Delivering caring banking
so our customers can
make the most of
life’s opportunities
Annual Report and Accounts
for the year ended 31 December 2024
Strategic report
1 Headlines
2 Who we are
4 Chairman’s statement
6 Chief Executive Officer’s review
9 Market overview
11 Strategy
12 Business model
14 Key performance indicators
16 Sustainability
35 Financial review
38 Operating review
44 Section 172(1) statement
46 Non-financial and sustainability
information statement
48 Risk management and principal risks
56 Viability statement
Governance
57 Chairman’s introduction to governance
59 Board of Directors
62 Division of responsibilities
64 Setting our strategy
65 Promoting long-term sustainable
success: Board focus areas during 2024
67 The Board: our culture
70 Stakeholder engagement
and decision making
75 Composition, succession and evaluation
76 Director induction, training
and evaluation
78 Nomination and Governance
Committee Report
82 Audit Committee Report
88 Risk Committee Report
91 Directors’ Remuneration Report
91 Annual Statement by the Chair
of the Remuneration Committee
94 Remuneration at a glance
97 Annual Report on Remuneration
114 Directors’ Report
Financial statements
122 Independent auditor’s report
130 Consolidated income statement
130 Consolidated statement
of comprehensive income
130 (Loss)/earnings per share
131 Dividends per share
131 Balance sheets
132 Statements of changes
in shareholders’ equity
134 Statements of cash flows
135 Statement of accounting policies
144 Financial and capital risk management
149 Notes to the financial statements
197 Alternative performance measures
Shareholder information
200 Information for shareholders
Find out more on our website:
vanquisbankinggroup.com
Delivering caring
banking
Customers remain at the heart of
everything we do.
5 We care about our
customers’ needs
5 We earn our customers’ trust
5 We empower customers to
make healthy financial choices
5 We support our customers
when it matters most
The Vanquis Way
We created The Vanquis Way to
guide our decisions and remind us
of what’s important when working
with our customers, communities,
and each other.
5 We care about people
5 We pull together as a team
5 We find a better way
5 We get the right things done
Our strategy
Our customer-led strategy
is steeped in a rich, detailed
understanding of the lives and
needs of those we serve.
5 Customer centricity
5 Insightful risk management
5 Efficient organisation
5 Digital, tech, data and analytics
5 A great people proposition
Making the most of life’s opportunities means different things to
different people. It could mean borrowing for a significant purchase
like a car. Or improving their credit score so they have more borrowing
options at better rates. For some, it's simply about managing their
finances more effectively during tighter months.
More on page
3
More on page
49
More on page
11
Contents
Statutory ROTE
(31.7)%
FY23: (2.8)%
Headlines
Adjusted ROTE
(7.0)%
FY23: 1.9%
Gross customer interest earning balances composition (£m)
Transformation cost savings
(£m)
Retail deposits
(£m)
NIM
18.4%
FY23: 18.6%
Adjusted cost: income
65.9%
FY23: 62.6%
Statutory cost: income
88.1%
FY23: 68.6%
2024 was a pivotal year in the turnaround of Vanquis Banking Group. Having laid out our strategy
in March 2024, we made substantive progress in the transformation of the business. A new
experienced leadership team was put in place and progress made to deliver a refreshed customer
proposition, with an expanded product range and enhanced capabilities, including AI tools, which
improved efficiency, scalability and overall customer experience.
The balance sheet was cleaned-up and the Gateway technology transformation programme, which will drive meaningful
further improvements, remains on track. Our focus continues to be on building a business model that delivers enduring
value for customers, colleagues, and shareholders.
Tier 1 ratio
18.8%
FY23: 19.9%
Retail funding
92.1%
FY23: 83.7%
Cards 59%
Vehicle Finance 36%
2CM 0%
Loans 5%
Cards 55%
Vehicle Finance 33%
2CM 9%
Loans 3%
FY23
£2,401m
Secured: 36%
Unsecured: 54%
Secured: 43%
Unsecured: 57%
FY24
£2,308m
FY23
15.4
218% 25%
1,925
FY24
48.9 2,399
FY23 FY24
Customer proposition
Credit, savings and money management products
Credit
Cards
Number of Customers
Gross customer interest earning balances Retail deposits
Vehicle
Finance
Second Charge
Mortgages
Personal
Loans
Savings Snoop
1,267k
£1,278m
110k
£765m
3.7k
£217m
24k
£49m
57k
£2,399m
293k
Credit Savings
Money
management
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
1
Who we are
Customers Colleagues Communities The environment
Our ESG priorities
Ensuring that every
decision we take, from
proposition development
through to in-life
management, is guided
by a clear understanding
of how it will benefit
our customers.
Creating and sustaining
an inclusive, supportive
workplace where
colleagues feel
well, engaged, and
empowered to deliver
their best work and reach
their full potential.
Improving the lives
of children and
young people in the
communities where
our customers live
and work by providing
them with access to
education, social and
financial inclusion, and
economic development
opportunities.
Ensuring that
climate-related risks
and opportunities are
integrated into our
business strategy and
decision making in areas
such as operational
resilience, customer
service, supply chain
management and,
where appropriate,
capital allocation.
Our customers’ core needs
Help me borrow healthily
Help me build a financial
safety net
Help me feel in control of
my everyday spending
To deliver caring banking so our customers
can make the most of life’s opportunities.
Our purpose
Credit Savings Money management
To offer our chosen target customers differentiated credit, savings and money
management solutions, with lending predominantly funded by retail deposits.
Our business model
We put our
customers at
the heart of
everything we do
We create
differentiated
solutions that
meet our
customers’ needs
We meet our
customers
where they are
We serve our
customers
efficiently and well
We deliver
attractive returns to
all our stakeholders
Vanquis Banking Group is a specialist
bank with a strong social purpose
Read more on pages 12 and 13
Read more on page 12
Read more on page 18
Read more on pages 11 and 12
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
2
To deliver caring banking so our customers can
make the most of life’s opportunities.
Vanquis Credit Card is
an excellent choice for
rebuilding or improving
your credit score. With a
simple application process
and a focus on helping
customers with limited
credit history, it provides
a solid starting point.”
Vanquis customer
Amazing help and
support from the
company to help me
buy the car I needed,
will highly recommend
to friends, family and
anyone in future.”
Moneybarn customer
Fantastic app!
Brilliant company!
Thanks so much for
helping me with
all my finances!”
Snoop customer
Second time I’ve
had finance with
Moneybarn, on
both occasions they
have been brilliant.
Kept me up to date
with the application
and explained
everything.”
Moneybarn customer
Our customer proposition
Credit Cards
We provide Credit Cards
tailored to customer
needs, offering a range
of APRs and credit limits.
Vehicle Finance
We finance used vehicles
through Conditional
Sale Agreements with
fixed APRs and no
ownership fees.
Second Charge
Mortgages
Through partnerships
we enable homeowners
to borrow against
their property.
Savings
We offer a range
of competitive,
easy-to-manage
savings accounts.
Snoop
Snoop leverages AI
and open banking to
help customers save
on household bills,
targeting up to £1,500
in annual savings.
Customers
Find out more on our website:
vanquisbankinggroup.com
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
3
A key part of this transformation is strengthening our
customer proposition. Through a differentiated approach,
we address three core needs: borrowing healthily,
controlling spending, and building a financial safety net.
By expanding direct channels, strengthening partnerships,
and leveraging Snoop, we aim to serve more customers.
Our ‘not yet’ approach to credit helps those who aren’t
eligible today but could be in the future - providing financial
management support until the time is right.
At the same time, our technology transformation is
creating a more integrated, scalable platform that
enables faster, lower-cost delivery. These changes will
drive greater customer loyalty, lower acquisition costs,
and deepen relationships, supporting a more sustainable
growth strategy.
These strategic shifts lay the foundation for sustainable
income growth, a leaner cost base, and strong shareholder
returns. While short-term challenges remain, in particular
with unmerited complaints from Claims Management
Companies (CMCs), disciplined execution will ensure
Vanquis becomes a more resilient, customer-centric,
and high-performing business, delivering long-term
value for both customers and shareholders.
Strategic progress
Under Ian McLaughlin’s leadership and a refreshed
executive team, we have made solid early progress in
executing our strategy, making difficult but necessary
decisions to secure long-term success.
Key areas of focus during the year were the diversification
of our product offerings, refining our approach to enhance
value for customers who really need us, marketplace
developments and strategic partnerships – expanding
access for underserved customers through new
distribution channels.
Alongside product expansion, we have taken out significant
costs and made advancements in our risk management,
ensuring portfolio resilience to drive sustainable,
risk-adjusted returns. Our technology transformation
programme, Gateway, is progressing well, creating a
scalable, efficient and customer-centric platform.
As a result of the progress made, I am confident
that 2024 will be remembered as a defining year in
Vanquis’ transformation.
With a clear strategic direction and enhanced financial
stability, we are confident in our ability to generate long-
term value. Our focus remains on serving our customers,
strengthening our lending portfolio, and creating
sustainable returns for shareholders.
Chairman’s statement
Building a leading bank for
those who need us most
Overview
As a financial services provider to close to 1.7 million
customers, largely in the underserved credit market,
we play a vital role in the UK financial system. We are
uniquely positioned to fulfil our purpose, ‘to deliver caring
banking so our customers can make the most of life’s
opportunities’, while delivering long-term, sustainable
returns for shareholders.
