for its implementation in the US.
On 1 January 2026, the PRA announced that firms will now be subject to the leverage ratio requirement if they have £75 billion or more in retail deposits, up from the previous £50 billion. The threshold for non-UK assets remains unchanged at £10 billion.

Metrics used in assessing and monitoring capital risk

Certain disclosures relating to the Group’s capital position are shown on the following pages. The disclosures present the consolidated capital position for the Group, as reported to the PRA. Disclosures for the Group’s regulated subsidiaries (Shawbrook Bank Limited and its subsidiaries, The Mortgage Lender Limited, Bluestone Mortgages Limited, and JBR Capital Limited), and Shawbrook Bank Limited’s unregulated subsidiaries, ThinCats Group Limited and Playter, are not separately disclosed and can be found in Shawbrook Bank Limited’s own Annual Report and Accounts, which is available on the Group’s website at: www.shawbrook.co.uk/investors/

Disclosures are presented on a CRD V basis after applying IFRS 9 transitional arrangements until 2024 when Transitional Adjustment was phased out and no longer applicable to 2025. A comparison of the reported capital metrics (including transitional adjustments) to the capital metrics as if IFRS 9 transitional arrangements had not been applied (the ‘fully loaded’ basis) is provided on page 171.

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168 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Market, liquidity and capital risk

Regulatory capital (audited)

Composition of the Group’s regulatory capital as at 31 December is as follows:

	2025 £m	2024 £m
Share capital	2.6	2.5
Share premium	134.7	87.3
Capital contribution reserve	19.9	19.9
Retained earnings	1,513.7	1,307.2
Intangible assets	(145.8)	(124.0)
Transitional adjustment for IFRS 9 (unaudited)	-	10.4
Deferred Tax Assets	(23.5)	-
Accumulated Other Comprehensive Income	(0.5)	-
Prudent valuation adjustment (unaudited)	(4.4)	(3.6)
Securitisation position which alternatively be subject to 1,250.0% risk weight (unaudited)	(6.9)	(6.6)
Common Equity Tier 1 capital	1,489.8	1,293.1
Capital securities	123.1	123.1
Additional Tier 1 capital	123.1	123.1
Total Tier 1 capital	1,612.9	1,416.2
Subordinated debt liability ¹	163.8	163.6
Tier 2 capital	163.8	163.6
Total regulatory capital	1,776.7	1,579.8

Regulatory capital (audited)

The Group’s total regulatory capital reconciles to the Group’s total equity per the statement of financial position as follows:

	2025 £m	2024 £m
Total regulatory capital	1,776.7	1,579.8
Subordinated debt liability ¹	(163.8)	(163.6)
Intangible assets	145.8	124.0
Transitional adjustment for IFRS 9 (unaudited)	-	(10.4)
Prudent valuation adjustment (unaudited)	4.4	3.6
Accumulated Other Comprehensive Income	0.5	-
Securitisation position which alternatively be subject to 1,250.0% risk weight (unaudited)	6.9	6.6
Cash flow hedging reserve	4.7	12.7
Deferred tax deductible	23.5	-
Fair value through other comprehensive income reserve	43.8	29.6
Total equity	1,842.5	1,582.3

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¹ For the purpose of regulatory capital calculations, capitalised interest and other accounting adjustments of £7.7 million are excluded (2024: £7.5 million).

Principal risks: Market, liquidity and capital risk

Movement in the Group’s total regulatory capital during the year is as follows:

	2025 £m	2024 £m
Total regulatory capital as at 1 January	1,579.8	1,424.9
Movement in Common Equity Tier 1 capital
Increase in capital contribution reserve	-	-
Share issuance (net of issuance related expenses)	47.5	-
Increase/(decrease) in retained earnings:
Profit for the year	195.5	219.9
Share-based payments	26.1	0.7
Coupon paid on capital securities	(15.1)	(15.1)
Increase in intangible assets	(21.8)	(16.8)
Deferred Tax deduction	(23.5)	-
Accumulated OCI	(0.6)	-
Decrease in transitional adjustment for IFRS 9	(10.4)	(7.1)
Decrease in prudent valuation adjustment	(0.7)	(0.6)
Decrease in securitisation position which alternatively be subject to 1,250.0% risk	(0.3)	(6.6)
Total movement in Common Equity Tier 1 capital	196.7	174.4
Movement in Additional Tier 1 capital
Increase in capital securities	-	-
Total movement in Additional Tier 1 capital	-	-
Movement in Tier 2 capital
Issue of subordinated debt	75.0	-
Redemption of subordinated debt	(76.5)	(20.0)
Other movements in subordinated debt	1.7	0.5
Total movement in Tier 2 capital	0.2	(19.5)
Total regulatory capital as at 31 December	1,776.7	1,579.8

Risk-weighted assets

The following table sets out the risk-weighted assets for the Group. The Group applies the standardised approach to measure credit risk, counterparty credit risk and securitisation exposures and the basic indicator approach to measure operational risk.

	2025 £m	2024 £m
Credit risk
Real Estate	3,615.8	3,155.4
SME	4,389.7	3,178.4
Consumer Finance	743.0	655.6
Retail Mortgage Brands	1,768.9	1,661.5
Other	224.0	268.5
Total credit risk	10,741.4	8,919.4
Counterparty credit risk: credit valuation adjustment	2.5	4.2
Securitisation exposures in the banking book	213.8	117.3
Operational risk	1,045.5	905.7
Total risk-weighted assets	12,003.2	9,946.6

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
170 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Market, liquidity and capital risk

Capital ratios

	2025 %	2024 %
Common Equity Tier 1 capital ratio	12.4	13.0
Total Tier 1 capital ratio	13.4	14.2
Total capital ratio	14.8	15.9

	2025 £m	2024 £m
Total Tier 1 capital	1,612.9	1,416.2
Exposure measure
Total statutory assets	22,468.9	19,722.7
Regulatory adjustments to statutory assets	(379.8)	(402.6)
Central bank claims	(1,924.5)	(2,244.7)
Off-balance sheet items	504.2	396.0
Exposure value for derivatives	115.6	126.7
Securities financial transactions	11.0	18.4
Transitional adjustment for IFRS 9	-	10.4
Regulatory deductions	(185.3)	(146.9)
Total exposures	20,610.1	17,480.0
UK Leverage ratio (%)	7.8%	8.1%

IFRS 9 transitional arrangements impact analysis

As detailed on page 168, the Group had elected to use a transitional approach when recognising the impact of adopting IFRS 9. The period to apply this approach ended in 2024 and was no longer applicable to 2025. This is illustrated in the following table by providing the adjustment made in 2024 whilst no adjustments were applied in 2025.

	2025	2024
	Including transitional adjustments	Transitional adjustments not applied
Capital resources
Common Equity Tier 1 capital (£m)	1,489.8	1,489.8
Total Tier 1 capital (£m)	1,612.9	1,612.9
Total regulatory capital (£m)	1,776.7	1,776.7
Risk-weighted assets
Total risk-weighted assets (£m)	12,003.2	12,003.2
Capital ratios
Common Equity Tier 1 capital ratio (%)	12.4	12.4
Total Tier 1 Capital Ratio (%)	13.4	13.4
Total capital ratio (%)	14.8	14.8
Leverage
UK Leverage ratio (%)	7.8	7.8

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Managing operational risk

Developments during the year

The Group manages operational risk across eight level two risk categories, with the Risk Committee receiving regular reports across the spectrum of these operational risks. These reports present the operational risk profile, including incidents that have arisen and the movement of key indicators. This allows the Risk Committee to assess the Group’s risk response and proposed remedial actions, including oversight of change projects.The risk and control self-assessment process is utilised by the Group as a key risk management tool for non-financial risks, including operational risk. This exercise is owned and completed by each customer segment and function and takes into consideration control effectiveness and residual risk score across the Group’s non-financial risks. The risk and control self-assessments are maintained in conjunction with the Group’s operational risk team who provide challenge and oversight. Risk and control self-assessments are aligned to top risk profile reporting. To enable effective risk management, the Group focuses on identifying, monitoring and managing operational risk events in each business area, driving appropriate actions, and where needed re-engineering and/or automating processes and controls to minimise recurrence. All business areas have business continuity and resilience plans in place, supported by business impact assessments, with enhanced controls and documentation in place for important business services. The Group has an Incident Management Framework in place that continues to identify and respond to operational disruption incidents to help maintain service continuity and prevent impact tolerance breaches. In addition, the Group uses external disaster recovery sites as back-up locations for IT servers. During 2025, the Group continued to invest in its operational risk framework, with the continued embedding of the Governance, Risk and Compliance (GRC) tool launched in 2023. All three lines of defence use the tool to record and monitor issues, risks and controls across all customer segments and functions. Data and insights from the tool are used to inform the Non-Financial Risk Oversight Committee of significant risks, events, control issues or themes impacting business areas. Throughout 2025, the Group has delivered its operational resiliency roadmap and enhanced scenario testing to meet the regulatory compliance. The Risk Committee approved the fourth annual operational resilience self-assessment in January 2025, ahead of the March 2025 milestone. Scenario testing was enhanced to include more live technology environment and important business service testing, providing assurance in the strength of resilience controls. The Risk Committee noted regular management updates on risk events and incidents through the year and management proposals to improve resiliency. To further connect the risk data and analysis universe third party risk management and operational resilience are live in the GRC system, systemising data capture and analysis for more proactive risk identification, governance rigour and supporting more timely incident impact analysis and response. A key focus area for 2025 was the continued simplification of the Group’s control environment, and the identification of material controls in line with expectations of the UK Corporate Governance Code. IT change continued to be a key focus for 2025, including oversight of non-delivery risks related to material projects and embedding enhancements to change delivery processes and governance.

Principal risks: Operational risk

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Principal risks: Technology and cyber risk

Managing technology and cyber risk

Developments during the year

Customer expectations for service availability continue to rise with the rapid pace of new technologies, leading to a significantly lower tolerance for service disruption. The Group recognises that, in order to continue to be recognised for offering very high levels of customer satisfaction, it needs to continually monitor systems risk and ensure that change is delivered with minimum disruption to customers. The Group has continued to invest in its digital capability to improve customer experience, investing in hybrid multi cloud technologies to increase the scale, stability and resilience of its systems. The technology, data and cyber security controls were aligned to the Group’s new risk and control taxonomies which has enabled more effective, data driven risk and control assessments. During 2025, the Group completed the transition of customers to the new digital savings experience, and all customer, business and operational indicators have reported normally. The Group has ensured that Internal Audit reviews are regularly conducted and, in 2025, this comprised: two reviews assessing maturity against the NIST 2.0 Cyber Security Framework covering Detect & Govern (completed) and Respond & Recover (in-progress), embedding of the updated and enhanced Change Framework and data controls in regulatory reporting. All historic Internal Audit items were closed in the period and open audit observations are progressing in line with agreed timescales. Technology and data remain a core competency for the Group, with strong capabilities and foundations already in place. The Group continued to progress its hybrid multi cloud strategy, supported by investment in server and storage refreshes in the on-premise data centres, enabling flexibility and agility on hosting decisions. The Group continued to perform annual penetration testing and project specific penetration testing linked to the go live of new systems (or major code / version / infrastructure changes). Additionally, further assurance exercises included an External Threat Attack Surface review and an External Network Security review. The embedding of the Group’s software application security testing matured further during 2025 with the adoption of new tooling and test automation capabilities. This positions the Group well for increased pace of delivery of digital change while maintaining the highest standards of quality and resilience.

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173 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Strategic risk

Managing strategic risk

Developments during the year

Strategic risk focuses on large, long-term risks that could become a material issue for the delivery of the Group’s goals and objectives. Management of strategic risk is primarily the responsibility of the Group’s senior management team. The management of strategic risk is intrinsically linked to the corporate planning and stress testing processes and is further supported by the regular provision of consolidated business performance and risk reporting to the Executive Committee and the Board. Strategic risk also includes the Group’s progress on equality, diversity and inclusion. During 2025, the Group continued regular portfolio reviews, with a focus on what could go wrong in order to identify whether any changes in risk appetite were appropriate or updates to key controls. This was supported by the implementation of further early warning indicators to identify potential problem loans and to support key areas of operational readiness such as arrears and non-performing loans. The Group also implemented an end-to-end credit risk management platform in SME to leverage data and technology in support of credit management. The Group continued to leverage its risk distribution capability to support existing customers as they grow and extended the Enable Guarantee programme to support Development finance customers. The Group also implemented a new portfolio management model to support Real Estate customers with lending in excess of £2.5 million. The Group made further progress on its Real Estate and Retail Mortgage Brands emission intensity and exceeded its sustainable finance commitment of £1.2 billion of originations for the period 2023 to 2025. In addition, the Group signed an agreement with an external partner to deliver a PCAF aligned methodology for the calculation of SME lending emissions. The Group also signed an agreement to receive an updated climate base case to support more realistic alternative climate scenarios at a more detailed level than before. During the year, the Board received and approved a number of reports, including the strategy update. It has also actively engaged in the compilation of the Group’s risk appetite, ICAAP, ILAAP, Recovery Plan and Resolution Pack, and Solvent Exit Analysis which are critical tools to managing strategic risk.

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174 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Transformation risk

Managing transformation risk

Developments during the year

Transformation risk management focuses on risks that could become material issues during the execution of technology or platform changes being implemented for organisational, regulatory or strategic purposes. Management of transformation risk is primarily the responsibility of the Group’s senior management team. The management of transformation risk is closely linked to corporate planning processes and is further supported by the regular provision of consolidated business performance and risk reporting to the Executive Committee, the Board and material IT projects to the PRA. During 2025, there has been a continued strong focus on improving the robustness of digital transformation governance and risk management within the Group via enhancements to the Change Delivery Framework. Responsibility for digital transformation risk sits with the Risk & Governance function in the Chief Technology Office providing clear accountability for risk management and facilitating a consistent and standardised approach to the delivery of transformation initiatives. The delivery efforts are closely supported by the technology teams in the Chief Technology Office.Working in close collaboration with second line risk, the Delivery function has continued to evolve and enhance the transformation risk management model, refining and building on the significant overhaul of the governance model that was introduced at the end of 2024 into Q1 2025. Group Risk Appetite reporting for transformation risk provides portfolio-wide status reporting for the Executive Committee and Board covering Material IT Projects, ensuring robust oversight of strategically important transformation initiatives. Against the backdrop of improvements in governance and oversight, over 250 change releases of various sizes were successfully delivered into production. This is across digital products, projects, infrastructure and platform related changes group-wide.

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175 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Conduct risk

Managing conduct risk

Developments during the year

The Group continually reviews its risk management approach to reflect the regulatory and legal environment in which it operates. The Group acts to deliver good outcomes for customers and is committed to acting in good faith for our customers, avoiding causing them foreseeable harm and enabling them to pursue their financial objectives. In 2025 the Group further strengthened its conduct-risk framework to align with the Consumer Duty, mapping key controls to the customer lifecycle. The Group consolidated controls into a streamlined structure, deployed it across control and testing platforms, and introduced new Customer Outcome definitions embedded in testing, MI and automated monitoring to improve oversight and customer outcomes. The Group is aware of the potential impacts that increased cost of living pressures may have upon its customers. In response, the Group continues to prioritise the management of conduct risks including ongoing review of the forbearance measures suite to support customers in financial difficulty and ongoing improvement to lending journeys to prevent customers becoming the victims of fraud. Ongoing monitoring of compliance with the Consumer Duty continues to be monitored through reports to Board, an updated risk appetite report, a customer experience dashboard, second- and third-line assurance activities and part of the existing annual RMF attestation each year. Further details on conduct matters the Group is involved in are provided in Note 35 and Note 49 of the Financial Statements.

FINANCIAL STATEMENTS
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176 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Compliance and regulatory risk

Managing compliance and regulatory risk

Developments during the year

The Group continually reviews its risk management approach to reflect the regulatory and legal environment in which it operates. The Group has no appetite for behaving inappropriately resulting in poor outcomes for its customers or reputation through non-compliance with regulation or standards of good practice. The Group has implemented safeguards and controls to prevent the misuse of its personal data which may constitute a breach of data privacy regulations. The Group continually reviews its data privacy framework to ensure it complies with any evolving regulatory and or legislative changes. A new regulatory horizon scanning tool was rolled out in 2025 to enable more efficient tracking of regulatory change and provide the Group with management information including an up-to-date schedule of regulatory changes and tracking of implementation activities across the Group. This tool leverages AI technology, which in combination with human judgement supports the Group in proactive horizon scanning. The Group’s Speak Up Policy has been enhanced in 2025 to reflect the latest regulatory guidance, supported by a new independent online tool to allow concerns to be raised and managed effectively. This enhances the Group’s Whistleblowing Framework, encouraging employees to raise concern where they identify or observe behaviours that are inconsistent with the Group’s values and ways of working. The Group enhanced its Conflicts of Interest management through implementation of a Conflicts of Interest Framework enabling individuals to declare both internal and external conflicts of interest relating to any activities undertaken within the Group in a consistent and transparent manner, ensuring alignment with regulatory expectations and the Group’s governance standards. Following the Basel Committee’s publication of the final Basel 3.1 standards in September 2024, the PRA in January 2025 confirmed the UK implementation date as 1 January 2027 and published near-final policy proposals and consultations — including consequential changes to Pillar 2A and regulatory reporting — to support firms’ transition. The Group continues to manage a programme of work to implement the changes required to ensure compliance with the rules as well as any data requests required by the PRA. The SMF 16 functions for TML, BML and JBR were transitioned to the SMF 16 for the Group, creating one SMF 16 function that governs all group regulated entities. This was approved by the FCA in March 2025.

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177 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Climate risk

Managing climate risk

Developments during the year

The risks associated with climate change are subject to rapidly increasing societal, regulatory, and political focus. In line with regulatory requirements, the Group has embedded climate risk as a principal risk in the RMF to address the risks associated with physical risk and the risk from the transition to a low-carbon economy. The Group has continued to invest in its climate data capability, transitioning to a more frequent assessment of its physical and transitional risk profile. This analysis has confirmed the ongoing improvement in EPC profile and a reduction in lending emissions for the residential and commercial investment portfolios. The dependency on wider policy actions is clear and will influence lending emissions targets in the medium term. The Group has engaged with an additional third party to establish baseline lending emissions numbers for its Commercial SME portfolio and to further increase its coverage over in-scope portfolios. The Group originated £1.8 billion of sustainable finance for the period 2023 to 2025, against its target of £1.2 billion of sustainability financing by 2025.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
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178 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Financial crime risk

Managing financial crime risk

Developments during the year

The Group operates in a highly regulated market and has proportionate procedures in place to mitigate the risk of the Group’s services being used to facilitate financial crime. The Group continues to monitor the increasing complexity of financial crime threats and any changes to the legislative and regulatory framework to manage any emerging risks. During 2025 the Group accelerated the maturity and roll-out of its financial-crime capability. We expanded use of our core financial-crime tooling across the business — including onboarding JBR onto our core financial crime system and enhancing MI and the move towards automated transaction monitoring for motor finance — and launched a programme to implement a single Financial Crime Orchestration Platform to centralise detection, case management and reporting. We also revised and issued Group Financial Crime Standards and delivered targeted anti-fraud and specialist training for key roles alongside mandatory, bank-wide financial crime training.

FINANCIAL STATEMENTS
CLIMATE REPORT
CORPORATE GOVERNANCE REPORT
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179 Shawbrook Group plc | Annual Report and Accounts 2025

Principal risks: Model risk

Managing model risk

Developments during the year

Model risk is the risk of an adverse outcome as a direct result of weaknesses or failures in the development, implementation or use of a model. There is an inherent risk associated with models because, by their very nature, they are imperfect and incomplete representations that rely on assumptions and theoretical methodologies and use historic data which may not represent future outcomes. Models are relied on to support a broad range of business and risk management activities across the Group including credit approval process, ECLs, stress testing, financial planning, pricing strategies, Asset and Liability Management, measurement of fair value for loans, and climate change. Model errors can arise when models are implemented incorrectly or misused, for instance when applied to uses that they were not designed for, or where there is a failure to update key assumptions when required. Model risk remains heightened due to inflation pressures, interest rate changes and market volatility experienced in recent years. The Board has supported the implementation and embedding of SS1/23 with the appointment of the Chair of Risk Committee as model risk champion, with a focus on data and model risk culture. Responsibility for model risk is delegated from the ExRC and the Chief Risk Officer (SMF for model risk) and oversight is provided by a Model Risk Oversight Committee (MRC). The Group has digitally enabled its model inventory to support the implementation of SS1/23 and has updated its model risk policies and standards to reflect the emergence of AI and machine learning. The policies and framework have also been updated to reflect Dear CFO letters on Model Risk and post model adjustments.The Group has leveraged its cloud native analytical environment using SAS Viya to support enhanced visualisation and support the implementation of machine learning applications that are currently in monitoring phase prior to a decision to go live for portfolio management. Economic uncertainty may lead to some models operating outside of their development boundaries and the Group continues to monitor and consider potential actions on calibration or post model adjustments. During 2025, the MRC oversaw the redevelopment and implementation of all its slotting models within the Commercial segment to align more closely with best practice and simplify the number of slotting models to reflect the target market. A new credit grading model was implemented for Buy to Let loans across all segments and was expanded to cover more annual reviews. The Group updated its stress testing capability to include loans acquired through ThinCats and created its first model for the assessment of climate change in Pillar 2A in its ICAAP. New models for ECL were implemented for the Group’s motor finance loans to increase coverage of the loan book.

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180 Shawbrook Group plc | Annual Report and Accounts 2025

ICAAP, ILAAP and stress testing

The ICAAP, ILAAP and associated stress testing exercises represent important elements of the Group’s ongoing risk management processes. The results of the risk assessment contained in these documents are embedded in the strategic planning process and risk appetite to ensure that sufficient capital and liquidity are available to support the Group’s growth plans, as well as cover its regulatory requirements at all times and under varying circumstances. The ICAAP and ILAAP are reviewed at least annually, and more often in the event of a material change in the Group’s business, its capital or liquidity. Ongoing stress testing and scenario analysis outputs are used to inform the formal assessments and determination of required buffers, the strategy and planning for capital and liquidity management as well as the setting of risk appetite limits. The Board, Risk Committee, ExRC and ALCo have engaged in a number of exercises that have considered and developed stress test scenarios. The analysis enables the Group to evaluate its capital and funding resilience in the face of severe but plausible risk shocks. In addition to the Annual Cyclical Scenario prescribed by the PRA, the stress tests have included a range of market-wide and idiosyncratic stress tests, as well as operational risk scenario analyses. Stress testing is an integral part of the adequacy assessment processes for liquidity and capital, and the setting of tolerances under the annual review of the Group risk appetite. The Group also performed reverse stress tests to help assess the full continuum of adverse impacts and, therefore, the level of stress at which the Group would breach its individual capital and liquidity guidance requirements as set by the PRA under the ICAAP and ILAAP processes. The reverse stress test in 2025 led to some further development of risk appetite and MI for the Board.

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181 Shawbrook Group plc | Annual Report and Accounts 2025

Solvent Exit Analysis, Recovery Plan and Resolution Pack

The Group has prepared a Solvent Exit Analysis, Recovery Plan and Resolution Pack in accordance with PRA Supervisory Statements SS2/24 ‘Solvent Exit Planning for Non-Systemic Banks and Building Societies’, SS9/17 ‘Recovery planning’ and SS19/13 ‘Resolution planning’. These documents represent the Group’s ‘Contingency Planning and Living Will’ and examine in detail:
* the consequences of severe levels of stress (i.e. beyond those in the ICAAP) impacting the Group at a future date;
* the state of preparedness and contingency plan to respond to and manage such a set of circumstances; and
* the options available to the Group to either withstand and recover from such an environment or exit the market in an orderly manner while remaining solvent.

The Solvent Exit Analysis, Recovery Plan and Resolution Pack is updated annually and was last approved by the Board in September 2025. The Solvent Exit Analysis, Recovery Plan or Resolution Pack can be updated more frequently in the event of a material change in the Group’s status, capital or liquidity position. The Solvent Exit and Recovery Plan triggers are updated annually. The Board is fully engaged in considering the scenarios and options available for remedial actions to be undertaken. The Board considers that the Group’s business model and the diversified nature of its business markets, provide it with the flexibility to consider selective business or portfolio disposals, credit appetite tightening, loan book run-off, equity raising, or a combination of these actions. The Group would invoke the Solvent Exit Execution Plan or Recovery Plan in the event that it is required.

FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT
182 Shawbrook Group plc | Annual Report and Accounts 2025

Climate Report 184
Strategy 194
Governance 196
Risk management 200
Metrics and targets 183

Shawbrook Group plc | Annual Report and Accounts 2025
CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

2025 marked a pivotal year for Shawbrook following our return to the public markets. With new stakeholders on board, we reaffirm our commitment to addressing climate risks and opportunities in a matter that is proportionate and aligned to long-term value creation. This report explains how climate considerations are embedded into our governance, risk management and strategic decision-making, and summarises the progress made during the year. This report is consistent with the Task Force on Climate-related Financial Disclosure’s (TCFD) 2017 Recommendations across all four pillars and, where feasible, incorporates the 2021 Annex to the Implementing Guidance. It also complies with both the FCA Listing Rule 9.8.6R(8) and amendments made to the Companies Act 2006 requirements by The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022. We continue to monitor regulatory developments, including the UK Government’s adoption of the International Sustainability Standards Board (ISSB) IFRS S1 and IFRS S2 standards as UK Sustainability Reporting Standards (UK SRS S1 and S2), and will evolve our reporting in line with future requirements.

“The Board remains committed to a proportionate and disciplined approach to climate. This year, climate metrics have improved, with a continued reduction in financed emissions across our Group Property Portfolios against the agreed baseline and sustainable finance originations exceeding our stated target. The Board has agreed updated metrics and targets to ensure climate considerations remain embedded within our governance, strategy and risk management, strengthening the Group’s resilience to climate-related risks and supporting sustainable, long-term resilience as the transition progresses.”
John Callender
Chairman

Our climate strategy supports our customers’ transition to net zero while managing the associated financial risks and opportunities. We take a proportionate approach, focusing on areas which have the greatest materiality and influence, and will continue to evolve our strategy in line with best practice. The transition to net zero requires a coordinated global effort and it depends on multiple factors including government policies, grid decarbonisation, supply chain transformation and shifts in consumer behaviour. Against this backdrop, our climate strategy adopts a proportionate and disciplined approach, focusing our efforts and short-term targets on areas where climate risk is financially material and we can have the greatest influence. Our approach prioritises portfolio segments where climate- related transition and physical risks have the greatest potential impact on credit quality, collateral values and long-term resilience, while maintaining a scope that is proportionate to our specialist banking model. We engage with customers, industry bodies and policymakers to address challenges such as data availability and quality, and to support a transition aligned with the objectives of the Paris Agreement. To support our short-term climate goals, during 2025, we continued to progress our transition planning across three priority areas, Group Property Lending Portfolios, SME Portfolios and Own Operations. High-level summaries of our approach and progress are provided on page 186. These summaries are intentionally high-level and are intended to support our preparation for future alignment with the UK Transition Plan Framework, as expectations on transition planning and disclosure continue to evolve. Other areas of our loan book, including motor finance, unsecured personal loans and savings, are not currently included within our net-zero pathway due to their short tenors, limited balance sheet materiality and constraints in assessing climate impact, aligning with our proportionate approach. Unsecured lending and savings have immaterial physical and transition risk, and there is limited ability to measure emissions given the lack of influence over the use of proceeds. Motor finance represents 3.9% of the balance sheet, which is not considered financially material. These portfolios will be kept under review as methodologies, data availability and regulatory expectations develop.# Strategy 184

Shawbrook Group plc | Annual Report and Accounts 2025

CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Target Metric T M

Our climate strategy	What we achieved in 2025
1	✓ Introduced a new platform partnership focused on improving customer retention and reinforcing the proportion of higher EPC-rated properties in our portfolio through early engagement and product transfer options.
	✓ Originated over £740 million in sustainable finance in 2025, bringing total sustainable lending since 2023 to over £1.8 billion. ${^2}$
	✓ Improved the EPC mix across our owner-occupied and buy-to-let portfolios, with EPC C+ rated properties comprising 50.3% and 50.8% of the respective portfolios at the end of 2025.
2	What we achieved in 2025
	✓ Continued to reduce our emissions intensity for our Group Property Portfolios against our 2021 baseline, driven by improvements in our overall EPC mix.
	✓ 58% of our suppliers are net zero aligned. ${^5}$
	✓ Achieved carbon neutrality for our own operations. ${^6}$
3	What we achieved in 2025
	✓ Approved new climate requirements within the Group’s collateral and valuation policy for Property Portfolios, standardising physical risk assessment and ensuring high flood risk assets have appropriate mitigants.
	✓ Continued to enhance and embed climate governance including disclosures with positive engagement from stakeholders across the Group.

	Support the climate transition	Reduce our environmental impact	Embed environmental considerations into our corporate DNA
Our focus	• Utilise and expand existing product offerings to facilitate EPC C+ acquisitions, retentions, and property improvements. • Engage with customers to help them understand their climate impact.	• Continue to improve data quality and coverage of financed emissions calculations. • Reduce own operational emissions through climate objectives and considerations built into sourcing and procurement process.	• Develop climate-related communications and engagement plan. • Provide ongoing climate and net zero training. • Further enhance due diligence guidance for our identified sensitive sectors.
Metrics and targets	Sustainable finance	% EPC C+ rated properties	Annual disclosure for owner-occupied and buy-to-let portfolio
	T £2 billion of originations by the end of 2028 ${^1}$	M	M
	Metrics and targets	Net zero by 2050 ${^3}$	Net zero by 2035 ${^4}$
	Carbon neutral ${^4}$	Net zero aligned suppliers	T Maintain for own operations
	T At least half by the end of 2028 ${^5}$	M	M
	Metrics and targets	Executive remuneration	Climate risk
	M Tracking climate strategy progress through variable remuneration performance measures	M	M
	M Annual disclosure on how we embed climate risk in the Group

${^1}$ For the period 1 January 2026 to 31 December 2028. Lending that aligns with the environmental criteria within our Sustainable Finance Framework. This has been developed using best practice and industry guidance.
${^2}$ We originated over £1.1 billion for the period from 1 January 2023 to 31 December 2024.
${^3}$ Covers Scope 1 and Scope 2, Scope 3 category 3 fuel-and-energy related activities, category 5: waste, category 6: business travel, category 7: employee commuting and category 15: financed emissions for the Group’s Property Lending Portfolios (as defined on page 200) and SME portfolios. This excludes Scope 3 category 1: purchased goods and services.
${^4}$ Covers Scope 1 and Scope 2 emissions using location-based methodology. Excludes all relevant Scope 3 emissions.
${^5}$ Number of suppliers, with annual spend of over £200,000, that either have a net zero target for their own operations or have aligned to the Science Based Targets initiative (SBTi) approach for net zero.
${^6}$ Through the purchase of verified carbon credits.

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Shawbrook Group plc | Annual Report and Accounts 2025

CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

	Group Property Lending Portfolios	SME Portfolios	Own Operations
Our high-level transition plans	Improve EPC mix across our portfolios by facilitating EPC C+ acquisitions, retentions and property improvements. Support customers’ net zero transition through understanding their priorities and plans, exploring partnerships, and providing financing through existing products. Leverage our lending product range and expand current offering to provide financing solutions for the net zero transition.	Reduce emissions intensity for our SME portfolios to achieve net zero financed emissions by 2050. Understand transition plans and implement climate assessments for our top suppliers. Support the transition by leveraging enhanced due diligence for businesses operating in our identified sensitive sectors, including evaluation of transition plans.	Invest in energy improvements for our existing offices and implement climate criteria for all new or renewed leases that meet defined energy efficiency and broader sustainability standards. Reduce own operational emissions to achieve net zero by 2035. Offsetting strategy through purchase of high quality verified carbon credits.
Progress update	• In 2025, we continued to finance higher EPC-rated properties. We provided over £1.3 billion in lending to properties with an EPC rating of C or higher. We achieved this through existing product offerings like simplified discounted fees and higher LTV for EPC C+ rated properties and new propositions such as a platform partnership with Eligible to support retention of higher-rated EPC properties. • Improved the EPC mix across our Residential Property portfolios, with 50.7% of properties rated EPC C+, supporting a reduction in our Residential Properties finance emissions. • Continued to collaborate with industry bodies to advocate for energy efficiency improvements, providing input towards recent consultations and roundtable on Warm Homes Plan and Minimum Energy Efficiency Standards for the Private Rented Sector.	• Agreed methodology to assess financed emissions and implementation underway to establish baseline and complete measurement during 2026. • Embedded our sensitive-sector lending process, completing enhanced due diligence on 40 cases to assess environmental risks and transition plans, and no escalations to the Sustainability Panel. • Continued to work with industry bodies and external partners to explore solutions to support our customers’ net zero transition.	• Continued to optimise office utilisation and drive energy efficiencies across our sites, while investing in core-estate energy improvements and engaging colleagues on energy use and recycling. • Delivered our first ESOS compliance update which included reducing energy consumption in server rooms by adjusting air conditioning settings. • Continued to enhance data quality for business travel and purchased goods and services, resulting in a better understanding of our actual emissions.
Customer engagement	Develop engagement strategies, including through partnerships, to support customers with their energy efficient home improvements. Develop engagement strategies, including through partnerships, to support customers with their net zero transition. Collaborate with industry bodies and partners to raise customer awareness and collectively advocate for energy efficiency improvements in the built environment.	Develop engagement strategies, including through partnerships, to support customers with their net zero transition. Collaborate with industry bodies and partners to amplify the SME voice on net zero and jointly overcome challenges such as data limitations.	Develop colleague engagement strategies to support implementation of employee behavioural change initiatives that support our climate ambitions.

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CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Climate-related risk

Area impacted	Time horizon	Description	Expected impact	Mitigations	Description type
Shawbrook business area	Short-term: Before 2030 (aligned with financial planning)	Risk: Transition Policy – Enhanced reporting and regulatory requirements	Current metrics and disclosures could be considered insufficient or misleading as reporting requirements continue to evolve.	High	Reputational damage and compliance issues
	Medium-term: 2030-2035 (aligned with scenario analysis)	Market – Customer behaviour	Consumer appetite for sustainable lending continues to change. There is a risk of misunderstanding what customers need when structuring our products.	Medium	Reduced demand due to shift in customer preferences
Real Estate and Retail Mortgage Brands • SME • Motor finance	Long-term: Beyond 2035 (outside current planning horizon)	Climate-related risk or opportunity	High: Impacts within the financial planning horizon	Medium: Impacts within the scenario planning horizon	Low: Impacts beyond 2035

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CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTSTechnology – Costs to transition to lower emissions technology
* Real Estate and Retail Mortgage Brands
* SME
* Motor Finance
Medium-term New technology could be required across all sectors intended to reduce emissions, which could result in devaluation of existing technology.
Medium Increased credit risk and collateral valuations decreases
* Continue working with industry bodies to increase customer awareness of the benefits of reducing emissions to mitigate the perception of retrofit solutions or the transition to electric vehicles being too expensive in the short-term.

Policy – Energy efficiency regulation
* Real Estate and Retail Mortgage Brands
* SME
Medium-term We are dependent on effective government policy to help drive financed emissions reductions. There is a risk that policies will not be in line with the UK’s net zero commitment.
Medium Reputational damage including potential legal risk of not meeting targets and increased customer credit risk
* Agreed restrictions on new lending for properties rated below EPC E, unless exempt.
* Quarterly monitoring of EPC distribution including originations, retentions and redemptions of EPC C or higher rated properties.
* All lending within Development Finance must have plans to meet EPC C or higher.

Climate-related risks and opportunities
We have identified several climate-related transition and physical risks that could impact the Group, alongside potential opportunities. These have been considered as part of our strategic and financial planning processes. Climate-related risks and opportunities are prioritised based on their potential financial impact and time horizon. The table below summarises the most material transition and physical risks identified across the Group, alongside associated opportunities, mitigations and management actions. Further details on the outputs of our quantitative assessment can be found in the Risk Report section of these disclosures on pages 109 to 182.