This year, we reset our strategy, made significant progress
in transforming the business and position the bank for
future success. Our customers remain at the heart of
everything we do – whether they’re facing financial
challenges, making important purchases, or managing
everyday expenses. With one-third of UK adults (up to
24 million people) financially stretched, our strong social
purpose aligns with a significant market opportunity, and
we are building a bank for those that need us most.
Strategy and transformation
During the year we made significant strides in transforming
Vanquis into a more customer-focused, efficient, and
resilient business. We are shifting from a product-led
approach to a needs-driven, integrated model that better
serves customers and supports sustainable growth.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
4
Commitment to customers
Our customers rely on us because they are underserved
by mainstream lenders, and we take this responsibility
seriously. Customer satisfaction remains strong, reflected
in over 36,000 Trustpilot reviews with a 4.2-star ‘Great’
rating – of which 80% are 5-star reviews.
Demand for our products remains strong, reflecting the
trust our customers place in us. For them, making the
most of life’s opportunities means different things; whether
they are borrowing for key purchases, looking to improve
their credit scores or navigating financial difficulties
with greater confidence, we will continue to broaden
our product offering, expand distribution channels and
ensure innovation and accessibility remain at the heart
of our strategy.
Industry developments
Throughout the year, management has remained focused
on addressing misconduct by CMCs and, since 4Q24,
ensuring clarity on motor finance commissions.
The unchecked rise in CMC activity has led to a surge in
unmerited claims, placing undue pressure on financial
institutions, often resulting in poor outcomes for customers
and overburdening the Financial Ombudsman Service
(FOS). This undermines the purpose of consumer protection
frameworks, inflating costs and delaying resolutions for
customers with genuine concerns. I therefore welcome
the FOS’s introduction of a £250 case fee for CMCs - a
necessary step towards deterring opportunistic claims and
restoring fairness to the redress process.
Vanquis fully supports a fair and transparent complaints
system that ensures customers receive appropriate redress
when justified. However, while the introduction of case fees
is a positive first step, further oversight and accountability of
CMCs are required to prevent continued abuse. Addressing
these challenges will be critical in ensuring a balanced
system that protects consumers while maintaining trust
and integrity across the industry.
Capital management and dividend
2024 has been a challenging year as we have sought to
direct capital towards future growth whilst addressing
unwarranted complaints and historical issues. As a result,
the Board has decided not to declare a dividend for 2024
(2023: 6.0p per share).
However, the Board intends to revisit the capital allocation
framework and dividend policy following full delivery of the
strategy in 2026.
With a clear strategic direction and enhanced financial
stability, we are confident in our ability to generate
long-term value. Our focus remains on serving our
customers, strengthening our lending portfolio, and
creating sustainable returns for shareholders.
Culture
A sound culture and strong people proposition are essential
to this commitment. In 2024, the Board actively engaged
with colleagues across the business to better understand
their experiences and the role of culture in shaping their
work environment. While colleague engagement was
understandably impacted by the uncertainty of the
operational turnaround, colleagues continue to view
Vanquis as an inclusive, safe, and respectful place to work.
More broadly, at Vanquis, financial inclusion is embedded in
our products, services, and community initiatives. Through
our Foundation, we support social mobility, creating
opportunities for children and young people. Equally,
we are committed to fostering an inclusive workplace
where colleagues can grow their careers and celebrate
high performance in an environment that reflects our
core values.
Our remuneration framework aligns with our strategic
objectives, ensuring a clear link between performance and
sustainable shareholder returns.
For more information see pages 91 to 113
Directors
Over the past several months we have taken the
opportunity of our operational turnaround and
organisational changes to refresh and reposition the Board.
I would like to thank Andrea Blance, Elizabeth Chambers
and Margot James, who stepped down as independent
non-executive directors in 2024, for their leadership and
guidance as we repositioned Vanquis as a specialist bank.
At the same time, I was pleased to welcome Karen Briggs,
Oliver Laird, and Jackie Noakes as independent non-
executive directors, effective 27 March 2024. Their combined
expertise in financial services, banking, governance, risk, and
compliance strengthens our Board as we drive business
and cultural change.
More recently, Angela Knight and Paul Hewitt stepped
down at the end of January 2025, after serving since
July 2018. I extend my sincere gratitude to them for their
significant contributions over the past six and a half
years. With these changes Michele Greene has assumed
the role of Chair of the Board Risk Committee and Senior
Independent Director, succeeding Angela Knight, and Oliver
Laird has taken over as Chair of the Board Audit Committee,
succeeding Paul Hewitt.
For more information see page 57
Summary
I would like to close by expressing my gratitude to the
executive team, my fellow Board members, and especially
to all our colleagues across Vanquis Banking Group. 2024
was a year of challenges and operational turnaround and I
am incredibly proud of how our colleagues have supported
one another, served our customers and made a positive
impact in our communities, all while driving the changes
necessary for our long-term success.
Looking ahead to 2025, the Board will continue to work
closely with the executive team to ensure we maintain
a steadfast focus on customer needs, drive measured,
sustainable growth and deliver long-term value
for shareholders.
While much work remains, I am confident that Vanquis is
on a stronger, more sustainable path to driving consistent
shareholder returns while continuing to serve and support
our customers.
Sir Peter Estlin
Chairman
13 March 2025
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
5
Introduction
2024 was a defining year for Vanquis – a year of
strategic clarity and operational turnaround. While we
faced challenges, we also made significant progress in
repositioning the business for sustainable, profitable growth.
Since unveiling our new strategy in March 2024, we
have focused on stabilising the business and laying the
foundations for long-term success. This progress has been
underpinned by stable credit quality and the financial
resilience of our customers, reinforcing our confidence
in the future.
Developing our customer proposition
Throughout the year, we expanded and diversified our
customer proposition to meet a broader range of their
needs. In Credit Cards, we repriced our portfolio and
introduced new balance transfer products to attract and
retain customers. We have significantly enhanced the
granularity of our customer cohorts by risk profile, vintage
and acquisition channel, and are focused on measured
growth to drive a sustainably profitable portfolio.
In Vehicle Finance, we also repriced our portfolio and,
significantly, we completed a review of Vehicle Finance
Stage 3 receivables. Although this resulted in a write down
of the value of these receivables in the year, it gave us
much greater clarity on the cost of risk of the portfolio
and better informed our aspirations for this business.
Supported by a forward flow agreement with Interbridge
Mortgages and an expanded partnership with Selina
Finance, our Second Charge Mortgages proposition
continues to gain momentum; I was particularly pleased
with the portfolio’s growth, with £217m in balances by the
end of 2024 (2023: £3m).
We also advanced our marketplace and partnership
development through agreements with H&T Pawnbrokers
and Fair Finance. These collaborations broaden our ability
to help fulfil more of our customers’ needs while driving
innovation and growth.
In Savings, we enhanced our ability to provide cost-
effective funding with an expanded product range that
included retail notice accounts, easy access accounts,
and a new, innovative savings proposition from Snoop.
Deposit balances grew 25% to £2.4bn by the end of 2024,
representing over 92% of our total funding. Our retail funding
platform continues to provide a strategic cost advantage
over wholesale alternatives, enabling the sustainable
growth of our lending propositions.
Snoop has firmly established itself as a strategic enabler,
with active users growing 25% during the year to 293,000,
of which 13% were Vanquis customers. Its credit score
feature has been well received by users, while the seamless
integration of its bill-switching capability into the Vanquis
app enhanced convenience and engagement. These
developments underscore our commitment to growth,
innovation, and customer centricity across our portfolio.
Additionally, key members of Snoop’s leadership team
have taken on senior roles across the Group, bringing their
expertise to strengthen our technology capabilities, drive
innovation, and accelerate our digital transformation.
Financial performance
Gross customer interest earning balances stabilised in the
second half of the year with managed, profitable growth
resuming in the fourth quarter. Balances stood at £2,308m
at the end of 2024, compared to £2,401m at the end of
2023. While new customer acquisition remained strong,
the overall reduction in receivables was driven by proactive
volume management to support profitable growth, along
with higher repayments from Credit Card customers.
Although growth in Second Charge Mortgages partially
offset the decline, lower balances were further impacted
by the Vehicle Finance Stage 3 receivables review and
a reduction in Personal Loans. Importantly, receivables
stabilised in the second half of 2024.
A Net Interest Margin (NIM) of 18.4% (2023: 18.6%) reflected
the growth of lower-risk Second Charge Mortgages,
which naturally yield a lower margin. This impact was
partially offset by repricing initiatives in Credit Cards
and Vehicle Finance.
Chief Executive Officer’s review
A pivotal year in the turnaround
of Vanquis
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
6
While stable underlying credit performance and lower
originations helped to mitigate impairment charges,
impairments increased 15% to £191.0m, primarily due
to the non-repeat of prior year provision releases and
reclassification of Vehicle Finance Stage 3 receivables to
post-charge-off assets and the absence of IFRS 9 provision
releases in 2023.
The early-stage implementation of our strategy has been
carefully managed, requiring necessary – and at times
difficult – decisions to position the business for long-term
success. By the end of 2024, these efforts delivered over
£64m in transformation cost savings, exceeding our £60m
commitment. We remain on track for an additional £15m of
savings in 2025.
Despite the trebling of FOS fees to £25m, primarily due to the
increase in unmerited CMC complaints, adjusted operating
costs for 2024 reduced 1% to £(302.3)m (2023: £(306.0)m).
The Group recorded an adjusted loss before tax of £(34.8)m
(2023: profit of £17.3m), primarily due to one-off costs
related to the operational turnaround and higher FOS fees.
The statutory loss before tax was £(136.3)m (2023: £(12.0)m),
including the accounting write-off of Moneybarn goodwill
and one-off transformation costs.
For more information see the Financial Review on page 35
Strategic execution
Driven by a passionate and talented leadership team, we
are executing a comprehensive strategy to transform our
business, achieve profitable growth and deliver sustainable
shareholder returns.
Leveraging technology and enhancing
customer experience
Throughout 2024, we leveraged technology to improve
customer experiences, integrating powerful money
management tools into our apps to drive convenience
and engagement. We also implemented a new telephony
system across all product areas, enhancing customer and
colleague interactions while driving operational efficiencies.
Strengthening risk management
We made significant advancements in risk management,
recalibrating our risk framework to ensure long-term, risk-
adjusted returns. Our risk appetite framework underwent a
thorough refresh, while a review of credit reference agency
data strengthened our underwriting capabilities. In Vehicle
Finance, we launched the Zoot credit decision system,
further refining risk management tools. To support portfolio
sustainability, we executed debt sales in Credit Cards as
part of a forward flow arrangement and completed two
Vehicle Finance debt sales in the second half of the year,
enhancing our debt management strategy.
Operational efficiency and cost savings
Disciplined cost management enabled us to achieve over
£64m in transformation cost savings by the end of 2024.
Our offshoring programme is now delivering run-rate cost
efficiencies. We also integrated AI into complaints handling,
automating complaint logging and reducing unprocessed
complaints to 5,600 at year end, down from 14,400 in
December 2023.
Technology transformation
Our technology transformation programme, Gateway,
is progressing as planned and remains on track for
completion by mid-2026. This unified, customer-centric
platform will enhance operational scalability, efficiency,
and customer experience. Gateway is expected to generate
£23–28m in annual cost savings, strengthening our financial
performance. Additionally, we are looking to deploy AI
across key areas, including fraud prevention, collections,
and customer interactions, to drive further automation
and efficiency.
Culture and leadership development
We are committed to making Vanquis a great place to
work, fostering a culture that empowers employees to
deliver empathetic, purpose-driven service. In 2024, we
strengthened our leadership team, making 22 key hires,
including a Chief Commercial Officer, Group General
Counsel, and Head of Operational Resilience. To enhance
colleague engagement, we introduced weekly CEO
vlogs, Stay Connected live events, and ExCo roundtables,
alongside leadership development programmes. This
contributed to improved ‘Great Place to Work’ survey results
at the end of the year, which demonstrate our positive
momentum on culture.
Complaints and Court of Appeal judgment
The conduct of certain CMCs remained a significant
challenge in 2024. While we welcome the new FOS CMC fee
structure we will closely monitor its impact and continue
working with regulators to combat the most egregious CMC
practices and reduce consumer harm.
We welcomed the Supreme Court’s decision to hear an
appeal against the Court of Appeal’s judgment in three
motor finance cases involving Close Brothers and FirstRand
Bank. We fully support a proportionate and fair resolution by
the Supreme Court.
As previously stated, Vanquis is not subject to the current
FCA Motor Commissions Review that has been focused on
discretionary commission arrangements (DCAs), which
Vanquis did not participate in.
Vanquis believes its position is differentiated on a number
of grounds versus the three cases subject to the judgment
and all customers signed a pre-contractual document that
confirmed a commission “will” be paid.
In accordance with IAS 37, the Group has not provided for
this matter, but has recognised a contingent liability.
For more information see the Contingent Liabilities note to the
financial statements on page 193
Outlook
Vanquis combines a strong social purpose with a
customer-first strategy, underpinned by a deep
understanding of underserved markets and the evolving
financial landscape. While challenges persist, our focus
remains on building a customer-centric business that
delivers long-term value for all stakeholders. We will
continue to prioritise continuous improvement and
sustainable profitable growth, and we are on track to
achieve our financial targets for 2025, including a low
single-digit ROTE.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
7
Investment case
The transformation of the business
Despite a challenging year as management executed the operational turnaround of our business, we have taken
meaningful action to deliver customer benefits, efficiency gains and laid the foundations for sustainable, profitable
growth in 2025 and beyond.
1
We have a compelling social purpose.
We know that financial security is a challenge for many
people, and that this has become a more acute issue in
recent years. Supporting our customers with a holistic
proposition is central to fulfilling our purpose.
Read more on pages 11 to 13
145
years’ experience in
consumer finance and
supporting communities
2
Serving customers in an underserved part of the
consumer lending market.
The consumer lending market is undergoing considerable
change, marked by economic headwinds, digital innovation,
regulatory evolution and a socially motivated drive towards
financial inclusion. We are well placed to capitalise on these
trends given limited competition.
Read more on pages 9 and 10
Customer numbers
1.69m
Target addressable market
in consumer lending
24m consumers
Source: Experian (Financial Strategy Segments tool).
This figure is the number of individuals aged 18+ in the
segments which comprise VBG’s chosen target market.
3
We have unique competitive advantages.
We benefit from a differentiated approach to our target
customers and have carefully developed propositions to respond
to their needs. Assets to help us meet these needs include the
Snoop money management app and lower funding costs driven
by the business being primarily funded through retail deposits.
Read more on page 13
94%
of users would recommend Snoop
Source: Snoop app survey.
92%
funded by retail deposits
4
Our management team is implementing our new
strategy at pace.
We have strengthened our leadership team with a number of key
hires. The resized Executive Committee has streamlined decision
making and aligned leadership with organisational goals.
Read more on pages 59 to 61
22
Senior Leadership Team
hires in 2024
5
We have potential to deliver substantial returns to our
key stakeholders.
We will measure our success through a series of
customer‑focused and financial measures. We project
an increase in ROTE to low single digits in 2025, low double
digits in 2026 and mid‑teens in 2027.
Read more on pages 11 to 15
2027 ROTE target:
‘mid-teens’
Chief Executive Officer’s review continued
Outlook continued
We are well progressed in strategically reshaping business, through optimising pricing and portfolio mix. We will continue
to deploy capital effectively to drive sustainable, profitable receivables growth and expand capital-light, fee-based
income through marketplace developments and new partnerships, delivering growth, quality, and returns for shareholders.
The headwinds we have faced mean we now expect to achieve our goal of sustainable mid-teens ROTE in 2027 and to
deliver double-digits ROTE in 2026.
We are excited about the opportunities that lie ahead and remain committed to making a meaningful positive impact
on the lives of our customers. I would like to thank all my colleagues for their unwavering dedication and hard work in
transforming our business, and our shareholders for their continued trust and support. Together, we will build a stronger
future for Vanquis and the communities we serve.
Ian McLaughlin
Chief Executive Officer
13 March 2025
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
8
Market overview
UK economy
In 2024, UK consumers faced financial strain as higher interest rates, increased tax
burdens, and inflation above historical norms continued to challenge household budgets.
Despite these pressures, consumers demonstrated remarkable resilience, adapting
their spending habits and financial strategies to navigate a difficult environment.
I have been with Vanquis for a
number of years. They are generous
with credit limit increases, providing
you handle your account responsibly.
Its customer service reps are
knowledgeable, helpful and kind.
Thank you, Vanquis, for being
a great credit card company!”
Vanquis customer
Insights from the Vanquis Financial Wellbeing Index - a
quarterly report analysing the real cost of living for workers
earning up to £40,000 per year - highlight the financial
challenges faced by this key demographic and Vanquis’
target market. Over the past two years, income for this
group has grown by 17%, while living expenses have
risen by 16%.
Encouragingly, recent trends show a shift towards a
quarterly surplus, with disposable income improving
to 2.9% in Q4 2024, up from a -2.8% deficit in Q3 2024.
However, financial pressures remain high, with 58% of
income allocated to essential costs, leaving little room for
savings or unexpected expenses. As the cost of essentials
continues to rise, tailored financial solutions are crucial to
supporting financial stability for those most affected by
the cost-of-living crisis.
Looking ahead to 2025, the UK economy is forecast to
experience modest growth, supported by easing but still
persistent inflationary pressures and a stable labour market.
Consumer behaviour is likely to remain cautious, reflecting
ongoing adjustments to the cost of living. While elevated
borrowing costs may challenge households early in the
year, anticipated interest rate reductions should provide
relief, supporting spending capacity and resilience.
Harnessing digital innovation
The consumer finance market continues to undergo
significant transformation, and digital innovation remains
pivotal in reshaping consumer finance. Advances in
AI, machine learning, and open banking are delivering
more personalised and effective customer experiences.
These innovations are helping households manage rising
expenses, offering tools that improve financial outcomes,
detect fraud earlier, and streamline customer journeys.
Regulation
The regulatory landscape has evolved significantly in recent
years, with a focus on consumer protection and responsible
lending. The FCA’s Consumer Duty framework, introduced
between 2022 and 2024, remains a priority, with regulatory
authorities now shifting their focus from implementation
to supervision. This provides an opportunity for Vanquis to
further embed high standards in its operations.
Vehicle finance commission disclosures matter
In October 2024, the Court of Appeal ruled that motor
dealers acting as credit brokers owe a fiduciary duty of
loyalty and impartiality to their customers. The judgment,
which stemmed from the cases of Johnson v FirstRand
Bank Ltd, Wrench v FirstRand Bank Ltd, and Hopcraft v
Close Brothers Ltd, raised the standard for disclosing
and obtaining consent for commissions beyond existing
FCA regulations. This introduced significant regulatory
uncertainty, pending a Supreme Court appeal.