187 Shawbrook Group plc | Annual Report and Accounts 2025 CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Climate-related risk	Area impacted	Time horizon	Description	Expected impact	Mitigations
Risk: Transition Reputational – Increased scrutiny of our role in transition from lending (financing) and business (operations)	* Real Estate and Retail Mortgage Brands * SME * Motor Finance * Own Operations	Medium-term	Current exposure to high emissions sectors and our role in the transition to net zero including impacts on our customers and our own business.	Medium Reputational damage and reduction in demand for our products	* Active monitoring and enhanced due-diligence requirements for new lending to high climate risk sectors. * Climate considerations are embedded in all credit papers and in key own operations processes, including supplier onboarding and requirements for new offices. * Climate oversight at Board to ensure we are progressing against our climate strategy.
Policy – Customer ability to increase efficiency	* Real Estate and Retail Mortgage Brands * SME * Motor finance	Short to Medium-term	Customers may struggle to fund energy efficiency improvements. This could mean customers’ ability to repay loans reduces and asset valuations may fall.	Medium Increased credit risk and collateral valuations decreases	* Controls and flags in place to notify customers when lending on EPC D or lower properties to consider future improvements to achieve EPC C or higher. * Plans to identify energy efficiency improvements and/or transition plans through customer engagement. * Actively monitor the market for signs and trends of falling property values and EPC ratings. * Customer engagement to support their transition towards electric vehicles and hybrid vehicles in the short-term.
Policy – Carbon tax	* Real Estate and Retail Mortgage Brands * SME * Motor finance * Own Operations	Long-term	Increased carbon pricing on our own emissions and customers’ operational emissions. This could mean increased operational costs for the Group and customers’ ability to repay loans reduces and asset valuations may fall.	Low Increased operational costs and customer credit risk	* Engage with customers to understand their plans to reduce emissions and the potential impact of increased carbon costs. This will also support in improving business continuity risk. * Enhanced due diligence carried out for high carbon sector transactions to understand decarbonisation plans. * Engage customers to support their transition towards electric and hybrid vehicles. * Implement carbon savings and energy efficiency improvements in existing offices to reduce own operational emissions. * Climate and energy efficiency principles built into sourcing process for new offices.

188 Shawbrook Group plc | Annual Report and Accounts 2025 CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Climate-related risk	Area impacted	Time horizon	Description	Expected impact	Mitigations
Risk: Physical Acute – Severe weather events	* Real Estate and Retail Mortgage Brands * SME * Own Operations	Long-term	Disruption due to physical events; damaged assets and/ or business disruption due to physical impacts.	Low Increased credit risk and collateral asset valuations	* Monitoring of flood risk for property exposure across the Group. * Customers are required to maintain valid property insurance throughout the duration of their loan. * Flood risk monitoring for our own operations and key suppliers. * Scenario analysis includes physical impact scenario on our property portfolio. * Integration of climate risk into business resilience scenarios as part of scenario analysis.
Chronic – Changes in precipitation patterns and temperatures	Opportunity Partnerships	Short-term	Collaboration enables acceleration of key opportunities.	High Increased revenue through additional funding provided	* We are members of trade bodies that seek to advance the UK’s net zero agenda and have participated in various industry forums on this agenda. * We plan to continue to collaborate with partners across the industry to further develop opportunities to enable the net zero transition.
Products and services	* Real Estate and Retail Mortgage Brands * SME * Motor Finance	Medium-term	Financing the net zero transition focusing on the delivery of energy efficient and low carbon solutions.	Medium Increased revenue through additional funding provided	* Actions have been taken across the Group to develop our sustainable finance proposition which includes providing a discount for buy-to-let mortgages to properties rated EPC C or higher. * Further new sustainable lending opportunities are being explored.
Energy source and efficiencies	Own Operations	Medium-term	Increase use of renewable energy and energy efficiency within our property portfolio.	Medium Reduced exposure to greenhouse gas (GHG) emissions and reduced sensitivity to changes in cost of carbon	* Offices we occupy and have operational control over are on renewables tariffs. * We continue to focus on increasing energy efficiency across our own operations, working with landlords to implement energy efficiency improvements. * We have incorporated energy efficiency principles into the procurement process for new offices.

189 Shawbrook Group plc | Annual Report and Accounts 2025 CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Process to identify risks and opportunities
We utilise a suite of tools and processes to identify risks and opportunities presented by climate change relating to our lending activities. These cover emissions measurement and both qualitative and quantitative scenario analysis.

Measuring building emissions and EPC data gathering
At an individual property level, we use EPC data to measure emissions and ascertain issues affecting transition, as well as a view of each financed property’s potential energy efficiency. During 2025, we strengthened our data capabilities, increasing coverage of financed emissions measurement for the Group Property Portfolios by improving data quality and coverage.

Measuring SME- linked financed emissions
Our SME customers are typically small companies who are not mandated to produce emissions figures under current regulation. In 2025, we defined our approach to measuring emissions by strengthening our assessment of climate risk across SME portfolios. This included identifying customers’ trading locations to support business continuity assessments and transition-financing opportunities, which are now at proof-of-concept stage. We also aligned our measurement methodology with the Partnership for Carbon Accounting Financials (PCAF). Building on the agreed methodology, planned actions for 2026 include establishing a sector-based climate base case to support planning, forecasting, and climate-informed decision-making, alongside insights to support customers’ net zero plans. We will also develop sector-based net zero pathways for our most material sectors. Due to current data limitations, this approach results in a PCAF score of 4. We plan to improve this over time as additional data becomes available.

Qualitative scenario analysis
We have analysed climate risks using the 2021 Climate Biennial Exploratory Scenario (CBES) (early, late action, and no action) over 30 years. These scenarios assumed varying levels of policy intervention to reduce carbon emissions. The analysis helped us to understand potential transition risks that could impact our business. Using a proportionate approach based on exposure levels, we selected five sectors for in-depth transition risk analysis. These sectors made up c.90% of our Real Estate and Retail Mortgage Brands, and SME business areas.# Quantitative scenario analysis

We have followed up on our two previous full quantitative scenarios using CBES with a focussed severe one-year stress using climate data at 2030 under the late action scenario which assumes a disorderly transition. The purpose of this scenario was to support the Group’s Internal Capital Adequacy Assessment Process (ICAAP) and assess whether physical and transition risk is adequately covered within Pillar 1 without double counting risks covered elsewhere in the ICAAP. This analysis is consistent with the cumulative losses used in our quantitative scenario and are broadly consistent with the conclusions of the 2021 CBES late action scenario versus the counterfactual scenario, considering property-related lending.

Physical risk assessments – lending

We have engaged with climate-related data partners, CLSQ and D-Risk to measure potential flood damage across the Group’s Property Lending Portfolios and SME operating addresses. We have used the floodability index which uses a Green, Amber, Red, Black 1 and Black 2 rating to categorise the risk of flooding. This is widely used by lenders and valuation surveyors to provide a consistent view across the property market. We have considered FloodRe $^1$ implications from 2039 onwards and how the market is beginning to regulate insurance pricing. We decided to tighten policy by strengthening automated decisioning with floodability ratings and plan to complete embedding of the forward-looking risk-based approach in 2026.

$^1$ Flood Re is a UK government-backed reinsurance scheme that supports the affordability of household flood insurance for high-risk properties. It is intended as a temporary measure and is scheduled to end in 2039, after which flood insurance pricing is expected to become fully risk-reflective.

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Physical risk assessment – own operations

We have completed a physical risk assessment of our own operations under flood, subsidence and coastal erosion climate perils. This includes the operational centres of our UK material outsourcers. The following scenarios were assessed:
* Flood risks under four climate scenarios (RCP $^1$ 2.6, 6 and 8.5) at three points in time (2030, 2050, 2080): One of our sites and one outsourcer site identified.
* Coastal erosion rates for locations within 1km of the coastline up to 2100: No office locations or current material outsourcers.
* Subsidence risks from a historical perspective (1961-90) and future perspective (2020-49; 2040-69): A number of sites were identified as subject to elevated subsidence risk. Our Third-Party Risk Management team within Risk Services engaged with internal Supplier Relationship Owners to determine what business continuity plans are in place to support an assessment of residual risk, of which none are outside of risk appetite.

$^1$ Stands for representative concentration pathway.

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Transition risk assessment – own operations

We have measured our Scope 1 and 2 emissions, as well as the relevant Scope 3 emissions for our own operations. We developed a plan to support our ambition of achieving net zero for our own operations by 2035. This plan, subject to evolution in line with our progress and wider business plans, includes a focus on renewable energy use, estate planning and the purchase of carbon offsets which we intend to reduce over time.

Outputs from qualitative risk assessment

We have undertaken qualitative scenario analysis, using the scenarios published as part of the 2021 CBES and developed and implemented our approach to embed the impact of climate change quantitatively within the ICAAP. We have assessed the impact of sector-related physical and transition risks on us. In addition, we completed a detailed review of assets and liabilities as part of the ILAAP, including sensitivity analysis to assess potential stress impacts, materiality and interconnectedness of climate, concluding that the impact is immaterial. Going forward, we plan to expand our approach to ILAAP to include enhanced documentation of assumptions and proportionality, embedding climate-driven liquidity stress testing and the integration of climate risk into the Recovery Plan and testing.

The table below outlines the risk impacts for our key sectors which influence collateral values and the ability of customers to repay loans:

Sector	Potential risk impacts
Property and construction	• Property at risk from flooding, subsidence, extreme weather events and chronic effects. This will impact asset valuations and owners may have costs to implement adaptation measures. • Properties which have poor energy efficiency could lead to falls in asset values. Owners have increased costs to remedy and may impact ability to repay loans.
Financial services	• The risks here lie in the look through to our financial services customers’ own clients. The majority of those clients are in the property (as above) and the automotive sectors and will need to comply with the transition in those sectors as applicable (e.g. move to electric and hybrid vehicles). This may impact vehicle collateral values and ability to repay loans.
Manufacturing and supply chain	• Assets can be moved to less risky areas of buildings or other sites but remain high risk whilst kept in the property. • Manufacturing is likely to see large shifts in policy (e.g. carbon taxes) and consumer preferences (e.g. desire for lower carbon products). Failure to adequately respond to these challenges may impact demand and increase costs, reducing the ability to repay loans.
Transport and storage	• Transport and storage are likely to see large shifts in policy (e.g. carbon taxes) and consumer preferences (e.g. desire for lower carbon products). Failure to adequately respond to these challenges may impact demand and increase costs, leading to a lower ability to repay loans.

The results of the analysis were broadly in line with expectations that under a more disruptive ‘late policy’ scenario, greater stressors would be faced by customers in the sectors in focus. These stressors were translated into specific steps we may take under each scenario for the relevant sectors, providing actionable insights that can be applied in the short term. Policy action is a highly rated driver for the property sector, with shifts in EPC requirements acting as a key indicator of the direction of travel in the decarbonisation of property in the UK. Technology change is expected to be a significant driver for lowering emissions in the manufacturing and supply chain sectors, whilst consumer behaviour is expected to drive demand for greener vehicles and other low-carbon, consumer-focussed sectors. We have considered these impacts as we have developed our transition plans outlined on page 186.

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Strategic resilience

Our strategy is aimed at supporting our customers’ transition to net zero and is impacted by climate-specific risks. We see the transition as an opportunity, particularly in our Commercial business and Retail Mortgage Brands, where policy interventions including a minimum EPC level and updates to our terms and conditions, have already been implemented. There are inherent risks in not recognising technological change and shifts in consumer demand, which may lead to adverse selection and a portfolio that is less re-financeable and exposed to reduced collateral values and/ or increased customer defaults. To support this, we are developing our retention capability, including product transfers and further advances, to provide the products needed to support the transition. We recognise that technology plays a significant role in assessing climate risk, and we are undertaking a pilot using smart-meter data to explore opportunities to improve the PCAF rating for property- related climate risk, enhance measurement accuracy and enable more granular risk assessments. We completed our annual quantitative assessment of the climate- related scenarios using data that we have received from our climate data partners. We have used the data to identify specific physical and climate-related adjustments to customer default and collateral valuations, enabling us to apply our stress-testing approaches to assess the impact of the late-policy-action scenario within our Pillar 2B assessment as part of our ICAAP. Pillar 2B is an assessment of risks over a 3-to-5 year period that are not currently picked up under Pillar 1 capital rules. For 2025, we also completed an assessment of the impact on expected credit losses (ECL) in line with recent Dear CFO letters on climate and completed a Pillar 2A assessment of climate risk, given that Pillar 1 assumes risks are internationally perfectly diversified.

Input into financial planning

Qualitative horizon scanning relating to climate change forms part of our macroeconomic trends analysis that accompanies our financial plan. In 2025, we followed up on our full quantitative scenario with a focussed severe one-year stress as part of our ICAAP. This scenario was designed to test that the Group was adequately capitalised in Pillar 1 for the transition and physical risks that its lending on property generate. This scenario was focussed on identifying the physical and transition risk without duplicating macroeconomic risk that is addressed in other parts of the ICAAP. We will further embed climate risk into our planning during 2026 as part of SS25/25 implementation by using a more granular base case and sector-specific scenarios. This will help us to incorporate climate considerations into our financial planning.# 193 Shawbrook Group plc | Annual Report and Accounts 2025 CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Governance Oversight and management of climate-related risks and opportunities are embedded within the Group’s governance framework. A summary of the arrangements is shown in the chart opposite. Further information on the respective roles of the Board and Management in overseeing, assessing and managing climate-related risks and opportunities is set out in the sections that follow.

Shawbrook Group Board
Responsible for setting the strategic aims and promoting the long-term sustainable success of the Group.

Climate Working Group
Responsible for delivery of strategy related to climate-related risks and opportunities. Focused on key themes: capability, governance and leadership, risk management, reporting and KPIs, climate data and measurement, operations, sustainable (green) finance and external engagement.

Emissions Measurement Working Group
Responsible for delivery of strategy related to climate-related emissions, including measurement and assurance activities for both financed and operational emissions.

Audit Committee
Responsible for overseeing internal controls and financial reporting including non-financial disclosures impacting financial statements.

Executive Committee
Supports the Chief Executive Officer in discharging their accountabilities including consideration of sustainability strategy, trends and targets.

Sustainability Sub-Committee
Responsible for developing and overseeing the delivery and implementation of the sustainability strategy. It also acts as the principal forum overseeing the activities of the Climate Working Group, and the Emissions Measurement Working Group, and supports programme related decision-making as appropriate. Reporting/escalations are made to the Board via the Executive Committee.

Sustainability Panel
Evaluates transactions identified as having high environmental and/or social risk. Comprises the Chief Executive Officer, Chief Financial Officer and Chief Risk Officer.

Executive Risk Committee
Supports the Chief Risk Officer in considering enterprise-wide risks including climate risk reporting and delivery against regulatory requirements.

Remuneration Committee
Responsible for reviewing and approving performance measures including those relating to climate.

Risk Committee
Responsible for advising the Board on current and future risks and determination of risk appetite including climate and strategic risk.

Key

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Board level committees
Executive level committees
Working Groups

The Board’s role and activities

The Board sets the Group’s strategic goals, including climate priorities, to promote the long-term sustainable success of the Group for the benefit of all our stakeholders. The Board is responsible for overseeing our approach and response to climate change, including oversight of progress against agreed targets. The Board discusses climate-related matters throughout the year, with formal updates received at least twice a year, focusing on material risks, progress against agreed targets and implications for strategy and risk appetite. The Board also receives periodic external training to remain informed on the evolving external and regulatory landscape. Certain aspects of climate governance are delegated to Management committees, as shown in the governance structure chart on page 194. During 2025, the Board (including Independent Directors) actively oversaw and challenged the Group’s climate strategy, including the following engagement:
* Reviewed and approved the Group’s 2024 Climate Report within the 2024 Annual Report and Accounts.
* Reviewed the Group’s half-year progress update on key metrics and targets and agreed new internal and external climate metrics and targets for the period 2026 to 2028.
* Received external training on the evolving landscape of climate-related disclosure requirements and regulatory expectations.
* Approved the climate risk appetite statement and a set of property-based risk appetite limits that provide a framework for future risk appetite limits that are aligned to interim targets and measures.
* Reviewed the outcomes of the climate quantitative scenario analysis as part of the Group’s ICAAP process.

Management’s role and activities

The Board delegates responsibility for the delivery and execution of the Group’s climate strategy to the Chief Executive Officer, supported by the Executive Committee, which is responsible for ensuring that the climate strategy is embedded across the Group. With oversight from the Board, Management is responsible for identifying, measuring, managing, monitoring, reporting on and challenging climate-related risks and opportunities. To ensure climate action remains a top priority, climate metrics were integrated within the 2025 variable remuneration performance measures and mandatory climate training has been implemented for all employees, including new joiners, embedding climate awareness across the organisation. During 2025, the Sustainability Sub-Committee continued to steer key aspects of the climate strategy, including:
* Discussed and reviewed operational carbon footprint results and the 2024 Climate Report.
* Reviewed progress against climate-related metrics ahead of discussion with the Executive Committee and the Board.
* Reviewed plans to evolve and deliver climate targets, including those relating to own operations and sustainable finance lending commitments.
* Discussed post-2025 climate targets and implications for the Group’s net zero ambitions for own operations by 2035 and financed emissions by 2050.

Separately, Management undertook external training on developing a realistic climate transition base case, to further support delivery of transition plans and to meet the PRA’s SS5/25 requirements on managing climate-related risks.

Chief Risk Officer
The Chief Risk Officer is the Senior Manager accountable under the PRA’s Senior Managers and Certification Regime for identifying and managing the risks arising from climate change. Climate considerations are included in the regular updates to the Executive Risk Committee.

Chief Financial Officer
The Chief Financial Officer has accountability for measuring financed emissions and integration of climate considerations into financial planning.

Chief Banking Officer, Chief Banking Risk Officer
The Chief Banking Officer and Chief Banking Risk Officer are responsible for aligning their strategic actions to respond to climate change by managing associated risks and opportunities, including meeting climate commitments.

Sustainability team
The Sustainability team (reporting into the Chief of Staff) works in partnership with key stakeholders across the Group to develop and deliver the climate strategy and has accountability for measuring emissions from own operations.

Executive Committee
The Executive Committee is supported in climate-related matters by the Sustainability Sub-Committee, chaired by the Chief of Staff, and its working groups. The Sustainability Sub-Committee has delegated responsibility to steer and provide oversight of the Group’s sustainability strategy including climate-related components. The Sustainability Sub-Committee convenes key senior representatives at least quarterly to oversee implementation of the Group’s climate strategy and embedding of climate-related deliveries into business-as-usual activities, and to track progress against internal and external climate metrics and targets.

Chief Executive Officer
The Chief Executive Officer is accountable for the development and delivery of the Group’s sustainability strategy, including overall accountability for climate-related risks and opportunities. Through the Executive Committee meetings, climate-related matters are discussed throughout the year, with spotlight sessions held at least twice a year.

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Risk management

We are aware that climate change represents an inherent risk to the Group, including the impact on the UK economy, asset values, customer affordability and operational resilience. Our objective is to continue to measure and embed climate risk within the Group thereby evolving our assessment of the risks and identify and deliver opportunities arising from climate change.

Physical risks can manifest in various ways, impacting organisations through water scarcity and quality issues, food security and extreme temperature changes affecting premises, operations, supply chains, transport and employee safety. Two main types:
* Acute physical risks: Event-driven such as cyclones, hurricanes or floods.
* Chronic physical risks: Long-term shifts in climate patterns (e.g. sustained higher temperatures) that may cause rising sea levels or persistent heatwaves.

We classify climate-related risks as follows:

Physical risk
Transition risk
Litigation risk

The transition to a lower-carbon economy may entail extensive policy, legal, technology and market changes to address mitigation and adaptation requirements related to climate change.
* Policy risks: Regulations aimed at climate mitigation (e.g. carbon pricing) and adaptation can create uncertainty and constrains on business operations.
* Legal risks: Companies may face legal action by individuals or entities seeking compensation from losses incurred due to the failure to mitigate or sufficiently adapt to the impacts and/or the inadequate disclosure of climate-related financial risks.
* Technology risks: The development and use of emerging technologies (e.g. renewable energy, battery storage and carbon capture and storage) can impact some companies’ competitiveness, costs and business models.• Market risk: Shifts in supply and demand for certain commodities, products and services driven by climate change can disrupt markets and create new challenges.
• Reputational risks: Public perception of a company’s climate action can adversely impact its brand and customer relationships. Litigation risk is defined as the risk of legal activity arising as a result of climate change. The risk arises from people or businesses seeking compensation for losses they may have suffered from physical or transition risks.

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Identification
Monitoring
Measurement
Reporting
Management
Challenge

1. Identification

Identifying risks that could impact the Group requires in-depth knowledge of our strategic objectives, business operations, target markets, and organisational structure. This process includes:

Obtaining portfolio-level climate risk data, on a proportionate basis, covering physical risks (including coastal erosion, surface water flooding and subsidence) across multiple IPCC RCP pathways, average building damage ratios, and transition risk metrics such as actual and potential EPCs, improvement options and indicative costs. The data also includes key property characteristics and emissions, with quarterly back-book review capability and API integration to support implementation into lending strategies.
Procuring operating location data for SME customers to enable comprehensive physical and transitional risk assessment. We have also worked with an external consultant to support the development of a PCAF aligned methodology for SME emissions measurement, with further analysis to be completed in 2026.
Testing the use of smart meter data to improve accuracy of emissions measurement for our property portfolios.

2. Measurement

Risk measurement quantifies the risks to the Group to enable assessment and selection of the appropriate means of managing the risk and to enable appropriate resources to be dedicated to its management. Appropriate systems, methodologies and models are selected for risk measurement and their limitations are understood and taken into account where possible. We consider the consistent application of planned and stressed conditions into the tools and measurement of risk.

Risk Management Framework (RMF)

We recognise the cross-cutting causal nature of climate risk and have designated climate risk as a principal risk in the Group’s risk taxonomy. This ensures the RMF is able to support the Group’s growth and manage the associated risks. Refer to the Risk Report on page 112 to see how climate risk is embedded within our overall RMF. In addition to the annual review of the RMF and risk appetite in 2025, the Group has taken a number of initiatives to strengthen its RMF. Climate risk specific highlights include a new climate base case scenario to improve data quality and transform this into actionable insights to support the assessment of physical and transition risks and opportunities across its portfolios. The Group completed the design of its approach to lending emissions in SME using a PCAF aligned approach to increase coverage of the lending portfolio which will help in setting net zero targets and transition plans. The Group approved some changes to its collateral and valuation policy to ensure that physical risk is reflected consistently in all valuation tools. The Group also added to its scenario analysis with the implementation of a Pillar 2A assessment in its ICAAP. To promote embedding, our climate risk standard supports principal risk owners with the identification, management and reporting of climate risk. The process for identifying, assessing and managing climate-related risks follows the six stages set out in the Group’s RMF and are reflected in all risk policies and include:

Risk appetite

Our risk appetite statement defines the types and levels of risks the Group is willing to accept or avoid within our risk capacity to achieve our business objectives. This is annually reviewed and approved by the Board alongside the budget and five-year plan. The Board approves and reviews performance against the Group’s risk appetite limits, including climate measures which continue to evolve alongside the development of new measures. Our risk appetite statement includes a qualitative statement supported by several objectives and dimensions, and a series of quantitative triggers and limits. Each measure in our risk appetite report is weighted to ensure that the most material measures are escalated in the event of a breach. In the context of climate risk, we have triggers for specific metrics such as potential EPC ratings on the buy-to-let and owner-occupied mortgage portfolios. These triggers serve as an ‘early-warning indicator’ to prompt timely action and prevent breaches of our risk appetite. Risk management plays an active role in our strategic planning process. As part of this process, the Risk function compares the impact of the Group’s plan to the risk appetite and has the authority to independently challenge and escalate initiatives that are not in line with the risk appetite statement. For further information on our risk appetite statement, objectives and dimensions please refer to page 111 within the Risk Report.

Our climate risk appetite statement: “The Group is committed to understanding the impacts its activities can have on the environment and embeds this understanding of physical and transition risks within its sustainability strategy. The Group will support its customers with financing for their transition to a low carbon economy and play its part in supporting the government’s commitment to net zero by 2050.”

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3. Management

Risk management involves identifying an appropriate strategy to address a specific risk which could include the following responses:
* Accept the risk – this is normally selected where the cost of mitigating the risk exceeds the loss if the risk were to materialise;
* Avoid the risk – by terminating the activity that generates the risk;
* Transfer the risk – by transferring to a third party, for example by taking insurance; or
* Mitigate the risk – by putting effective controls in place to reduce the risk.

Our primary risk management strategy for climate risk is to use the data and insights from scenario testing to mitigate the risk. We implement policies to support customers in the transition to a low carbon economy through our lending. In some instances, we will seek to avoid the risk. This could be due to non-alignment with the net zero trajectory or where the physical risk is not within our risk appetite.

4. Monitoring

We use physical and transition risk management information to monitor the evolution of climate risk within our lending portfolio. This includes setting targets for EPC mix and physical risk exposure. We also use management information to assess the strategic risk through adverse selection. For SME customers this may include continuity or resiliency scores to support customer engagement to help them understand climate risk to their strategy in addition to the other risks attached to the lending.

5. Reporting

We report on climate risks regularly through the Executive Risk Committee and onwards to the Risk Committee and Board. This includes performance against risk appetite metrics and the results of our quantitative scenario analysis through the ICAAP.

6. Challenge

Challenge of the climate strategy is provided by the Board governance process and supported by assurance reviews provided through the Group’s internal audit function. Some examples of work completed during 2025 to incorporate climate risk into existing principal risks include:
* Improved data quality to increase EPC coverage across property portfolios.
* Regulatory compliance to include climate risk assessment under Pillar 2A in line with PRA feedback.
* Developed an agreed SME measurement methodology, with support from external consultants, with further analysis and measurement planned in 2026.
* Assessment of Consumer Duty implications relating to the use of smart meter data for residential households.
* Development of a new and realistic climate base case scenario to support assessment of physical and transition risks and opportunities across all portfolios.

We have undertaken qualitative scenario analysis using the scenarios published as part of the 2021 CBES and developed and implemented our approach to embed the impact of climate change quantitatively within the ICAAP.

Risk management lifecycle

Climate risk impacts different risk types. Our risk analysis of assets and liabilities identified strategic, credit and liquidity risk as primary areas of focus for embedding climate risk in the RMF, followed by operational and conduct risk.

Strategic risk

Strategic risk is a risk that arises from the failure to execute the Board approved strategy. In the context of climate risk, this may manifest through adverse selection, leading to concentration in a particular area that may threaten our long-term viability as a business or misalign with external market expectations. To address this, we have developed a series of key risk indicators and metrics (e.g. the percentage of buy-to-let and owner-occupied properties currently at or with the potential to improve to an EPC rating of C or higher) to monitor and quantify the impact of adverse selection on performance.

Credit risk

We have developed a bespoke and proportionate approach to prioritise and assess climate risk within credit risk, aligning to the previous requirements of the PRA SS3/19. We intend to update our approach to align with the recently published PRA SS5/25 during 2026.This involves utilising four strategies covering 94% (2024: 96%) of the net loan book. The graphic on page 199 summarises our exposure against each strategy. Exclusions relate mainly to acquired portfolios or loans with a short tenor where there is very limited physical or transition risk.

Impact against other risk types

We continue to extend our climate risk management process to other principal risks as part of our approach to embed climate risk in the way we do business. This includes the delivery of climate-related opportunities and embedding of policy changes to ensure there is no climate arbitrage across the Group.

Top and emerging risks

Our top and emerging risks are identified through the process outlined in the RMF and are considered regularly by the Executive Risk Committee and subsequently by the Board Risk Committee. These are set out in the Risk Report on pages 117 to 127. The Board has considered the top and emerging risks and concluded that climate risk remains a top risk in 2025.

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Operating segments

Portfolio approach


£13,185m	74.6%	£1,123m	6.4%
Net Exposure	Customer climate strategy	Real Estate	SME
		£2,367m*	13.4%
		Customer climate strategy	Consumer Finance

Source: Shawbrook net loan book at 31 December 2025.
*Includes ThinCats.

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Data-led customer climate strategy

Our data and API driven climate strategy focuses on long-term lending through term loans. For these asset classes (except Motor Finance) we obtain physical and transition risk data from our climate data partner for our entire back book every quarter. This helps us review physical risks such as flooding and subsidence, and transition risks related to property EPCs, and emissions derived from energy costs. Insights from this data have supported product developments, strategy enhancements and policy rules including supporting customers in their transition to an EPC rating of C or higher and ensuring appropriate valuation for investment properties. We deliver climate data through an API to facilitate a frictionless origination journey and provide more certainty to customers on the outcome of the lending journey. These changes complement the work we’ve completed on our external portal for brokers supporting our Real Estate customers.

Policy and assurance strategy

Building regulations and the development of policies promoting modern building techniques are crucial for sustainable housing. We use independent monitoring surveyors to confirm property development aligns with our policy at each stage. We also have the benefit of a portal to assess physical risk including flood and subsidence risk. This ensures completed properties can be refinanced at exit under normal insurance terms.

Individual counterparty strategy

We apply a climate lens to our lending strategy, adopting a more tailored approach in certain situations. To support this, we refine our approach to material counterparties to include questions that identify the key climate risks. The climate data from climate portal and back book analysis is made available through a portal which helps to inform our relationship management teams prior to engaging with customers.

Exclusions with low climate risk/net zero impact

We have taken a proportionate approach to our climate risk assessment, excluding short tenor products where physical or transition risk is not material and/ or where financial materiality is limited. This applies to savings, unsecured personal loans, motor finance and loans that are in run-off.

Metrics and targets

Our ambition is to reach net zero by 2050

Financed emissions

Our most significant GHG emissions relate to Scope 3: category 15 –financed emissions associated with our lending portfolios. To inform our reduction strategy and achieve net zero by 2050, we measure emissions using the PCAF methodology for consistent, transparent and comparable results across the financial services sector. At present, we have measured financed emissions for the Group’s Property Lending Portfolios. A methodology has been agreed to assess emissions across our SME portfolios, which we will implement during 2026 to establish a baseline and complete initial measurement. We will continue to improve data quality and expand coverage across our loan book where proportionate and material. This is expected to include our motor portfolio in the future, subject to balance sheet materiality. Other asset classes remain outside the current measurement boundary but will be kept under review as methodologies and regulatory expectations evolve.

Property Lending Portfolios

Of the Group’s £17.6 billion total exposure, £12.1 billion (69%) relates to the Group Property Portfolios ¹. Within this, £8.6 billion (71%) is currently in scope for financed emissions measurement, where sufficient data exists to calculate emissions in line with PCAF requirements. This results in a PCAF data quality score of 3 ². Emissions are primarily estimated using available EPC data, adjusted for UK grid decarbonisation and unregulated emission sources (e.g. appliances) to improve accuracy. The remaining £3.5 billion (29%) is temporarily out of scope due to data limitations. A structured data remediation plan is underway to address these gaps and increase portfolio coverage over time.

The table below sets out how the Group’s Property Lending Portfolios are segmented in line with PCAF guidance on building classification. Bridging and acquired portfolios are excluded from this analysis ³.

Property Lending Portfolios	Property type classification	Operating segment
Residential Properties	Real Estate	• Buy-to-let (secured against residential property) • Owner-occupied mortgages ⁴
Retail Mortgage Brands	• Buy-to-let (secured against residential property) • Owner-occupied mortgages
Commercial Properties	Real Estate	• Commercial investment (including semi-commercial) lending ⁵

¹ Data as of November 2025. This is used for financed emissions measurement for the Group’s Property Lending Portfolios.
² Defined by PCAF as using “Estimated building energy consumption per floor area based on official building energy labels and the floor area are available”.
³ The Group’s acquired portfolios include certain buy-to-let and commercial investment lending that is in run-off.
⁴ This includes second charge mortgages within our back book.
⁵ Where the commercial element of the property accounts for more than 50% of its value it is classified as a Commercial Investment mortgage.

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Clear metrics and targets are fundamental to tracking progress and managing climate-related impacts. We report Scope 1, 2 and relevant Scope 3 emissions in line with the PCAF and the GHG Protocol, providing transparent and comprehensive disclosure. Emissions are fully disaggregated by category and clearly split between operational (non-financed) and financed emissions. Scope 1, Scope 2 and Scope 3 emissions excluding financed emissions are disclosed in the SECR report on page 43, with both current and prior year comparatives. Scope 3 financed emissions are presented separately in the following section, reflecting emissions associated with our lending activities.

Attribution factor$_b$ = Outstanding amount$_b$ $\times$ Attribution factor$_b$ $\times$ Property value at origination$_b$

Building emissions$_b$ = (with $b$ = building)

We measure these emissions using EPC data, adjusting for UK grid decarbonisation and unregulated emissions sources such as appliances to improve accuracy, resulting in a PCAF data quality score of 3 ¹.

Our progress

Emissions intensity relative to our 2021 baseline has continued to reduce for both Residential Properties and Commercial Properties, by 17.4% and 36.8%, respectively. The main drivers have been improvements in the overall EPC mix across both portfolios, enhanced data matching and accuracy, and external factors such as annual updates to emission factors, which were lower than the previous year reflecting ongoing grid decarbonisation in the UK.

Data limitations and methodology enhancements

Our measurement of property emissions is subject to data and methodological limitations, including incomplete EPC coverage and reliance on standardised and sometimes outdated assumptions rather than actual energy consumption. Where available, EPC data is matched to the property portfolio and supplemented with updated grid and unregulated emissions assumptions, in line with current market practice. EPC coverage is expected to improve over time through continued customer engagement and methodological enhancements. We will also assess the use of property-level energy consumption data, where this becomes publicly available, to further improve accuracy and support transition planning.

Type	Absolute emissions (tCO2e) ²	Emissions intensity (kgCO2e/m²) ³
	2025	2024
Residential Properties	80,646	78,497
Commercial Properties	26,632	25,453

¹ Defined by PCAF as using “Estimated building energy consumption per floor area based on official building energy labels and the floor area are available”.
² Total GHG emissions associated with the Property Lending Portfolios.To understand the efficiency of the Property Lending Portfolios in terms of emissions per unit, which allows for portfolio growth. 201 Shawbrook Group plc | Annual Report and Accounts 2025 CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Residential Properties risk assessment

Energy risk assessment

As part of our approach to managing energy-related transition risk across our property portfolios, we receive energy risk assessments during the origination process. This informs credit decision-making and supports the identification and management of both climate- related transition risk and opportunities. Our partnership with CLSQ and D-Risk provides valuable insights into property-level energy performance, including potential EPC ratings, enabling us to proactively address climate risk. We have also continued to improve EPC data coverage across the back book. Current EPC coverage for the Group’s buy-to-let mortgage portfolio is 81% (2024: 71%) and owner-occupied mortgage portfolio is 88% (2024: 85%).

	2025	2024
Exposure to buy-to-let mortgages by EPC	X%	X%
Exposure to owner-occupied¹ by EPC	X%	X%

¹ This includes second-charge mortgages within our back book.

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Flood risk assessment

We continue to monitor physical risk data to assess the proportion of our buy-to-let and owner-occupied mortgage portfolios exposed to climate risk. Through our climate data partnership, we evaluate surface water, coastal and river flood hazards at a property level using location-specific data. This model considers flood type, frequency and depth of flooding to determine potential damage. Our analysis shows that 1.0% of total loan exposure across both portfolios are located in areas classified as high or very high flood risk zones. To date, the Group has not had any losses attributed to flooding, indicating appropriate and robust controls within our underwriting process to mitigate this risk. We have also modelled future flood risk projections to 2055 under a high physical risk scenario assuming current defences remain in place. While this analysis indicates a potential increase in risk over time, the projected increase is not considered material to the Group’s risk profile.