In January 2025, ahead of the Supreme Court hearing
scheduled for April 2025, the Government intervened,
highlighting concerns over the potential economic impact.
With 80% of new vehicles in the UK purchased on finance,
the Treasury warned that the Court of Appeal’s decision
could restrict credit availability and harm the UK’s reputation
as a stable regulatory environment. The Government
emphasised the need for proportional remedies to mitigate
economic harm while balancing consumer protection with
the vital role of the vehicle finance sector.
Financial inclusion
Financial inclusion is an important element of a
well-functioning economy, ensuring that individuals have
access to essential financial products and services, such
as banking, credit, savings, and insurance. The Government
has created a Financial Inclusion Committee to support this
goal. The Committee’s objectives are to develop, coordinate,
and implement interventions that enhance financial
inclusion across the UK and advise the Government on its
broader financial inclusion strategy.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
9
Financial inclusion continued
Its focus areas include:
5 digital inclusion and access to banking services;
5 savings;
5 insurance;
5 affordable credit and problem debt; and
5 financial education and capability.
The financial sector plays a key role in fostering financial
inclusion by expanding access to responsible credit,
particularly for consumers with non-prime credit histories.
This effort is supported by innovative underwriting models,
tailored forbearance options, and partnerships with
Community Development Finance Institutions (CDFIs)
and credit unions.
Vanquis remains committed to advancing financial
inclusion through our purpose-driven approach. By
providing responsible credit solutions and supporting our
customers’ financial resilience, we aim to help more people
actively participate in the economy and build long-term
financial stability.
Market opportunity
The retail banking sector is navigating a challenging
environment, balancing regulatory changes, compliance
demands, and customer expectations, while transforming
business models and adopting new technologies. Against
this backdrop, government and industry discussions have
emphasised the importance of improving access to credit,
building savings, and enhancing financial resilience –
objectives that are central to Vanquis’ mission.
The non-standard credit market represents a significant
opportunity, with £2bn in unmet credit demand (source: L.E.K
Insights). As financial vulnerability increases, Vanquis is well-
positioned to address these needs through its differentiated
approach to credit, savings, and money management
solutions. Our lending activities are predominantly funded
by retail deposits, offering a stable and sustainable
foundation for growth.
Vanquis’ customer-centric strategy focuses on identifying
and profiling key customer groups based on shared
financial needs. This approach not only enhances our
understanding of existing customers but also enables
us to refine our offerings, strengthening areas where we
have strong market penetration. Additionally, it highlights
opportunities for market development where Vanquis has
both the expertise and a clear competitive advantage.
By expanding into multi-product solutions and leveraging
targeted innovation, we aim to meet evolving consumer
needs and drive sustainable growth. Our focus on
financial inclusion ensures that we remain aligned with our
customers’ needs while helping them build resilience. This
strategy positions Vanquis to adapt effectively to market
dynamics, support underserved communities, and create
long-term value for all stakeholders.
The chart below summarises our approach:
Existing
markets
New
markets
Existing products
Market penetration
Consolidating
existing
strengths
Market development
Growing
our customer
footprint
Product development
Building
a holistic
proposition
Diversification
No
current
plans
New products
Market overview continued
This is the best money I’ve spent
on an app. I love data and I really
appreciate the different filters and
views available. Easy decision to
renew my subscription next year.”
Snoop Plus customer
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
10
Strategy
Our customer-led strategy is based on our detailed
understanding of the lives and needs of those we serve.
We acknowledge and celebrate the diversity and
individuality of modern society, and have come to
appreciate that, amid this complexity, we can identify
sizeable cohorts of consumers who have core needs in
common. Three such core needs are:
5 help me borrow healthily;
5 help me feel in control of my everyday spending; and
5 help me build a financial safety net.
Our ethnographic studies, other qualitative research,
surveys, benchmarking and data science have together
helped us establish existing strengths to consolidate,
areas to develop and opportunities for business growth.
This has led us to the following articulation of our Group
purpose: ’to deliver caring banking so our customers
can make the most of life’s opportunities’.
We are working with customers to design future solutions
and improve their experience, using insights from experts
across the Group.
Market status quo
5 Parent/child relationship
5 Banking jargon
5 Customer feels judgement and bias
5 Bank’s timeframes
5 Customer as a profit source
Delivery of these themes will
be underpinned by a set of
progressive principles which
contrast markedly to the industry
norms, creating an organisation
that is intrinsically differentiated.
Strategic themes 2024 highlights Focus for 2025
Customer
centricity
5 Expanded lending propositions and launched innovative
Savings products to attract and retain customers.
5 Achieved a 4.2 Trustpilot rating, with 80% of reviews
at 5 stars.
5 Further refine targeted customer propositions.
5 Grow customer engagement to drive Credit
Card utilisation.
5 Improve customer experience.
Insightful risk
management
5 Recalibrated risk framework for sustainable,
risk-adjusted returns.
5 Strengthened underwriting with improved credit
reference agency data.
5 Further invest in our risk management capability
to differentiate in the market.
Efficient
organisation
5 Achieved greater than £60m in transformation cost
savings by the end of 2024.
5 Integrated AI-automated complaint logging and the
Genesys telephony system to reduce backlog and
improve efficiency.
5 Optimise capital and liquidity management.
5 Execute cost transformation.
5 Continue enhancing operational excellence, with
a focus on collections and fraud.
Digital, tech,
data and
analytics
5 Transformation programme, Gateway, on track for
mid-2026 completion.
5 Enhanced digital banking experience through scalable
tech solutions.
5 Continue with the technology transformation.
5 Execute data and analytics transformation with
the benefit of Snoop functionality.
A great people
proposition
5 Improved ‘Great Place to Work’ survey results. 5 Progress our collective ‘one Group’ culture.
5 Create an enabling environment that is supportive
of the strategy.
Our principles
5 Coach and empower
5 Simple language
5 Customer feels supported
towards resilience
5 Respect customers’ time
5 Customer integral to purpose
Our five strategic themes and objectives
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
11
Building on our purpose to deliver caring banking so our
customers can make the most of life’s opportunities,
we care about our customers’ needs, earn their trust,
empower them to make healthy financial choices and
support them when it matters.
Here is how we look to make a difference for our
customers at each stage of the journey:
Customer centricity: our customer journey
1
Awareness
We create awareness by meeting customers’
core needs.
2
Consideration
We have a differentiated value proposition that is
designed around customers’ core needs rather than
being product led.
3
Conversion and onboarding
We aim to provide a frictionless first contact and
onboarding journey, leveraging our evolving systems
capability and emerging technologies.
4
Addressing customers’ core needs
We empower our customers to borrow healthily, feel
in control of their everyday spending and build a
financial safety net.
5
Support when it’s most needed
We are committed to being there for our customers
in challenging times as well as good ones.
6
Deepening relationships
We present solutions which address our customers’
needs and encourage longer and deeper relationships.
7
Advocacy
We have a genuinely positive impact on our
customers, so they are much more inclined to
recommend us.
Our needs-led approach is naturally inclusive of anyone
who has the needs we have identified. We are open to
receiving custom from a diverse group and our target
market has a wide income range.
Business model
We are driven by our
customer‑centric approach
Our business model is the way that we generate
financial and non-financial value for customers
and broader stakeholders and starts with a deep
understanding of our customers’ needs, preferences and
behaviours, gained from extensive market research and
data analysis. This approach ensures that every decision
we take, from proposition development through to in-life
management, is guided by a clear understanding of
how it will benefit our customers.
The comprehensive analysis undertaken has revealed
the core needs of consumers and will allow us to build
a tailored proposition. This continuously deepening
understanding positions us more favourably to become
the preferred partner for our target customers.
Here is a glimpse into the work we have undertaken on
the core needs of those we serve:
Core needs:
Understanding our customers’ needs
Help me borrow healthily
We understand that healthy borrowing is based on
establishing quality, long-term relationships with customers.
Banking can often be filled with jargon, creating a trust gap
with customers who may feel judged in difficult situations.
We can help to bridge this gap by communicating with
customers in a language they understand, helping them
grasp their commitments so they can successfully manage
their debts over time. We encourage customers to reach out
to us if they need assistance, providing options, flexibility, and
a supportive environment where trust can be built without
fear of judgement.
Help me feel in control of
my everyday spending
We understand that money is simply a tool, and we recognise
that our customers may be managing tight finances or
seeking to maximise opportunities while prioritising peace of
mind, short-term goals, and quality interactions. Long-term
goals can often seem unattainable.
We can help by recognising that our customers’ emotional
needs are just as important, and we strive to offer tools
and services that provide customers with guidance and
personalised insights. Our aim is to simplify day-to-day
financial decisions and help customers achieve peace of
mind in their everyday lives.
Help me build a financial safety net
We understand that money is tight for many people, with
often little or no savings to fall back on when an unexpected
household expense hits. This can lead to increases in
indebtedness and take some time to recover from.
We can help people be prepared for the unexpected by
building a savings buffer, guiding them to unlock hidden
opportunities to save money, and offering motivation to get
started and keep going.
Our customer proposition
Underpinned by our values:
We care about people We pull together as a team
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
12
Our success in the marketplace will be determined by
the strength of our business model and the relative
advantages that are intrinsic to our organisation.
These strengths provide value to our customers,
colleagues, regulators, shareholders, suppliers and
communities, while reaffirming our commitment to
quality and innovation:
Lower funding costs
We benefit from lower funding costs compared to
many competitors, which is achieved through the
strategic use of retail deposits, thereby enhancing
our price competitiveness.