Flood exposure by region

Region	% of total regional loans at high risk	% of total regional loans at very high risk	Illustration key
South East	0.4%	1.3%	1.7%
South West	2.1%	0.7%	0.9%
Wales	3.0%	3.7%	2.8%
West Midlands	2.6%	2.2%	2.4%
Yorkshire & Humberside	0.4%	0.5%	1.1%
Scotland	1.1%	1.4%	2.6%
North West	2.6%	0.6%	0.7%
North East	1.1%	1.1%	0.2%
Greater London	0.2%	0.6%	0.5%
East Midlands	0.9%	0.9%	1.4%
East Anglia	2.0%	1.2%	1.3%

	2025	2024
	X%	X%

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Carbon-related exposure risk assessment

We have assessed our climate-related transition and physical risks across our lending portfolios using a proportionate, portfolio-specific approach. Metrics used include financed emissions measurement, where data is available, and portfolio-level physical and transition risk analysis applied on both a quantitative and qualitative basis. Property-related exposures, representing approximately 70% of the loan book, have been assessed using these metrics and are considered to have very low physical and transition risks. For SME portfolios, the Group has developed a PCAF-aligned, sector- based methodology using external data for Great Britain and pending completion of emissions measurement, a high-level qualitative assessment of physical and transition risks has been undertaken for these portfolios. The remaining exposures have been assessed qualitatively for physical and transition risks only and will not be assessed quantitatively, in line with the Group’s proportionate approach. A summary of the assessment by exposure is set out in the table below.

31 December 2025

	Net Exposure £m	%	Transition Risk	Physical Risk
Commercial Bank
Commercial Bank - Real Estate	7,622.9	43.1	Very low	Low
Commercial Bank - SME
Agriculture, forestry and fishing	2.8	0	Low	Very low
Mining and quarrying	0	0	Low	Very low
Manufacturing	276.6	1.6	Very low	Low
Transport, storage and utilities	422.6	2.4	Low	Very low
Construction	705.1	4.0	Very low	Low
Wholesale and retail trade	261.4	1.5	Very low	Very low
Real estate activities	945.0	5.3	Very low	Very low
Financial and insurance activities	900.6	5.1	Very low	Very low
Services and other	794.7	4.5	Very low	Very low
Personal: Other	0.2	0	Very low	Very low
Retail Bank
Retail Mortgage Brands	4,717.3	26.7	Very low	Low
Consumer Lending	330.8	1.9	Low	Very low
Motor Finance	691.8	3.9	Low	Very low
Total Shawbrook	17,671.8	100

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Sustainable finance originations

In 2025, we originated over £740 million in sustainable finance, supporting our customers’ transition to net zero. This brings our total sustainable financing from 1 January 2023 to 31 December 2025 ¹ to over £1.8 billion, surpassing our current target of £1.2 billion sustainable finance originations. Looking ahead, we have renewed our commitment for the period 2026 to 2028, targeting £2 billion of sustainable finance originations. Sustainable finance originations are assessed against the environmental eligibility criteria set out in the Group’s sustainable finance framework ².

¹ We originated £475 million and £640 million of sustainable finance in 2023 and 2024 respectively. ² More information can be found on our website.
We have committed to provide £2 billion sustainable finance originations between 1 January 2026 and 31 December 2028.

Own operational footprint

We measure and manage GHG emissions from our operational activities using a third-party climate management and carbon accounting platform. In line with the GHG Protocol, emissions are reported across Scopes 1, 2, and 3 (categories 1–14), with financed emissions (Scope 3, category 15) reported separately on page 201. In 2025, our total operational emissions were calculated at 12,434.3 tonnes of carbon dioxide equivalent (tCO2e), of which 162.2 tCO2e relate to our own operations. To offset emissions associated with our own operations, we have invested in high-quality, verified carbon credits, maintaining carbon neutrality as we progress towards our net-zero target through ongoing emissions reduction initiatives. A detailed breakdown of emissions by scope is provided in the Group’s SECR Report on page 43. Our ambition is to reach net zero by 2035 for our own operations and maintain carbon neutrality in the meantime.

Purchased goods and services

We recognise that our climate impact extends across our supply chain, with purchased goods and services representing the majority of our operational emissions. As at 31 December 2025, 57.5% of our suppliers were assessed as having commitments aligned with net zero objectives. We have extended our commitment relating to supplier net zero alignment to the end of 2028, and plan to continue engaging with our key suppliers with an ambition to increase the proportion aligned to net zero, in support of the wider transition. We remain committed to ensuring that at least 50% of suppliers with annual spend above £200,000 are net zero aligned through to the end of 2028.

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FINANCIAL STATEMENTS
CLIMATE REPORT
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RISK REPORT
STRATEGIC REPORT
xxx Independent Auditor’s Report xxxx for the year ended 31 December 2025

Financial Statements 207

Independent Auditor’s Report 216
Consolidated statement of profit and loss 217
Consolidated statement of comprehensive income 218
Consolidated and Company statement of financial position 219
Consolidated statement of changes in equity 220
Company statement of changes in equity 221
Consolidated and Company statement of cash flows 222
Notes to the financial statements 206

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Independent Auditor’s Report to the members of Shawbrook Group plc

1. Our opinion is unmodified

We have audited the financial statements of Shawbrook Group plc (the ‘parent Company’ or the ‘Company’) and its subsidiaries (together referred to as the ‘Group’) for the year ended 31 December 2025 which comprise the Consolidated statement of profit and loss, Consolidated statement of comprehensive income, Consolidated and Company statement of financial position, Consolidated statement of changes in equity, Company statement of changes in equity, Consolidated and Company statement of cash flows, and the related notes, including the accounting policies in note 7. In our opinion:
* the financial statements give a true and fair view of the state of the Group’s and of the parent 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 UK-adopted international accounting standards;
* the parent Company financial statements have been properly prepared in accordance with UK-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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (‘ISAs (UK)’) and applicable law.Our responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the Board Audit. We were first appointed as auditor by the directors in June 2011. The period of total uninterrupted engagement is for the fifteen financial years ended 31 December 2025. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to public interest entities. No non-audit services prohibited by that standard were provided.

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.

We summarise below the key audit matters (unchanged from 2024), in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters:

Overview	Materiality: Group financial statements as a whole	£14.7m (2024: £12.7m) 4.6% of normalised Group profit before tax (2024: 4.3% of Group profit before tax)
Key audit matters vs 2024	Recurring risks
Expected credit losses on loans and advances to customers	Measurement of loans and advances to customers at fair value through other comprehensive income
IT user access management	Recoverability of parent Company’s investment in subsidiary

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Key Audit Matter	The risk	Our response
Expected credit losses on loans and advances to customers	£203.4m; 2024: £172.0m Refer to Audit Committee report, Risk Report and Notes to the financial statements.	Subjective Estimate The estimation of expected credit losses (‘ECL’) of loans to customers involves significant judgement and estimates with a high degree of uncertainty. The key areas where we have identified greater levels of Group’s judgement and therefore increased levels of audit focus in the estimation of ECL are: • Model estimations – Inherently judgemental modelling is used to estimate ECL, particularly in determining the Probability of Default (‘PD’) in certain portfolios. ECL may be inappropriate if certain models or underlying assumptions do not accurately predict defaults or recoveries over time, become out of line with wider industry experience, or fail to reflect the credit risk of financial assets. As a result, certain IFRS 9 models and model assumptions are the key drivers of complexity and uncertainty in the Group’s calculation of the ECL estimate. • Economic scenarios – IFRS 9 requires the Group to measure ECL on an unbiased forward- looking basis reflecting a range of future economic conditions. Significant judgement is applied by the Group in determining the economic scenarios used, particularly in the current economic environment, and the probability weightings applied to them. • Post-model adjustments – Adjustments to the model-driven ECL results are made by the Group to address known impairment model limitations or emerging trends. The identification of a complete set of adjustments is inherently subjective and significant judgement is involved in estimating these amounts. • Significant Increase in Credit Risk (‘SICR’) – The staging criteria selected to identify a significant increase in credit risk is a key area of judgement within the Group’s ECL calculation as these criteria determine whether a 12-month or a lifetime provision is recorded. • Individually assessed – Stage 3 – The measurement of SME Stage 3 assets is an inherently judgemental area within the financial statements. Lifetime expected credit losses on Commercial customer exposures in Stage 3 are individually determined based on certain assumptions about the recovery of the asset using various key inputs including the expected future cash flows, and discount rates. The effect of these matters is that, as part of our risk assessment, we determined that ECL provisioning has a high degree of estimation uncertainty, with a potential range of reasonable outcomes greater than our materiality for the financial statements as a whole, and possibly many times that amount. Disclosure quality Disclosure quality – The disclosures regarding the Group’s application of IFRS 9 are important in explaining the key judgements and material inputs to the IFRS 9 ECL results, as well as sensitivity of the ECL results.

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Key Audit Matter	The risk	Our response
Measurement of loans and advances to customers at fair value through other comprehensive income	£4,068.0m; 2024: £3,580.2m Refer to Audit Committee report, Risk Report and Notes to the financial statements.	Subjective estimate Loans and advances to customers originated under the ‘held to collect and sell’ business model are classified in accordance with IFRS 9 as measured at fair value through other comprehensive income. The fair value model uses unobservable inputs and as such the loans are classified as level 3 in the fair value hierarchy under IFRS 13. For fair value measurement, there is subjectivity in pricing the significant unobservable inputs. Where significant pricing inputs are unobservable, management has limited reliable, relevant market data available in determining the fair value, and hence estimation uncertainty can also be high which leads to a significant risk of fraud and error. We determined that the risk-adjusted discount rate applied in the calculation has a high degree of estimation uncertainty, with a potential range of reasonable outcomes on the fair valuation of loans and advances to customers greater than our materiality for the financial statements as a whole, and possibly many times that amount. As a result, a significant risk of error and fraud was identified in respect of the risk-adjusted discount rate determined by the Group.

Methodology choice: We assessed the appropriateness of the methodology used to value the loans, including suitability of the model and key assumptions used around the risk-adjusted discount rate.

Our valuation expertise: We engaged our internal valuation specialists to reprice the fair value portfolio using an independent credit risk-adjusted discount factor, developed based on the risk characteristics of each product and data on similar instruments in the market and recalculate the underlying cash flows.

Sensitivity analysis: Our valuation specialists also calculated the impact on fair value for sensitivity over the key assumptions such as the risk-adjusted discount factor and prepayment curves.

Test of details: We performed tests of details over the completeness and accuracy of the data that feeds into the model primarily by tracing the relevant data elements to the original source documentation.

Assessing transparency: We critically assessed the adequacy of the disclosures regarding the degree of estimation uncertainty involved in arriving at the valuation including sensitivity analysis and fair value hierarchy disclosure.

Our results: We found the measurement of the loans and advances to customers at fair value through other comprehensive income, and associated disclosures made to be acceptable (2024: acceptable).

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Key Audit Matter

The risk	Our response
IT user access management	Refer to Risk Report.

Control performance The Group’s accounting and reporting processes are dependent on automated controls enabled by IT systems. User access management controls are an important component of the IT control environment that ensure that unauthorised access and changes to systems and data does not impact the effective operation of the automated controls in the financial reporting processes. Our audit approach relies on the effectiveness of IT access and change management controls. Our audit procedures identified deficiencies in certain IT access controls for systems relevant to financial reporting, like those identified in the prior years. Management continues to remediate open deficiencies around user access management. Since some of these deficiencies remained open during the year and as at year end, we performed additional procedures to respond to the risk of unauthorised changes to automated controls over financial reporting, such as an assessment of compensating controls implemented and operated by management during the period or performing substantive procedures.

Our audit procedures included:

Control testing: at the Group and relevant third parties including service organisations, we tested the design, implementation and operating effectiveness of relevant controls related to user access management including:
* Authorising access rights for new access provision;
* Authorising modified access;
* Timely removal of user access rights;
* Privileged user and developer access to production systems, the procedures to assess granting, potential use, and the removal of these access rights; and
* Segregation of duties including access to multiple systems that could circumvent segregation controls.

Test of details: For certain account balances we responded to the deficient general IT controls by performing additional substantive testing. This included increasing sample testing over certain account balances. We also compared selected data to external sources (such as third-party contracts and / or bank statements), to test the integrity of the transactional level data that is flowing into and contained within the Group’s financial statements.

Our Results: Based on our testing and the additional procedures performed in response to the IT deficiencies identified, we concluded that none of the IT deficiencies impacted the effective operation of automated controls that we placed reliance on in our audit (2024: acceptable).

Key Audit Matter

The risk	Our response
Recoverability of parent Company’s investment in subsidiary (£508.4m; 2024: £432.5m)	Refer to Notes to the financial statements.

Low risk, high value The carrying amount of the parent Company’s investment in its subsidiary represents 75% (31 Dec 2024: 71%) of the parent Company’s total assets. The investment’s recoverability is not at a high risk of material misstatement or subject to significant judgement or estimation uncertainty. However, due to the materiality in the context of the parent Company’s financial statements, this is considered to be the area that has the greatest effect on our overall parent Company audit. We performed the following audit procedure rather than seeking to rely on any of the Company’s controls because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described below.

Test of details: We compared the carrying amount of 100% of investments with the relevant subsidiary’s financial statements to identify whether its net tangible assets, being an approximation of its minimum recoverable amount, were in excess of its carrying value. We also considered the subsidiary’s track record of generating profits when assessing indicators of recoverability.

Our results: We found the parent Company’s conclusion that there is no impairment of its investments in subsidiary to be acceptable (2024: acceptable).

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Independent Auditor’s Report to the members of Shawbrook Group plc

3. Our application of materiality and an overview of the scope of our audit

Our application of materiality

Materiality for the Group financial statements as a whole was set at £14.7m (2024 £12.7m), determined with reference to a benchmark of Group profit before tax, normalised to add back an accelerated share-based payment expense of £25.0m (2024: £nil) following the Group’s initial public offering (‘IPO’), and administrative expenses which were directly attributable to the IPO of £20.3m (2024: £nil), of which it represents 4.6% (2024: 4.3%). We adjusted for these items because they do not represent the normal, continuing operations of the Group. We performed risk assessment procedures on the share-based expense and further audit procedures on the IPO costs excluded from the normalised Group profit before tax used as the benchmark for our materiality.

Materiality for the parent Company financial statements as a whole was set at £6.0m (2024: £6.0m), determined with reference to a benchmark of Company total assets, of which it represents 0.9% (2024: 1.0%).

In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole. Performance materiality was set at 65% for the Group financial statements and 75% for the parent financial statements (2024: 65% for Group and parent) of materiality for the financial statements as a whole, which equates to £9.6m (2024: £8.3m) for the Group and £4.5m (2024: £3.9m) for the parent Company. We applied these percentages in our determination of performance materiality based on the level of identified misstatements and control deficiencies during the prior period impacting the Group financial statements with a lower performance materiality applied to the parent Company owing to those misstatements and control deficiencies being less prevalent in the parent Company.

We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £0.7m (2024: £0.6m), in addition to other identified misstatements that warranted reporting on qualitative grounds. We agreed to report misstatements related to the parent Company exceeding £0.3m (2024: £0.3m).

Overview of the scope of our audit

We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of material misstatement to the Group financial statements and which procedures to perform at these components to address those risks. In total, we identified 8 components (2024: 6), having considered our evaluation of the Group’s operational and legal structure, existence of common information systems, existence of common risk profile across entities/business units/functions/business activity and our ability to perform audit procedures centrally. Of those, we identified 1 (2024: 1) quantitatively significant component, which is Shawbrook Bank Limited, which contained the largest percentages of either total income or total assets of the Group, for which we performed audit procedures. We also performed the audit of the parent Company and selected one component with accounts contributing to the specific risks of material misstatement of the Group financial statements, based on qualitative and quantitative considerations. Accordingly, we performed audit procedures on 3 components (2024: 2). We set the component materialities, ranging from £7.0m to £14.4m (2024: £8.3m to £11.5m), having regard to size and risk profile.Normalised PBT Group materiality Group materiality £14.7m (2024: £12.7m) £14.4m Component materiality (2024: £11.5m) £14.7m Whole financial statements materiality (2024: £12.7m) £9.6m Whole financial statements performance materiality (2024: £8.3m) £0.7m Misstatements reported to the audit committee (2024: £0.6m) Group normalised profit before tax (PBT) £317.5m (2024: £295.1m)

96% (2024: 96%)
100% (2024: 100%)
90% (2024: 92%)

Our audit procedures covered the following percentage of Group total income:

We performed audit procedures in relation to components that accounted for the following percentages of Group profit before tax and Group total assets:

	Group PBT	Group total assets

We performed analysis at an aggregated Group level to re-examine our assessment that there is not a reasonable possibility of a material misstatement in these components.

Group total income

Impact of controls on our group audit

The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s internal control over financial reporting.

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4. Going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group or the parent Company or to cease their operations, and as they have concluded that the Group’s and the parent Company’s financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the financial statements (‘the going concern period’).

We used our knowledge of the Group and parent Company, its industry and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Group’s and parent Company’s financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Group’s and parent Company’s available financial resources over this period were:

The availability of funding and liquidity in the event of a market-wide stress scenario; and
Insufficient regulatory capital to meet minimum regulatory capital levels.

We considered whether these risks could plausibly affect regulatory capital and liquidity in the going concern period by comparing severe, but plausible, downside scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Group’s and parent Company’s financial forecasts.

We considered whether the going concern disclosure in the financial statements gives a full and accurate description of the Director’s assessment of going concern.

Our conclusions based on this work:

we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group’s or parent Company’s ability to continue as a going concern for the going concern period;
we have nothing material to add or draw attention to in relation to the directors’ statement in note 3 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s use of that basis for the going concern period, and we found the going concern disclosure in note 3 to be acceptable; and
the related statement under the UK Listing Rules set out on page 108 is materially consistent with the financial statements and our audit knowledge.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Group or the parent Company will continue in operation.

5. Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud (‘fraud risks’) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

Enquiring of directors, internal audit, executive management and inspection of policy documentation as to the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for ‘whistleblowing’, as well as whether they have knowledge of any actual, suspected or alleged fraud;
Reading Board, Audit Committee and Risk Committee meeting minutes;
Considering remuneration incentive schemes and performance targets for management and directors; and
Using analytical procedures to identify any unusual or unexpected relationships.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as expected credit losses on loans and advances to customers and measurement of loans and advances to customers at fair value through other comprehensive income.

On this audit we do not believe there is a fraud risk related to revenue recognition because there is limited complexity and judgement involved in calculation and recognition of revenue.

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We also identified a fraud risk related to expected credit losses on loans and advances to customers and measurement of loans and advances at fair value through other comprehensive income due to the fact these involve significant estimation uncertainty and subjective judgements that are difficult to corroborate. Further detail in respect of expected credit losses on loans and advances to customers and measurement of loans and advances at fair value through other comprehensive income is set out in the key audit matter disclosures in Section 2 of this report as the procedures relating to those estimates and judgements also address the risk of fraud.

We performed procedures including:

identifying journal entries and other adjustments to test based on risk criteria and comparing the identified entries to supporting documentation. These included journal entries posted by senior management, journals posted to seldom used accounts, and those including a specific description;
assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
evaluating the business purpose of significant unusual transactions.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group’s regulatory and legal correspondence and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s license to operate. We identified the following areas as those most likely to have such an effect: specific areas of regulatory capital and liquidity, conduct (including consumer duty), money laundering and financial crime and certain aspects of company legislation recognising the financial and regulated nature of the Group’s activities.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any.Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non- detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

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6. We have nothing to report on the other information in the Annual Report

The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Strategic report and directors’ report

Based solely on our work on the other information:
* we have not identified material misstatements in the strategic report and the directors’ report;
* in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
* in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and longer-term viability

We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge. Based on those procedures, we have nothing material to add or draw attention to in relation to:
* the directors’ confirmation within the Group Viability Statement page 56 that they have carried out a robust assessment of the emerging and principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
* the Emerging and Principal Risks disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed and mitigated; and
* the directors’ explanation in the Group Viability Statement of how they have assessed the prospects of the Group, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

We are also required to review the Group Viability Statement, set out on page 56 under the UK Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge. Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance disclosures and the financial statements and our audit knowledge. Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit knowledge:
* the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy;
* the section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee considered in relation to the financial statements, and how these issues were addressed; and
* the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.

We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified by the UK Listing Rules for our review. We have nothing to report in this respect.

Independent Auditor’s Report to the members of Shawbrook Group plc

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Independent Auditor’s Report to the members of Shawbrook Group plc

7. We have nothing to report on the other matters on which we are required to report by exception

Under the Companies Act 2006, we are required to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
* the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or
* certain disclosures of directors’ remuneration specified by law are not made; or
* we have not received all the information and explanations we require for our audit.

We have nothing to report in these respects.

8. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page 108, the directors are responsible for:
* the preparation of the financial statements including being satisfied that they give a true and fair view;
* such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
* assessing the Group and parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
* using the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities . The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report has been prepared in accordance with those requirements.

9. The purpose of our audit work and to whom we owe our responsibilities

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.Simon Clark (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 11 March 2026

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FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Consolidated statement of profit and loss for the year ended 31 December 2025

	Note	2025 £m	2024 £m
Interest income calculated using the effective interest rate method	12	1,284.6	1,199.3
Other interest and similar income	12	137.3	187.7
Interest expense and similar charges	13	(775.0)	(796.1)
Net interest income		646.9	590.9
Operating lease rental income		7.3	8.7
Depreciation on operating leases	28	(6.2)	(7.4)
Net other operating lease income		0.1	0.1
Net operating lease income		1.2	1.4
Fee and commission income	14	17.3	16.2
Fee and commission expense	14	(18.7)	(16.1)
Net fee and commission (expense)/income	14	(1.4)	0.1
Net gains on structured asset sales	15	34.8	14.1
Net (losses)/gains on derivative financial instruments and hedge accounting	27	(2.2)	1.9
Net gains on loans and advances measured at FVTPL	40	0.3	-
Net other operating income		2.5	1.4
Net operating income		682.1	609.8
Administrative expenses	16	(326.1)	(252.8)
Impairment losses on financial assets	20	(83.0)	(67.2)
Provisions	35	(0.8)	5.3
Total operating expenses		(409.9)	(314.7)
Profit before tax		272.2	295.1
Tax	21	(76.7)	(75.2)
Profit after tax		195.5	219.9
	2025	2024
Earnings per share
Basic (pence)	22	35	40
Diluted (pence)	22	35	40

The notes on pages 222 to 281 are an integral part of these financial statements.

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Consolidated statement of comprehensive income for the year ended 31 December 2025

	Note	2025 £m	2024 £m
Profit after tax		195.5	219.9
Items that may be reclassified subsequently to the statement of profit and loss:
Cash flow hedging reserve
Net (loss)/gains from effective portion of changes in fair value	27	(4.4)	17.6
Reclassifications to statement of profit and loss	27	(6.6)	(6.2)
Related tax	30	3.0	(3.2)
Movement in cash flow hedging reserve		(8.0)	8.2
Fair value through other comprehensive income reserve
Net gains from changes in fair value		18.3	35.6
Change in loss allowance	20	1.4	5.3
Related tax	30	(5.5)	(11.0)
Movement in fair value through other comprehensive income reserve		14.2	29.9
Total items that may be reclassified subsequently to the statement of profit and loss		6.2	38.1
Other comprehensive income, net of tax		6.2	38.1
Total comprehensive income		201.7	258.0
Attributable to
Shareholders		186.6	242.9
Other equity owners	42	15.1	15.1

The notes on pages 222 to 281 are an integral part of these financial statements.

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FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Consolidated and Company statement of financial position as at 31 December 2025

Assets	Group		Company
	Note	2025 £m	2024 £m	2025 £m
Cash and balances at central banks	23	1,924.5	2,244.7	–
Loans and advances to banks	23	246.8	304.4	–
Loans and advances to customers	24	17,770.1	15,176.6	–
Investment securities	26	2,158.0	1,513.6	–
Derivative financial assets	27	87.5	227.1	–
Current tax receivable		7.9	14.5	–
Property, plant and equipment	28	54.6	65.5	–
Intangible assets	29	145.8	124.0	–
Deferred tax assets	30	23.8	16.0	–
Other assets	31	49.9	36.3	0.5
Investment in subsidiaries	32	–	–	508.4
Subordinated debt receivable	39	–	–	172.7
Total assets		22,468.9	19,722.7	681.6
Liabilities
Amounts due to banks	33	1,430.6	1,376.1	–
Customer deposits	34	18,353.5	15,804.0	–
Provisions	35	8.3	11.5	–
Derivative financial liabilities	27	93.2	117.1	–
Debt securities in issue	36	412.3	549.2	–
Lease liabilities	37	24.8	25.6	–
Other liabilities	38	132.2	85.8	8.2
Subordinated debt liability	39	171.5	171.1	172.7
Total liabilities		20,626.4	18,140.4	180.9
Equity
Share capital	41	2.6	2.5	2.6
Share premium account		134.7	87.3	134.7
Capital securities	42	123.1	123.1	123.1
Capital contribution reserve		19.9	19.9	19.9
Cash flow hedging reserve		4.7	12.7	–
Fair value through other comprehensive income reserve		43.8	29.6	–
Retained earnings		1,513.7	1,307.2	220.4
Total equity		1,842.5	1,582.3	500.7
Total equity and liabilities		22,468.9	19,722.7	681.6

	Group		Company
	Note	2025 £m	2024 £m	2025 £m

The Company has taken advantage of the exemption in section 408 of the Companies Act 2006 not to present its individual statement of comprehensive income and related notes that form a part of these financial statements. The Company’s profit for the year 2025 was £15.9 million (2024: profit of £14.9 million).

The notes on pages 222 to 281 are an integral part of these financial statements.

These financial statements were approved by the Board of Directors on 11 March 2026 and were signed on its behalf by:

Marcelino Castrillo Dylan Minto
Chief Executive Officer Chief Financial Officer

Registered number 07240248

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Consolidated statement of changes in equity for the year ended 31 December 2025

	Share capital £m	Share premium account £m	Capital securities £m	Capital contribution reserve £m	Cash flow hedging reserve £m	FVOCI reserve £m	Retained earnings £m	Total equity £m
As at 1 January 2025	2.5	87.3	123.1	19.9	12.7	29.6	1,307.2	1,582.3
Profit for the year	–	–	–	–	–	–	195.5	195.5
Movement in cash flow hedging reserve	–	–	–	–	(8.0)	–	–	(8.0)
Movement in fair value through other comprehensive income reserve	–	–	–	–	–	14.2	–	14.2
Total comprehensive income	–	–	–	–	(8.0)	14.2	195.5	201.7
Issue of ordinary shares	0.1	49.9	–	–	–	–	–	50.0
Share issue related costs	–	(2.5)	–	–	–	–	–	(2.5)
Equity -settled share-based payments	–	–	–	–	–	–	26.1	26.1
Coupon paid on capital securities	–	–	–	–	–	–	(15.1)	(15.1)
As at 31 December 2025	2.6	134.7	123.1	19.9	4.7	43.8	1,513.7	1,842.5

	Share capital £m	Share premium account £m	Capital securities £m	Capital contribution reserve £m	Cash flow hedging reserve £m	FVOCI reserve £m	Retained earnings £m	Total equity £m
As at 1 January 2024	2.5	87.3	123.1	19.9	4.5	(0.3)	1,101.7	1,338.7
Profit for the year	–	–	–	–	–	–	219.9	219.9
Movement in cash flow hedging reserve	–	–	–	–	8.2	–	–	8.2
Movement in fair value through other comprehensive income reserve	–	–	–	–	–	29.9	–	29.9
Total comprehensive income	–	–	–	–	8.2	29.9	219.9	258.0
Equity -settled share-based payments	–	–	–	–	–	–	0.7	0.7
Coupon paid on capital securities	–	–	–	–	–	–	(15.1)	(15.1)
As at 31 December 2024	2.5	87.3	123.1	19.9	12.7	29.6	1,307.2	1,582.3

The notes on pages 222 to 281 are an integral part of these financial statements.

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Company statement of changes in equity for the year ended 31 December 2025

	Share capital £m	Share premium account £m	Capital securities £m	Capital contribution reserve £m	Retained earnings £m	Total equity £m
As at 1 January 2025	2.5	87.3	123.1	19.9	193.5	426.3
Profit for the year	–	–	–	–	15.9	15.9
Total comprehensive income	–	–	–	–	15.9	15.9
Issue of ordinary shares	0.1	49.9	–	–	–	50.0
Share issue related costs	–	(2.5)	–	–	–	(2.5)
Equity -settled share-based payments	–	–	–	–	26.1	26.1
Coupon paid on capital securities	–	–	–	–	(15.1)	(15.1)
As at 31 December 2025	2.6	134.7	123.1	19.9	220.4	500.7

	Share capital £m	Share premium account £m	Capital securities £m	Capital contribution reserve £m	Retained earnings £m	Total equity £m
As at 1 January 2024	2.5	87.3	123.1	19.9	193.0	425.8
Profit for the year	–	–	–	–	14.9	14.9
Total comprehensive income	–	–	–	–	14.9	14.9
Equity -settled share-based payments	–	–	–	–	0.7	0.7
Coupon paid on capital securities	–	–	–	–	(15.1)	(15.1)
As at 31 December 2024	2.5	87.3	123.1	19.9	193.5	426.3

The notes on pages 222 to 281 are an integral part of these financial statements.

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Consolidated and Company statement of cash flows for the year ended 31 December 2025

Cash flows from operating activities	Group		Company
	Note	2025 £m	2024 £m	2025 £m
Profit before tax		272.2	295.1	15.9
Adjustments for non -cash items and other adjustments included in the statement of profit and loss	43	250.6	82.7	3.0
(Increase) in operating assets	43	(1,951.8)	(1,544.0)	(0.1)
Increase in operating liabilities	43	2,559.8	2,182.3	0.2
Tax (paid) / recovered		(62.9)	(85.5)	0.4
Net cash generated/(used by) from operating activities		1,067.9	930.6	19.4
Cash flows from investing activities
Purchase of investment securities		(1,211.9)	(898.8)	–
Disposals and maturities of investment securities		470.2	184.0	–
Purchase of property, plant and equipment		(0.6)	(2.7)	–
Purchase and development of intangible assets		(18.0)	(15.1)	–
Other movements in intangible assets		3.2	–	–
Purchase of subordinated debt		–	–	(75.0)
Redemption of subordinated debt receivable		–	–	76.6
Investment in right -of-use asset		–	(6.9)	–
Investment in subsidiary		(49.8)	–	–
Purchase of subsidiary, net of cash acquired		(12.1)	–	–
Net cash (used by)/generated from investing activities		(769.2)	(739.5)	(48.2)

	Group		Company
	Note	2025 £m	2024 £m	2025 £m
Cash flows from financing activities
Increase/(Decrease) in amounts due to banks		54.5	(28.9)	–
Issue of debt securities		–	250.0	–
Repurchase and redemption of debt securities		(697.0)	(453.7)	–
Costs arising on issue of debt securities		(0.2)	(1.0)	–
Payment of principal portion of lease liabilities		(0.8)	(2.2)	–
Issue of subordinated debt		12.0	–	75.0
:---	---:	---:	---:	---:
Redemption of subordinated debt	(76.5)	(20.0)	(76.5)	(20.0)
Costs arising on issue of subordinated debt	(0.9)	–	(2.1)	–
Capital contribution	–	–	–	–
Coupon paid to holders of capital securities	(15.1)	(15.1)	(15.1)	(15.1)
Net cash (used by)/generated from financing activities	(676.5)	(270.9)	28.8	(35.1)
Net (decrease)/increase in cash and cash equivalents	(377.8)	(79.8)	–	–
Cash and cash equivalents as at 1 January	2,549.1	2,628.9	–	–
Cash and cash equivalents as at 31 December	2,171.3	2,549.1	–	–

Additional information on operational cash flows from interest
Interest paid | (777.7) | (747.5) | (17.5) | (16.3)
Interest received | 1,463.0 | 1,396.7 | 17.5 | 16.3

The notes on pages 222 to 281 are an integral part of these financial statements. 221

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STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 222

1. Reporting entity

Shawbrook Group plc (the ‘Company’) is a public limited company incorporated and domiciled in the UK. The Company is registered in England and Wales (company number 07240248) and the registered office is Lutea House, Warley Hill Business Park, The Drive, Great Warley, Brentwood, Essex, CM13 3BE. The consolidated financial statements comprise the results of the Company and its subsidiaries (together, the ‘Group’), including its principal subsidiary, Shawbrook Bank Limited. Details of subsidiary companies included in the Group are provided in Note 45. The ultimate parent company is Marlin Bidco Limited, at the reporting date, as detailed in Note 44. On 7 January 2026, Marlin Bidco Limited entered into Guernsey Members’ Voluntary Liquidation. The principal activities of the Group are lending and savings. Further details regarding the nature of the Group’s operations are provided in the Strategic Report (starting on page 2).

2. Basis of accounting and measurement

Both the consolidated and Company financial statements are prepared in accordance with UK-adopted international accounting standards, as defined by the UK Endorsement Board. New and revised standards and interpretations adopted by the Group during the year are detailed in Note 6. Material accounting policies applied by the Group are detailed in Note 7. The reporting period for the Consolidated and Company financial statements is the 12 months ended 31 December 2025. No individual statement of profit and loss or related notes are presented for the Company, as permitted by Section 408 of the Companies Act 2006. The financial statements are prepared on a going concern basis (see Note 3) and on a historical cost basis, except for the following material items, which are carried at fair value: derivative financial instruments, certain loan receivables measured at fair value through profit and loss (FVTPL) and fair value through other comprehensive income (FVOCI), and certain investment securities measured at FVOCI.

3. Going concern

The financial statements are prepared on a going concern basis. In assessing the appropriateness of this basis, the Directors considered the Group’s current financial position and forward-looking projections of profitability, cash flows and capital resources over a period of at least 12 months from the date of approval of the financial statements. In forming this assessment, the Directors also considered the Group’s risk assessment framework, including the identification and assessment of top and emerging risks (see page 117 of the Risk Report) through management and Board risk governance, and the potential impacts of these risks on the Group’s financial position and business model. The Directors have reviewed the Group’s capital and liquidity plans under the Group’s approved budget and considered the results of stress testing and scenario analysis performed as part of the going concern assessment and the ILAAP and ICAAP processes. The stress testing included a range of severe but plausible scenarios designed to assess resilience across differing macroeconomic and interest rate environments, together with additional idiosyncratic and balance sheet stresses relevant to the Group. The assessment also considered the effect of management actions that are within the control of the Group. Based on the assessment performed, including the outcomes of base case forecasts and severe but plausible stresses, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for a period of at least 12 months from the date of approval of these financial statements and to continue to meet its regulatory capital and liquidity requirements. Accordingly, the Directors have concluded that it is appropriate to adopt the going concern basis in preparing these financial statements.

4. Functional and presentation currency

Both the consolidated and Company financial statements are presented in pounds sterling, which is the functional currency of the Company and all of its subsidiaries. All amounts are rounded to the nearest million (to one decimal place), except where otherwise indicated. Foreign currency transactions are translated into the functional currency using the spot exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the spot exchange rate at the reporting date. Foreign exchange gains and losses resulting from the restatement and settlement of such transactions are recognised in the statement of profit and loss. Non-monetary assets and liabilities measured on a historical cost basis and denominated in foreign currencies are translated into the functional currency using the spot exchange rate at the date of the transaction. Non-monetary assets and liabilities measured at fair value and denominated in foreign currencies are translated into the functional currency at the spot exchange rate at the date of valuation. Where these assets and liabilities are held at FVTPL, exchange differences are reported as part of the fair value gain or loss.

5. Presentation of risk and capital management disclosures

Disclosures required under IFRS 7 ‘Financial Instruments: Disclosures’ concerning the nature and extent of risks relating to financial instruments are included within the principal risks section of the Risk Report. Specifically, this section includes updates and additional information about credit risk (starting on page 130), market, liquidity and capital risk (starting on page 160). Disclosures required under IAS 1 ‘Presentation of Financial Statements’ concerning the management of capital are also included within the principal risks section of the Risk Report (starting on page 167).