Financial efficiency
Our robust retail deposit base equips us with
the capability to align lower-cost deposits with
lending volumes, ensuring financial efficiency in the
matching of assets and liabilities.
Risk-based pricing
Our organisation has extensive credit experience
and capability in the markets we serve.
Broad product portfolio
Our broad product portfolio caters to a spectrum
of needs within our target market, providing
comprehensive financial solutions and fostering
opportunities for cross-purchase.
Snoop
Snoop, a unique capability, empowers our
customers to manage their finances effectively
and realise tangible savings.
Established brands
Our Vanquis and Moneybarn brands have earned a
strong reputation and trust within our target market,
reinforcing our market presence.
Our customer proposition
Our strengths
Our core products
5 Credit Cards – via the Vanquis brand.
5 Vehicle Finance – via the Moneybarn brand.
5 Second Charge Mortgages – via forward flow
agreements with Interbridge Mortgages and
Selina Finance.
5 Savings – fixed-term products, notice accounts,
cash ISAs, and easy access accounts.
5 Budgeting and money management – via Snoop.
We are also developing a marketplace proposition
where we partner with like-minded companies so
customers can access products and services our
core product suite does not meet. This includes:
5 partnering with H&T Pawnbrokers and Fair Finance
to support ‘not yet’ customers - those not eligible
for credit today but could be in the future; and
5 white-label partnerships where Vanquis acts as
the introducer but does not underwrite the loans.
The common denominator for the lending customers we
aim to serve is that they are susceptible to low financial
resilience, have relatively low levels of disposable income
and savings, and are using their opportunities to the limit
due to circumstances or priorities. Long-term goals often
feel so hard to reach that we observe people prioritising
short-term goals.
Our lending customers generally do not aim to
accumulate wealth, but to have comfort, stability
and peace of mind and to live life to its fullest. These
customers simply want ‘enough’ to remove some of the
barriers and burdens they face and to feel they have the
space to truly live, rather than just get by.
Ultimately, they are striving for peace of mind. Money is
intrinsically related to their goals as an enabler - it is a
means to an end for them.
We believe deeply that our customer proposition and
solutions can serve to empower the millions of people
in this position to get closer to achieving their goals by
borrowing healthily, feeling in control of their everyday
spending and building a financial safety net.
Our customer proposition is carefully designed and
developed to achieve success in our chosen markets,
leveraging our existing capabilities and adopting
enhancements and continuous improvements we make
on the basis of customer and colleague feedback.
Furthermore, we are capitalising on our ongoing
investments in technology to bolster our capabilities,
drive process efficiencies and add further value for our
customers. Collectively, these will move us to a position of
clearer differentiation and improved market positioning.
We find a better way We get the right things done
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Vanquis Banking Group plc Annual Report and Accounts 2024
13
Key performance indicators
A great people proposition
The key performance indicators (KPIs) represent the principal metrics reported to Group
management on a monthly basis to support the strategic decision making. Key performance
indicators have been updated to better align with areas of guidance.
1
Colleague
engagement score (%)
60%
22 23
68
53
Definition
A metric used to gauge colleagues’
engagement, motivation and commitment
towards their work.
Strategic focus
To continuously monitor and take action
to maintain and improve colleague
engagement.
Comment
The survey conducted in December 2024
reflects an improvement YoY, although
the score continues to be reflective of the
extent of change in the year.
24
60
3
Community
investment (£m)
£1.4m
22 23
1.4 1.4
Definition
The cash cost of contributions provided
to community projects or charities.
Strategic focus
Investments in the communities we serve
to improve our customers’ lives.
Comment
We continue to invest in our Foundation
partners to address the wide range of
social and financial inclusion issues that
are relevant to our customers and the
communities where we operate.
24
1.4
2
Senior management
gender diversity (%)
34%
22 23
33
35
Definition
The percentage of the Group’s senior
management who identify as female.
Strategic focus
Committing to the Women in Finance Charter
by achieving 40% target by 2026 through
delivering signatory actions to create a more
equal, inclusive and gender diverse workplace.
Comment
We continue to drive actions to support
better gender balance.
24
34
Key
Certain alternative performance measures (APMs) have been used in this report.
See pages 197 to 199 for an explanation of their relevance, definition and method of calculation. In the current year, the updated
management team has revised its focus to the APMs presented below; there have been no changes to these APMs in the year.
When a friend stands by you in a
moment in need, you never forget.
Vanquis did that when all other credit
facilities were unavailable to me.
Thank you, Vanquis.”
I can’t thank you enough for helping me
purchase my new car. Will definitely be
recommending you to family and
friends. 5* service, thank you.”
Vanquis on Trustpilot
4.2
Moneybarn on Trustpilot
4.4
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
14
6
Risk‑adjusted
margin (%)
11.7%
22 23
20.3
13.6
Definition
Total income, less impairment
charge for the 12 months ended
31 December as a percentage
of average gross customer
interest earning balances.
Strategic focus
Demonstrates the total income
after impairment charges.
Comment
The decline reflects higher
impairment charges and
higher interest expense in
2024 given the higher interest
rate environment.
8
Net receivables
(£bn)
£2.2bn
7
Gross customer interest
earning balances (£bn)
£2.3bn
22 23
1.9
2.2
22 23
2.2
2.4
Definition
Amounts receivable from
customers as reported on the
balance sheet
representing gross
receivables less impairment
provision calculated in accordance
with IFRS 9.
Strategic focus
Amounts receivable from
customers net of provisions.
Comment
Net receivables were broadly
stable year-on-year with the
reduction in gross receivables
offset by the reduction in
impairment provision driven
by the Vehicle Finance Stage 3
receivables review.
Definition
Interest earning amounts
receivable from customers.
Strategic focus
Amounts receivable
from customers.
Comment
Gross customer interest
earning balances reduced
year-on-year driven by
proactive volume management
to drive sustainable, profitable
growth, along with subdued
customer spending and higher
repayments from Credit Card
customers. The Vehicle Finance
Stage 3 receivables review and
reduction in Personal Loans
also reduced balances, which
was partially offset by growth in
Second Charge Mortgages.
10
Tier 1 ratio
(%)
18.8%
22 23
26.4
19.9
Definition
The ratio of the Group’s Tier 1
capital to the Group’s risk-
weighted assets measured in
accordance with the Capital
Requirements Regulation (CRR).
Strategic focus
Demonstrates the Group’s
capital resources relative to
regulatory minimum levels.
Comment
The Group maintained a robust
capital position with a CET1 ratio
of 18.8%. The Group is guiding
to a Tier 1 ratio of greater than
17.5% in 2025.
9
Adjusted cost:
income ratio (%)
65.9%
22 23
59.9
62.6
Definition
Adjusted operating costs as a
percentage of total income.
Strategic focus
Efficiency of the business
expressed as the adjusted
cost base as a proportion of
income generated.
Comment
The rising trend reflects reduced
income partly offset by lower
costs. In 2025 and going forward,
this KPI will change to statutory
cost: income ratio and the
Group is guiding to a high 50s
percentage cost: income ratio
in 2025, a low 50s percentage
ratio in 2026, and a 49% or lower
ratio in 2027.
11
Liquidity
coverage ratio (%)
359%
22 23
1,139
1,263
Definition
A regulatory measure that
assesses net 30-day cash
outflows as a proportion
of high-quality liquid
assets (HQLA).
Strategic focus
Demonstrates the
Group’s ability to meet its
short-term liabilities.
Comment
The Group continues to
hold a significant level of
excess liquidity.
Insightful risk management ‑ Efficient organisation ‑ Digital, tech, data and analytics
24
11.7
24
2.2
24
2.3
24
65.9
24
18.8
24
359
5
Net interest
margin (%)
18.4%
2322
21.2
18.6
Definition
Interest income less interest
expense for the 12 months
ended 31 December as a
percentage of average
gross customer interest
earning balances.
Strategic focus
Demonstrates the interest
income generated less
interest expense.
Comment
The decline reflects the
higher interest expense in
2024 given the higher interest
rate environment. The Group
is guiding to greater than
17% NIM in 2025 and greater
than 16% NIM in 2026 driven
by the continued mix effect
from growth in Second
Charge Mortgages.
4
Adjusted ROTE
(%)
(7.0)%
22 23
Definition
Adjusted return on tangible equity
(ROTE) is defined as adjusted
profit after tax as a percentage
of average tangible equity for the
12 months ended 31 December.
Strategic focus
Demonstrates how well the
Group’s returns are generated
from its tangible equity.
Comment
The reduction reflects the adjusted
loss in 2024. In 2025 and going
forward, this KPI will change to
statutory reported ROTE and the
Group is guiding to a low single
digits percentage ROTE in 2025,
a low double digits percentage
ROTE in 2026, and a mid-teens
percentage ROTE in 2027.
24
21.8
1.9
(7.0)
24
18.4
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
15
Through the provision of
responsible and sustainable
products and services, our
aim is to support the everyday
spending of our customers, help
build their savings and promote
healthy borrowing.
How we engage with customers
Customer surveys and focus
groups; market research and data
analysis; applications and other
website tools; customer complaint
processes; engagement with
money/debt advice partners; and
proposition development.
What matters to our customers
Customer service; affordability
and price; data protection;
flexibility; convenience and ease of
experience; and help when things
go wrong.
The long-term success of the
Group requires us to attract
and retain the best talent by
providing a workplace culture
that is meritocratic, supportive
and inclusive.