6. New and revised standards and interpretations

Adoption of new and revised standards and interpretations during the current reporting period

During the year ended 31 December 2025, the amendment to IAS 21 Lack of Exchangeability became effective for annual reporting periods beginning on or after 1 January 2025. This amendment did not have a material effect on the Group’s financial statements, as the Group’s operations are predominantly UK ‑ focused and therefore not exposed to significant currency or hyperinflationary risk.

Future developments

A number of amendments to existing accounting standards have been issued as at 31 December 2025 but are not yet effective and have not been early adopted by the Group. Based on current assessments, none of these forthcoming changes are expected to have a material impact on the Group’s financial statements, although the Group continues to assess their impact as implementation approaches. Key upcoming developments include:

Amendments to IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments Effective 1 January 2026. These amendments address derecognition of financial liabilities settled via electronic transfers, clarify the SPPI test, provide guidance on non-recourse features, and introduce new disclosure requirements, including for ESG-linked features.
Amendments to IFRS 9 and IFRS 7: Contracts Referencing Nature-Dependent Electricity Effective 1 January 2026. The amendments clarify own-use criteria for nature-dependent electricity contracts, update cash flow hedge designation rules, and introduce new disclosures on their impact on financial performance and cash flows.
Annual Improvements to IFRS Accounting Standards – Volume 11 Effective 1 January 2026. These include minor clarifications and corrections to IFRS 1, IFRS 7, IFRS 9, IFRS 10, and IAS 7.
IFRS 18: Presentation and Disclosure in Financial Statements Effective 1 January 2027, with early adoption permitted. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals, it requires entities to classify all income and expenses into five categories: operating, investing, financing, income tax and discontinued operations, and introduces defined subtotals, including operating profit. It also requires clearer definitions and reconciliations of management-defined performance measures. The Group is currently assessing the impact of this standard on the presentation of its financial statements.
IFRS 19: Subsidiaries Without Public Accountability – Disclosures Effective 1 January 2027. The standard permits eligible subsidiaries without public accountability, whose parent prepares IFRS consolidated statements, to apply reduced disclosures instead of full IFRS requirements.The Group will continue to monitor these developments and will apply the relevant standards and amendments when they become effective.

7. Material accounting policies

Except where otherwise indicated, the Group has consistently applied the following accounting policies to all periods presented in these financial statements.

a) Basis of consolidation

Subsidiaries See disclosures at Note 45

Subsidiaries are entities, including structured entities, that are controlled by the Group. Control is achieved when the Group has power over the entity, is exposed or has rights to variable returns from its involvement with the entity and can use its power over the entity to affect its returns. The Group reassesses whether it controls the entity if facts and circumstances indicate that there are changes to one or more of these three elements of control. Subsidiaries are consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. Accounting policies are applied consistently across the Group and intragroup transactions and balances are eliminated in full on consolidation.

Business combinations

Business combinations are accounted for using the acquisition method. Consideration transferred and the identifiable assets acquired and liabilities assumed as part of the business combination are generally, with some limited exceptions, recognised at their acquisition date fair values. The cost of acquisition is the aggregate of the fair value of consideration transferred, amount recognised for non-controlling interests and the fair value of any previous interest held. If the cost of acquisition exceeds the fair value of identifiable net assets acquired, goodwill is recognised and is treated in accordance with the policies set out in Note 7(m). If the fair value of identifiable net assets acquired exceeds the cost of acquisition (a ‘bargain purchase’), a gain is recognised in the statement of profit and loss. Acquisition-related costs are expensed as incurred and are included in administrative expenses in the statement of profit and loss, except if related to the issue of debt or equity securities, whereby any incremental direct transaction costs are recognised as a deduction from the instrument.

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Notes to the financial statements for the year ended 31 December 2025
7. Material accounting policies (continued)
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b) Operating segments See disclosures at Note 11

Operating segments are identified based on internal reports and components of the Group that 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 for the Group is the Executive Committee. Operating segments may be included as a reportable operating segment even when quantitative thresholds stipulated in IFRS 8 ‘Operating segments’ are not met, if the Group deems that such information is useful to users of the financial statements in understanding the performance of the different customer segments it operates within. The Group determines operating segments according to similar economic characteristics and the nature of its products and services. No operating segments are aggregated to form the Group’s reportable operating segments.

c) Interest income and expense See disclosures at Note 12 and Note 13

Interest on financial instruments measured at amortised cost, FVOCI and FVTPL

For interest-bearing financial instruments measured at amortised cost or FVOCI, interest income and expense is recognised using the effective interest rate (EIR) method, which allocates interest over the expected life of the financial instrument. In calculating interest under the EIR method, the Group applies its established accounting policy in relation to financial instruments that revert from a fixed to variable rate of interest, whereby the EIR is based on the fixed rate for the fixed period and does not take account of any reversionary interest post the end of the fixed date. The Group monitors actual and expected customer repayment behaviour and periodically adjusts the recognition profile to reflect significant changes. The EIR is the rate that exactly discounts the estimated future cash flows over the expected life of the financial instrument to the gross carrying amount of a financial asset, or the amortised cost of a financial liability. When calculating the EIR, future cash flows are estimated by considering all contractual terms of the financial instrument, excluding the loss allowance recognised on financial assets. The calculation includes all fees paid or received between parties to the contract that are an integral part of the EIR, transaction costs and all other premiums or discounts. Transaction costs include incremental costs that are directly attributable to the acquisition or issue of the financial instrument.

For non-credit impaired financial assets (i.e. a ‘Stage 1’ or ‘Stage 2’ asset per page 131 of the Risk Report), interest income is calculated by applying the calculated EIR to the gross carrying amount of the financial asset. For financial assets that become credit-impaired after initial recognition (i.e. a ‘Stage 3’ asset per page 131 of the Risk Report), interest income is calculated by applying the calculated EIR to the amortised cost of the financial asset. If the asset is no longer credit-impaired, the calculation of interest income reverts to the gross basis. For financial assets that were credit-impaired on initial recognition (i.e. a ‘POCI’ asset per page 131 of the Risk Report), interest income is calculated by applying a credit-adjusted EIR to the amortised cost of the financial asset. The calculation of interest income does not revert to the gross basis, even if the credit risk of the asset improves. For financial liabilities, interest expense is calculated by applying the calculated EIR to the amortised cost of the financial liability. Interest income and interest expense on loans and advances held at FVTPL are presented as other interest income within NII.

Interest on derivative financial instruments

For derivative financial instruments forming part of a qualifying hedging relationship, net interest income or expense is recognised based on the underlying hedged items. For derivative financial instruments hedging assets, the net interest income or expense is recognised in interest income. For derivative financial instruments hedging liabilities, the net interest income or expense is recognised in interest expense. For derivative financial instruments not in a qualifying hedging relationship, interest is presented in accordance with whether it represents interest income or interest expense.

Interest on leases

Interest relating to lease and instalment credit agreements is recognised in a manner that achieves a constant rate of interest on the remaining balance of the receivable/liability.

d) Fee and commission income and expense See disclosures at Note 14

Fee and commission income includes amounts from contracts with customers that are not included in the EIR calculation. These amounts are recognised when performance obligations attached to the fee or commission have been satisfied. The income streams included in fee and commission income all have a single performance obligation attached to them. Where income is earned from the provision of a service, such as an account maintenance fee or a non-utilisation fee, the performance obligation is deemed to have been satisfied when the service is delivered. In general, services are provided each month, thus the performance obligation is satisfied and the income recognised on a monthly basis. Where income is earned upon the execution of a significant act, such as fees for executing a payment, the performance obligation is deemed to have been satisfied and the income recognised when the act is completed. Incremental costs incurred to generate fee and commission income are charged to fee and commission expense as they are incurred.

e) Administrative expenses See disclosures at Note 16

Administrative expenses are recognised on an accruals basis. Accounting policies for expenses relating to intangible assets are set out in Note 7(m). Accounting policies for payroll related costs, are set out below: Salaries and social security costs are recognised over the period the employees provide the services to which the payments relate. Cash bonus awards are recognised to the extent that there is a present obligation to employees that can be reliably measured and are recognised over the period the employees are required to provide services.

For long-term incentive plans, benefits are recognised at the present value of the obligation at the reporting date, reflecting the best estimate of the effect of the associated performance conditions. Costs are recognised over the period until which all vesting conditions are considered to have been reasonably achieved, which takes into account the period the employees are required to provide services. For defined contribution pension arrangements, the Group pays fixed contributions into employees’ personal pension plans, with no further payment obligations once the contributions have been paid. The Group’s contributions to such arrangements are recognised as an expense when they fall due.

f) Tax See disclosures at Note 21 and Note 30

Tax comprises current tax and deferred tax.Tax is generally recognised in the statement of profit and loss, except where it relates to items recognised directly in equity, in which case the tax is also recognised in equity. An exception to this is distributions to holders of capital securities, whereby the distribution is recognised directly in equity, but the tax relief is recognised in the statement of profit and loss, to align with where the transactions and events that generated the distributable profits are recognised. The liability for current tax is calculated using tax rates that have been enacted or substantially enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are only recognised for all deductible timing differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are netted off where there is a legally enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend to settle current tax liabilities and assets on a net basis. The measurement of deferred tax reflects the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date.

g) Cash and cash equivalents

See disclosures at Note 23 Cash and cash equivalents is the aggregate of cash and balances at central banks, loans and advances to banks and short-term highly liquid debt securities with less than three months to maturity from the date of acquisition. All components of cash and cash equivalents are classified as financial assets measured at amortised cost (see Note 7(t)). Loans and advances to banks include cash collateral paid under terms that are usual and customary for such activities.

h) Loans and advances to customers

See disclosures at Note 24 Loans and advances to customers include loan receivables, finance lease receivables and instalment credit receivables. Loan receivables are financial assets measured at amortised cost, FVOCI and FVTPL (see Note 7(t)). Finance lease receivables and instalment credit receivables are accounted for as detailed in Note 7(r). For presentational purposes, they are included within loans and advances to customers at amortised cost. Certain assets included in loans and advances to customers are pledged as collateral under terms that are usual and customary for such activities, whilst others have been transferred to structured entities as part of securitisation transactions. These assets do not meet the derecognition criteria outlined in Note 7(t) and therefore continue to be recognised in their entirety in the statement of financial position. Certain loans are designated as the hedged item in hedge relationships. The total carrying amount of loans and advances to customers includes the cumulative fair value adjustment to the carrying amount of the hedged item in relation to fair value hedges (see Note 7(l)).

i) Securitisation transactions

See disclosures at Note 25 and Note 36 Certain loans included within loans and advances to customers are securitised, by transferring the beneficial interest in the loans to a bankruptcy remote structured entity. A structured entity is an entity designed so that its activities are not governed by way of voting rights. An assessment is performed to determine whether the Group controls such structured entities, in accordance with the criteria set out in Note 7(a). In performing this assessment, factors considered include: the purpose and design of the entity; its practical ability to direct the relevant activities of the entity; the nature of the relationship with the entity; and the size of its exposure to the variability of returns of the entity. Where the Group is assessed to control the structured entity, it is treated as a subsidiary and is fully consolidated. A further assessment is performed to determine whether the securitised loans meet the derecognition criteria outlined in Note 7(t). If the derecognition criteria are met, the transferred loans are treated as sales, referred to as ‘structured asset sales’ and a gain or loss on derecognition is recognised in the statement of profit and loss. If the derecognition criteria are not met, the transfer of loans is not treated as a sale and the loans continue to be recognised in their entirety in the statement of financial position. Securitisations involve the simultaneous issue of debt securities by the associated structured entity to investors. In securitisation transactions where the structured entity is consolidated, the issued debt securities are classified on initial recognition as financial liabilities, as the substance of the contractual arrangements are such that there is an obligation to deliver the cash flows generated from the underlying securitised loans to the debt security holder. These financial liabilities are measured at amortised cost (see Note 7(t)) and are presented in debt securities in issue in the statement of financial position. Certain debt securities issued by structured entities are retained by the Group. Where retained debt securities are issued by consolidated structured entities, they are eliminated in full on consolidation. Where retained debt securities are issued by unconsolidated structured entities, they are recognised in investment securities in the statement of financial position.

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Notes to the financial statements for the year ended 31 December 2025

Material accounting policies (continued)

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j) Investment securities

See disclosures at Note 26 Investment securities are classified as financial assets measured at amortised cost and FVOCI (see Note 7(t)). Certain investment securities are pledged as collateral under terms that are usual and customary for such activities. These assets do not meet the derecognition criteria outlined in Note 7(t) and therefore continue to be recognised in their entirety in the statement of financial position. Investment securities may be sold subject to a commitment to repurchase them at a predetermined price (a ‘repurchase agreement’). The terms of these transactions are such that the derecognition criteria outlined in Note 7(t) are not met and, accordingly, the sold assets continue to be recognised in their entirety in the statement of financial position. Consideration received as part of repurchase agreements is recognised as a liability in amounts due to banks in the statement of financial position, reflecting that there is an obligation to repurchase the assets for a fixed price at a future date. The difference between the sale and repurchase price is treated as interest and is accrued over the life of the agreement using the EIR method. Investment securities may also be swapped via linked repurchase and reverse repurchase agreements with the same counterparty (a ‘security swap’). In such transactions, no cash consideration is exchanged, the transferred assets are not derecognised and there is no associated liability as the non-cash collateral received is not recognised in the statement of financial position (i.e. the transaction is off-balance sheet). Net fees are treated as interest and are accrued over the life of the agreement using the EIR method.

k) Derivative financial instruments

See disclosures at Note 27 Derivative financial instruments are classified as FVTPL (see Note 7(t)). Derivatives are classified as financial assets when their fair value is positive and financial liabilities when their fair value is negative. Where there is the legal right and intention to settle net, the derivative is classified as a net asset or net liability, as appropriate. To calculate fair values, discounted cash flow models using yield curves that are based on observable market data are typically used. For collateralised positions, discount curves based on overnight indexed swap rates are used. For non-collateralised positions, discount curves based on Sterling Overnight Index Average rate (SONIA) are used. For measuring derivatives that might change the classification from being an asset to a liability or vice versa, fair values do not take into consideration the credit valuation adjustment, debit valuation adjustment or the funding valuation adjustment because the impact on any uncollateralised position is deemed to be immaterial. Where derivatives are not designated as part of an accounting hedge relationship, gains and losses arising from changes in the clean fair value are recognised in net gains/(losses) on derivative financial instruments and hedge accounting in the statement of profit and loss. Where derivatives are designated within an accounting hedge relationship, the treatment of changes in fair value is as described in Note 7(l). The Group enters into master netting and margining agreements with derivative counterparties.In general, under such master netting agreements, the amounts owed by each counterparty that are due on a single day in respect of all transactions outstanding under the agreement are aggregated into a single net amount payable by one party to the other. In certain circumstances, for example when a credit event such as a default occurs, all outstanding transactions under the agreement are aggregated into a single net amount payable by one party to the other and the agreements terminated. Under margining agreements, where there is a net asset position valued at current market values in respect of derivatives with a counterparty, then that counterparty will place collateral, usually cash, with the Group to cover the position. Similarly, where there is a net liability position, the Group will place collateral, usually cash, with the counterparty.

l) Hedge accounting
See disclosures at Note 27

The Group has elected, as an accounting policy choice permitted under IFRS 9 ‘Financial Instruments’, to continue to apply the hedge accounting rules set out in IAS 39 ‘Financial Instruments – Recognition and measurement’. However, additional hedge accounting disclosures introduced by IFRS 9’s consequential amendments to IFRS 7 are provided. Hedge accounting is permitted when documentation, eligibility and testing criteria are met. Accordingly, at the inception of a hedge relationship, the Group formally designates and documents the hedge relationship that it wishes to apply hedge accounting to and the risk management objective and strategy for undertaking the hedge. The method to be used to assess the effectiveness of the hedge relationship is also documented. At inception, and on a monthly basis thereafter, an assessment is performed to determine whether the hedging instrument is highly effective in offsetting changes in the fair value or cash flows of the hedged item. For this assessment, the dollar-offset method is used, except for trades designated in dynamic hedge accounting relationships, whereby the regression method is used. The hedge is deemed to be highly effective where the actual results of the hedge are within a range of 80-125%. If it is concluded that the hedge is no longer highly effective, hedge accounting is discontinued. The Group’s hedging strategy incorporates the use of both fair value hedges and cash flow hedges, as detailed below:

Fair value hedges
Certain derivatives are designated as hedging instruments to hedge interest rate risk. The hedged items are portfolios of loans and advances to customers or customer deposits that are identified as part of the risk management process. The portfolios comprise either fixed rate loans, or fixed rate deposits, in respect of the designated benchmark interest rate (e.g. SONIA). Each portfolio is grouped into repricing time periods based on expected repricing dates, by scheduling cash flows into the periods in which they are expected to occur. The hedging instruments are designated to those repricing time periods. Changes in the fair value of the derivatives designated as hedging instruments, together with changes in the fair value of the hedged item attributable to the hedged risk, are recognised in net gains/(losses) on derivative financial instruments and hedge accounting in the statement of profit and loss. Movement in the fair value of the hedged item is recognised as an adjustment to the carrying amount of the hedged asset or liability.

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If the hedge no longer meets the criteria for hedge accounting, hedge accounting is discontinued prospectively. The cumulative fair value adjustment to the carrying amount of the hedged item is amortised to the statement of profit and loss over the remaining period to maturity. If the hedged item is derecognised, the cumulative fair value adjustment to the carrying amount of the hedged item is recognised immediately in the statement of profit and loss.

Cash flow hedges
Certain derivatives are designated as hedging instruments to hedge variability in cash flows attributable to interest rate risk. The hedged cash flows may be highly probable future cash flows attributable to a recognised asset or liability, or a highly probable forecast transaction. The effective portion of changes in the fair value of derivatives designated as hedging instruments is recognised in other comprehensive income and is presented in the cash flow hedging reserve in the statement of financial position. The ineffective portion is recognised immediately in the statement of profit and loss in net gains/(losses) on derivative financial instruments and hedge accounting. The carrying amount of the hedged item is not adjusted. Amounts accumulated in the cash flow hedging reserve are reclassified to the statement of profit and loss in the periods in which the hedged cash flows affect profit and loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss remains in the cash flow hedging reserve and is subsequently reclassified to the statement of profit and loss when the forecast transaction affects profit and loss. When a forecast transaction is no longer expected to occur, any cumulative gain or loss included in the cash flow hedging reserve is immediately reclassified to the statement of profit and loss. When reclassifying amounts to the statement of profit and loss they are recognised in net gains/(losses) on derivative financial instruments and hedge accounting.

m) Intangible assets and amortisation
See disclosures at Note 29

Goodwill
Goodwill may arise on the acquisition of subsidiaries and represents the excess of the cost of acquisition over the fair value of identifiable net assets acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is not amortised but is tested for impairment annually and whenever there is an indication that impairment may exist. For the purpose of impairment testing, goodwill is allocated to cash generating units (CGUs). A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. If the carrying amount of a CGU exceeds the recoverable amount, an impairment loss is recognised in administrative expenses in the statement of profit and loss.

Other intangible assets
Other intangible assets are measured at cost less accumulated amortisation and any accumulated impairment losses. For externally acquired intangible assets, cost includes the original purchase price of the asset and any directly attributable costs of preparing the asset for its intended use. For internally developed intangible assets, cost includes all costs directly attributable in preparing the asset so that it is capable of operating in its intended manner. For internally developed intangible assets costs may only be capitalised when it can be demonstrated that: the expenditure can be reliably measured; the product or process is technically and commercially feasible; future economic benefits are probable; and there is the intention and ability to complete development and subsequently use or sell the asset. Until the point that all conditions are regarded as met, costs are recognised in administrative expenses in the statement of profit and loss as incurred. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset it relates to. All other expenditure is recognised in administrative expenses in the statement of profit and loss as incurred. Intangibles arising from acquisitions are measured at fair value at the acquisition date and then amortised subsequently. The estimated useful life adopted is based on Shawbrook’s policy depending on the type of intangibles. Amortisation is calculated to write off the cost of the asset less its estimated residual value on a straight-line basis over its estimated useful life and is charged to administrative expenses in the statement of profit and loss. The estimated useful life is three to seven years. The amortisation method, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. Assets are reviewed for indicators of impairment at each reporting date and if indicators are present, an impairment review is performed. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised in administrative expenses in the statement of profit and loss. On the disposal of an asset, the net disposal proceeds are compared with the carrying amount of the asset and any gain or loss included in administrative expenses in the statement of profit and loss.

n) Investment in subsidiaries
See disclosures at Note 32

The Company’s investments in controlled entities are valued at cost less any accumulated impairment losses. Investments are reviewed for indicators of impairment at each reporting date and if indicators are present, an impairment review is performed. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised in the statement of profit and loss.

o) Amounts due to banks
See disclosures at Note 33

Amounts due to banks are classified as financial liabilities measured at amortised cost (see Note 7(t)). Amounts due to banks may include liabilities recognised as part of repurchase agreements (see Note 7(j)) and cash collateral received under terms that are usual and customary for such activities.

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p) Customer deposits See disclosures at Note 34
Customer deposits are classified as financial liabilities measured at amortised cost (see Note 7(t)). Certain deposits are designated as the hedged item in hedge relationships. The total carrying amount of customer deposits includes the cumulative fair value adjustment to the carrying amount of the hedged item in relation to fair value hedges (see Note 7(l)).

q) Provisions See disclosures at Note 35
Provisions are recognised when there is a present obligation arising as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions for levies are recognised when the conditions that trigger the payment of the levy are met. When it is expected that some or all of a provision will be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. Provisions also include the loss allowance recognised on loan commitments (see Note 7(u)).

r) Leases See disclosures at Note 37

Group as a lessor: finance leases
Lease and instalment credit agreements in which the Group transfers substantially all the risks and rewards of ownership of the underlying asset to the lessee are treated as finance leases. A receivable equal to the net investment in the lease is recognised in loans and advances to customers in the statement of financial position. This amount represents the future lease payments less profit and costs allocated to future periods. The receivable is subject to impairment, as detailed in Note 7(u). Lease payments are apportioned between interest income in the statement of profit and loss and a reduction of the receivable in order to achieve a constant rate of interest on the remaining balance of the receivable.

Group as a lessor: operating leases
Lease agreements in which the Group does not transfer substantially all the risks and rewards of ownership of the underlying asset to the lessee are treated as operating leases. The leased asset is recognised in property, plant and equipment in the statement of financial position at the lower of its fair value less costs to sell and the carrying amount of the lease (net of impairment allowance) at the date of exchange. Depreciation is calculated to write off the cost of the asset less its estimated residual value on a straight-line basis over the life of the lease and is charged to depreciation on operating leases in the statement of profit and loss. Assets are reviewed for indicators of impairment at each reporting date and if indicators are present, an impairment review is performed. If the carrying amount exceeds the recoverable amount, an impairment loss is recognised in net other operating lease income/(expense) in the statement of profit and loss. Operating lease rental income is recognised in the statement of profit and loss on a straight-line basis over the lease term. Where an agreement is classified as an operating lease at inception but is subsequently reclassified as a finance lease following a change to the agreement or an extension beyond the primary term, then the agreement is accounted for as a finance lease.

Group as a lessee
At the lease commencement date a right-of-use asset and a lease liability is recognised.

s) Subordinated debt See disclosures at Note 39
Subordinated debt liabilities are classified as financial liabilities measured at amortised cost (see Note 7(t)). Subordinated debt receivables in the Company are classified as financial assets measured at amortised cost (see Note 7(t)).

t) Financial assets and financial liabilities See disclosures at Note 40

Recognition of financial assets and financial liabilities
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. Regular way purchases and sales of financial assets are recognised on trade date.

Classification and measurement of financial assets
To classify financial assets, two assessments are performed:
* The ‘business model assessment’: this assessment determines whether the Group’s objective is to generate cash flows from collecting contractual cash flows (‘hold-to-collect’), by both collecting contractual cash flows and selling financial assets (‘hold-to-collect-and-sell’) or neither. The assessment is performed at a portfolio level and is based on expected scenarios. In making this assessment, information considered includes: sales in prior periods, expected sales in future periods and the reasons for such sales. If cash flows are realised in a manner that is different from the original expectation, the classification of the remaining financial assets in that portfolio is not changed, but such information is used when assessing new financial assets going forward.
* The ‘SPPI test’: this assessment determines whether the contractual cash flows of the financial asset are solely payments of principal and interest on the principal amount outstanding (SPPI) (i.e. whether the contractual cash flows are consistent with a basic lending arrangement). For the purposes of this test, principal is defined as the fair value of the financial asset at initial recognition. Interest is defined as consideration for the time value of money and credit risk associated with the principal amount outstanding and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a reasonable profit margin. The SPPI test is performed at an instrument level based on the contractual terms of the instrument at initial recognition. In performing the SPPI test, terms that could change the contractual cash flows so that they are not SPPI are considered, such as: contingent and leverage features, non-recourse arrangements and features that could modify the time value of money.

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Based on the two assessments, financial assets are classified as amortised cost, FVOCI or FVTPL, as follows:
* Amortised cost: when the financial asset is held in a hold-to-collect business model and its contractual terms give rise on specified dates to cash flows that are SPPI.
* FVOCI: when the financial asset is held in a hold-to-collect-and-sell business model and its contractual terms give rise on specified dates to cash flows that are SPPI.
* FVTPL: when the financial asset does not meet the criteria to be classified as amortised cost or FVOCI.

Derivatives embedded in contracts where the host is a financial asset are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification. For financial assets that meet the requirements to be classified as amortised cost or FVOCI, on initial recognition, the Group may irrevocably designate the financial asset as FVTPL, if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Investments in equity instruments are normally classified as FVTPL. However, on initial recognition of an equity instrument that is not held for trading, the Group may irrevocably elect, on an investment-by-investment basis, to present subsequent changes in fair value in the statement of other comprehensive income. After initial recognition, financial assets are reclassified only under the rare circumstances that the Group changes its business model for managing financial assets. Financial assets classified as amortised cost are initially measured at fair value plus incremental direct transaction costs. Subsequent measurement is at amortised cost using the EIR method (see Note 7(c)). Amortised cost is reduced by impairment losses (see Note 7(u)). Interest income, foreign exchange gains and losses and impairment losses are recognised in the statement of profit and loss. Financial assets classified as FVOCI are initially measured at fair value plus incremental direct transaction costs. Subsequent measurement is at fair value, with changes in fair value recognised in other comprehensive income and presented in the FVOCI reserve in the statement of financial position. Interest income, foreign exchange gains and losses and impairment losses are recognised in the statement of profit and loss. Financial assets classified as FVTPL are initially measured at fair value and are subsequently remeasured at fair value. Net gains and losses, including any interest or dividend income, are recognised in the statement of profit and loss.

Classification and measurement of financial liabilities
Financial instruments are classified as a financial liability when the substance of the contractual arrangements result in the Group having a present obligation to deliver cash, another financial asset or a variable number of equity instruments. Financial liabilities are classified at initial recognition as FVTPL or amortised cost as follows:
* FVTPL: when the financial liability meets the definition of held for trading, or when the financial liability is designated as such to eliminate or significantly reduce an accounting mismatch that would otherwise arise.
* Amortised cost: when the financial liability is not classified as FVTPL.

Financial liabilities classified as FVTPL are initially measured at fair value and are subsequently remeasured at fair value. Net gains and losses, including any interest, are recognised in the statement of profit and loss.Financial liabilities classified as amortised cost are initially measured at fair value minus incremental direct transaction costs. Subsequent measurement is at amortised cost using the EIR method (see Note 7(c)). Interest expense is recognised in the statement of profit and loss.

Derecognition of financial assets and financial liabilities

Derecognition is the point at which the Group ceases to recognise a financial asset or a financial liability on its statement of financial position. A financial asset (or a part of a financial asset) is derecognised when:
* the contractual rights to the cash flows from the financial asset have expired;
* the financial asset is transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred; or
* the financial asset is transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are neither transferred nor retained and control of the asset is not retained.

If control of the asset is retained, the transferred asset continues to be recognised only to the extent of the Group’s continuing involvement, with the remainder being derecognised. A financial liability (or a part of a financial liability) is derecognised when the contractual obligations are extinguished (i.e. discharged, cancelled, or expired).

On derecognition, the difference between the carrying amount (or the carrying amount allocated to the portion being derecognised) and the sum of the consideration received/paid (including any new asset obtained less any new liability assumed) is recognised in the statement of profit and loss. For financial assets classified as FVOCI, any gains/losses accumulated in the FVOCI reserve are reclassified to the statement of profit and loss.

Modification of financial assets and financial liabilities

When a financial asset or financial liability is modified, a quantitative and qualitative evaluation is performed to assess whether or not the new terms are substantially different to the original terms. For financial assets, the Group considers the specific circumstances including:
* if the borrower is in financial difficulty, whether the modification merely reduces the contractual cash flows to amounts the borrower is expected to be able to pay;
* whether any substantial new terms are introduced that substantially affects the risk profile of the loan;
* significant extension of the loan term when the borrower is not in financial difficulty;
* significant change in the interest rate; and
* insertion of collateral, other security or credit enhancements that significantly affect the credit risk associated with the loan.

For financial liabilities, the Group specifically, but not exclusively, considers the outcome of the ‘10% test’. This involves a comparison of the cash flows before and after the modification, discounted at the original EIR, whereby a difference of more than 10% indicates the modification is substantial.

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If the terms and cash flows of the modified financial instrument are deemed to be substantially different, the derecognition criteria are met and the original financial instrument is derecognised and a ‘new’ financial instrument is recognised at fair value. The difference between the carrying amount of the derecognised financial instrument and the new financial instrument with modified terms is recognised in the statement of profit and loss.

If the terms and cash flows of the modified financial instrument are not deemed to be substantially different, the financial instrument is not derecognised and the Group recalculates the ‘new’ gross carrying amount of the financial instrument based on the revised cash flows of the modified financial instrument discounted at the original EIR and recognises any associated gain or loss in the statement of profit and loss. Any costs and fees incurred are recognised as an adjustment to the carrying amount of the financial instrument and are amortised over the remaining term of the modified financial instrument by recalculating the EIR on the financial instrument.

In relation to financial assets, where a modification is granted due to the financial difficulty of the borrower, the objective of the modification is usually to maximise recovery of the original contractual terms rather than to originate a new asset with substantially different terms. Under such circumstances, it is first considered whether a portion of the asset should be written off before the modification takes place. This approach impacts the result of the quantitative evaluation and usually means the derecognition criteria are not met.

Fair value of financial assets and financial liabilities

Fair value is defined as 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. The fair value of a liability reflects its non-performance risk.

Where possible, fair value is determined with reference to quoted prices in an active market or dealer price quotations. 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. Where quoted prices are not available, generally accepted valuation techniques are used to estimate fair value, including discounted cash flow models and Black-Scholes option pricing. Where possible these valuation techniques use independently sourced market parameters, such as interest rate yield curves, option volatilities and currency rates.

On initial recognition, the best evidence of the fair value of a financial instrument is normally transaction price (i.e. the fair value of the consideration given or received). If it is determined that the fair value on initial recognition differs from the transaction price, such differences are accounted for as follows:
* if fair value is evidenced by a quoted price in an active market for an identical asset or liability, or based on a valuation technique that uses only data from observable markets, the difference is recognised in the statement of profit and loss on initial recognition (i.e. day one profit and loss);
* in all other cases, the fair value will be adjusted to bring it in line with the transaction price (i.e. day one profit and loss will be deferred by including it in the initial carrying amount of the asset or liability). Subsequently, the deferred gain or loss will be released to the statement of profit and loss on an appropriate basis over the life of the instrument, but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.

If an asset or liability measured at fair value has a bid price and an ask price, assets are measured at bid price and liabilities are measured at ask price. A fair value hierarchy is used that categorises financial assets and financial liabilities into three different levels, as detailed in Note 40(b). Levels are reviewed at each reporting date to determine whether transfers between levels are required. Further details of the fair value calculation of derivative financial instruments are set out in Note 7(k).

Offsetting financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Income and expenses are presented on a net basis only when permitted by accounting standards, or for gains and losses arising from a group of similar transactions.

u) Impairment of financial assets

See disclosures at Note 20

Impairment of financial assets is calculated using a forward-looking expected credit loss (ECL) model. ECLs are an unbiased probability-weighted estimate of credit losses determined by evaluating a range of possible outcomes. A summary of ECL measurement is as follows:
* Financial assets that are not credit-impaired at the reporting date: as the present value of all cash shortfalls. Cash shortfalls are the difference between the contractual cash flows due and the cash flows that are expected to be received.
* Financial assets that are credit-impaired at the reporting date: as the difference between the gross carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original EIR.
* Loan commitments: as the present value of the difference between the contractual cash flows due if the commitment is drawn down and the cash flows that are expected to be received.

ECLs are measured in a manner that reflects the time value of money and uses reasonable and supportable information that is available at the reporting date, without undue cost or effort, about past events, current conditions and forecasts of future economic conditions.

ECLs are calculated and a loss allowance recorded for all financial assets not held at FVTPL (i.e. those at amortised cost and FVOCI) and for loan commitments. Assets held at FVTPL and equity instruments are not subject to impairment. Loss allowances are presented in the statement of financial position as follows:
* Financial assets measured at amortised cost: as a deduction from the gross carrying amount of the financial asset.
* Financial assets measured at FVOCI: in other comprehensive income in the FVOCI reserve.It does not reduce the carrying amount of the financial asset, which remains at fair value. • Loan commitments: generally, as a provision.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

7. Material accounting policies (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 231

Where a financial instrument includes both a drawn and an undrawn component, and the loss allowance on the undrawn component cannot be separately identified from the drawn component, a combined loss allowance is presented as a deduction from the gross carrying amount of the drawn component. Any excess of the loss allowance over the gross carrying amount of the drawn component is presented as a provision.

The calculation of ECLs is dependent upon the ‘stage’ the asset is assigned to (Stage 1, 2 or 3). The stage is determined based on changes in credit risk when comparing credit risk at initial recognition to credit risk at the reporting date, or whether the asset was POCI. Details of the ‘staging’ of assets and POCI assets, the calculation of ECLs and the key judgements and estimates associated with this, are provided in the credit risk section of the Risk Report starting on page 130.

It is possible to elect, as an accounting policy choice, to use the ‘simplified approach’ for trade receivables, contract assets and lease receivables. The Group has elected not to use this simplified approach.

Modifications

If a financial asset is modified, an assessment is made to determine whether it meets the derecognition criteria outlined in Note 7(t). If the modification does not result in derecognition of the existing asset, the expected cash flows arising from the modified financial asset are included in calculating the cash shortfalls from the existing asset. If the modification does result in derecognition of the existing asset, the expected fair value of the ‘new’ asset is treated as the final cash flow from the existing financial asset at the time of its derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset that are discounted from the expected date of derecognition to the reporting date using the original EIR of the existing financial asset. The date of renegotiation is considered to be the date of initial recognition for impairment calculation purposes, including in determining whether a significant increase in credit risk has occurred and whether the new financial asset is deemed to be a POCI asset.

Write-offs

Loans and debt securities are written off (either partially or in full) when there is no realistic prospect of recovery. This is generally the case when it is determined that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. Write-offs constitute a derecognition event, as detailed in Note 7(t). Financial assets that are written off can still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. Amounts subsequently recovered on assets written off are recognised in impairment losses on financial assets in the statement of profit and loss.

v) Capital securities

See disclosures at Note 42

Capital securities are classified as equity instruments, as the substance of the contractual arrangements are such that there is no present obligation to deliver cash, another financial asset or a variable number of equity instruments. The capital securities are measured at the fair value of the proceeds from the issuance less any costs that are incremental and directly attributable to the issuance (net of applicable tax). Distributions to holders of the capital securities are recognised when they become irrevocable and are deducted from retained earnings in equity.

w) Loan commitments

See disclosures at Note 48

Loan commitments are firm commitments to provide credit under pre-specified terms and conditions. Certain uncommitted facilities are included within reported loan commitments where the terms are such that there is an obligation to the customer should the customer get into financial distress. A loss allowance is recognised on loan commitments in accordance with the policies set out in Note 7(u). The loss allowance is included within provisions in the statement of financial position.

x) Contingent assets and contingent liabilities

See disclosures at Note 49

Contingent assets are possible assets that arise from past events whose existence will be confirmed only by the occurrence, or non-occurrence, of one or more uncertain future events not wholly within the control of the Group. Contingent assets are not recognised in the financial statements, but they are disclosed if an inflow of economic benefits is probable.

Contingent liabilities are possible obligations that arise from past events whose existence will be confirmed only by the occurrence, or non-occurrence, of one or more uncertain future events not wholly within the control of the Group. Alternatively, they are present obligations that have arisen from past events where the outflow of resources is uncertain or cannot be reliably measured. Contingent liabilities are not recognised in the financial statements, but they are disclosed unless the probability of settlement is remote.

y) Earnings per share

See disclosures at Note 22

Basic earnings per share is calculated by dividing the profit attributable to ordinary equity shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share adjusts the basic earnings per share for the effects of all dilutive potential ordinary shares, which may arise from share options, convertible instruments, or other equity- based arrangements. The Group presents both basic and diluted earnings per share in accordance with IAS 33 Earnings per Share.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 232

z) Share based payments

See disclosures at Note 18

For equity-settled share-based payments, the grant date fair value of the share-based payment transaction is recognised as an expense, with a corresponding increase in retained earnings in equity, on a straight-line basis over the period the employees become unconditionally entitled to the awards (the ‘vesting period’). The grant date fair value is estimated using a generally accepted valuation method. Where there are market conditions or non-vesting conditions, the grant date fair value is measured to reflect such conditions and there is no true- up for differences between expected and actual outcomes. Where the vesting period is dependent on achieving a non-market performance condition, the length of the expected vesting period at grant date is estimated based on the most likely outcome. Subsequently, the estimated vesting period is revised until the actual outcome is known. The amount recognised as an expense is adjusted to reflect the number of awards for which the non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that will eventually vest.

For cash-settled share-based payments, the fair value of the amount payable to employees is recognised as an expense, with a corresponding increase in other liabilities, over the vesting period. The fair value of the liability is remeasured at each reporting date and at the date of settlement, with any changes recognised as an expense.

In the Company’s financial statements, the equity-settled share-based payment transaction is recognised as an increase in its investment in subsidiaries, with a corresponding increase in retained earnings in equity.

The Group operated an equity settled Management Incentive Plan (MIP), which was originally introduced for a set of individuals in April 2019. This scheme vested upon listing. During the year ended 31 December 2025, the Group adopted a new equity settled scheme for selected key employees in the form of an option to acquire A2 shares in Marlin Bidco Limited (Marlin) for nil consideration, subject to performance outcomes linked to a prescribed exit event. As with the MIP, the IPO and subsequent liquidation of Marlin resulted in the vesting of this arrangement with assets distributed to A2 shareholders in the same form as the MIP.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 233

8. Critical accounting judgements and estimates

The preparation of financial statements requires the Group to make judgements and estimates that affect the application of accounting policies and the reported results and financial position. Estimates, and the underlying assumptions driving these estimates, are reviewed by the Group on an ongoing basis. Due to the inherent uncertainty in making estimates, actual results reported in the future may differ from the amounts estimated. Revisions to estimates are recognised in the period in which the estimates are revised and in any future periods affected. In the reported year, the areas involving the most complex and subjective judgements, and areas where estimates are considered to have the most significant effect on the financial statements, are set out in the following sections.

a) Impairment losses on financial assets

See accounting policies at Note 7(u) and disclosures at Note 20

Impairment of financial assets is calculated using a forward-looking ECL model.The calculation and measurement of ECLs requires the use of complex judgements and represents a key source of estimation uncertainty.

Judgements
Judgements considered to have the most significant effect on amounts in the financial statements are:
* determining the stage the financial asset is allocated to and therefore whether a 12-month or lifetime ECL is recognised in the financial statements. This involves judgements over whether the financial asset has had a significant increase in credit risk since initial recognition, whether the financial asset is in default or whether the financial asset is ‘cured’; and
* application of judgemental adjustments to modelled ECLs when the Group judges that the modelled ECL amount does not adequately reflect the expected outcome.

Estimates
Underlying assumptions used in estimating ECLs that, depending on a range of factors, could result in a material adjustment in the next financial year are:
* the forward-looking economic scenarios used;
* probability weightings applied to these scenarios; and
* model assumptions used, such as the probability of default and loss given default.

Additional details of the critical judgements and estimates, including sensitivity analysis, are included in the credit risk section of the Risk Report on pages 144 to 151.

b) Provisions for customer remediation and conduct issues
See accounting policies at Note 7(q) and disclosures at Note 35
Provisions have been recognised in respect of potential claims for instances of misrepresentation, breaches of contract or other wrongdoing by suppliers, in circumstances where the Group may have a liability under consumer credit legislation for the acts or omissions of suppliers (although the Group continues to pursue recovery from such suppliers). Calculating the amount of the provision requires judgement and represents a source of estimation uncertainty.

Judgements
In prior years, significant judgement was required to assess whether past events resulted in a present obligation and whether it was probable that an outflow of resources would be required in respect of customer complaints relating to holiday ownership (timeshare) products. As the provision has been established for some time, this judgement is considered largely historical in nature. No new judgement has arisen in the current year that would materially alter the assessment of the existence of an obligation.

Estimates
The timeshare model splits the portfolio into cohorts reflecting the loans that were impacted by the different outcomes of the Judicial Review. Each cohort has different assumptions (referred to as the base case) for number of complaints expected, the uphold rate and the amount of redress. For alternate scenario, where the sensitivity would result in the revised assumption being lower than the base case assumption, the sensitivity assumption has been floored at the base case assumption. The following table sets out the underlying assumptions used in estimating the provision that, depending on a range of factors, could result in a material adjustment in the next financial year. Sensitivity analysis to illustrate the impact of, what the Group considers to be, reasonable changes to these underlying assumptions, is also provided.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025
8. Critical accounting judgements and estimates (continued)
Shawbrook Group plc | Annual Report and Accounts 2025
234

Assumption	Sensitivity analysis
Number of complaints	The impact of a +/- 5 percentage point change in deriving this figure the Group takes into account: in the absolute number of complaints would • the status of current claims and projected potential future claims based on result in a £0.2 million increase or a £0.2 existing complaint data; and million decrease in the provision, respectively. • the statutory limitation period.
Number of upheld claims	The impact of a +/-10 percentage point change in the average uphold rate per complaint would result in a £3.3 million increase or a £3.3 million decrease in the provision, respectively.
Redress costs on upheld claims	The impact of a +/-10 percentage point change in the average redress per complaint would result in a £0.6 million increase or decrease in the provisions, respectively.

Once the number of complaints has been estimated, it is necessary to estimate how many of these claims will be upheld. The sensitivity is driven by the fact that we have limited claims that have completed the full review process including where customers might appeal to FOS for the claim to be reviewed. Therefore, the final upheld number could be higher depending on final outcomes on complaints received but not yet processed to completion.
This reflects the expected average customer compensation on the estimated number of upheld claims, based on agreed redress strategies (inclusive of loan balance adjustments and cash payments). This is based on actual claim data.

The Group has commenced work to pursue recoveries on timeshare products from either original suppliers or, failing that, the Group’s insurers. In accordance with IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’, such reimbursements are recognised as an asset only when they are virtually certain. The Group typically considers a reimbursement claim to be virtually certain once it has been accepted by the other party. Additional information about provisions for customer remediation and conduct issues are provided in Notes 35 and 49.

c) Fair value of loans measured at fair value through other comprehensive income
See accounting policies at Note 7(t) and disclosures at Note 40(b)
The Group holds certain mortgage loans that are measured at FVOCI. In valuing these loans, the Group makes use of unobservable inputs (i.e. Level 3 in the fair value hierarchy) and the calculation represents a source of estimation uncertainty.

Estimates
To calculate the fair value of the loans measured at FVOCI, the Group uses the discounted cash flow method, in which the significant unobservable inputs are the risk-adjusted discount rate and prepayment curve used. Additional details, including sensitivity analysis, are provided in Note 40(b).

d) Fair value of loans measured at fair value through profit and loss
See accounting policies at Note 7(t) and disclosures at Note 40(b)
Details of the critical judgements and estimates, including sensitivity analysis, are included in Note 40.

e) ThinCats deferred tax assets
See accounting policies at Note 7(f) and disclosures at Note 30.
Details of the critical judgements and estimates are included in Note 30.

Other judgements
a) Securitisations
See accounting policies at Note 7(i) and disclosures at Note 25
Securitisation transactions involve the transfer of certain customer loans to a structured entity. In determining the accounting treatment to be applied for such transactions the Group must perform a number of complex assessments, which necessitates the application of judgement.

Judgements
Judgements considered to have the most significant effect on amounts in the financial statements are:
* assessing whether the Group controls the structured entity and whether it should therefore be treated as a subsidiary by virtue of control and consolidated; and
* assessing whether the securitised loans should be derecognised.

The outcome of these assessments significantly impacts the resulting accounting treatment and amounts recognised in the financial statements. In making such assessments the structure and terms of the contractual arrangements are scrutinised, with particular consideration given to matters such as: who will service and manage the securitised loans and the ownership of any ‘X’ notes and residual certificates issued by the structured entity (which represents the ‘equity’ investment in the securitised loans, giving the rights to any excess spread and the risk of losses associated with any defaults). During the year, the Group completed two securitisation transactions. Judgement was applied to conclude that both structured entities should not be consolidated and the securitised loans met the criteria for derecognition from the statement of financial position. Additional details are provided in Note 25.

Acquisition of subsidiary
See accounting policies in Note 7(a)

Acquisition of ThinCats Group
On 30 September 2025, Shawbrook Bank Limited, the Group’s principal subsidiary, completed the acquisition of 100% of the ordinary shares of ThinCats Group Limited (ThinCats), including its 8 wholly owned subsidiaries, making it a wholly owned subsidiary of the Group (see Note 45). ThinCats is a specialist lender providing bespoke funding solutions to established, growth-oriented small and medium-sized enterprises (SME) in the UK. The acquisition strengthens the Group’s strategic position in the SME lending market and is expected to accelerate growth in this segment by leveraging its technology enabled platform, origination capabilities, and established distribution network. The consolidation began on 30 September 2025, the date on which control transferred to the Group. For the three-month period from acquisition to the reporting date, ThinCats contributed net operating income of £10.6 million and profit before tax of (£4.4) million to the Group’s results. If the acquisition had occurred on 1 January 2025, it is estimated that the consolidated net operating income for the Group for the year ended 31 December 2025 would have been £719.5 million and consolidated profit before tax for the Group would have been £292.8 million.In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2025. As detailed below, the Group has determined provisional fair values at the date of acquisition for the consideration transferred and the identifiable assets acquired, and liabilities assumed. The Group continues to assess these amounts, in particular the fair value of identifiable net assets acquired, to determine if any additional information existed at the date of acquisition that would alter these amounts. This assessment will be completed by September 2026.

Consideration transferred
The total fair value of consideration transferred for the acquisition was £46.0 million.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

10. Acquisition of subsidiary (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 236

Identifiable assets acquired and liabilities assumed
The following table sets out information about the net assets acquired at the date of acquisition, including the carrying amount, fair value adjustments recognised and the resultant fair value.

	Fair value adjustment	Carrying amount (See note below table)	Fair value
£m	£m	£m
Cash and cash equivalents	–	50.3	50.3
Loans and advances to customers	15.9 a	623.1	639.0
Derivative financial assets	–	0.4	0.4
Intangible assets	2.7 b	1.8	4.5
Deferred tax assets	19.8 c	–	19.8
Other assets	(7.6) d	11.6	4.0
Intercompany loan	–	(128.2)	(128.2)
Debt securities in issue	(0.3) e	(472.5)	(472.8)
Deferred tax liabilities	(1.3) f	–	(1.3)
Other liabilities	11.6 g	(19.6)	(8.0)
Subordinated debt liability	–	(63.0)	(63.0)
Total identifiable net assets acquired	40.8	3.9	44.7

Fair value adjustments per above table:
a) ThinCats’ pre-acquisition ECL allowances have been unwound as the acquisition date fair value of the loan portfolios becomes the new gross carrying amount under IFRS 9. Post-acquisition ECLs have been recognised through Shawbrook’s framework and any Day 1 impact recorded in profit or loss.
b) The adjustment includes £4.5 million for identifiable intangible assets recognised on acquisition (customer relationships £2.6 million, brand £0.8 million, technology £1.1 million), offset by £1.8 million of ThinCats’ pre-existing goodwill written off on acquisition because IFRS 3 prohibits carrying forward acquiree goodwill.
c) A deferred tax asset has been recognised for ThinCats’ carried-forward tax losses in accordance with IFRS 3.24 and IAS 12, where future taxable profits are considered probable.
d) Comprises: (i) £4.1 million derecognition of fair value gains previously recognised by ThinCats on loans measured at FVTPL, removed to avoid double counting as the acquisition-date fair value supersedes prior measurement; (ii) £2.3 million fair-value adjustment to a contractual exit-fee right using a 50% haircut for uncertainty; and (iii) £1.2 million derecognition of prepayments and accruals for transaction-related costs that do not meet recognition criteria.
e) £0.3 million adjustment to debt securities in issue relates to fair value adjustment to funding liabilities.
f) Deferred tax relates to the identifiable intangible assets mentioned in b) above, recognised on acquisition.
g) Deferred completion fees of £11.6 million, representing EIR-related balances on origination fees, have been derecognised as they do not generate contractual cash inflows and would not be recognised separately by a market participant. These amounts have been removed through the acquisition fair value adjustments.

Acquisition of Imployapp Limited (trading as Playter)
On 2 December 2025, Shawbrook Bank Limited, the Group’s principal subsidiary, acquired 100% of the ordinary shares of Imployapp Limited (“Playter”), a fintech lender providing short term credit and working capital facilities to UK SMEs. Playter became a wholly owned subsidiary from this date. The acquisition enhances the Group’s SME lending capabilities by combining Playter’s technology and team with Shawbrook’s digital infrastructure, distribution network and funding resources. This is expected to broaden the Group’s access to fast, flexible finance for UK SMEs and support continued growth in this segment. Playter commenced being consolidated as a subsidiary of the Group from 2 December 2025, the date when control transferred to the Group. From acquisition to the reporting date, Playter has contributed net operating income of £0.6 million and loss before tax of £0.1 million. If the acquisition had occurred on 1 January 2025, it is estimated that the net operating income for the Group for the year ended 31 December 2025 would have been £686.8 million and the consolidated profit before tax for the Group would have been £273.6 million. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2025. Provisional fair values have been assigned to the consideration transferred and the identifiable assets and liabilities. These remain subject to review, particularly the valuation of acquired net assets. The final assessment will be completed by December 2026.

Consideration transferred
The total fair value of consideration transferred for the acquisition was £18.7 million.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

10. Acquisition of subsidiary (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 237

	Fair value adjustment	Carrying amount (See note below table)	Fair value
£m	£m	£m
Cash and cash equivalents	–	2.3	2.3
Loans and advances to customers	3.7 a	19.0	22.7
Intangible assets	3.1 b	–	3.1
Other assets	0.1 c	1.9	2.0
Debt securities in issue	–	(22.0)	(22.0)
Deferred tax liabilities	(1.5) d	–	(1.5)
Other liabilities	0.1 e	(0.6)	(0.5)
Total identifiable net assets acquired	5.5	0.6	6.1

Fair value adjustments per above table:
a) £3.7 million comprises a £3.0 million fair value gain recognised on re-measuring the loan book at acquisition, plus the reversal of £0.7 million pre-acquisition loan impairment.
b) £3.1 million represents intangible assets in the form of Playter’s proprietary lending and servicing platform. The asset has been recognised as part of the purchase price allocation.
c) £0.1 million reflects the reversal of an impairment provision on accounts receivable.
d) The £1.5 million fair value adjustment to deferred tax liabilities comprises £0.7 million relating to the loan book (as noted in a) and £0.8 million arising from the recognition of separately identifiable intangible assets (as noted in b)
e) £0.1 million relates to the removal of pre-acquisition EIR income deferrals.

Goodwill
Goodwill arising from the two acquisitions has been recognised as follows:

	ThinCats	Playter	Total
£m	£m	£m
Fair value of consideration transferred	46.0	18.7	64.7
Fair value of identifiable net assets acquired	(44.7)	(6.1)	(50.8)
Goodwill recognised	1.3	12.6	13.9

The goodwill recognised on both acquisitions reflects the expected synergies arising from integrating the acquired businesses into the Group. None of the goodwill recognised is expected to be tax deductible for trading purposes. In the year ended 31 December 2024, the Group completed the acquisition of 100% of the ordinary shares of JBR Auto Holdings Limited (“JBR”) for total consideration of £22.0 million, making it a wholly owned subsidiary. In 2025, following a measurement period adjustment in accordance with IFRS 3, the identifiable net assets acquired were revised to £17.4 million (31 December 2024: £14.2 million), resulting in goodwill of £4.6 million (31 December 2024: £7.8 million).

Acquisition related costs
In the year ended 31 December 2025, acquisition related costs of £5.7 million for ThinCats and £0.8 million for Playter are recognised in administrative expenses in the statement of profit and loss.

11. Segmental analysis
See accounting policies in Note 7(b)

The following section provides information regarding the operating segments of the Group. Substantially all of the Group’s activities are in the UK and, as such, segmental analysis on geographical lines is not presented. The Group is not reliant on any single customer and therefore information about major customers is also not provided.

On 30 September 2025, the Group completed the acquisition of ThinCats and its subsidiaries (see Note 10). ThinCats is a UK-based alternative lending platform that provides bespoke business loans to mid-sized SMEs. Since the acquisition date, the company and its subsidiaries have been reported within the SME reportable operating segment. On 2 December 2025, the Group completed the acquisition of Playter and its subsidiaries (see Note 10). Playter is a fintech lender providing short term credit and working capital facilities to UK SMEs. Since the acquisition date, the company and its subsidiaries have been reported within the SME reportable operating segment.

Reportable operating segments
Description
Provides specialist commercial and residential mortgage products to professional landlords, Commercial Real Estate investors and homeowners.SME Provides a range of innovative and tailored solutions to support UK small and medium-sized enterprises (SME) with their event-driven needs. Consumer Provides unsecured personal loans, unsecured loans through strategic partnerships, and Retail Finance motor finance loans via JBR Auto Holdings Limited. Retail Comprised of the Group’s subsidiaries, The Mortgage Lender Limited and Bluestone Mortgage Mortgages Limited. Provides residential mortgages for those with complex income profiles, Brands including the self-employed, entrepreneurs and first-time buyers, and buy-to-let mortgages. Any income or expense not allocated to the above reportable operating segments is included in ‘Other’, which does not represent a reportable operating segment.

The following tables provide summarised information regarding the results of each reportable operating segment based on the new presentation for reportable operating segments to reflect how results are provided to the chief operating decision maker. The tables have been updated to reflect the revised naming conventions for operating segments, including the prior year comparative table.

Where applicable, segment results are presented on an underlying basis, with underlying adjustments presented separately to allow reconciliation to the statutory results of the Group. Underlying performance represents the basis on which the chief operating decision maker (CODM) assesses segment performance. Underlying adjustments comprise items of income or expense that are material by size and/or nature and are typically non-recurring. These include provisions for motor finance commission redress, corporate activity and integration costs associated with acquisitions, IPO-related costs and the IFRS 2 modification charge recognised on vesting of legacy share-based arrangements. Underlying adjustments are determined at a Group level and are not allocated to operating segments. These items are presented separately in order to facilitate comparison of the Group’s underlying performance from period to period. Further details are provided on page 17.

The results for each segment are presented on a consolidated basis, as reviewed by the CODM. Intra-group transactions between segments are minimal and are not separately disclosed. Intra-group transactions are conducted under terms that are usual and customary for such activities.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Segmental analysis (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 239

	Commercial Mortgage SME	Retail Finance	Real Estate	Consumer Finance	Retail Brands	Underlying Other	Underlying total	Statutory adjustment	Statutory total
Year ended 31 December 2025	£m	£m	£m	£m	£m	£m	£m	£m	£m
Interest and similar income	455.2	362.8	96.8	268.7	238.4	1,421.9	–	1,421.9
Interest expense and similar charges	(270.3)	(143.9)	(33.4)	(177.1)	(148.0)	(772.7)	(2.3)	(775.0)
Net interest income	184.9	218.9	63.4	91.6	90.4	649.2	(2.3)	646.9
Net operating lease income	–	1.2	–	–	–	1.2	–	1.2
Net fee and commission (expense) /income	(1.9)	9.0	(2.6)	0.1	(6.0)	(1.4)	–	(1.4)
Net gains on structured asset sales	–	–	–	33.2	1.6	34.8	–	34.8
Net losses on derivative financial instruments and hedge accounting	–	–	–	–	(2.2)	(2.2)	–	(2.2)
Net other operating income	–	–	–	–	2.5	2.5	–	2.5
Net gains on loans and advances at FVTPL	–	0.3	–	–	–	0.3	–	0.3
Net operating income	183.0	229.4	60.8	124.9	86.3	684.4	(2.3)	682.1
Administrative expenses	(25.5)	(44.6)	(23.2)	(26.0)	(148.1)	(267.4)	(58.7)	(326.1)
Impairment losses on financial assets	(7.8)	(46.3)	(17.9)	(4.7)	–	(76.7)	(6.3)	(83.0)
Provisions	–	–	0.2	–	–	0.2	(1.0)	(0.8)
Total operating expenses	(33.3)	(90.9)	(40.9)	(30.7)	(148.1)	(343.9)	(66.0)	(409.9)
Profit/(loss) before tax	149.7	138.5	19.9	94.2	(61.8)	340.5	(68.3)	272.2

$^1$ For details of the underlying adjustments, refer to page 17, Summary of statutory results for the period table in Strategic Report.

	Commercial Mortgage SME	Retail Finance	Real Estate	Consumer Finance	Retail Brands	Underlying Other	Underlying total	Statutory adjustment	Statutory total
Year ended 31 December 2024	£m	£m	£m	£m	£m	£m	£m	£m	£m
Interest and similar income	403.1	327.6	74.3	251.2	330.8	1,387.0	–	1,387.0
Interest expense and similar charges	(235.1)	(138.6)	(22.4)	(160.5)	(239.5)	(796.1)	–	(796.1)
Net interest income	168.0	189.0	51.9	90.7	91.3	590.9	–	590.9
Net operating lease income	–	1.4	–	–	–	1.4	–	1.4
Net fee and commission (expense) /income	(1.9)	10.0	(5.1)	0.4	(3.3)	0.1	–	0.1
Net gains on structured asset sales	–	–	–	14.1	–	14.1	–	14.1
Net gains on derivative financial instruments and hedge accounting	–	–	–	–	1.9	1.9	–	1.9
Net other operating income	–	–	–	–	1.4	1.4	–	1.4
Net operating income	166.1	200.4	46.8	105.2	91.3	609.8	–	609.8
Administrative expenses	(24.0)	(40.6)	(17.4)	(39.6)	(127.2)	(248.8)	(4.0)	(252.8)
Impairment losses on financial assets	(7.9)	(25.8)	(27.8)	(5.7)	–	(67.2)	–	(67.2)
Provisions	–	–	–	–	–	–	5.3	5.3
Total operating expenses	(31.9)	(66.4)	(45.2)	(45.3)	(127.2)	(316.0)	1.3	(314.7)
Profit/(loss) before tax	134.2	134.0	1.6	59.9	(35.9)	293.8	1.3	295.1

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Segmental analysis (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 240

The following tables present summarised information about the Group’s assets and liabilities based on the reportable operating segments. Loans and advances to customers and assets on operating leases (i.e. the Group’s ‘loan book’) are allocated to the relevant lending segments. All other assets and liabilities are allocated to ‘Other’.

	Commercial Mortgage SME	Retail Finance	Real Estate	Consumer Finance	Retail Brands	Other	Total
As at 31 December 2025	£m	£m	£m	£m	£m	£m	£m
Assets	7,625.5	4,396.5	1,021.8	4,750.9	4,674.2	–	22,468.9
Liabilities	–	–	–	–	–	(20,626.4)	(20,626.4)
Net assets/(liabilities)	7,625.5	4,396.5	1,021.8	4,750.9	4,674.2	(20,626.4)	1,842.5

	Commercial Mortgage SME	Retail Finance	Real Estate	Consumer Finance	Retail Brands	Other	Total
As at 31 December 2024	£m	£m	£m	£m	£m	£m	£m
Assets	6,777.7	3,112.7	880.0	4,436.0	4,516.3	–	19,722.7
Liabilities	–	–	–	–	–	(18,140.4)	(18,140.4)
Net assets/(liabilities)	6,777.7	3,112.7	880.0	4,436.0	4,516.3	(18,140.4)	1,582.3

Interest and similar income
See accounting policies in Note 7(c)

| | 2025 | 2024 |
| :--- | £m | £m |
| Interest income calculated using the effective interest rate method | | |
| Cash and balances at central banks | 87.4 | 135.0 |
| Loans and advances to customers: loan receivables measured at amortised cost | 886.7 | 805.9 |
| Loans and advances to customers: loan receivables measured at FVOCI | 219.5 | 193.1 |
| Investment securities | 91.0 | 65.3 |
| Total interest income calculated using the effective interest rate method | 1,284.6 | 1,199.3 |
| Other interest and similar income | | |
| Loans and advances to customers: finance lease and instalment credit receivables | 72.3 | 50.5 |
| Loans and advances to customers: loan receivables measured at FVTPL | 1.8 | - |
| Derivative financial instruments | 63.2 | 137.2 |
| Total other interest and similar income | 137.3 | 187.7 |
| Total interest and similar income | 1,421.9 | 1,387.0 |

Interest income calculated using the effective interest rate (EIR) method is attributable to financial assets measured at amortised cost and at FVOCI. Interest income on derivative financial instruments includes interest income of £57.8 million attributable to derivative financial instruments in qualifying hedging relationships hedging assets (2024: £129.0 million of interest income). For financial assets measured at FVTPL, interest income is determined using the EIR method together with any additional returns that reflect the specific features of the loan.

Interest expense and similar charges
See accounting policies in Note 7(c)

| | 2025 | 2024 |
| :--- | £m | £m |
| Amounts due to banks | 47.3 | 65.4 |
| Customer deposits | 673.1 | 647.0 |
| Derivative financial instruments | 3.3 | 25.1 |
| Debt securities in issue | 31.4 | 39.3 |
| Lease liabilities | 1.2 | 0.3 |
| Subordinated debt liability | 18.7 | 19.0 |
| Total interest expense and similar charges | 775.0 | 796.1 |

Except for interest on derivative financial instruments and lease liabilities, amounts in the above table are calculated using the EIR method and are attributable to financial liabilities measured at amortised cost. Interest expense on derivative financial instruments includes interest expense of £1.3 million attributable to derivative financial instruments in qualifying hedging relationships hedging liabilities (2024: £19.8 million of interest expense).

Net fee and commission income
See accounting policies in Note 7(d)

| | 2025 | 2024 |
| :--- | £m | £m |
| Fee income on loans and advances to customers | 9.6 | 10.9 |
| Credit facility related fees | 7.6 | 5.3 |
| Other fee income | 0.1 | - |
| Fee and commission income | 17.3 | 16.2 |
| Fee and commission expense | (18.7) | (16.1) |
| Net fee and commission (expense)/income | (1.4) | 0.1 |

Net gains on structured asset sales
See accounting policies in Note 7(i)

| | 2025 | 2024 |
| :--- | £m | £m |
| Net gains on structured asset sales | 34.8 | 14.1 |
| Net gains on structured asset sales | 34.8 | 14.1 |

Structured asset sales
The net gain on structured asset sales is attributable to securitised loan portfolios. The securitised loans were transferred to unconsolidated structured entities and met the criteria to be derecognised from the statement of financial position (see Note 25 and Note 26).

16.# Administrative expenses

See accounting policies in Note 7(e)

	2025 £m	2024 £m
Payroll costs (Note 17)	191.5	150.3
Depreciation of property, plant and equipment (Note 1)	28.6	4.6
Amortisation of intangible assets (Note 29)	14.1	9.8
IPO transaction costs	20.3	-
Other administrative expenses	93.9	88.1
Total administrative expenses	326.1	252.8

Other administrative expenses include fees paid to the Group’s auditor (excluding VAT), KPMG LLP, as detailed below.

	2025 £000	2024 £000
Audit of these annual accounts	198.7	170.0
Audit of the annual accounts of subsidiary companies	4,002.3	3,832.2
Audit related assurance services	335.8	309.0
IPO related assurance services	1,905.0	-
Other assurance services	50.0	50.0
Total auditor’s remuneration	6,491.8	4,361.2

1 Includes depreciation of all asset categories except for assets on operating leases. Depreciation of assets on operating leases is presented as a separate line item in the statement of profit and loss, forming part of the net operating lease income total.

17. Employees

See accounting policies in Note 7(e)

Aggregate payroll costs included in administrative expenses (see Note 16) are as follows:

	2025 £m	2024 £m
Wages and salaries	139.4	129.1
Social security costs	17.9	12.8
Pension costs	8.1	7.7
Share-based remuneration (Note 18)	26.1	0.7
Total payroll costs	191.5	150.3

In the table above, share-based remuneration is presented separately from wages and salaries. The prior-year comparative has been represented to align with the current-year presentation. Further details regarding share-based remuneration transactions are provided in Note 18.

Pension costs represent contributions to defined contribution pension schemes. The Group does not operate any defined benefit pension schemes.

Details of Directors’ remuneration are provided on page 82.

The average number of persons employed by the Group on a full-time equivalent basis by reportable operating segment is set out in the following table.

	2025	2024
Real Estate	199	208
SME	279	299
Consumer Finance	83	95
Retail Mortgage Brands	259	323
Other	663	594
Average number of employees (on a full-time equivalent basis)	1,483	1,519

Figures in the above tables include contracted employees of the Group only and do not include contractors.

18. Employee share-based payment transactions

See accounting policies in Note 7(z)

During the year, the Group operated various share-based payment arrangements, as set out below. Further information is provided in the Directors’ Remuneration Report starting on page 82.

The share-based payment expense during the year comprised the following:

	2025 £m	2024 £m
Management Incentive Plan	–	0.7
2025 Share Plan	26.1	–
Total share-based payment expense	26.1	0.7

Legacy Share Plans

Management Incentive Plan

Prior to the IPO, the Group operated an equity settled Management Incentive Plan (MIP), which was originally introduced for a set of individuals in April 2019. Individuals selected for inclusion in the equity settled MIP were initially entitled to acquire non-voting ‘B’ class ordinary shares (‘B shares’) in Marlin Bidco Limited (Marlin), which was the ultimate parent company of the Group. In January 2025, all 9,150 B shares (2024: 9,150) were converted into a new class of A shares in Marlin, namely 6,016,857 A6 shares. The conversion was effected by sub dividing and reclassifying B shares into A6 shares. This involved amending the rights attaching to shares rather than the transfer, disposal, acquisition or issue of shares. The IPO resulted in the vesting of the MIP (there having been no movement in the number of A6 shares ahead of this). As a result of the vesting, the assets distributed to A6 shareholders consisted of their pro-rata share of the cash proceeds Marlin received following the sale of Shawbrook shares as part of the IPO and the Shawbrook shares Marlin did not sell as part of the IPO. During the year ended 31 December 2025, the charge recognised in payroll costs for MIP is £nil (2024: £0.7 million).

2025 Share Plan

In January 2025, the Company adopted a new equity settled incentive arrangement for selected key employees in the form of an option to acquire A2 shares in Marlin for nil consideration, subject to performance outcomes linked to a prescribed exit event. The IPO resulted in the vesting of this arrangement with assets distributed to A2 shareholders. Given that the Plan vested on listing, the expense of £26.1 million (2024: £nil) was fully recognised during the year ended 31 December 2025.

Post IPO Share Plans

Performance Share Plan (PSP)

Following the IPO, the Group adopted the PSP under which the Remuneration Committee may grant awards to executive directors and selected key employees as part of their variable remuneration. Awards will typically comprise of a right to acquire ordinary shares in the Company for nil (or nominal) consideration and will vest subject to continued employment (other than in ‘good leaver’ circumstances) and the achievement of performance criteria set at the time of grant. Awards may be exercised from the point of vesting to the tenth anniversary of the grant date. The first grant under the PSP was made on 12 December 2025 (with an expected vesting date of 1 April 2028). The expense for the year ended 31 December 2025 is immaterial.

All Employee share-based arrangements

In January 2026, the Group awarded all eligible employees 418 Free shares each in the Company under the Share Incentive Plan (“SIP”), which is subject to a three-year holding period for the award date. The Group also intends to make the first grants under the Sharesave in 2026, which will vest in the ordinary course, after the completion of service and savings period requirements. Further information in respect of these arrangements will be provided in the Group’s Annual Report and Accounts for the year ending 31 December 2026.

19. Directors’ remuneration

Information in respect of Directors’ Remuneration is provided in the single total figure of remuneration within the Directors’ Remuneration Report on page 93.

20. Impairment losses on financial assets

See accounting policies in Note 7(u)

Impairment losses on financial assets are attributable to the Group’s loans and advances to customers and loan commitments. Impairment losses for the Group’s other financial asset categories that are in scope of IFRS 9 impairments (cash and balances at central banks, loans and advances to banks and investment securities) are immaterial, totalling less than £0.1 million in both reported years.

The following table provides analysis of impairment losses on financial assets by financial asset category.

	2025 £m	2024 £m
Impairment losses on loans and advances to customers at amortised cost
Net ECL charge for the year	27.3	29.2
Loan balances written off in the year	65.8	47.2
Amounts recovered in the year in respect of loan balances previously written off	(15.0)	(12.3)
Total impairment losses on loans and advances to customers at amortised cost	78.1	64.1
Impairment losses on loans and advances to customers at FVOCI
Net ECL charge for the year 1	4.9	6.3
Total impairment losses on loans and advances to customers at FVOCI	4.9	6.3
Impairment on loan commitments
Net ECL (credit) for the year	–	(3.2)
Total impairment on loan commitments	–	(3.2)
Total impairment losses on financial assets	83.0	67.2

1 In the 12 months ended 31 December 2025, the change in the loss allowance of £1.4 million included in the consolidated statement of comprehensive income is presented after deducting £3.5 million (2024: £1.0 million) of loss allowance attributable to securitised loan portfolios transferred to unconsolidated structured entities at the date of derecognition from the statement of financial position (see Note 25).

Further analysis of the net ECL charge for the year in respect of loans and advances to customers at amortised cost, loans and advances to customers at FVOCI and loan commitments is provided in the credit risk section of the Risk Report on page 137, 141 and 143, respectively.

Critical accounting judgements and estimates

The impairment of financial assets is an area identified as involving critical accounting judgements and estimates. Additional details are provided in Note 8(a) and in the credit risk section of the Risk Report on pages 144 to 151.

21. Tax

See accounting policies in Note 7(f)

A summary of the tax charge recognised in the statement of profit and loss is as follows:

	2025 £m	2024 £m
Current tax
Current year	70.5	74.6
Adjustment in respect of prior years	(4.1)	(3.9)
Total current tax	66.4	70.7
Deferred tax
Origination and reversal of temporary differences	8.6	3.0
Adjustment in respect of prior years	1.7	1.5
Total deferred tax	10.3	4.5
Total tax charge	76.7	75.2

Additional information about the Group’s deferred tax assets is provided in Note 30.