How we engage with colleagues
Colleague forums; colleague
engagement surveys; wellbeing
surveys; diversity and inclusion
affinity groups; all colleague
events; team meetings; internal
communications channels;
training and development; and
engaged line management.
What matters to our colleagues
Career development opportunities;
health, safety and wellbeing;
reward and recognition; diversity
and inclusion; positive workplace
culture; and communication.
As a dual regulated firm, it is
important that we maintain
proactive, open and constructive
dialogue with our regulators and
policymakers so they understand
the needs of our customers
and the role the Group plays in
their lives.
How we engage with regulators
and Government
Regular supervisory meetings;
trade association membership;
participation in multi-stakeholder
forums; contributing to public
consultation; and engagement
with charities, NGOs and
other partners.
What matters to our regulators
and Government
Ongoing regulatory compliance;
control and supervision; delivering
fair customer outcomes; payment
of taxes; financial inclusion; and
community investment and
social mobility.
Customers Colleagues
Our stakeholders
This section provides an overview of Vanquis’ key stakeholders, how
we engage with them and the issues/themes that matter to them.
Effective engagement with our stakeholders enables our business to understand their views and concerns, and ensure
that these are factored into our decision-making processes. This enables us to provide our customers with products and
services that meet their needs, deliver on our purpose and generate value for all stakeholders.
Details relating to how the Vanquis Banking Group plc Board has sought to ensure that it has factored stakeholder views
and inputs into its decision making are set out in the Section 172(1) Statement on pages 44 and 45 of this report.
Regulators and Government
Easy to apply for, quick reply
and once your application
has been approved your card
comes through really quick.
The app is easy to use, and
you are kept up to date on
your spending and payments
and all you need to know.”
Vanquis customer
Find out more on our website:
vanquisbankinggroup.com
Sustainability
More on page
38
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
16
Haven’t been with Vanquis for
long but from my early
experience it’s been great.
Instant approval, decent mobile
app and credit limit increases far
quicker than I expected. If used
responsibly this card is brilliant.”
Vanquis customer
Find out more on our website:
vanquisbankinggroup.com
Our institutional and retail
shareholders are the owners of
Vanquis, and we aim to provide
them with clear and accurate
information on our strategy and
business model, and deliver
sustainable, profitable growth
based on our understanding of
our customers.
How we engage
with shareholders
Annual Report and Accounts;
results announcements, trading
updates and presentations;
investor meetings; conference
attendance; and engagement
with rating agencies.
What matters to
our shareholders
Financial performance; growth
potential; new product/
partnership opportunities; cost
management; risk management
and reporting; and accessible
information.
Our suppliers play a key role
in the way we operate and in
the delivery of products and
services to our customers, so it
is important that we build strong
relationships with them.
How we engage with suppliers
Due diligence processes; supplier
relationship management
framework; and ongoing
supplier feedback.
What matters to our suppliers
Financial performance; prompt
payment; regulatory compliance
and data protection; and
working with a sustainable and
responsible company.
Our purpose inspires us to
support children and young
people in the communities
we serve through colleague
volunteering, community
investment, and long-term
partnerships.
How we engage
with communities
Charitable and community
partnerships; engagement with
schools and colleges; colleague
volunteering; and participation in
conferences and seminars.
What matters to
our communities
Sustainable community
investment; financial and social
inclusion; volunteering; and
communication.
Shareholders Suppliers
Communities
More on page
38
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Vanquis Banking Group plc Annual Report and Accounts 2024
17
Sustainability continued
Our sustainability strategy
Our sustainability strategy, which is aligned with our purpose to
deliver caring banking, ensures that we manage and report on the
Environmental, Social and Governance (ESG) issues that are most
material to our business activities.
As such, a key priority of this strategy is to operate our business of providing our customers with products and services in
a responsible manner. This ensures that we are focused on delivering great outcomes for our customers, from proposition
development, through to in-life management, and in the event they experience financial difficulties. The second area of our
sustainability strategy relates to acting responsibly and sustainably in all our other stakeholder relationships. This underlines
our commitment to: create an inclusive and engaging workplace for our colleagues; support the communities we serve
through the Vanquis Banking Group Foundation; ensure that we treat our suppliers fairly; conduct our business activities in
an ethical manner; and take action on climate change.
Our purpose to deliver caring banking so our customers can make the
most of life’s opportunities is at the heart of why our business has existed for
almost 145 years. It underpins our customer-led strategy which is born out of
a detailed understanding of the lives and needs of the 1.69 million customers
we serve. So, whether it’s helping people to borrow healthily, enabling them
to control their spending or supporting them to build a financial safety net,
we empower customers to make the right financial choices and support
them when it matters. It also places great emphasis on the importance of
the ESG agenda, in particular, ensuring that we focus on ‘social’ and respond
to the needs of our colleagues and communities.”
Ian McLaughlin
Chief Executive Officer
Materiality assessment
To help us to identify and prioritise the ESG risks/issues that
are most material to our business and our key stakeholders
we periodically undertake a materiality assessment. Our
most recent assessment was undertaken to support the
internal organisational changes that were implemented
throughout 2024. This exercise determined the importance
of supporting our customers, colleagues and communities,
and affirms our decision to ensure that the focus of our
sustainability strategy is on the ‘S’ in ESG.
Our policies
To support our business activities and the embedding of
our sustainability strategy, we have a range of corporate
policies in place which set the codes of conduct, controls,
processes, and requirements for all colleagues, suppliers,
and contractors within and working with our Group.
These cover issues such as inclusion and diversity,
modern slavery and human rights, and environmental
management and can found, along with other policies,
at www.vanquisbankinggroup.com.
Our sustainability performance at a glance
Measure 2024 performance
Customers
Level of customer satisfaction (Trustpilot score) Credit Cards: 4.2/5 (2023: not available).
Vehicle Finance: 4.4/5 (2023: not available).
Total number of customer complaints Total number of complaints: 87,561 (2023: 69,609).
Colleagues Workplace culture and colleague engagement Great Place to Work Trust Index score: 60% (2023: 53%).
Communities Amount invested to support our communities £1.4m invested to support our Foundation (2023: £1.4m).
Suppliers Prompt payment of suppliers 97% of suppliers paid within 30 days (2023: 92%).
The environment
Absolute scope 1 and 2 GHG emissions 2024 Scope 1 and 2 GHG emissions: 500 tCO
2
e (2023: 806 tCO
2
e),
a reduction of 38%. Total scope 1 and 2 (and associated scope 3)
GHG emissions: 647 tCO
2
e (2023: 1,039 tCO
2
e), a reduction of 38%.
Climate-related financial disclosure Refer to pages 22 to 34 for more information.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
18
Supporting our customers
Through our commitment to ensure that every decision we
take is guided by a clear understanding of how it will benefit
our customers, no matter where they are on their customer
service journey with us, we recognise that we have a
responsibility to support them if they find themselves in
financially challenging situations. This is why we ensure that
our customer-facing colleagues are trained in recognising
signs that might indicate a customer could be classified as
’vulnerable’, or may be facing financial difficulty, whether in
the short or long term.
We are also able to draw on the expertise from the
longstanding relationships we have developed over the
years with organisations in the money advice and financial
education sectors. By supporting these organisations,
our customers can also access free independent and
personal financial advice and support if they are facing
financial strain.
Working with Plain Numbers
Vanquis Banking Group joined Plain Numbers, an
organisation dedicated to supporting customers’
who struggle with numbers, as an Implementation
Partner in March 2023. Together, we work on improving
consumer outcomes through the provision of clear and
understandable financial communications. Throughout
2024, colleagues have continued to participate in Plain
Numbers’ practitioner training, which brings to life the
numerical struggles much of the public must contend with
when making financial decisions. We also partnered with
TV mathematician and National Numeracy Ambassador
Bobby Seagull to launch a series of simple video guides
for the most misunderstood financial terms, such as
compound interest, AER and APR. The guides were launched
on National Numeracy Day on Wednesday 22 May 2024 and
were certified by Plain Numbers.
Working with The Money Charity
The Money Charity specialises in improving financial
capability. It does this by providing information, advice and
guidance to people of all ages, so that they can manage
their money well and increase their financial wellbeing.
Vanquis has partnered with the charity since 2013, and
during this time our funding has enabled it to deliver 3,056
hours’ worth of financial education workshops to almost
76,500 young people. Throughout 2024, our support for
The Money Charity enabled it to deliver 306 workshop hours
to 6,560 young people with over half of these delivered to
groups of ‘disadvantaged’ young people. The aim of these
workshops, aligns with our purpose, as they provide young
people with building blocks to sound money management,
helping them to develop the skills, knowledge, attitudes and
behaviours they will need so they can make the most of
their money throughout their lives.
Treating suppliers fairly
Vanquis is committed to the prompt payment of our
suppliers, and endeavours to pay all invoices within
agreed terms and in accordance with requirements of
the UK Government’s Prompt Payment Code. We have
been a signatory to this Code for almost a decade and
are committed to paying all suppliers within 60 days of
receiving an invoice, and paying 95% of invoices from small
suppliers within 30 days.
Percentage of suppliers paid in 60 days in 2024 100%
Percentage of suppliers paid in 30 days in 2024 97%
We are also committed to engaging with all our suppliers
in a responsible manner and are opposed to slavery and
human trafficking in both our direct operations and the
indirect operations of the supply chains we have. As such,
the Group will not knowingly support or do business with
any organisation involved in slavery or human trafficking.