A reconciliation of profit before tax to the total tax charge is shown in the following table. The effective tax rate is 28.2% (2024: 25.5%). This is higher than the UK corporation tax rate due to the combined impact of the banking surcharge and the other adjustments set out in the table below.2025	2024
£m	£m
Profit before tax	272.2
Implied tax charge thereon at 25% (2024: 25%)	68.1
Adjustments
Banking surcharge	4.0
Tax relief on coupon paid on capital securities	(4.1)
Adjustment in respect of prior years	(2.4)
Capital expenses related to IPO	4.8
Capital expenses related to acquisitions	0.7
Group structuring capital expenses	0.6
Entertaining and other disallowable expenses	0.2
Non -deductible share scheme costs	0.3
Exempt dividends	(5.2)
SPV fair value and consolidation adjustments	9.0
Other permanent differences	0.7
Total tax charge	76.7

22. Earnings per share

See accounting policies in Note 7(y)

The table below shows the earnings per share (EPS) for 2025 and 2024. The calculation is based on the profit after tax attributable to equity shareholders less coupon paid on capital securities divided by the number of weighted average ordinary shares. For the purposes of basic and diluted earnings per share, the weighted average number of ordinary shares in issue during the year has been used, with shares issued during the year included from the date of issue and time-apportioned accordingly. Although share options were in issue during the year, they were newly granted and did not vest during the year. Accordingly, these instruments had no dilutive effect and diluted earnings per share is the same as basic earnings per share.

	2025	2024
	£m	£m
Profit attributable to equity holders	195.5	219.9
Coupon paid on capital securities	(15.1)	(15.1)
Profit attributable to ordinary shareholders	180.4	204.8
Average number of shares ( million)
Basic	508.5	506.2
Effect of dilutive share options and awards	–	–
Diluted	508.5	506.2
Basic (pence)	35	40
Diluted (pence)	35	40

23. Cash and cash equivalents

See accounting policies in Note 7(g)

	2025	2024
	£m	£m
Cash and balances at central banks	1,924.5	2,244.7
Loans and advances to banks	246.8	304.4
Total cash and cash equivalents	2,171.3	2,549.1

The Group’s cash and cash equivalents balance includes:
* £156.9 million (2024: £191.8 million) of cash collateral paid against derivative contracts.
* £38.3 million (2024: £49.2 million) of securitisation cash, which represents the cash balances of consolidated structured entities.

The loss allowance for both cash and balances at central banks and loans and advances to banks is immaterial in both reported years, totalling less than £0.1 million.

24. Loans and advances to customers

See accounting policies in Note 7(h)

The following tables analyse the carrying amount of loans and advances to customers by loan classification and agreement type. Finance lease and instalment credit receivables are presented within loans and advances to customers at amortised cost.

Loans and advances to customers at amortised cost

	Loans and advances to customers	Gross carrying amount	Loss allowance	Carrying amount	Loans and advances at FVOCI	Loans and advances at FVTPL	Total
As at 31 December 2025	£m	£m	£m	£m	£m	£m	£m
Loan receivables		12,953.5	(178.8)	12,774.7	4,046.0	62.9	16,883.6
Finance lease receivables		22.2	(0.6)	21.6	–	–	21.6
Instalment credit receivables		839.5	(10.0)	829.5	–	–	829.5
	13,815.2	(189.4)	13,625.8	4,046.0	62.9	17,734.7
Fair value adjustments for hedged risk (see Note 27)		13.4			22.0	–	35.4
Total loans and advances to customers							17,770.1

The FVTPL loans are new in 2025 and arise from the acquisition of ThinCats. These loans have cash flows that do not meet the Solely Payments of Principal and Interest (SPPI) criteria.

Loans and advances to customers at amortised cost

	Loans and advances to customers	Gross carrying amount	Loss allowance	Carrying amount	Loans and advances at FVOCI	Loans and advances at FVTPL	Total
As at 31 December 2024	£m	£m	£m	£m	£m	£m	£m
Loan receivables		11,031.9	(149.4)	10,882.5	3,601.1	–	14,483.6
Finance lease receivables		22.6	(0.7)	21.9	–	–	21.9
Instalment credit receivables		752.5	(9.3)	743.2	–	–	743.2
	11,807.0	(159.4)	11,647.6	3,601.1	–	15,248.7
Fair value adjustments for hedged risk (see Note 27)		(51.2)			(20.9)	–	(72.1)
Total loans and advances to customers							15,176.6

Additional analysis of the Group’s loans and advances to customers at amortised cost and loans and advances to customers at FVOCI and the associated loss allowance is provided in the credit risk section of the Risk Report starting on page 137 and 141, respectively.

Loans and advances to customers include the following pledged and transferred assets. Amounts represent the carrying amount (after loss allowance deducted).
* £2,442.6 million (2024: £2,306.4 million) includes amounts encumbered through access to the Bank of England’s Sterling Monetary Framework.
* £1,918.1 million (2024: £2,255.4 million) transferred to consolidated structured entities as part of securitisation programmes, which are pledged as collateral against debt securities in issue.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025
24. Loans and advances to customers (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 | 248

Loans and advances to customers also include loans with a carrying amount (after loss allowance deducted) of £2.3 million (2024: £6.2 million) that were offered under COVID-19 related business support schemes. The UK Government provides a guarantee to protect 80% of any post-recovery loss in the event of default on these loans. Details of claims made against the government guarantee are as follows:

	2025	2024
Number of claims made during the year	–	–
Amount pending receipt as at 1 January (£m)	–	0.2
Amount claimed during the year (£m)	–	–
Amount received on claims during the year (£m)	–	(0.2)
Amount pending receipt as at 31 December (£m)	–	–

Finance lease and instalment credit receivables

Finance lease and instalment credit receivables relate to agreements issued by the Group to customers for a variety of assets, predominantly plant and machinery. The following table sets out a maturity analysis, showing the undiscounted payments to be received after the reporting date and a reconciliation to the gross carrying amount of the receivable.

	2025		2024
	Finance lease receivables (£m)	Instalment credit receivables (£m)	Finance lease receivables (£m)	Instalment credit receivables (£m)
Undiscounted payments receivable
Within one year	8.8	518.3	9.5	448.5
Between one and two years	6.6	168.1	7.0	203.3
Between two and three years	3.5	94.9	5.4	122.6
Between three and four years	2.0	136.8	2.3	33.2
Between four and five years	1.7	14.1	0.8	11.2
After five years	2.7	0.8	0.6	2.6
Total undiscounted payments receivable	25.3	933.0	25.6	821.4
Unearned finance income	(3.1)	(93.5)	(3.0)	(68.9)
Gross carrying amount	22.2	839.5	22.6	752.5

Instalment credit receivables include block discounting facilities of £365.0 million (2024: £311.4 million).

The cost of assets acquired by the Group during the year, for the purpose of letting to customers under finance lease and instalment credit agreements, is as follows:

	2025	2024
	£m	£m
Finance lease agreements	4.8	6.6
Instalment credit agreements	358.3	133.7
Total cost of assets acquired during the year	363.1	140.3

Modifications

The Group sometimes modifies the terms of loans provided to customers due to commercial renegotiations, or for distressed loans with a view to maximising recovery. Modifications occurring due to the customer encountering financial difficulties are referred to as forbearance activities. Details of forborne loans are provided in the credit risk section of the Risk Report starting on page 158. Modification gains or losses during the year were immaterial.

Write-offs still under enforcement activity

Loans that are written off can still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. The contractual amount outstanding on loans and advances to customers that were written off during the reporting period, and are still subject to enforcement activity, is £104.9 million (2024: £84.4 million).

25. Securitisations and structured entities

See accounting policies in Note 7(i)

Consolidated structured entities

The Group includes consolidated structured entities relating to securitisation programmes. These securitisations involve the transfer of certain mortgage loans included within loans and advances to customers to bankruptcy remote structured entities. The Group continues to service the transferred loans in return for an administration fee and is entitled to any residual income from the structured entity after the debt obligations and senior expenses of the securitisation programme have been met. Based on the structure of these securitisations, for accounting purposes, it is assessed that the Group controls the structured entities and they are therefore treated as subsidiaries and are fully consolidated (see Note 45). The transfer of loans does not meet the derecognition criteria and they therefore continue to be recognised in their entirety in loans and advances to customers in the statement of financial position. The securitisations involve the simultaneous issue of debt securities by the structured entities to investors.The debt securities may be issued to external investors, which provides a form of long-term funding to the Group. Alternatively, some, or all, of the debt securities may be purchased by a subsidiary of the Group, Shawbrook Bank Limited. These internally held debt securities are used for funding and liquidity purposes. For example, they may be exchanged for UK gilts, referred to as a ‘security swap’, or they may be positioned with the Bank of England for use as collateral against amounts drawn under its funding schemes.

During the year ended 31 December 2025, the following transactions with consolidated structured entity took place:
* In September 2025, the Group acquired ThinCats Group Limited which included four subsidiaries by virtue of control relating to securitisation transactions, TC Funding I Limited, TC Funding III Limited, TC Funding V DAC and TC Funding Limited (only three of the deemed separate entity silos). Following acquisition, the Group repurchased all assets previously held by TC Funding I Limited and TC Funding V DAC and simultaneously repaid all outstanding liabilities. TC Funding V DAC is liquidated and TC Funding I Limited is currently undergoing the formal liquidation process, while TC Funding III Limited and TC Funding Limited remain active. Having performed an assessment, the Group has concluded that it controls the three active entities, consequently, the assets and liabilities of the entities have been consolidated into the Group’s financials.

In the comparative year ended 31 December 2024, the following transactions with consolidated structured entities took place:
* In May 2024, loans with a gross carrying amount (before loss allowance) of £557.4 million and a carrying amount (after loss allowance) of £556.2 million were transferred to Lanebrook Mortgage Transaction 2024-1 plc. The structured entity simultaneously issued mortgage-backed debt securities of £557.4 million and £5.5 million of uncollateralised ‘X’ notes, £250.0 million of which was issued to external investors (see Note 36), with the remainder retained by the Group and eliminated on consolidation.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
25. Securitisations and structured entities (continued)
Shawbrook Group plc | Annual Report and Accounts 2025
250

The following table summarises the carrying amount of securitised loans that continue to be recognised in the statement of financial position and the associated debt securities issued by consolidated structured entities.

	2025		2024
	Loans and advances securitised (Note 24)	Debt securities in issue (Note 36)	Loans and advances securitised (Note 24)	Debt securities in issue (Note 36)
	£m	£m	£m	£m
Ealbrook Mortgage Funding 2022 -1 plc	101.2	113.4	146.0	161.4
Lanebrook Mortgage Transaction 2022-1 plc	283.3	288.3	292.1	299.3
Shawbrook Mortgage Funding 2022 -1 plc	340.4	347.7	426.6	431.4
Genesis Mortgage Funding 2022 -1 plc	–	–	108.0	112.3
Holbrook Mortgage Transaction 2023 -1 plc	261.8	268.3	353.8	393.9
Lanebrook Mortgage Transaction 2023 -1 plc	375.7	387.4	387.1	398.6
Lanebrook Mortgage Transaction 2024 -1 plc	521.7	528.1	548.9	554.4
ThinCats Funding Limited	39.5	44.0
Total	1,923.6	2,351.3	1,977.2	2,255.4
Less: loss allowance on securitised loans	(5.5)		(7.1)
Less: held by the Group (and eliminated on consolidation)		(1,564.9)		(1,802.1)
Total recognised in statement of financial position	1,918.1	412.3	2,255.4	549.2

1 Based on unaudited management information provided by the unconsolidated structured entities.

Unconsolidated structured entities

The Group has interests in four unconsolidated structured entities associated with securitisation programmes. These securitisations involve the transfer of certain mortgage loans included within loans and advances to customers to bankruptcy remote structured entities. The residual certificates, representing the rights to receive residual income from the structured entity, are sold as part of these transactions. Based on the structure of these securitisations, for accounting purposes, it is assessed that the Group does not control the structured entities and they are therefore not consolidated. The transfer of loans meets the criteria for derecognition and they are therefore derecognised in their entirety from the statement of financial position, referred to as ‘structured asset sales’.

In May 2025, loans with a carrying amount of £563.5 million (net of £1.7 million loss allowance), comprising loans held at amortised cost of £10.9 million and loans held at FVOCI of £552.6 million, were transferred to an unconsolidated structured entity. Upon transfer, a net gain on derecognition of £22.9 million was recognised in the statement of profit and loss. The Group paid up-front expenses incurred in forming the unconsolidated structured entity of £0.9 million, including amounts to capitalise the entity, all bank and legal expenses. The Group has no intention to provide any further financial or other support following these initial set-up costs.

In December 2025, loans with a carrying amount of £335.1 million (net of £2.2 million loss allowance), comprising loans held at amortised cost of £29.2 million and loans held at FVOCI of £305.9 million, were transferred to an unconsolidated structured entity. Upon transfer, a net gain on derecognition of £10.3 million was recognised in the statement of profit and loss. The Group paid up-front expenses incurred in forming the unconsolidated structured entity of £1.4 million, including amounts to capitalise the entity, all bank and legal expenses. The Group has no intention to provide any further financial or other support following these initial set-up costs.

During the year ended 31 December 2024, loans with a carrying amount of £412.6 million (net of £1.0 million loss allowance), comprising loans held at amortised cost of £24.6 million and loans held at FVOCI of £388.0 million, were transferred to an unconsolidated structured entity. Upon transfer, a net gain on derecognition of £14.1 million was recognised in the statement of profit and loss (see Note 15). The Group paid up-front expenses incurred in forming the unconsolidated structured entity of £1.4 million, including amounts to capitalise the entity, all bank and legal expenses. The Group has no intention to provide any further financial or other support following these initial set-up costs.

A portion of the debt securities issued by unconsolidated structured entities as part of these securitisation transactions were purchased by a subsidiary of the Group, Shawbrook Bank Limited. The Group therefore has a direct interest in these unconsolidated structured entities. As at 31 December 2025, the carrying amount of the Group’s investment in debt securities issued by unconsolidated structured entities is £735.8 million (2024: £392.2 million) (see Note 26). This amount represents the Group’s maximum exposure to loss from its interests in unconsolidated structured entities. As at 31 December 2025, the total asset value 1 of the unconsolidated structured entities that the Group has a direct interest in, including the portion in which the Group has no interest, is £1,476.6 million (2024: £706.4 million).

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
25. Securitisations and structured entities (continued)
Shawbrook Group plc | Annual Report and Accounts 2025
251

The Group does not provide any ongoing financial support to any of the unconsolidated structured entities that it has a direct interest in.

Other accounting judgements

For each securitisation transaction completed, the assessments involved in determining whether the Group controls the structured entity and whether the loans meet the criteria to be derecognised are identified as involving accounting judgements. Additional details are provided in Note 9(a).

26. Investment securities
See accounting policies in Note 7(j)

	2025		2024
	Covered Debt bonds	Covered Debt securities	Total	Covered Debt bonds
	£m	£m	£m	£m
As at 1 January	780.3	733.3	1,513.6	517.0
Additions	172.6	1,039.3	1,211.9	366.9
Maturities /Disposals	(47.0)	(423.2)	(470.2)	(104.7)
Other movements	(0.3)	(97.0)	(97.3)	1.1
As at 31 December	905.6	1,252.4	2,158.0	780.3

Debt securities represent mortgage-backed debt securities, of which £735.8 million (2024: £392.2 million) were issued by unconsolidated structured entities as part of securitisation transactions that were retained by the Group. The Group's investment securities balance includes:
* £390.2 million (2024: £nil) includes amounts encumbered through access to the Bank of England’s Sterling Monetary Framework.
* £178.1 million (2024: £nil) classified as FVOCI.
* £35.3 million (2024: £64.3 million) of restricted amounts invested in short-term money market funds by consolidated structured entities.
* During the year ended 31 December 2025, the Group sold £390 million of debt securities issued by unconsolidated structured entities, and a net gain on derecognition of £1.2 million was recognised in the statement of profit and loss.

The loss allowance for investment securities is immaterial, totalling less than £0.1 million in both reported years.

27. Derivative financial instruments and hedge accounting
See accounting policies in Note 7(k) and Note 7(l)

Derivative financial instruments

Derivative financial instruments are used by the Group for risk management purposes to minimise or eliminate the impact of movements in interest rates and foreign exchange rates. Derivatives are not used for trading or speculative purposes. The Group uses the International Swaps and Derivatives Association Master Agreement to document these transactions in conjunction with a Credit Support Annex.Unhedged positions principally arise from securitisation programmes where the transferred loans do not meet the derecognition criteria and therefore continue to be recognised in their entirety within loans and advances to customers, together with their associated centrally cleared derivatives and hedge accounting relationships. Within the consolidated structured entities, interest rate risk is managed with over-the-counter (OTC) derivatives, and the Group enters into economically offsetting centrally cleared derivatives to remove the duplicated hedging effect on consolidation, ensuring that only the intended interest rate exposure is reflected within the Group.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

27. Derivative financial instruments and hedge accounting (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 252

The following table analyses the Group’s derivative financial instruments by instrument type and whether the instrument is designated as a hedging instrument in a qualifying hedging relationship.

	Assets		Liabilities
	Nominal amount	Carrying amount	Nominal amount	Carrying amount
	£m	£m	£m	£m
As at 31 December 2025
Instruments not in hedging relationships
Interest rate swaps	2,220.5	26.2	3,642.1	26.3
Spot and forward foreign exchange swaps	70.9	0.3	34.7	0.1
Total instruments not in hedging relationships	2,291.4	26.5	3,676.8	26.4
Instruments in fair value hedging relationships
Interest rate swaps	8,348.8	60.7	6,241.0	65.2
Balance guaranteed swaps	–	–	–	–
Total instruments in fair value hedging relationships	8,348.8	60.7	6,241.0	65.2
Instruments in cash flow hedging relationships
Interest rate swaps	432.0	0.3	549.0	1.6
Total instruments in cash flow hedging relationships	432.0	0.3	549.0	1.6
Total derivative financial instruments	11,072.2	87.5	10,466.8	93.2

	Assets		Liabilities
	Nominal amount	Carrying amount	Nominal amount	Carrying amount
	£m	£m	£m	£m
As at 31 December 2024
Instruments not in hedging relationships
Interest rate swaps	2,131.2	74.1	5,181.0	73.3
Spot and forward foreign exchange swaps	3.9	–	23.5	0.1
Total instruments not in hedging relationships	2,135.1	74.1	5,204.5	73.4
Instruments in fair value hedging relationships
Interest rate swaps	9,394.5	144.7	3,950.0	43.4
Balance guaranteed swaps	69.9	3.3	–	–
Total instruments in fair value hedging relationships	9,464.4	148.0	3,950.0	43.4
Instruments in cash flow hedging relationships
Interest rate swaps	485.0	5.0	70.0	0.3
Total instruments in cash flow hedging relationships	485.0	5.0	70.0	0.3
Total derivative financial instruments	12,084.5	227.1	9,224.5	117.1

Interest rate swaps are used to manage interest rate risk associated with the Group’s loans and advances to customers (including pipeline loans) and customer deposits (including offers/ pipeline for savings). Spot and forward foreign exchange swaps are used to manage foreign exchange risk associated with the Group’s loans and advances to customers and loans and advances to banks. As part of the ThinCats acquisition in September 2025, the Group acquired derivative financial assets, comprising of swap contracts with a fair value of £0.4 million. These derivatives were closed immediately following acquisition. Balance guaranteed swaps were acquired as part of the BML acquisition in May 2023 and fair value hedge accounting was designated on acquisition. Fair value hedge accounting was de-designated following the termination of balance guaranteed swaps in June 2025. In respect of the derivative financial instruments set out above, cash collateral totalling £156.9 million has been paid (2024: £191.8 million) and £61.0 million has been received (2024: £157.9 million) (see Note 23 and Note 33, respectively). There was also securitisation collateral received in the form of Gilts with a nominal value of £28.6 million (2024: £75.9 million) and a market value of £27.1 million (2024: £79.8 million).

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

27. Derivative financial instruments and hedge accounting (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 253

Additional information about market risk, and the use of derivatives in managing such risk, is included in the Risk Report starting on page 160. All of the Group’s GBP derivatives are cleared through the London Clearing House via ABN Amro and Barclays. FX derivatives are over-the-counter (OTC) with Lloyds. SPV swaps are over-the-counter (OTC) derivatives with Lloyds, Barclays and Santander. The following tables split out the total nominal amount of derivative financial instruments into cleared and OTC.

	Assets			Liabilities
	Cleared	OTC	Total	Cleared	OTC
	£m	£m	£m	£m	£m
As at 31 December 2025
Instruments not in hedging relationships
Interest rate swaps	341.1	1,879.4	2,220.5	3,642.1	–
Spot and forward foreign exchange swaps	–	70.9	70.9	–	34.7
Total instruments not in hedging relationships	341.1	1,950.3	2,291.4	3,642.1	34.7
Instruments in fair value hedging relationships
Interest rate swaps	8,348.8	–	8,348.8	6,241.0	–
Balance guaranteed swaps	–	–	–	–	–
Total instruments in fair value hedging relationships	8,348.8	–	8,348.8	6,241.0	–
Instruments in cash flow hedging relationships
Interest rate swaps	432.0	–	432.0	549.0	–
Total instruments in cash flow hedging relationships	432.0	–	432.0	549.0	–
Total derivative financial instruments	9,121.9	1,950.3	11,072.2	10,432.1	34.7

	Assets			Liabilities
	Cleared	OTC	Total	Cleared	OTC
	£m	£m	£m	£m	£m
As at 31 December 2024
Instruments not in hedging relationships
Interest rate swaps	27.7	2,103.5	2,131.2	5,181.0	–
Spot and forward foreign exchange swaps	–	3.9	3.9	–	23.5
Total instruments not in hedging relationships	27.7	2,107.4	2,135.1	5,181.0	23.5
Instruments in fair value hedging relationships
Interest rate swaps	9,394.5	–	9,394.5	3,950.0	–
Balance guaranteed swaps	–	69.9	69.9	–	–
Total instruments in fair value hedging	9,394.5	69.9	9,464.4	3,950.0	–
relationships
Instruments in cash flow hedging relationships
Interest rate swaps	485.0	–	485.0	70.0	–
Total instruments in cash flow hedging	485.0	–	485.0	70.0	–
relationships
Total derivative financial instruments	9,907.2	2,177.3	12,084.5	9,201.0	23.5

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

27. Derivative financial instruments and hedge accounting (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 254

Hedge accounting

The Group holds certain derivative financial instruments as hedging instruments in fair value hedges and cash flow hedges in order to hedge exposures to changes in interest rates. Additional details of these hedges are provided in the following sections. All hedge accounting relationships have remained highly effective throughout both reported years.

Fair value hedges

Details of the Group’s fair value hedges are presented in the following tables.

	Maturity
As at 31 December 2025	Less than 1 month	1 - 3 months	3 months – 1 year	1 - 5 years	More than 5 years	Total
Interest rate swaps
Nominal amount (£m)	737.0	1,380.0	5,523.0	6,919.8	30.0	14,589.8
Average fixed interest rate , %	4.11	4.11	3.68	3.69	0.69	3.74
Balance guaranteed swaps
Nominal amount (£m)	–	–	–	–	–	–
Average fixed interest rate , %	–	–	–	–	–	–

	Maturity
As at 31 December 2024	Less than 1 month	1 - 3 months	3 months – 1 year	1 - 5 years	More than 5 years	Total
Interest rate swaps
Nominal amount (£m)	747.0	1,294.0	4,542.7	6,629.6	131.2	13,344.5
Average fixed interest rate , %	4.42	4.58	4.53	3.54	2.58	4.02
Balance guaranteed swaps
Nominal amount (£m)	–	–	69.9	–	–	69.9
Average fixed interest rate , %	–	–	1.07	–	–	1.07

Amounts relating to items designated as hedging instruments and hedge ineffectiveness are set out in the following tables. The carrying amount of assets and liabilities included in these tables are presented in the statement of financial position on the lines derivative financial assets and derivative financial liabilities, respectively. Ineffectiveness is recognised in the statement of profit and loss on the line net gains/(losses) on derivative financial instruments and hedge accounting. The main sources of ineffectiveness in these hedge relationships relate to the modelled prepayment/repayment behaviour and the assumptions that are used in modelling this behaviour.

	Carrying amount	Change in fair value of hedging instrument	Ineffectiveness recognised in statement of profit and loss
	Nominal used for calculating	Assets	Liabilities
As at 31 December 2025	£m	£m	£m
Interest rate swaps	14,589.8	60.7	65.2
Balance guaranteed swaps	–	–	–

	Carrying amount	Change in fair value of hedging instrument	Ineffectiveness recognised in statement of profit and loss
	Nominal used for calculating	Assets	Liabilities
As at 31 December 2024	£m	£m	£m
Interest rate swaps	13,344.5	144.7	43.4
Balance guaranteed swaps	69.9	3.3	–

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

27.# Derivative financial instruments and hedge accounting (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 255

Amounts relating to items designated as hedged items are as follows:

	Accumulated fair value adjustments included in the carrying amount of the hedged item	Change in fair value used for calculating ineffectiveness	Carrying amount
As at 31 December 2025	£m	£m	£m
Assets
Fixed rate mortgage loans included in loans and advances to customers hedged by interest rate swaps	8,130.6	32.6	116.5
Fixed rate mortgage loans included in loans and advances to customers hedged by balance guaranteed swaps	–	2.8	1.4
Liabilities
Fixed rate customer deposits included in customer deposits	6,846.0	(15.1)	(10.0)

	Accumulated fair value hedge adjustments included in the carrying amount of the hedged item	Change in fair value used for calculating ineffectiveness	Carrying amount
As at 31 December 2024	£m	£m	£m
Assets
Fixed rate mortgage loans included in loans and advances to customers hedged by interest rate swaps	7,109.1	(75.4)	(35.6)
Fixed rate mortgage loans included in loans and advances to customers hedged by balance guaranteed swaps	3.2	3.3	2.4
Liabilities
Fixed rate customer deposits included in customer deposits	6,530.3	(5.0)	(2.2)

1 The accumulated amount of fair value adjustments remaining in the statement of financial position for hedged items that have been de-designated, for which the fair value hedged item adjustment is being amortised into the statement of profit and loss is £5.4 million (2024: £9.3 million).

Cash flow hedges

Details of the Group’s cash flow hedges are presented in the following tables.

Maturity	Less than 1 month	1 - 3 months	3 months – 1 year	1 - 5 years	More than 5 years	Total
As at 31 December 2025
Interest rate swaps (pay fixed)
Nominal amount (£m)	–	–	–	358.0	288.0	646.0
Average fixed interest rate , %	–	–	–	3.58	3.68	3.63
Interest rate swaps ( receive fixed)
Nominal amount (£m)	–	–	180.0	155.0	–	335.0
Average fixed interest rate , %	–	–	3.61	3.57	–	3.59

Maturity	Less than 1 month	1 - 3 months	3 months – 1 year	1 - 5 years	More than 5 years	Total
As at 31 December 2024
Interest rate swaps (pay fixed)
Nominal amount (£m)	–	–	–	360.0	195.0	555.0
Average fixed interest rate , %	–	–	–	3.78	3.82	3.79
Interest rate swaps (receive fixed)
Nominal amount (£m)	–	–	–	–	–	–
Average fixed interest rate , %	–	–	–	–	–	–

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

Derivative financial instruments and hedge accounting (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 256

Amounts relating to items designated as hedging instruments and hedge ineffectiveness are set out in the following tables. The carrying amount of assets and liabilities included in these tables are presented in the statement of financial position on the lines derivative financial assets and derivative financial liabilities, respectively. Ineffectiveness recognised in the statement of profit and loss and amounts reclassified from the cash flow hedging reserve to the statement of profit and loss are both presented on the line net gains/(losses) on derivative financial instruments and hedge accounting. The main source of ineffectiveness in these hedge relationships relate to differences in the timing of cash flows between the hedged item and hedging instrument.

	Carrying amount	Change in fair value of hedging instrument used for ineffectiveness measurement	Change in value of hedged item used for ineffectiveness measurement (recognised in OCI)	Amount reclassified from cash flow hedging reserve to statement of profit and loss	Ineffectiveness recognised in statement of profit and loss
As at 31 December 2025	Nominal amount	Assets	Liabilities	£m	£m
Interest rate swaps (pay fixed)	646.0	0.2	1.6	(7.9)	(7.9)
Interest rate swaps (receive fixed)	335.0	0.2	–	2.9	3.5

	Carrying amount	Change in fair value of hedging instrument used for ineffectiveness measurement	Change in value of hedged item used for ineffectiveness measurement (recognised in OCI)	Amount reclassified from cash flow hedging reserve to statement of profit and loss	Ineffectiveness recognised in statement of profit and loss
As at 31 December 2024	Nominal amount	Assets	Liabilities	£m	£m
Interest rate swaps (pay fixed)	555.0	5.0	0.3	17.7	17.8
Interest rate swaps (receive fixed)	–	–	–	(2.3)	(0.2)

Amounts relating to items designated as hedged items are as follows:

Cash flow hedging reserve

	Continuing hedges	Discontinued hedges	Change in value used for calculating hedge ineffectiveness
As at 31 December 2025	£m	£m	£m
Liabilities
Floating rate debt securities included in debt securities in issue and floating rate borrowings included in amounts due to banks	7.9	(1.5)	6.0
Floating rate covered bonds and asset finance floating rate assets	(3.5)	0.2	1.6

	Continuing hedges	Discontinued hedges	Change in value used for calculating hedge ineffectiveness
As at 31 December 2024	£m	£m	£m
Liabilities
Floating rate debt securities included in debt securities in issue and floating rate borrowings included in amounts due to banks	(17.8)	4.6	12.7
Floating rate covered bonds and asset finance floating rate assets	0.2	–	0.1

Net gains and losses on derivative financial instruments and hedge accounting

Gains and losses on derivative financial instruments and hedge accounting recognised in the statement of profit and loss are summarised as follows:

	2025 £m	2024 £m
Net fair value (losses) /gains on derivative financial instruments	(121.1)	48.4
Net fair value gains/(losses) on hedged risk	118.9	(46.5)
Net (losses)/gains on derivative financial instruments and hedge accounting	(2.2)	1.9

Net fair value gains/(losses) on derivative financial instruments includes foreign exchange gains and losses.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 257

28. Property, plant and equipment

	Right-of-use assets	Leasehold property	Fixtures, fittings and equipment	Assets on operating leases	Total
Year ended 31 December 2025	£m	£m	£m	£m	£m
Cost
As at 1 January 2025	38.5	3.0	19.0	59.2	119.7
Additions	0.2	0.1	0.3	6.6	7.2
Acquisitions through business combinations	–	–	–	–	–
Disposals	(1.5)	–	(0.2)	(7.4)	(9.1)
Transfer to finance leases	–	–	–	(11.2)	(11.2)
As at 31 December 2025	37.2	3.1	19.1	47.2	106.6
Accumulated depreciation
As at 1 January 2025	7.5	1.8	15.5	29.4	54.2
Charge for the year	4.4	0.4	1.5	6.2	12.5
Disposals	(1.5)	–	(0.2)	(6.0)	(7.7)
Transfer to finance leases	–	–	–	(7.0)	(7.0)
As at 31 December 2025	10.4	2.2	16.8	22.6	52.0
Carrying amount
As at 1 January 2025	31.0	1.2	3.5	29.8	65.5
As at 31 December 2025	26.8	0.9	2.3	24.6	54.6

	Right-of-use assets	Leasehold property	Fixtures, fittings and equipment	Assets on operating leases	Total
Year ended 31 December 2024	£m	£m	£m	£m	£m
Cost
As at 1 January 2024	12.8	2.3	16.9	60.8	92.8
Additions	28.1	0.7	2.0	7.4	38.2
Acquisitions through business combinations	0.4	–	0.1	–	0.5
Disposals	(2.8)	–	–	(5.3)	(8.1)
Transfer to finance leases	–	–	–	(3.7)	(3.7)
As at 31 December 2024	38.5	3.0	19.0	59.2	119.7
Accumulated depreciation
As at 1 January 2024	7.7	1.5	13.8	29.3	52.3
Charge for the year	2.6	0.3	1.7	7.4	12.0
Disposals	(2.8)	–	–	(4.4)	(7.2)
Transfer to finance leases	–	–	–	(2.9)	(2.9)
As at 31 December 2024	7.5	1.8	15.5	29.4	54.2
Carrying amount
As at 1 January 2024	5.1	0.8	3.1	31.5	40.5
As at 31 December 2024	31.0	1.2	3.5	29.8	65.5

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 258

29. Intangible assets

See accounting policies in Note 7(m)

	Goodwill	Other intangibles	Total	Goodwill	Other intangibles	Total
2025	£m	£m	£m	2024	£m	£m
Cost
As at 1 January	86.0	101.7	187.7	78.2	82.9	161.1
Additions	–	18.0	18.0	–	15.1	15.1
Acquisitions through business combinations	13.9	7.6	21.5	7.8	3.7	11.5
Disposals	–	(1.7)	(1.7)	–	–	–
Adjustments	(3.2)	–	(3.2)	–	–	–
As at 31 December	96.7	125.6	222.3	86.0	101.7	187.7
Accumulated amortisation and impairment
As at 1 January	1.1	62.6	63.7	1.1	52.8	53.9
Amortisation charge for the year	–	14.1	14.1	–	9.8	9.8
Disposals	–	(1.3)	(1.3)	–	–	–
As at 31 December	1.1	75.4	76.5	1.1	62.6	63.7
Carrying amount
As at 1 January	84.9	39.1	124.0	77.1	30.1	107.2
As at 31 December	95.6	50.2	145.8	84.9	39.1	124.0

During the year, the Group recognised a £3.2 million reduction to goodwill in respect of the acquisition of JBR Auto Holdings Limited, completed on 30 September 2024. The adjustment arises from the recognition of a Deferred Tax Asset relating to tax losses that existed at the acquisition date. Sufficient information to recognise this asset was not available at the acquisition date, however, additional evidence obtained during 2025 confirmed that recovery of the losses is probable. In accordance with IFRS 3 Business Combinations, this represents a measurement period adjustment as it relates to facts and circumstances that existed at the acquisition date. The adjustment has no material impact on the Group’s current or prior year profit and loss, and therefore has been recognised in the current year. Other intangibles comprise internally generated software and development costs, together with intangible assets recognised on acquisition, including brands, customer relationships and technology assets. Internally generated intangible assets primarily relate to capitalised development expenditure on banking systems, digital platforms and credit management infrastructure that meet the recognition criteria set out in IAS 38.57.As at 31 December 2025, internally generated intangible assets had additions of £17.1 million (2024: £14.6 million), totalling to a gross cost of £110.3 million (2024: £78.9 million) with an accumulated amortisation was £72.1 million (2024: £59.4 million). The net book value of internally generated intangible assets is £38.2 million (2024: £34.2 million). Amortisation of internally generated software is recognised within administrative expenses over useful economic lives of three to seven years. Acquisition-related intangible assets are amortised over their estimated useful lives in accordance with the Group’s policy.

Goodwill impairment testing

The Group performed its annual assessment to identify any impairment to goodwill. For the purposes of impairment testing, goodwill is allocated to the Group’s cash-generating units (CGUs). As at 31 December 2025, the identified CGUs include Real Estate, SME, TML, BML and JBR. No separate goodwill impairment assessment has been performed for the two acquisitions during the year. Goodwill for these acquisitions are provisional, as permitted under IFRS 3.45. A full assessment will be undertaken during the year ending 31 December 2026, or earlier if objective indicators of impairment arise. Goodwill is impaired if the carrying amount of a CGU exceeds the recoverable amount. Determining the recoverable amount involves the calculation of the CGU’s value in use, which is derived by discounting the forecast cash flows (post-tax profits) to be generated from its continuing use, as described below.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025
29. Intangible assets (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 259

Forecast cash flows are based on the Board approved budget and assumptions regarding the long-term pattern of sustainable cash flows thereafter. Five years of forecast cash flows (post-tax profits) are included in the discounted cash flow model (2024: five years). A terminal value growth rate of 2.0% is then applied into perpetuity to extrapolate cash flows beyond the cash flow period (2024: 1.5%). The terminal value growth rate is estimated by the Group taking into account rates disclosed by comparable institutions. To discount the forecast cash flows, the Group derives a CGU specific discount rate. These discount rates are an estimate of the return that investors would require if they were to choose an investment that would generate cash flows of amount, timing and risk profile equivalent to those that the entity expects to derive from the CGU. The Group calculates the discount rates using the price-to-book ratio method, which incorporates target return on equity, growth rate and the price-to-book ratio. The discount rate for each CGU is adjusted to reflect the risks inherent to the individual CGU. Discount rates used for each CGU are as follows:

	2025		2024
	Post-tax	Pre-tax $^1$	Post-tax	Pre-tax $^1$
Real Estate	11.7%	15.5%	12.6%	16.9%
SME	13.2%	17.7%	14.1%	18.8%
TML	13.7%	18.9%	14.1%	18.9%
BML	14.2%	19.1%	15.6%	21.3%
JBR	15.2%	20.4%	16.1%	21.1%

In both reported years, impairment testing indicated the recoverable amount of each CGU was in excess of its carrying amount and, as such, no impairment losses have been recognised. Reasonably possible changes in forecast cash flows and the applied post-tax discount rate would not result in the recoverable amount of any CGU reducing below the carrying amount, as verified by sensitivity analysis.
$^1$ The Group applies post-tax discount rates to post-tax cash flows when testing CGUs for impairment. The pre-tax discount rate is disclosed in accordance with IAS 36 ‘Impairment of Assets’.

A summary of the carrying amount of goodwill by CGU is as follows:

	2025					Total	2024					Total
	Real Estate	SME	TML	BML	JBR	£m	Real Estate	SME	TML	BML	JBR	£m
As at 1 January	9.0	34.7	10.0	23.4	7.8	84.9	9.0	34.7	10.0	23.4	–	77.1
Acquisitions through business combinations	–	13.9	–	–	–	13.9	–	–	–	–	7.8	7.8
Adjustment	–	–	–	–	(3.2)	(3.2)	–	–	–	–	–	–
As at 31 December	9.0	48.6	10.0	23.4	4.6	95.6	9.0	34.7	10.0	23.4	7.8	84.9

30. Deferred tax assets

See accounting policies in Note 7(f) Deferred tax assets are attributable to the following items:

	2025	2024
	£m	£m
Decelerated tax depreciation	3.4	4.1
IFRS 9 adjustment	0.8	1.1
Tax losses in subsidiary companies	38.3	14.5
Tax on gains within SPVs	–	8.5
Fair value through other comprehensive income reserve	(16.3)	(10.8)
Other	(2.4)	(1.4)
Total deferred tax assets	23.8	16.0

Movements in deferred tax assets are as follows:

	2025	2024
	£m	£m
As at 1 January	16.0	35.7
Amounts recognised in statement of profit and loss (see Note 21):
Current year movement	(8.6)	(3.0)
Adjustment in respect of prior years	(1.7)	(1.5)
Amounts recognised in other comprehensive income:
Current year movement in cash flow hedging reserve	3.0	(3.2)
Current year movement in fair value through other comprehensive income reserve	(5.5)	(11.0)
Other:
Acquisitions through business combinations	19.8	(1.0)
Adjustments	0.8	–
As at 31 December	23.8	16.0

The Group’s business plans project future profits that are sufficient to fully recognise the deferred tax assets. The Group has recognised a deferred tax asset of £19.8 million on the acquisition of ThinCats in relation to historic trading losses (see Note 10). Based on the analysis of the forecasted future taxable profits for the ThinCats brand the Group has concluded it is more likely than not that the deferred tax asset will be recovered through future taxable income. Deferred tax assets have been calculated based on an aggregation rate of 27.0% (2024: 27.0%), which is the estimated rate of recovery that will unwind over the remaining life of the underlying assets with which they are associated.

31. Other assets

	Group		Company
	2025	2024	2025	2024
	£m	£m	£m	£m
Other debtors	21.5	18.0	–	–
Prepayments	27.9	17.4	0.5	0.4
Accrued income	0.5	0.9	–	–
Total other assets	49.9	36.3	0.5	0.4

32. Investment in subsidiaries

See accounting policies in Note 7(n) The investment in subsidiary in the Company statement of financial position relates to the Company’s investment in Shawbrook Bank Limited and is attributable to the following components:

	2025	2024
	£m	£m
Equity shares	267.8	267.8
Capital securities	125.0	125.0
Capital contribution	19.9	19.9
Share -based payments	45.9	19.8
Issue of share capital in Shawbrook Bank Limited	49.8	–
Total investment in subsidiaries	508.4	432.5

Movements in the Company’s investment in subsidiaries are as follows:

	2025	2024
	£m	£m
As at 1 January	432.5	431.8
Share issuance	49.8	–
Share -based payments	26.1	0.7
As at 31 December	508.4	432.5

Details of the capital securities transactions between Shawbrook Bank Limited and the Company are provided in Note 42. Share-based payments are attributable to the scheme detailed in Note 18.

33. Amounts due to banks

See accounting policies in Note 7(o)

	2025	2024
	£m	£m
Amounts due to banks	1,369.2	1,216.2
Derivative collateral received	61.0	157.9
Other	0.4	2.0
Total amounts due to banks	1,430.6	1,376.1

The Group maintains access to the Bank of England’s Sterling Monetary Framework, including a reserves account. Amounts due to banks include:
* £nil (2024: £800 million) drawn under the Bank of England’s Term Funding Scheme with additional incentives for SMEs, which fell due for repayment in 2025. These amounts are collateralised by customer loan assets and investment securities.
* £61.0 million (2024: £157.9 million) of cash collateral received against derivative contracts. £0.4 million (2024: 2.0 million) of cash collateral received against repurchase agreement.
* £0.4 million (2024: £2.0 million) of cash collateral received against repurchase agreements.

34. Customer deposits

See accounting policies in Note 7(p)

	2025	2024
	£m	£m
Retail customers:
Instant access	7,052.4	6,007.9
Term deposits and notice accounts	11,227.5	9,764.1
Corporate customers:
Term deposits	58.5	27.0
Fair value adjustments for hedged risk	15.1	5.0
Total customer deposits	18,353.5	15,804.0

35. Provisions

See accounting policies in Note 7(q)

	2025		2024
	Loss provision	Other provisions	Total provision	Loss provision
	£m	£m	£m	£m
As at 1 January	0.6	10.9	11.5	3.8
Provisions utilised	–	(4.2)	(4.2)	–
Provisions made/(released)	–	1.0	1.0	(3.2)
As at 31 December	0.6	7.7	8.3	0.6

Loss provision
The loss provision represents the loss allowance on loan commitments (see Note 48). Provisions released represent the net ECL credit for the year on loan commitments and is recognised in impairment losses on financial assets in the statement of profit and loss (see Note 20).

Other provisions
Other provisions represent provisions made in relation to customer remediation and conduct issues and provisions for legal costs to defend cases brought against the Group. Provisions made are recognised in provisions in the statement of profit and loss.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025
Shawbrook Group plc | Annual Report and Accounts 2025 263A reconciliation of the net amount recognised in provisions in the statement of profit and loss is as follows:

	2025	2024
	£m	£m
Other provisions made	1.0	0.3
Other provisions recovered	(0.2)	(5.6)
Net charge/(credit) for provisions	0.8	(5.3)

The Group has received a number of complaints from customers about holiday ownership (timeshare) products, where the Group provided finance to customers to fund the purchase of those products. Based on the information available at the reporting date, the Group has updated its provision of £6.3 million (2024: £9.2 million), reflecting the best estimate of probable outflows associated with timeshare claims. Ultimately redress will depend on claim rates. At this time, the Group believes the provision recognised is adequate. The Group has commenced work to pursue recoveries from either original suppliers or, failing that, the Group’s insurers, however, in accordance with IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’, such reimbursement cannot be recognised as an asset unless it is virtually certain. The Group typically does not deem a reimbursement claim to be virtually certain until it has been accepted by the other party. As at 31 December 2025, the Group recognised a reimbursement asset of £5.6 million (2024: £5.6 million) on a subset of Timeshare claims relating to an anticipated recovery from the Group’s insurers, which is included in Other assets. In addition to previously disclosed provisions, most recently relating to timeshare complaints, the Group is recognising a new provision of £1.0 million (2024: £nil) for redress liabilities around motor finance commissions arrangements.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025
35. Provisions (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 263

Following the commencement of the FCA’s consultation paper on a possible motor finance consumer redress scheme in October 2025, and considering the FCA’s draft proposals, the Group considers that some redress is likely to be due to customers in relation to historical commission arrangements on regulated motor finance agreements. While the estimated financial impact of the proposed scheme would not be material to the Group, a provision has been recognised reflecting a degree of uncertainty around any final scheme rules. This will be updated once any final scheme rules are published.

Critical accounting judgements and estimates

The calculation of other provisions relating to customer remediation and conduct issues is an area identified as involving critical accounting judgements and estimates. Additional details are provided in Note 8(b).

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 264

Debt securities in issue
See accounting policies in Note 7(i)

Debt securities in issue comprise asset-backed notes issued to external investors by consolidated structured entities as part of securitisation transactions (see Note 25). The notes are secured on the underlying portfolio of securitised loans and recourse under the notes is limited to the structured entity only. A summary of notes in issue is provided in the following table. Amounts included in the table include accrued interest and unamortised capitalised costs.

	Optional redemption	2025	2024
Issued	Issuer Listing date	Maturity date	£m
Class A -E mortgage- backed floating rate notes	May 2022	Genesis Mortgage Funding 2022 -1 plc	Euronext Dublin
Class A mortgage - backed floating rate notes	Nov 2023	Lanebrook Mortgage Transaction 2023 -1 plc	Euronext Dublin
Class A mortgage - backed floating rate notes	May 2024	Lanebrook Mortgage Transaction 2024 -1 plc	Euronext Dublin
Total debt securities in issue			412.3

Movements in the year are summarised in the following table:

	2025	2024
	£m	£m
As at 1 January	549.2	462.8
Issuances	–	250.0
Acquisitions through business combinations	560.1	289.1
Repurchases and redemptions	(697.0)	(453.7)
Costs capitalised	(0.2)	(1.0)
Other movements	0.2	2.0
As at 31 December	412.3	549.2

During the year ended 31 December 2025, the Group sold £390.0 million of debt securities issued by unconsolidated structured entities, a net gain on derecognition of £1.2m million was recognised in the statement of profit and loss. During the year ended 31 December 2025, Class A-E mortgage backed floating rate notes issued by Genesis Mortgage Funding 2022-1 plc have been fully redeemed following the optional redemption date. As part of the ThinCats acquisition in 2025, the Group acquired issued debt securities totalling £538.1 million, comprised of senior and mezzanine notes issued to external investors by a consolidated structured entities. The notes were redeemed shortly after the acquisition date. During the year ended 31 December 2024, issuances comprised £250.0 million Class A mortgage-backed floating rate notes due 2027. These notes were issued to external investors in May 2024 by a consolidated structured entity, Lanebrook Mortgage Transaction 2024-1 plc, and are listed on Euronext Dublin. As part of the JBR acquisition in 2024, the Group acquired issued debt securities totalling £289.1 million, comprised of senior and mezzanine notes issued to external investors by a consolidated structured entity, JBR Capital DD Limited. The notes were redeemed shortly after the acquisition date. During the year ended 31 December 2024, senior notes issued by Wandle Mortgage Funding Limited were fully redeemed following the optional redemption date.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 265

Leases
See accounting policies in Note 7(r)

Group as a lessor: finance leases

Assets leased to customers under finance lease and instalment credit agreements are predominantly plant and machinery. The underlying asset provides security against the gross receivable and the Group provides no residual value guarantees in order to mitigate risk. Details of the Group’s finance lease and instalment credit receivables are set out in Note 24. This includes a maturity analysis showing the gross investment in the lease (the undiscounted lease payments receivable) and a reconciliation to the net investment in the lease (the gross carrying amount of the receivable). Finance income recognised during the year on finance lease and instalment credit receivables is included in other interest and similar income (see Note 12).

Group as a lessor: operating leases

Assets leased to customers under operating leases are predominantly plant and machinery. The carrying amount of the Group’s assets on operating leases and the movements during the year are set out in Note 28. Net income from operating leases is presented on the face of the statement of profit and loss.

Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

	2025	2024
	£m	£m
Within one year	5.7	6.1
Between one and two years	4.2	4.8
Between two and three years	3.3	3.6
Between three and four years	2.0	2.8
Between four and five years	1.2	1.2
After five years	0.7	0.9
Total future minimum rentals receivable	17.1	19.4

Group as a lessee: finance leases

The Group has lease contracts for several buildings. These leases typically have lease terms of between 5 and 10 years. The Group does not sublease any of these leased assets. Details of right-of-use assets recognised in relation to these leases, including the carrying amount and movements during the year, are set out in Note 28. The carrying amount of associated lease liabilities and movements during the year are as follows:

	2025	2024
	£m	£m
As at 1 January	25.6	6.1
Additions	–	21.3
Acquisitions through business combinations	–	0.4
Interest expense	1.2	0.3
Payments	(2.0)	(2.5)
As at 31 December	24.8	25.6

A maturity analysis of lease liabilities is presented in the liquidity risk section of the Risk Report on page 163.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS
Notes to the financial statements for the year ended 31 December 2025

Shawbrook Group plc | Annual Report and Accounts 2025 266

Leases (continued)

The Group also has a number of low value lease contracts for office equipment, for which the Group applies the recognition exemption for leases of low value assets. For such leases, no right-of-use asset is recognised and lease payments are charged to administrative expenses in the statement of profit and loss.

The following table provides a summary of the amounts recognised in the statement of profit and loss:

	2025			2024
	Administrative expenses	Interest expense	Total	Administrative expenses	Interest expense
	£m	£m	£m	£m	£m
Depreciation expense on right -of-use assets	3.9	–	3.9	2.6	–
Interest expense on lease liabilities	–	1.2	1.2	–	0.3
Rental expense on low value assets	0.3	–	0.3	0.5	–
Total	4.2	1.2	5.4	3.1	0.3

Cash outflows from leases in the statement of cash flows are as follows:

	2025	2024
	£m	£m
Payment of the interest portion of the lease liability (cash flows from operating activities)	–	0.3
Payment of the principal portion of the lease liability (cash flows from financing activities)	0.8	2.2
Total cash outflows from leases	0.8	2.5

38.Other liabilities Group Company 2025 2024 2025 2024
£m £m £m £m
Other creditors (including sundry creditors and other taxes) 50.3 22.1 – –
Accruals 81.9 63.7 7.3 –
Amounts owed to Group companies – – 0.9 8.0
Total other liabilities 132.2 85.8 8.2 8.0

39. Subordinated debt

See accounting policies in Note 7(s)

Subordinated debt liability

Subordinated debt liabilities comprise notes issued by the Company, as summarised in the following table. Amounts included in the table include accrued interest and unamortised capitalised costs.

	Call date	Maturity date	Issued date	2025	2024
				£m	£m
9.0% fixed rate reset callable Jul 2025 subordinated notes	1 Jul 2025	Oct 2030	Jul 2020	–	76.5
12.25 % fixed rate reset callable Oct 2028 subordinated notes	Oct 2023	Jan 2034	Oct 2023	94.9	94.6
9.25% fixed rate reset callable Jun 2030 subordinated notes	June 2025	Sep 2035	Jun 2025	76.6	–
Total subordinated liabilities				171.5	171.1

Listing
Euronext Dublin International Securities
London Stock Exchange International Securities
London Stock Exchange International Securities

The call date may be a fixed date or a defined period of time. Where it relates to a period of time, the date listed reflects the start of the period, thus reflecting the earliest date the call option may be exercised.

Movements in the year are summarised in the following table:

	2025	2024
	£m	£m
As at 1 January	171.1	188.5
Issuances	75.0	–
Redemptions	(76.5)	(20.0)
Costs capitalised	(0.9)	–
Other movements	2.8	2.6
As at 31 December	171.5	171.1

During the year ended 31 December 2025, the Company issued a £75.0 million 12.25% fixed rate reset callable subordinated notes, under the £1 billion Euro Medium Term Note (EMTN) Programme. The notes are listed on the International Securities Market of the London Stock Exchange. In July 2025, the Group redeemed 9.0% fixed rate reset callable subordinated notes issued in July 2020, with a nominal value of £75.0 million, at par. No gains or losses were recognised on redemption.

The principal terms of the subordinated debt liabilities are as follows:

Interest: interest on the notes is fixed at an initial rate until the reset date. On the reset date, the interest rate will be reset and fixed based on a set margin above a defined market rate.
Redemption: the Company may elect to redeem all, but not part, of the notes by exercising its call option 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 notes constitute direct, unsecured and subordinated obligations of the Company and rank at least pari passu, without any preference, among themselves as Tier 2 capital. The notes rank behind the claims of depositors and other unsecured and unsubordinated creditors, but rank in priority to holders of Tier 1 capital and of equity in the Company.

Subordinated debt receivable

The subordinated debt receivable in the Company statement of financial position represents subordinated debt issued to the Company by the Group’s principal subsidiary, Shawbrook Bank Limited. The notes issued by Shawbrook Bank Limited are on terms consistent with the listed notes issued by the Company. As at 31 December 2025, the subordinated debt receivable in the Company statement of financial position is £172.7 million (2024: £171.1 million). The loss allowance recognised on the subordinated debt receivable is £nil in both reported years.

40. Financial assets and financial liabilities

See accounting policies in Note 7(t)

a) Classification of financial assets and financial liabilities

The following table analyses the carrying amount of the Group’s financial assets and financial liabilities by measurement classification. There were no reclassifications between classification categories during either of the reported years.

	2025				2024
	Amortised cost	FVOCI	FVTPL	Carrying amount	Amortised cost	FVOCI	FVTPL	Carrying amount
	£m	£m	£m	£m	£m	£m	£m	£m
Financial assets
Cash and balances at central banks	1,924.5	–	–	1,924.5	2,244.7	–	–	2,244.7
Loans and advances to banks	246.8	–	–	246.8	304.4	–	–	304.4
Loans and advances to customers ¹	13,639.2	4,068.0	62.9	17,770.1	11,596.4	3,580.2	–	15,176.6
Investment securities	1,979.9	178.1	–	2,158.0	1,513.6	–	–	1,513.6
Derivative financial assets	–	–	87.5	87.5	–	–	227.1	227.1
Total financial assets	17,790.4	4,246.1	150.4	22,186.9	15,659.1	3,580.2	227.1	19,466.4
Financial liabilities
Amounts due to banks	1,430.6	–	–	1,430.6	1,376.1	–	–	1,376.1
Customer deposits	18,353.5	–	–	18,353.5	15,804.0	–	–	15,804.0
Derivative financial liabilities	–	–	93.2	93.2	–	–	117.1	117.1
Debt securities in issue	412.3	–	–	412.3	549.2	–	–	549.2
Lease liabilities ²	24.8	–	–	24.8	25.6	–	–	25.6
Subordinated debt liability	171.5	–	–	171.5	171.1	–	–	171.1
Total financial liabilities	20,392.7	–	93.2	20,485.9	17,926.0	–	117.1	18,043.1

¹ The loans and advances to customers balance includes finance lease and instalment credit receivables, which are measured in accordance with IFRS 16 ‘Leases’. These are included in the amortised cost column.
² Lease liabilities, which are measured in accordance with IFRS 16 ‘Leases’, are included in the amortised cost column.

b) Fair value of financial assets and financial liabilities

A summary of the valuation methods used by the Group to calculate the fair value of its financial assets and financial liabilities is as follows:

Cash and balances at central banks and loans and advances to banks: fair value approximates the carrying amount as balances have minimal credit losses and are either short-term in nature or re-price frequently.
Loans and advances to customers at:
Amortised cost and FVOCI: fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date, and adjusted for future credit losses if considered material.
- FVTPL: These loans and advances were acquired as part of the ThinCats acquisition. In the absence of market comparables, they are valued using internal models and classified as Level 3.
Investment securities, debt securities in issue and subordinated debt liability: fair value is based on quoted prices where available or by discounting cash flows using market rates.
Derivative financial instruments: fair value is obtained from quoted market prices in active markets and, where these are not available, from valuation techniques including discounted cash flows.
Amounts due to banks and customer deposits: fair value is estimated using discounted cash flows applying either market rates where practicable, or rates offered with similar characteristics by other financial institutions. The fair value of floating rate placements, fixed rate placements with less than six months to maturity and overnight deposits is considered to approximate the carrying amount.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS Notes to the financial statements for the year ended 31 December 2025
40. Financial assets and financial liabilities (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 269

In accordance with IFRS 7, fair value disclosures are not required for lease liabilities. As such, the Group does not calculate a fair value for lease liabilities and they are not included in the following fair value disclosures.

The Group uses a fair value hierarchy which reflects the significance of the inputs used in making fair value measurements. There are three levels to the hierarchy as follows:

Level 1: quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). A Level 2 input must be observable for substantially the full term of the instrument. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves observable at commonly quoted intervals, implied volatilities and credit spreads. Assets and liabilities classified as Level 2 have been valued using models whose inputs are observable in an active market; and
Level 3: inputs for the asset or liabilities that are not based on observable market data (unobservable inputs). In assessing whether a market is active, factors such as the scale and frequency of trading activity, the availability of prices and the size of bid/offer spreads are considered. If, in the opinion of the Group, a significant proportion of an instrument’s carrying amount is driven by unobservable inputs, the instrument, in its entirety, is classified as Level 3 of the fair value hierarchy. Level 3 in this context means that there is little or no current market data available from which to determine the level at which an arm’s length transaction would be likely to occur. It generally does not mean that there is no market data available at all upon which to base a determination of fair value (for example, consensus pricing data may be used).Financial assets and financial liabilities measured at amortised cost

The following table analyses the Group’s financial assets and financial liabilities measured at amortised cost into the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during either of the reported years.

	2025			2024
	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
£m	£m	£m	£m	£m	£m	£m
Financial assets at amortised cost
Cash and balances at central banks	1,924.5	–	–	2,244.7	–	–
Loans and advances to banks	–	246.8	–	–	304.4	–
Loans and advances to customers	–	–	13,639.2	–	–	11,596.4
Investment securities	1,394.3	585.6	–	1,121.4	392.2	–
Financial liabilities at amortised cost
Amounts due to banks	–	1,430.6	–	–	1,376.1	–
Customer deposits	–	18,353.5	–	–	15,804.0	–
Debt securities in issue	–	412.3	–	–	549.2	–
Subordinated debt liability	–	171.5	–	–	171.1	–

The following table provides a comparison of the carrying amount per the statement of financial position and the calculated fair value for the Group’s financial assets and financial liabilities measured at amortised cost. For cash and balances at central banks, loans and advances to banks, the carrying amount is considered to be a reasonable approximation of fair value and, as such, these are not included in the following table.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS Notes to the financial statements for the year ended 31 December 2025

40. Financial assets and financial liabilities (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 270

	2025		2024
	Carrying	Fair value	Carrying amount	Fair value
	£m	£m	£m	£m
Financial assets at amortised cost
Loans and advances to customers	13,639.2	13,966.4	11,596.4	11,912.2
Investment securities	1,979.9	1,983.7	1,513.6	1,515.5
Financial liabilities at amortised cost
Amounts due to banks	1,430.6	1,430.6	1,376.1	1,376.1
Customer deposits	18,353.5	18,373.4	15,804.0	15,815.0
Debt securities in issue	412.3	413.9	549.2	552.5
Subordinated debt liability	171.5	189.9	171.1	179.8

Financial assets and financial liabilities measured at fair value

The following table analyses the Group’s financial assets and financial liabilities measured at fair value into the fair value hierarchy. There were no transfers between levels of the fair value hierarchy during either of the reported years. All financial assets and financial liabilities measured at fair value are recurring fair value measurements.

	2025			2024
	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
£m	£m	£m	£m	£m	£m	£m
Financial assets at fair value
Loans and advances to customers	–	–	4,130.9	–	–	3,580.2
Investment securities	27.9	150.2	–	–	–	–
Derivative financial assets	–	87.5	–	–	227.1	–
Financial liabilities at fair value
Derivative financial liabilities	–	93.2	–	–	117.1	–

$^1$ Additions include new financial assets originated or purchased, additional drawdowns and accrued interest.

Financial assets and financial liabilities measured at fair value: Level 3 analysis

The following section provides additional analysis of the Group’s financial assets and financial liabilities measured at fair value that are categorised as Level 3. Movements in the fair value of Level 3 financial assets and financial liabilities are as follows:

	2025		2024
	Loans and advances to customers at FVOCI	Loans and advances to customers at FV TPL	Loans and advances to customers at FVOCI	Loans and advances to customers at FV TPL
£m	£m	£m	£m
As at 1 Januar y	3,580.2	–	2,815.3	–
Additions $^1$	1,518.0	84.6	1,376.1	–
Net fair value gains/(losses) recognised in the statement of profit and loss	42.9	0.3	(24.2)	–
Net fair value gains recognised in other comprehensive income	18.8	–	35.6	–
Settlements/repayments	(1,091.9)	(22.0)	(622.6)	–
As at 3 1 December	4,068.0	62.9	3,580.2	–

In relation to the above table:
* Net fair value gains/(losses) on FVOCI loans and advances recognised in the statement of profit and loss are included in net gains/(losses) on derivative financial instruments and hedge accounting. The net gains/(losses) attributable to loans and advances to customers at FVOCI represent unrealised gains/(losses) on hedged items, which are largely offset by unrealised gains/(losses) on the derivative financial instruments in the hedge accounting relationship.
* Net fair value gains/(losses) recognised in other comprehensive income are included in net gains/(losses) from changes in fair value in relation to the FVOCI reserve. All gains/(losses) recognised are unrealised.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS Notes to the financial statements for the year ended 31 December 2025

40. Financial assets and financial liabilities (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 271

For the Level 3 loans and advances to customers at FVOCI, the fair value is calculated using the discounted cash flow method. The significant unobservable inputs used in this calculation are the risk-adjusted discount rate, which is derived from cost of replacement assets based on comparable market rates, and the prepayment curve. As at 31 December 2025, the following risk-adjusted discount rates are used in the calculation of fair value on loans and advances to customers at FVOCI: TML Buy to Let portfolio – 5.27%, TML owner occupied portfolio – 5.51% and BML portfolio – 6.59% (31 December 2024: 6.08%, 6.36% and 6.88%). The fair value of Level 3 loans and advances to customers measured at FVTPL is determined using a discounted cash flow approach. The significant unobservable inputs include the risk-adjusted discount rate, comprising a risk-free rate based on the forward SONIA curve over the remaining weighted average life of the loan, and a risk premium derived from the loan’s origination IRR, adjusted for any increase in credit risk since origination. The discount rate is updated at each reporting date to reflect changes in market interest rates and credit risk. As at 31 December 2025, a risk-adjusted discount rate of 16.4% is used in the calculation of fair value.

Critical accounting estimates

The valuation of loans and advances to customers at FVOCI and FVTPL is an area identified as involving critical accounting estimates. Additional details are provided in Note 7(t), 8(c) and 40(b) respectively. The Group believes that the calculated fair values are appropriate, however, the following table provides sensitivity analysis to illustrate the impact that reasonably possible changes could have on the asset value and total equity recognised at the end of the reporting period. There would be immaterial impact to the statement of profit and loss as a result of these changes.

	2025		2024
Change in significant unobservable input	Increase/(decrease) to asset value and FVOCI reserve	Increase/(decrease) to profit and loss	Increase/(decrease) to asset value and FVOCI reserve	Increase/(decrease) to profit and loss
£m	£m	£m	£m
Decrease in discount rate by 50 bps	51.9	0.5	49.5	–
Increase in discount rate by 50 bps	(50.7)	(0.5)	(48.3)	–
Decrease in prepayment curve by 10%	31.6	1.0	21.8	–
Increase in prepayment curve by 10%	(20.6)	(1.0)	(13.7)	–

c) Offsetting financial assets and financial liabilities

The disclosures set out in the following tables include financial assets and financial liabilities that are either offset in the statement of financial position, or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the statement of financial position. Financial collateral amounts disclosed in the tables are limited to the net balance sheet exposure for the instrument in order to exclude any over collateralisation. Financial collateral amounts disclosed exclude initial margin cash collateral with central clearing houses. Financial collateral amounts disclosed as at 31 December 2025 do not include securities received with a notional of £28.6 million and a market value of £27.1 million (31 December 2024: notional of £75.9 million and a market value of £79.8 million).

	Related amounts not offset	Net amount presented on Financial statement of position	Subject to master netting arrangements	Gross Amount collateral received/ pledged	Net amount offset
As at 31 December 2025	£m	£m	£m	£m	£m
Financial assets
Derivative financial assets	87.5	87.5	(0.3)	(60.7)	26.5
Total financial assets	87.5	87.5	(0.3)	(60.7)	26.5
Financial liabilities
Derivative financial liabilities	93.2	93.2	–	(90.0)	3.2
Total financial liabilities	93.2	93.2	–	(90.0)	3.2

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS Notes to the financial statements for the year ended 31 December 2025

40. Financial assets and financial liabilities (continued)

Shawbrook Group plc | Annual Report and Accounts 2025 272

	Related amounts not offset	Net amount presented on Financial statement of position	Subject to master netting arrangements	Gross Amount collateral received/ pledged	Net amount offset
As at 31 December 2024	£m	£m	£m	£m	£m
Financial assets
Derivative financial assets	227.1	227.1	(4.1)	(153.7)	69.3
Total financial assets	227.1	227.1	(4.1)	(153.7)	69.3
Financial liabilities
Derivative financial liabilities	117.1	117.1	–	(117.1)	–
Total financial liabilities	117.1	117.1	–	(117.1)	–

$^1$ Net of £2.5 million issuance costs.

41. Share capital

In November 2025, the Group successfully completed its Initial Public Offering (IPO) on the London Stock Exchange (LSE). Prior to the IPO, the Company undertook a share split of each ordinary share from a nominal value of £0.01 to £0.005. As part of the IPO, the Group issued 13,513,513 new ordinary shares at a price of 370 pence per share, raising gross proceeds of £50 million. In addition, 80,493,537 existing ordinary shares were sold by the parent company, Marlin Bidco Limited.Following admission to the LSE, the Company had 519,687,271 ordinary shares of £0.005 each in issue. The new share issuance resulted in an increase in share capital of £67,568, with the balance of the proceeds credited to the share premium account, thereby strengthening the Group’s overall capital position.

Number of ordinary shares
As at 1 January 2025	506,173,758
Issued during the year	13,513,513
As at 31 December 2025	519,687,271

2025	2024
£m	£m
2.6	2.5
134.7	187.3
137.3	89.8

Share capital
Share premium account
Total share capital and share premium

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025 Shawbrook Group plc | Annual Report and Accounts 2025 273

42. Capital securities

See accounting policies in Note 7(v)

Capital securities comprise securities issued by the Company, as summarised in the following table. Amounts included in the table are presented net of transaction costs of £1.9 million (2024: £1.9 million).

Next call	2025	2024
Issued	Listing date	£m
International Securities
12.103% fixed rate reset perpetual Additional Tier 1 write down capital securities	Oct 2022	Market of London Stock Exchange
10.298 % fixed rate reset perpetual Additional Tier 1 write down capital securities (interest rate reset from 7.875% in December 2022)	Dec 2017	Global Exchange Market of Euronext Dublin
Total capital securities

In both reported years, the Group paid all interest when scheduled. Distributions made to holders of the capital securities, recognised directly in equity, totalled £15.1 million (2024: £15.1 million).

The principal terms of the capital securities are as follows:
* Interest: interest is fully discretionary and the Company may elect to, or in certain circumstances is obliged to, cancel (in whole or in part) any interest otherwise scheduled to be paid. Any interest not paid when scheduled is cancelled. The capital securities bear a fixed rate of interest until the first reset date. On the first reset date, and on each fifth anniversary thereafter, the interest rate will be reset and fixed based on a set margin above a defined market rate.
* Redemption: the capital securities are perpetual with no fixed redemption date. The Company may elect to redeem all, but not part, of the capital securities by exercising its call option on certain dates, or during defined periods, 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.
* Write-down: in the event of the Group’s Common Equity Tier 1 capital ratio falling below 7.0%, an automatic and permanent write down shall occur, resulting in the full reduction and cancellation of all capital securities and the cancellation of any interest which is accrued and unpaid.

$^1$ The call date may be a fixed date or a defined period of time. Where it relates to a period of time, the date listed reflects the start of the period, thus reflecting the earliest date the call option may be exercised.

Ranking: the capital securities constitute direct, unsecured and subordinated obligations of the Company and rank pari passu, without any preference, among themselves. The capital securities also rank pari passu with the most senior class of issued preference shares in the Company, if any, and rank ahead of the holders of all other classes of issued shares of the Company, but rank junior to the claims of unsubordinated and subordinated creditors, other than those creditors whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of holders of the capital securities.

In conjunction with each transaction between the Company and external investors, equivalent transactions take place between the Company and its principal subsidiary, Shawbrook Bank Limited. The capital securities issued by Shawbrook Bank Limited are on terms consistent with the equivalent listed capital securities issued by the Company. This is recognised in the Company statement of financial position as part of the investment in subsidiaries (see Note 32).

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025 Shawbrook Group plc | Annual Report and Accounts 2025 274

43. Notes to the cash flow statement

Adjustments for non-cash items and other adjustments included in the statement of profit and loss

	Group			Company
	2025	2024	2025	2024
	£m	£m	£m	£m
ECL charge on loans and advances to customers at amortised cost	27.3	29.2	–	–
ECL charge on loans and advances to customers at FVOCI	4.9	6.3	–	–
ECL (credit)/charge on loan commitments	–	(3.2)	–	–
Net (gains)/losses on loans and advances at FVTPL	(0.3)	–	–	–
Other movements on investment securities	97.3	23.3	–	–
Depreciation of property, plant and equipment	12.5	12.0	–	–
Amortisation of intangible assets	14.1	9.8	–	–
Other movements on subordinated debt receivable	–	–	(2.2)	(2.2)
Other movements on subordinated debt payable	2.8	2.6	5.2	2.6
Disposal of intangible assets	0.4	–	–	–
Other movements on debt securities in issue	65.5	2.0	–	–
Other movements on capital securities	–	–	–	–
Equity -settled share-based payments	26.1	0.7	–	–
Total non-cash items and other adjustments	250.6	82.7	3.0	0.4

Net change in operating assets

	Group			Company
	2025	2024	2025	2024
	£m	£m	£m	£m
Decrease in mandatory deposits with central banks	–	39.9	–	–
(Increase) in loans and advances to customers	(2,072.2)	(1,609.4)	–	–
Decrease in derivative financial assets	129.0	37.0	–	–
(Increase) in operating lease assets	(1.0)	(5.7)	–	–
(Increase) in other assets	(7.6)	(5.8)	(0.1)	(0.4)
(Increase) in operating assets	(1,951.8)	(1,544.0)	(0.1)	(0.4)

Net change in operating liabilities

	Group			Company
	2025	2024	2025	2024
	£m	£m	£m	£m
Increase in customer deposits	2,549.5	2,241.3	–	–
(Decrease) in other provisions	(3.2)	(1.2)	–	–
(Decrease) in derivative financial liabilities	(23.9)	(67.4)	–	–
Increase in other liabilities	37.4	9.6	0.2	0.6
Increase in operating liabilities	2,559.8	2,182.3	0.2	0.6

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025 Shawbrook Group plc | Annual Report and Accounts 2025 275

44. Ultimate parent company

The ultimate parent and controlling party of the Group is Marlin Bidco Limited at the reporting date. Marlin Bidco Limited is a company jointly owned by PSCM Pooling LP and Marlinbass Limited. Both companies are incorporated in Guernsey and are investment vehicles of Pollen Street Capital Limited and BC Partners LLP, respectively. However, the parent company, Marlin Bidco Limited, has been liquidated in January 2026. The largest company in which the results of the Group are consolidated is that headed by Shawbrook Group plc (see Note 1). No other financial statements include the results of the Group.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025 Shawbrook Group plc | Annual Report and Accounts 2025 276

45. Subsidiary companies

See accounting policies in Note 7(a)

Wholly owned subsidiary companies

As at 31 December 2025, the Group includes the following subsidiary companies whose results are included in the consolidated financial statements. The Company’s investment in subsidiaries is detailed in Note 32.