Our most recent modern slavery statement, as well as our
Group-wide Human Rights and Modern Slavery Policy, can
all be found on www.vanquisbankinggroup.com.
Colleagues
A more diverse and inclusive workplace culture
At Vanquis, we want our colleagues to feel they belong,
be themselves and reflect the customers and communities
we serve. This is not only good for our business, but also
the right thing to do for society.
Our diversity and inclusion programme is driven to large
extent by our five affinity groups which are led by our
colleagues and focus on the following themes: disability,
LGBTQ+, gender balance, ethnicity and social mobility.
In 2024, these groups collaborated to deliver various
events and activity. Notably, the Gender Balance Group
worked with Jayne-Anne Gadhia to host a ‘Time to Talk’
session on International Women’s Day which emphasised
the importance of inclusion for everyone. In response to
the summer riots, our Ethnicity Group sought to support
colleagues affected by the events they witnessed in their
communities and on television. Throughout the year, the
Disability Group provided valuable advice to the business
on creating an inclusive workplace for colleagues with
disabilities and long-term conditions. Additionally, we
hosted a webinar with the Bank Workers Charity during
Carers Week, highlighting the challenges faced by carers
and the support available through the charity.
Our commitment to improve gender diversity across
the Group is underpinned by our commitment to the
HM Treasury Women in Finance Charter. We became a
Charter signatory, a government initiative to improve
gender diversity in senior positions within the financial
services sector, in March 2019, and committed to having 40%
female representation in the Group’s senior management
population by December 2026. As of 31 December 2024,
we had 34% female representation in this population. The
annual bonus scheme for our executive directors is linked
to our performance against our Women in Finance Charter
target (see our Directors’ Remuneration Report on pages 91
to 113 for more information). Further diversity and inclusion
information which relates to the FCA’s Listing Rules 6.6.6(9)
and 6.6.6(10) is set out in the Nomination Committee Report
on pages 79 to 81.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
19
Sustainability continued
2024
2024 community investment figures
2023
Cash £1,171,597
Management costs £114,549
Value of colleague time £77,271
Total £1,363,417
Cash £1,152,579
Management costs £169,231
Value of colleague time £62,225
Total £1,384,035
Our sustainability strategy continued
Colleagues continued
A more diverse and inclusive workplace culture continued
As of 31 December 2024, we had the following gender split:
Total No. of women % of women No. of men % of men
Board membership 10 4 40% 6 60%
Executive committee 7 2 29% 5 71%
Senior leaders 110 37 34% 73 66%
All Group colleagues 1,269 587 46% 682 54%
We engage with our colleagues on an annual basis
to collect information on other diversity and inclusion
categories
1
. This information is summarised below:
5 16% (2023: 18%) of colleagues informed us that they had
a disability or long-term health condition.
5 17% (2023: 18%) of colleagues informed us that they
come from a Black, Asian, other White or minority
ethnic background.
5 5% (2023: 5%) of colleagues informed us that they were
part of the LGBTQ+ community.
5 15% (2023: 11%) of colleagues have caring responsibilities.
1 This data is based on colleagues’ voluntary self-declaration via our
December 2024 Great Place to Work colleague engagement survey which
accounts for 81% of the Vanquis Banking Group workforce.
During 2024, Vanquis Banking Group was awarded the
Silver Standard for LGBTQ+ Diversity, Equality and Inclusion
(DE&I) excellence in financial services in its first assessment
by LGBT Great. In addition, the Group is a member of the
Business Disability Forum and has completed its Disability
Smart Audit to identify areas for prioritisation and focus with
a view to improving disability inclusion across the business.
Engaging our colleagues
We keep our people engaged and informed via regular
Group-wide leadership and colleague communications
and broadcasts. Alongside this, colleagues are encouraged
to develop a sense of community using a variety of tools,
including our ‘Stay Connected’ intranet site. This enables
them to host a range of events, from quizzes to book clubs,
and baking sessions to wellbeing talks.
In December 2024, we, again utilised the Great Place to
Work model in our annual colleague engagement survey.
The key score from this is as follows:
5 60% (2023: 53%) Great Place To Work Trust Index score
While this score shows improvements compared to 2023,
they continue to reflect the levels of uncertainty and
change that colleagues have experienced during 2024.
The Vanquis Banking Group Foundation
Vanquis is committed to improving the lives of children and young people in the communities where our customers live
and work by providing them with access to education, social and financial inclusion, and economic development
opportunities. We deliver on this commitment through the Vanquis Banking Group Foundation which we launched in 2023.
The vision for the Foundation is to build a future where every child and young person in the UK is supported to achieve their
full potential, contributing to a brighter future. During 2024, we did this by focusing on three key strategic pillars:
Education Community Financial inclusion advice
We back programmes that boost literacy
and numeracy rates and offer insights into
the world of work and the skills needed to
secure opportunities.
We support social and financial inclusion
in the communities where we operate.
This work funds a range of money advice,
debt management and financial education
organisations which support our customers
and other consumers to make the most of
their financial options.
In 2024 Vanquis invested £1.4m in the communities we serve via our Foundation.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
20
Supporting children and young people to develop
literacy, numeracy and employability skills
We believe that by supporting the education agenda we
can help the children and young people who live and
work in the many communities we serve across the UK
to make the most out of life’s opportunities. Through our
Foundation, we have developed an education programme
to help children and young people to acquire or boost their
skills and aspirations in order to participate in society and
progress in education, the workplace or the communities
they live in.
Throughout 2024, we worked with and supported
organisations such as School-Home Support, National
Numeracy, the Social Mobility Business Partnership, Leading
Children and others to: provide support for programmes to
boost the literacy and numeracy of children, young people
and other groups; and offer children and young people
insights into the world of work and the skills that will help
them secure opportunities, including employment.
National Numeracy Day 2024
On 22 May 2024, we were a Lead Supporter of National
Numeracy Day, which aims to showcase numeracy in
everyday life and help the nation to build confidence when
working with numbers, for the seventh year running. On the
day itself, and throughout May, our colleagues engaged
in a range of activities which highlighted how essential
numeracy skills are for navigating modern life, from
managing personal finances to excelling in the workplace.
This included engaging with schools to deliver numeracy
assemblies and classroom activities to support children to
think and be more confident about using numbers in the
real world, building on our long-standing relationship with
the Professional Darts Corporation to link up with National
Numeracy to deliver a Bullseye Maths Challenge in honour
of the day to schoolchildren at The O2 in London, and
teaming up with National Numeracy Ambassador Bobby
Seagull to create some videos which helped to explain
some common financial terms. We also hosted a ‘Big
Number Natter’ for our colleagues which provided them
with an opportunity to talk about their experience with
maths, and get advice and support on becoming more
confident with numbers.
Ensuring children are able to be in school,
ready to learn
We are incredibly proud of the partnership we have with
School-Home Support (SHS), whose work we have funded
in Bradford and Kent since 2016. Our funding has enabled
SHS practitioners to work with both parents/carers and
children to make an assessment of the key challenges they
are facing, and which are acting as a barrier to children
attending school. The approach that the practitioners take
looks beyond the school gate and works with families to
understand and overcome the root causes of absence
and improve attendance and participation levels. Our
partnership has also sought to support families who
face financial hardships as a result of the ongoing cost-
of-living crisis, coupled with increasingly stretched local
services. Through the School Uniform Fund we established
with SHS in 2022, its practitioners can provide a child with
all the clothing they need to feel comfortable at school.
The work that SHS delivers is transformative and delivers
lasting impacts for children, young people and families.
This is why we were delighted that our partnership was
highly commended under the Banks and Financial Services
category at this year’s Business Charity Awards 2024.
Supporting students with work insight and skills
Through our longstanding partnerships with the Ahead
Partnership and Social Mobility Business Partnership, and
the relationships we have with schools and colleges in the
communities surrounding our offices in Bradford, Chatham,
London and Petersfield, we have delivered a number
of sessions which engage with young people who face
barriers or are underrepresented within our workforce, to
build their aspirations, skills and careers knowledge and
support them to think about what steps they could take
towards realising their future job prospects. During the
year, over 60 colleagues supported almost 200 students by
working with our partners to deliver sessions on the roles
that exist within our sector, goal setting and action planning,
interview preparation and practice and CV writing.
Community investment
We aim to support local community groups to address
a wide range of social and financial inclusion issues that
are relevant to our customers and the communities where
we operate. We do this via the community foundation
partnerships we currently have with Bradford District
Community Foundation, Hampshire and Isle of Wight
Community Foundation, Kent Community Foundation
and London Community Foundation. By working with our
community foundation partners, we have the confidence
that we are directing our funding to the places where it is
needed the most. In 2024, through our four partnerships in
Bradford, Kent, London and Hampshire, we provided grants
of between £2,500 to £10,000 to grass roots community
organisations. The grants will help organisations to
address a wide range of complex issues, such as reducing
inequality, exclusion and disadvantage for children and
young people.