Name	Country of incorporation	Class of shares	Ownership%	Principal activity (see below)	Registered address (see below)	Audit status
Shawbrook Bank Limited and its subsidiaries, as follows:
a i The Mortgage Lender Limited (company number: 09280057)	England and Wales	Ordinary	100	Mortgage finance	a	ii
Bluestone Mortgages Limited (company number: 02305213) and its subsidiaries, as follows:
b ii Bluestone Mortgage Finance No. 3 Limited (company number: 10863328)	England and Wales	Ordinary	100	Special purpose vehicle	b	ii
b ii Bluestone Mortgage Finance No. 5 Limited (company number: 13177731)	England and Wales	Ordinary	100	Special purpose vehicle	b	ii
b ii Bluestone Mortgage Retention Finance No. 1 Limited (company number: 12087164)	England and Wales	Ordinary	100	Risk retention holder	b	ii
b ii Bluestone Mortgage Retention Finance No. 2 Limited (company number: 13904329)	England and Wales	Ordinary	100	Risk retention holder	b	ii
JBR Auto Holdings Limited (company number: 09349929) and its subsidiaries, as follows:
d ii JBR Capital Limited (company number: 07520989)	England and Wales	Ordinary	100	Motor finance	d	ii
d ii JBR Auto Finance Limited (company number: 09352159)	England and Wales	Ordinary	100	Holding company	d	ii
d ii JBR Auto Services Limited (company number: 09361616)	England and Wales	Ordinary	100	Administrative services	d	ii
ThinCats Group Limited (company number: 13393055) and its subsidiaries, as follows:
e ii ThinCats Limited (company number: 09707863) and its subsidiaries, as follows:	England and Wales	Preference Deferred	100	Holding company Employing entity and loan origination	e e	ii iii
e ii ESF Loans Limited (company number: 10725890)	England and Wales	Ordinary	100	Dormant	e	iii
e ii TC Loans Limited (company number: 13031559)	England and Wales	Ordinary	100	Facility agent and security trustee	e	ii
e iii TC Loans I Limited (company number: 09721235)	England and Wales	Ordinary	100	Dormant	e	iii
Business Loan Capital Limited (company number: 09867563) and its subsidiaries, as follows:
e ii TC Loans II Limited (company number: 11680000)	England and Wales	Ordinary	100	SME lender	e	ii
e iii TC Security Trustee Limited (company number: 12633574)	England and Wales	Ordinary

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
Shawbrook Group plc | Annual Report and Accounts 2025 277

Registered address (see below)	Audit status (see below)	Name	Country of incorporation	Class of shares	Ownership%	Principal activity
Singers Corporate Asset Finance Limited (company number: 06863223)	England and Wales	Ordinary	100	Dormant	a	iii
Shawbrook Healthcare Finance Limited (company number: 00983790)	England and Wales	Ordinary	100	Dormant	a	iii
Coachlease Limited (company number: 03462512)	England and Wales	Ordinary	100	Dormant	a	iii
Hermes Group Limited (company number: 02452917)	England and Wales	Ordinary	100	Dormant	a	iii
Singer & Friedlander Commercial Finance Limited (company number: SC053939)	Scotland	Ordinary	100	Dormant	c	iii
Link Loans Limited (company number: 06642090)	England and Wales	Ordinary	100	Dormant	a	iii
Centric SPV 1 Limited (company number: 06441060)	England and Wales	Ordinary	100	Dormant	a	iii
Resource Partners SPV Limited (company number: 03817443)	England and Wales	Ordinary	100	Dormant	a	iii

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
45. Subsidiary companies (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 278

The following changes took place during the year ended 31 December 2025:

ThinCats Group Limited became a wholly owned subsidiary of Shawbrook Bank Limited, the Group’s principal subsidiary, in September 2025 (see Note 10). ThinCats Group Limited has seven wholly owned direct and indirect subsidiary companies, as detailed in above table, all of which became indirect subsidiary companies of the Group as part of the acquisition.

Imployapp became a wholly owned subsidiary of Shawbrook Bank Limited, the Group’s principal subsidiary, in December 2025 (see Note 10).

Registered addresses of the subsidiary companies included in the above table are as follows:

a: Lutea House, Warley Hill Business Park, The Drive, Great Warley, Brentwood, Essex, England, CM13 3BE.
b: Floor 10 40 Leadenhall Street, London, England, EC3A 2BJ.
c: 8 Nelson Mandela Place, Glasgow, Scotland, G2 1BT.
d: 773 Finchley Road, London, England, NW11 8DN.
e: 2 Snowhill, Snowhill Queensway, Birmingham, B4 6GA
f: Fox Court, 14 Gray’s Inn Road, London, England, WC1X 8HN

The audit status of the subsidiary companies included in the above table is as follows:

i: audited accounts are prepared for the subsidiary company.
ii: an exemption from audit has been applied and the Group guarantees all outstanding liabilities of the exempted subsidiary company in accordance with Section 479A-C of the Companies Act 2006.
iii: an exemption from audit for dormant companies has been applied in accordance with Section 480 of the Companies Act 2006.

Subsidiaries by virtue of control

As at 31 December 2025, the Group includes the following structured entities relating to securitisation programmes (see Note 25). Shares of these entities are ultimately beneficially owned through an independent trust. However, for accounting purposes, the entities are controlled by the Group and, as such, they are treated as subsidiaries and are fully consolidated (except in the case of TC Funding Limited which is only partially consolidated as noted below).
$^1$ As at the reporting date, Genesis Mortgage Funding 2022-1 PLC, JBR Capital DD Limited and TC Funding V DAC are in the process of being liquidated.

Registered address (see below)	Audit status (see below)	Name	Country of incorporation	Class of shares
Shawbrook Mortgage Funding Holdings Limited	England and Wales	Holding company	a	i
Ealbrook Mortgage Funding 2022 -1 plc	England and Wales	Special purpose vehicle	a	i
Ealbrook Mortgage Funding 2022-1 Holdings Limited	England and Wales	Holding company	a	i
Lanebrook Mortgage Transaction 2022 -1 plc	England and Wales	Special purpose vehicle	a	i
Shawbrook Mortgage Funding 2022 -1 plc	England and Wales	Special purpose vehicle	a	i
Genesis Mortgage Funding 2022 -1 PLC $^1$	England and Wales	Special purpose vehicle	b	i
Holbrook Mortgage Transaction 2023 -1 plc	England and Wales	Special purpose vehicle	a	i
Lanebrook Mortgage Transaction 2023-1 plc	England and Wales	Special purpose vehicle	a	i
Lanebrook Mortgage Transaction 2024 -1 plc	England and Wales	Special purpose vehicle	a	i
JBR Capital DD Limited (company number: 09335526) $^1$	England and Wales	Special purpose vehicle	c	ii
TC Funding I Limited (company number: 11266885)	England and Wales	Special purpose vehicle	d	iv
TC Funding III Limited (company number: 12677970)	England and Wales	Special purpose vehicle	d	iii
TC Funding Limited (company number: 12428334)	England and Wales	Special purpose vehicle	d	iii
TC Funding V DAC (company number: 739818) $^1$	Ireland	Special purpose vehicle	e	iv

The following changes took place during the year ended 31 December 2025:

ThinCats Group Limited became a wholly owned subsidiary of Shawbrook Bank Limited. The acquisition means that the Group’s indirect share in the assets and liabilities of the following are also consolidated in the preparation of the consolidated financial statements of the Group:
* TC Funding I Limited
* TC Funding III Limited
* 3 silos of TC Funding Limited.

Silo accounting has been applied to consolidate the Group’s share in the assets and liabilities of TC Funding Limited in the consolidated financial statements. TC Funding Limited is an SPV specifically created to administer CBILS and RLS lending. Three of the seven silos of TC Funding Ltd hold assets which are effectively owned by the Group, via TC Funding I limited, TC Funding III limited and ThinCats Limited, and are consolidated in preparation of the consolidated financial statements of the Group.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
45. Subsidiary companies (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 279

Registered addresses of the subsidiary companies included in the above table are as follows:

a: 5 Churchill Place, 10th Floor, London, United Kingdom, E14 5HU.
b: 18a Capricorn Centre Cranes Farm Road, Basildon, Essex, SS14 3JJ.
c: 7th Floor 21 Lombard Street, London, EC3V 9AH
d: C/O Tmf Group, 13th Floor, One Angel Court, London, United Kingdom, EC2R 7HJ
e: 31-32 Leeson Street Lower, Dublin 2, Dublin, Dublin, D02 Ka62, Ireland

The audit status of the subsidiary companies included in the above table is as follows:

i: audited accounts are prepared for the company.
ii: an exemption from audit for dormant companies has been applied in accordance with Section 480 of the Companies Act 2006.
iii: an exemption from audit for small companies has been applied in accordance with Sections 476-477 of the Companies Act 2006.
iv : an exemption from audit for small Designated Activity Companies has been applied in accordance with Part 16 of the Companies Act 2014.

46. Related party transactions

Transactions with key management personnel

Key management personnel refer to the Executive Management team and the Directors of the Group. Total compensation for the year for key management personnel employed by the Group is as follows:

	2025 £m	2024 £m
Short -term employee benefits	8.3	7.3
Other long -term benefits	2.3	1.9
Post -employment benefits	0.1	0.1
Termination benefits	0.2	–
Share based payments	18.7	–
Total compensation for employed key management personnel	29.6	9.3

In addition to the above, in the year ended 31 December 2025, the Group incurred fees in relation to the Institutional Directors appointed to the Board as set out and agreed within the Framework Agreement prior to IPO and within the letters of appointment following the IPO. This totalled £0.1 million (2024: £0.1 million). The institutional Directors are not employed by the Group and, accordingly, their fees are not included in the above table. Further details of compensation paid to the Directors of the Group are provided in the Directors’ Remuneration Report on page 82.

The Group provides employee loans to certain key management personnel. As at 31 December 2025, the amount outstanding in respect of these loans was £10.8 million (2024: £0.5 million), of which £10.4 million was in respect of interest free IPO related transitional loans, provided to facilitate the winding up of Shawbrook’s pre Admission holding company Marlin, which were repaid on 7 January 2026. The non IPO related loans to the value of £0.4 million remain outstanding and are subject to interest in accordance with the beneficial loan arrangements rate set by HMRC. These loans do not involve more than the normal risk of collectability or present other unfavourable features. Interest income recognised in respect of these loans is less than £0.1 million in both reported years. No provisions have been recognised in respect of these loans and no balances have been written off or forgiven during either of the reported years.

The Group holds savings deposits from certain key management personnel and their close family members. Such deposits are held in the ordinary course of business on normal commercial terms. As at 31 December 2025, the amount held in respect of these deposits is £0.8 million (2024: £0.6 million). Interest expense recognised in respect of these deposits is less than £0.1 million in both reported years.

STRATEGIC REPORT CORPORATE GOVERNANCE REPORT RISK REPORT CLIMATE REPORT FINANCIAL STATEMENTS

Notes to the financial statements for the year ended 31 December 2025
46. Related party transactions (continued)
Shawbrook Group plc | Annual Report and Accounts 2025 280

The Group also issued subordinated notes listed on various stock exchanges.The key management personnel have subscribed for £50,000 aggregate principal amount of Fixed Rate Reset Callable Tier 2 Capital Notes due January 2034 (2024: £50,000) and £150,000 aggregate principal amount of Fixed Rate Reset Subordinated Notes due September 2035 (2024: £nil).

Transactions with the ultimate parent
The ultimate parent and controlling party of the Group is Marlin Bidco Limited (see Note 44). As at 31 December 2025, the balance owed to Marlin Bidco Limited is £0.8 million (2024: £0.8 million). Details of employee share based payment schemes relating to Marlin Bidco Limited are outlined in Note 18.

Transactions between the Company and subsidiary companies
Transactions during the year between the Company and Shawbrook Bank Limited, recognised in the Company statement of profit and loss, are as follows:

	2025 £m	2024 £m
Coupon on capital securities ¹	15.1	15.1
Interest on subordinated debt receivable	18.2	18.5
Management fee	1.0	0.8
Total income from subsidiary	34.3	34.4

Subsidiary companies of the Group are detailed in Note 45.

Amounts due to the Company from its principal subsidiary, Shawbrook Bank Limited, and recognised in the Company statement of financial position, are as follows:

	Note	2025 £m	2024 £m
Other amounts receivable/payable	31	1.6	(8.0)
Subordinated debt receivable ²	39	172.7	171.1
Total amounts due from subsidiary		174.3	163.1

¹ The coupon on capital securities relates to capital securities issued to the Company by Shawbrook Bank Limited, which are included as part of the investment in subsidiaries (see Note 32).

² The total subordinated debt receivable per Note 39 is £171.5 million (2024: £171.1 million). The difference compared to the amount presented in this table of £1.2 million (2024: £nil million) relates to capitalised amounts (capitalised costs and a modification loss), which do not constitute amounts owing between the parties.

² The total subordinated debt receivable per Note 39 is £172.7 million (2024: £172.1 million). The difference compared to the amount presented in this table of £nil million (2024: £1.0 million) relates to capitalised amounts (capitalised costs and a modification loss), which do not constitute amounts owing between the parties.

47. Capital commitments
As at 31 December 2025, the Group has no capital commitments (2024: £nil).

48. Loan commitments
See accounting policies in Note 7(w)
As at 31 December 2025, the Group has loan commitments, which are not recognised in the statement of financial position, of £1,479.2 million (2024: £1,414.4 million). A loss allowance of £0.6 million (2024: £0.6 million) is held against these loan commitments, which is recognised in provisions in the statement of financial position (see Note 35). Additional analysis of the Group’s loan commitments and the associated loss allowance is provided in the credit risk section of the Risk Report starting on page 143.

49. Contingent assets and contingent liabilities
See accounting policies in Note 7(x)
Part of the Group’s business is regulated by the Consumer Credit Act (CCA), a piece of UK legislation designed to protect the rights of consumers. The Group’s Consumer franchise is exposed to risk under Section 75 and Section 140A of the CCA, in relation to any misrepresentations, breaches of contract or other failures by suppliers of goods and services to customers, where the purchase of those goods and services is financed by the Group. While the Group would have recourse to the supplier in the event of such liability, if the supplier became insolvent, that recourse would have limited value. The Group continues to undertake reviews of its compliance with the CCA and other consumer regulations. The Group has identified some areas of potential non-compliance, which, based on current information, are not considered to be material. However, in light of the uncertainties involved in such matters, there can be no assurance that the outcome of a particular matter will not result in a material liability.

Timeshare complaints
Please refer to Provisions (Note 35) for updates in relation to timeshare complaints.

Motor finance commission arrangements
Please refer to Provisions (Note 35) for updates in relation to motor finance commissions arrangements.

50. Events after the reporting period
On 7 January 2026 the Group’s Controlling Shareholder, Marlin Bidco Limited, entered into Guernsey Members’ Voluntary Liquidation. Following the share transfers that took place on the same date, the interests of Pollen Street Capital and BC Partners are now represented through PSC Marlin Holdco Limited and Marlinbass Limited, respectively.

Other Information 283
Abbreviations 285
Other performance indicators 286
Alternative Performance Measures (APMs) 291
Country-by-country reporting 282
Shawbrook Group plc | Annual Report and Accounts 2025
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Throughout this document:
‘ Company ’ refers to: Shawbrook Group plc
‘ Group ’ refers to: the ‘Company’ and its subsidiaries
‘ Shawbrook ’ refers to: the ‘Group’
‘ Shareholder ’ refers to: Marlin Bidco Limited

Abbreviations

Abbreviation	Definition
ABL	Asset Backed Lending
ABP	Annual Bonus Plan
AGM	Annual General Meeting
AI	Artificial Intelligence
ALCo	Assets and Liabilities Sub-Committee
APE	Average Principal Employed
API	Application Programme Interface
AVM	Automated Valuation Model
bps	Basis point
BML	Bluestone Mortgages Limited
C-SREP	Capital Supervisory Review and Evaluation Process
CBES	Climate Biennial Exploratory Scenario
CCA	Consumer Credit Act
CET1	Common Equity Tier 1
CGU	Cash generating unit
CISO	Chief Information Security Officer
CMP	Credit Management Platform
the ‘Code’	UK Corporate Governance Code 2018
COVID-19	Coronavirus disease
CRD	Cash Ratio Deposit
CRD V	Capital Requirements Directive
CRM	Customer relationship management
CRR/CRR II	Capital Requirements Regulation
CSF	Cybersecurity Framework
CTO	Chief Technology Officer
DEFRA	Department for Environment, Food & Rural Affairs
DTR	Disclosure Guidance and Transparency Rule
DWF	Discount Window Facility
EAD	Exposure at default
EBA	European Banking Authority
ECL	Expected credit loss
EDD	Enhanced Due Diligence
EDI	Equality, diversity and inclusion
EEA	European Economic Area
EIR	Effective interest rate
EMTN	Euro Medium Term Note
EPC	Energy performance certificate
EPS	Earnings per share
ESG	Environmental, social and governance
ESOS	Energy Savings Opportunity Scheme
EU	European Union

The following abbreviations are used within this document:

Abbreviation	Definition
ExRC	Executive Risk Committee
FCA	Financial Conduct Authority
FSCS	Financial Services Compensation Scheme
FSMA	Financial Services and Markets Act
FTE	Full time equivalent
FTSE	Financial Times Stock Exchange
FVOCI	Fair value through other comprehensive income
FVTPL	Fair value through profit or loss
GDPR	General Data Protection Regulation
GHG	Greenhouse gas
GRC	Governance, Risk and Compliance
HMRC	HM Revenue and Customs
HQLA	High-Quality Liquid Assets
IAS	International Accounting Standards
IBS	Important Business Services
ICAAP	Internal Capital Adequacy Assessment Process
ICMA	International Capital Market Association
IEA	International Energy Agency
IFRS	International Financial Reporting Standards
ILAAP	Internal Liquidity Adequacy Assessment Process
IPO	Initial Public Offering
IRB	Internal Rating Based
IRR	Internal Rate of Return
ISA	Individual Savings Account
ISDA	International Swaps and Derivatives Association
ISSB	International Sustainability Standards Board

283 Shawbrook Group plc | Annual Report and Accounts 2025
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Time periods referred to within this document are defined as follows:

Period	Definition
FY	Full year: 12 months from 1 January to 31 December
H1	First half: six month period from 1 January to 30 June
H2	Second half: six month period from 1 July to 31 December
Q1	First quarter: three month period from 1 January to 31 March
Q2	Second quarter: three month period from 1 April to 30 June
Q3	Third quarter: three month period from 1 July to 30 September
Q4	Fourth quarter: three month period from 1 October to 31 December

Abbreviation	Definition
JBR	JBR Auto Holdings Ltd
LCR	Liquidity coverage ratio
LGD	Loss given default
LMA	Loan Market Association
LSE	London Stock Exchange
LTV	Loan to Value
M&A	Mergers and Acquisitions
MCOB	Mortgages and Home Finance: Conduct of Business
MI	Management Information
MIP	Management Incentive Plan
ML	Machine Learning
MLRO	Money Laundering Reporting Officer
MRC	Model Risk Oversight Committee
MRIO	Multi-regional input-output
NED	Non-Executive Directors
NIST	National Institute of Standards and Technology
NSFR	Net stable funding ratio
OTC	Over-the-counter
OTD	Originate to Distribute
PBT	Profit Before Tax
PCAF	Partnership for Carbon Accounting Financials
PD	Probability of default
PMA	Post-model adjustment
POCI	Purchased or originated credit-impaired
PPGD	Probability of Possession Given Default
PRA	Prudential Regulation Authority
PSP	Performance Share Plan
QA	Quality Assurance
RCP	Representative Concentration Pathways
RMF	Risk Management Framework
ROPA	Record of Processing Activities
ROTE	Return on Tangible Equity
SAS	Statistical Analysis System
SEA	Solvent Exit Analysis
SECR	Streamlined energy and carbon reporting
SDDT	Small Domestic Deposit Taker
SICR	Significant increase in credit risk from initial recognition
SIP	Share Incentive Plan
SMEs	Small and medium-sized enterprises
SMF	Senior Management Function
SM&CR	Senior Managers and Certification Regime
SONIA	Sterling Overnight Index Average rate
SPPI	Solely payments of principal and interest on the principal amount outstanding
SPV	Special Purpose Vehicle
TAM	Total addressable Market
TCFD	Task Force on Climate-related Financial Disclosures
TFSME	Term Funding Scheme with

283 Shawbrook Group plc | Annual Report and Accounts 2025
FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORTadditional incentives for SMEs TML The Mortgage Lender Limited TNAV Total Net Asset Value TSR Total Shareholder Return UK United Kingdom UK MAR UK Market Abuse Regulation UN SDGs United Nations Sustainable Development Goals USA United States of America 284 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Arrears ratio The Group calculates its arrears measure by including all accounts that are greater than 3 contractual payments down at month end but excluding loans that are term expired. This is then divided by the total loan book, excluding term expired loans. ABL and Development Finance loans are excluded from the arrears measure given there is no concept of arrears in these products. POCI loans are also excluded.

Common Equity Tier 1 (CET1) capital ratio Common Equity Tier 1 capital, divided by, risk-weighted assets.

Leverage ratio Total Tier 1 capital, divided by, total leverage ratio exposure measure.

Liquidity coverage ratio Liquidity buffer, divided by, total 30-day net cash outflows in a standardised stress scenario.

Risk-weighted assets A measure of assets adjusted for their associated risks. Risk weightings are established in accordance with Prudential Regulation Authority rules and are used to assess capital requirements and adequacy under Pillar 1.

Total capital ratio Total regulatory capital, divided by, risk-weighted assets.

Total Tier 1 capital ratio Total Tier 1 capital, divided by, risk-weighted assets.

Other performance indicators Certain financial measures disclosed in the Annual Report and Accounts do not have a standardised meaning prescribed by international accounting standards and may not therefore be comparable to similar measures presented by other issuers. These measures are considered ‘alternative performance measures’ (non-GAAP financial measures) and are not a substitute for measures prescribed by international accounting standards. Definitions of financial performance indicators referred to in the Strategic Report (in alphabetical order) are set out below:

285 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Alternative Performance Measures (APMs)

Throughout this report, the Group presents a range of key performance indicators, including Alternative Performance Measures (APMs), which management use to assess performance, monitor trends and support decision-making. Certain measures presented are not defined under IFRS and may therefore not be directly comparable with similarly titled measures used by other entities. The Directors believe these non-IFRS measures provide useful supplementary information to aid understanding of the Group’s underlying performance. Definitions and reconciliations are set out below:

Loan book

The loan book is calculated as the sum of loans and advances to customers (net of loss allowance and fair value adjustments for hedged risk) and the carrying amount of assets on operating leases. Loans and advances to customers includes loans and advances to customers at amortised cost, loans and advances to customers at FVOCI and loans and advances to customers measured at fair value through profit and loss (FVTPL), along with loans transferred to assets held for sale, which are still considered to be part of the Group’s overall loan book until derecognised.

(£m)	2025	2024
Loans and advances to customers	17,770.1	15,176.6
Carrying amount of assets on operating leases	24.6	29.8
Total loan book	17,794.7	15,206.4

Loan book (including originate to distribute (OTD) assets)

This measure comprises the loan book (as defined above) plus the carrying amount of all structured asset sales derecognised through our originate to distribute (OTD) strategy.

(£m)	2025	2024
Loans and advances to customers	17,770.1	15,176.6
Carrying amount of assets on operating leases	24.6	29.8
Amounts involved in originate to distribute (OTD) assets	1,372.5	721.4
Total loan book (including OTD assets)	19,167.2	15,927.8

Average principal employed

Average principal employed is calculated as the average of monthly closing loans and advances to customers (net of loss allowance and fair value adjustments for hedged risk) and assets on operating leases included in property, plant and equipment.

Wholesale funding

Wholesale funding is calculated as the sum of amounts due to banks and debt securities in issue.

(£m)	2025	2024
Amounts due to banks	1,430.6	1,376.1
Debt securities in issue	412.3	549.2
Wholesale funding	1,842.9	1,925.3

Tangible net asset value

Tangible net asset value is calculated as total assets less total liabilities, intangible assets and capital securities.

(£m)	2025	2024
Total assets	22,468.9	19,722.7
Less: Total liabilities	(20,626.4)	(18,140.4)
Less: Intangible assets	(145.8)	(124.0)
Less: Capital securities	(123.1)	(123.1)
Tangible net asset value	1,573.6	1,335.2

286 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Earnings per share

Profit attributable to ordinary shareholders divided by the weighted average number of ordinary shares in issue during the financial year. The table below reconciles the ratio on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Profit after tax	251.5	219.0
Coupon paid to holders of capital securities	(15.1)	(15.1)
Profit after tax less AT1 coupon (A)	236.4	203.9
Weighted average number of ordinary shares (B)	508.3	506.2
Earnings per share (A/B) (pence)	47	40

Gross asset yield

Gross asset yield is calculated as net operating income less interest expense and similar charges, divided by average principal employed.

	Underlying	Statutory
(£m)	2025	2024
Net operating income	684.4	609.8
Less: underlying interest expense and similar charges	(772.7)	(796.1)
Total (A)	1,457.1	1,405.9
Average principal employed (B)	16,182.2	14,290.4
Gross asset yield (A/B) (%)	9.0	9.8

Liability yield

Liability yield is calculated as interest expense and similar charges divided by average principal employed.

	Underlying	Statutory
(£m)	2025	2024
Interest expense and similar charges	(775.0)	(796.1)
Total statutory results adjustments ¹	2.3	-
Total (A)	(772.7)	(796.1)
Average principal employed (B)	16,182.2	14,290.4
Liability yield (A/B) (%)	(4.8)	(5.6)

Net interest margin

Net interest margin is calculated as net operating income divided by average principal employed.

	Underlying	Statutory
(£m)	2025	2024
Net operating income	682.1	609.8
Total statutory results adjustments ¹	2.3	-
Total (A)	684.4	609.8
Average principal employed (B)	16,182.2	14,290.4
Net interest margin (A/B) (%)	4.2	4.3

287 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

¹ Total statutory results adjustments include incremental funding costs of £2.3m incurred in respect of the ThinCats acquisition. As the adjustment increases net operating income and reduces interest expense by an equal amount, it does not impact the numerator used in the calculation of gross asset yield.

Cost to APE efficiency ratio

Cost to APE efficiency ratio is calculated as the sum of: (i) administrative expenses; (ii) provisions in the statement of profit and loss; and (iii) total statutory results adjustments (when calculating the measure on an underlying basis), divided by average principal employed. The table below reconciles the ratio on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Administrative expenses	(326.1)	(252.8)
Provisions	(0.8)	5.3
Total statutory results adjustments ¹	59.7	(1.3)
Total (A)	(267.2)	(248.8)
Average principal employed (B)	16,182.2	14,290.4
Cost to APE efficiency ratio (A/B) (%)	(1.7)	(1.7)

Cost to income ratio

Cost to income ratio is calculated as the sum of: (i) administrative expenses; (ii) provisions in the statement of profit and loss; and (iii) total statutory results adjustments (when calculating the measure on an underlying basis), divided by net operating income. The table below reconciles the ratio on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Administrative expenses	(326.1)	(252.8)
Provisions	(0.8)	5.3
Total statutory results adjustments ¹	59.7	(1.3)
Total (A)	(267.2)	(248.8)
Net operating income (B)	684.4	609.8
Cost to income ratio (A/B) (%)	(39.0)	(40.8)

Cost of risk

Cost of risk is calculated as impairment losses on financial assets, divided by average principal employed. The table below reconciles the ratio on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Impairment losses on financial assets (A)	(83.0)	(67.2)
Total statutory results adjustments ²	6.3	-
Total (A)	(76.7)	(67.2)
Average principal employed (B)	16,182.2	14,290.4
Cost of risk (A/B) (%)	(0.47)	(0.47)

¹ Total statutory adjustments include (i) for the year ended 31 December 2025, £29.8 million IFRS 2 modification costs, £20.3 million IPO related costs, £8.6 million corporate activity costs and £1.0 million motor finance provision charge, and (ii) for the year ended 31 December 2024, £4.0 million of corporate activity costs primarily in relation to the acquisition of JBR and £5.3 million of provision recovery in relation to the Timeshare Provision.2 Total statutory adjustments include (i) for the year ended 31 December 2025 the recognition on acquisition of ThinCats of a £6.3 million expected credit loss allowance in respect of the acquired loan portfolio, reflecting alignment to the Group’s IFRS 9 provisioning methodology (ii) for the year ended 31 December 2024 (£nil). 288 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Return on lending assets before tax

Return on lending assets before tax is calculated as the sum of (i) profit before tax; and (ii) total statutory results adjustments (when calculating the measure on an underlying basis), divided by average principal employed. The table below reconciles the measure on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Profit before tax	272.2	295.1
Total statutory results adjustments ¹	68.3	(1.3)
Profit before tax, before statutory adjustments (A)	340.5	293.8
Average principal employed (B)	16,182.2	14,290.4
Return on lending assets before tax (A/B) (%)	2.1	2.1

Return on tangible equity

Return on tangible equity is calculated as profit after tax, plus total statutory results adjustments (when calculating the measure on an underlying basis), less distributions made to holders of capital securities, divided by the product of average risk-weighted assets multiplied by 12.5 per cent., which is the target CET1 ratio. Average risk-weighted assets is calculated as risk-weighted assets at the beginning of the period, plus risk-weighted assets at the end of the period, divided by two. The table below reconciles the measure on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Profit after tax	195.5	219.9
Total statutory results adjustments ²	56.0	(0.9)
Profit after tax before statutory adjustments (A)	251.5	219.0
Coupon paid to holders of capital securities (B)	(15.1)	(15.1)
A+B	236.4	203.9
Risk-weighted assets at the beginning of the period (C1)	9,946.6	8,701.3
Risk-weighted assets at the end of the period (C2)	12,003.2	9,946.6
Average risk-weighted assets ((C1+C2)/2) (D)	10,974.9	9,324.0
*D 12.5 per cent.**	1,371.9	1,165.5
Return on tangible equity (%)	17.2	17.5

$^1$ Total statutory adjustments include (i) for the year ended 31 December 2025, £29.8 million IFRS 2 modification costs, £20.3 million IPO related costs, £17.2 million corporate activity costs and £1.0 million provision charge, and (ii) for the year ended 2024, £4.0 million of corporate activity costs primarily in relation to the acquisition of JBR and £5.3 million of provision recovery in relation to the Timeshare Provision.

$^2$ Total statutory adjustments include (i) for the year ended 31 December 2025, £12.7 million of corporate activity costs, £22.3 million of IFRS 2 modification, £20.3 million IPO-related costs and £0.7 million Motor finance provision, and (ii) for the year ended 31 December 2024, £3.0 million of corporate activity costs primarily in relation to the acquisition of JBR and £3.9 million of provision recovery in relation to the Timeshare Provision.

289 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Return on tangible equity (calculated using actual TNAV)

Return on tangible equity is calculated as profit after tax, (adjusted to deduct distributions made to holders of capital securities), divided by average tangible equity. Average tangible equity is calculated as total equity less capital securities and intangible assets at the beginning of the period, plus total equity less capital securities and intangible assets at the end of the period, divided by two. The table below reconciles the measure on both an underlying and statutory basis.

	Underlying	Statutory
(£m)	2025	2024
Profit after tax	195.5	219.9
Total statutory results adjustments ¹	56.0	(0.9)
Profit after tax before statutory adjustments (A)	251.5	219.0
Coupon paid to holders of capital securities (B)	(15.1)	(15.1)
A+B	236.4	203.9
Total equity at the beginning of the period (C1)	1,582.3	1,338.7
Capital securities (at the beginning of the period) (D1)	123.1	123.1
Intangible assets (at the beginning of the period) (E1)	124.0	107.2
C1-D1-E1 (F1)	1,335.2	1,108.4
Total equity at the end of the period (C2)	1,842.5	1,582.3
Capital securities (at the end of the period) (D2)	123.1	123.1
Intangible assets (at the end of the period) (E2)	145.8	124.0
C2-D2-E2 (F2)	1,573.6	1,335.2
Average tangible equity ((F1+F2)/2)	1,454.4	1,221.8
Return on tangible equity (%)	16.3	16.7

$^1$ Total statutory adjustments include (i) for the year ended 31 December 2025, £12.7 million of corporate activity costs, £22.3 million of IFRS 2 modification, £20.3 million IPO-related costs and £0.7 million Motor finance provision, and (ii) for the year ended 31 December 2024, £3.0 million of corporate activity costs primarily in relation to the acquisition of JBR and £3.9 million of provision recovery in relation to the Timeshare Provision.

290 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

The following disclosures are provided solely to comply with the requirements of the Capital Requirements (Country-by-Country Reporting) Regulations 2013. These disclosures may not be relied on for any other purpose. The country-by-country reporting requirements originate from Article 89 of the Capital Requirements Directive (CRD IV). The purpose is to provide increased transparency regarding the source of the Group’s income and the locations of its operations. In both reported years, Shawbrook Group plc and its subsidiaries (the ‘Group’) are all UK registered entities. The activities of the Group are detailed in Note 1 of the Financial Statements and in the Strategic Report. Details of subsidiary companies included in the Group are provided in Note 45 of the Financial Statements. Required disclosures for the year ended 31 December are summarised below:

Country-by-country reporting

	2025 UK	2024 UK
Net operating income (£m)	682.1	609.8
Profit before tax (£m)	272.2	295.1
Tax charge (£m)	76.7	75.2
Tax paid (£m)	62.9	85.5
Average number of employees on a full-time equivalent basis	1,483	1,519

The Group received no public subsidies during either of the reported years.

291 Shawbrook Group plc | Annual Report and Accounts 2025 FINANCIAL STATEMENTS CLIMATE REPORT CORPORATE GOVERNANCE REPORT RISK REPORT STRATEGIC REPORT

Shawbrook Group plc Registered office: Lutea House, Warley Hill Business Park, The Drive, Great Warley, Brentwood, Essex, CM13 3BE. Registered in England and Wales – Company Number 07240248.

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Shawbrook Group PLC — Annual Report (ESEF) 2025

Financial Highlights

Disciplined growth and efficiency

Robust, resilient foundations

Contents

Our Strategy

Diversified markets

Specialist at scale

Technology-enabled

Credit discipline

Entrepreneurial culture

A specialist lending business model delivering resilient returns through the cycle

Technology and AI delivering positive customer and colleague experiences

Capital strength and credit excellence

Entrepreneurial mindset and culture

Looking ahead

Colleague adoption and culture

AI spotlight

Managing AI-related credit risk

AI in action across the Group

Financial review

Performance indicators

Financial performance metrics

Financial position metrics

Summary of statutory results for the period

Financial commentary

Profit growth driven by disciplined execution

Operating leverage improved through efficiencies of scale

Stable credit performance supported by prudent risk management

Robust capital position and diversified funding

Looking ahead

Business review Commercial

Business review Commercial SME

Our proposition

Our markets and customers

Business review Commercial SME

2025 achievements

Advancing our digital, data and platform capabilities

Maintaining discipline and portfolio resilience

Looking ahead

Business review

Commercial Real Estate markets

Our markets and customers

Business review

Commercial Real Estate 2025 achievements

Strengthening and expanding our propositions

Advancing our digital, data and platform capabilities

Maintaining discipline and portfolio resilience

Looking ahead

Business review

Retail

Our markets and customers

Competitive and structural advantages

Business review Retail

Retail Mortgage Brands markets

TML buy-to-let

Business review Retail

Retail Mortgage Brands

2025 achievements

Looking ahead

Business review Retail

Consumer Finance markets

Our markets and customers

Business review Retail

Consumer Finance

2025 achievements

Looking ahead

Our markets and customers

Savings

Business review Retail

Savings

2025 achievements

Looking ahead

Sustainability Report

Our sustainability strategy

Empowering our People

Strengthening an entrepreneurial culture that drives ownership and accountability at every level

Continue building an inclusive environment that attracts and retains exceptional talent

A culture that supports innovation, accountability and sustainable growth

Shawbrook Group PLC Annual Report (ESEF) 2025

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