Bradford 2025 City of Culture
Having been based in Bradford since 1880, we are proud to
support the district in its capacity as the UK’s City of Culture
in 2025. We were named as the first official delivery partner
for Bradford 2025 back in 2022, and this will see us support
the development of the cultural programme and ensure
that it leaves a legacy for years to come. The impact that
this designation will have on the Bradford district cannot
be underestimated, in terms of driving inward investment,
boosting local economic growth and delivering a lasting
social and cultural legacy, particularly for young people,
and that’s something we are really proud to be part of.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
21
Sustainability continued
The Vanquis Banking Group Foundation
continued
Colleague volunteering
All our colleagues can take two days’ volunteering leave
every year which helps them to engage with our purpose
to deliver caring banking and support the causes they care
most about as well as the community initiatives that are
supported by the Group. Throughout the year, colleagues
volunteered 2,546 hours (2023: 1,696 hours) in support of
a range of community projects and initiatives. This has
enabled our colleagues to give up their time to volunteer
as charity trustees and treasurers and Parent Teacher
Association members or to take part in tree planting
initiatives. It also gives our colleagues the opportunity to
take part in team challenges which are facilitated by the
business. For example, during 2024, 15 colleagues from our
technology and change team volunteered 109 hours to
build a new adventure play area at Clayton Village School
in Bradford and 30 colleagues from our Vehicle Finance
business in Hampshire volunteered around 200 hours to
redecorate Connor’s Toy Library, a resource at St. Mary’s
Hospital, Portsmouth, which provides support for families
with children with Down syndrome.
Our Foundation plans for 2025
Throughout 2024, as our focus has been on progressing the
turnaround of our business and delivering cost savings, we
took the opportunity to make some changes to the Vanquis
Foundation. We will continue to support children and young
people through our existing education partnerships to
develop the literacy, numeracy and employability skills they
need to achieve their potential. However, we will, in 2025,
reduce the number of community foundation partnerships
we support from four to one. This will see us continue to
support the Bradford District Community Foundation to fund
grass roots community organisations across the Bradford
district to address a range of social inclusion issues. We
will also continue to engage in colleague volunteering and
fundraising activities.
Climate-related disclosures
Playing our part in tackling climate change is aligned with
our purpose to deliver caring banking which is why we are
committed to ensuring that we understand the risks and
opportunities that climate change presents to our business
and key stakeholders.
We recognise that the growth and sustainability of our
business depend on the resilience of our operations, our
supply chains, and the communities where our customers
and colleagues live and work. As such, we aim to minimise
our environmental impacts and work with others to take
action on the issue of climate change. Our commitment to
do this is underpinned by our ambition to achieve net zero
carbon dioxide emissions from 2021 levels by 2040. In doing
so, we acknowledge that it is not possible for anyone to get
to net zero alone. Interventions by Government in terms of
policy and to support the development of new technologies
and initiatives are vital to creating a low carbon economy
and enabling everyone to transition to net zero in a fair and
just way. Without good progress on these issues, achieving
our climate ambitions will be challenging. Companies from
all sectors and all their stakeholders must work in concert
in order to make this transition a reality.
Climate-related financial disclosures
compliance summary
Vanquis Banking Group plc confirms that it has made
climate-related financial disclosures for the year ended
31 December 2024 that it believes are consistent with the
four pillars and 11 recommended disclosures of the Task
Force on Climate-related Financial Disclosures (TCFD)
(as defined in the FCA’s Listing Rule 6.6.6(8), the Climate-
related Financial Disclosure (CFD) Regulations 2022 and
the UK Companies Act (that is, sections 414CB(2A)(a to
h)). The text and table below and overleaf outlines how
the 11 recommendations have been addressed within the
Strategic Report.
TCFD pillars TCFD recommended disclosures
Strategic Report section
where disclosures comply
with the Companies Act
Strategic Report section
where further details comply
with the FCA’s Listing Rules
Governance – Disclose
the organisation’s
governance around
climate-related issues
and opportunities.
Describe the Board’s oversight
of climate-related risks and
opportunities.
Climate governance (see pages
23 and 24)
Effective stakeholder communication
(see pages 70 to 74)
Non-financial sustainability information
statement (see pages 46 and 47))
Governance – How the Board
oversees the assessment and
management of climate-
related risks and opportunities
(see page 23)
Describe management’s role in
assessing and managing climate-
related risks and opportunities.
Climate risk management (see pages
31 and 32)
Risk management and principal risks
(see pages 48 to 55)
Governance – Management’s
roles and responsibilities in
assessing and managing
climate-related risks and
opportunities (see page 24)
Our sustainability strategy continued
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
22
TCFD pillars TCFD recommended disclosures
Strategic Report section
where disclosures comply
with the Companies Act
Strategic Report section
where further details comply
with the FCA’s Listing Rules
Strategy – Disclose the
actual and potential
impacts of climate-
related risks and
opportunities on the
organisation’s business,
strategy and financial
planning where such
information is material.
Describe the climate-related risks
and opportunities the organisation
has identified over the short,
medium, and long term.
Our sustainability strategy (see page 18)
Non-financial Sustainability Information
Statement (see pages 46 and 47)
Our climate strategy, time
horizons, and climate-related
risks and opportunities
explained (see pages 22,
24 and 25)
Describe the impact of climate-
related risks and opportunities
on the organisation’s businesses,
strategy, and financial planning.
Climate-related risks and opportunities
(see pages 24 and 25)
Our climate strategy and
business impacts (see pages 22,
24 and 25)
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2°C
or lower scenario.
Climate-related scenario analysis (see
pages 26 to 30)
Scenario analysis and the
resilience of our strategy
(see pages 26 to 30)
Risk management
– Disclose how the
organisation identifies,
assesses and manages
climate-related risks.
Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Climate risk management (see pages
31 and 32)
Risk management and principal risks
(see pages 48 to 55)
Risk management – Our
processes for identifying and
assessing climate-related risk
(see pages 31 and 32)
Describe the organisation’s
processes for managing climate-
related risks.
Climate risk management (see pages
31 and 32)
Risk management and principal risks
(see pages 48 to 55)
Risk management – Our
processes for monitoring and
managing climate-related risk
(see pages 31 and 32)
Describe how processes for
identifying, assessing, and
managing climate-related
risks are integrated into the
organisation’s overall risk
management.
Climate risk management (see pages
31 and 32)
Risk management and principal risks
(see pages 48 to 55)
Risk management – How we
integrate climate-related risks
into our risks management
policies and processes (see
pages 31 and 32)
Metrics and targets –
Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.
Disclose the metrics used by the
organisation to assess climate-
related risks and opportunities
in line with its strategy and risk
management process.
Our sustainability performance
at a glance (see page 18)
Climate-related metrics and targets
(see pages 32 and 33)
Non-Financial Sustainability Information
Statement (see pages 46 and 47)
Metrics and targets – Overview
of our metrics (see pages
32 and 33)
Disclose scope 1, scope 2, and, if
appropriate, scope 3 greenhouse
gas emissions (GHG), and the
related risks.
Metrics and targets – Our scope 1,2 and
3 GHG emissions (see page 33)
Metrics and targets – Our
scope 1,2 and 3 GHG emissions
(see page 33)
Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets.
Our sustainability performance
at a glance (see page 18)
Climate-related metrics and targets
(see pages 32 and 33)
Metrics and targets – Overview
of our metrics (see pages
32 and 33)
Governance
How the Board oversees the assessment and management of climate-related risks and opportunities
The Vanquis Banking Group plc Board has ultimate accountability for all risks, including climate-related risks and
opportunities. It also has overall accountability for the delivery of the Group’s ESG strategy and regularly reviews performance
in accordance with this strategy. The Board fulfils this accountability by receiving annual updates at its meetings. It is also
supported by the Board’s other committees (see below). The Board has a range of environmental experience, as set out on
page 75 of the Vanquis Banking Group plc Annual Report and Financial Statements 2024, with 90% of the Board classified
as having skills and experience in this area.
Board Audit Committee Remuneration Committee Risk Committee
The Board is responsible for promoting
the long-term success of Vanquis
Banking Group and delivering sustainable
value for our shareholders. This includes
reviewing the Group’s climate change
objectives as part of a broader review of
the Group’s purpose/ESG strategy and
setting the Group’s risk appetite, which
includes risks related to climate change.
Supports the Board in
reviewing the climate-related
disclosures made by the
Group in its Annual Report and
Financial Statements.
Assists the Board in its
oversight of its remuneration
policies and practices in
relation to any ESG-related
metrics, including those
that relate to the climate
change agenda.
Assists the Board by taking
an active role in defining risk
appetite, and monitoring the
risk management and internal
control systems across the
Group. This includes any
climate-related risks.
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Vanquis Banking Group plc Annual Report and Accounts 2024
23
Governance continued
Management’s roles and responsibilities in assessing
and managing climate-related risks and opportunities
The Group’s CEO is accountable for management oversight
in relation to the progress being made by the Group in
managing its strategic ESG objectives, including those
that relate to climate change. In addition, other Executive
Committee members, have responsibilities for delivering
specific activities which support the Group to assess
and manage climate-related risks and opportunities. For
example, the Group’s Chief Risk Officer chairs the cross-
functional Climate Risk Committee (CRC) which provides
guidance and direction, on an annual basis, for the
identification, assessment and management of climate
change-related risks and opportunities that are material to
the Group and its stakeholders. This supports the business
in meeting its reporting obligations.
Internal audit
Our Internal Audit function periodically reviews the controls
that are in place to manage and/or mitigate climate
related risks. This was last done in 2023.
Remuneration
The remuneration of our executive directors continues to be
partly linked to our progress in meeting climate risk-related
reporting requirements and working towards the setting
of longer-term carbon reduction targets, via their annual
bonus plan. There is also an ESG underpin in the Group’s
Restricted Share Plan (RSP), whereby awards are granted
annually to executive directors in the form of conditional
awards or options. For more information, refer to the
Directors’ Remuneration Report on pages 91 to 113.
Our climate strategy
Our strategy is to ensure that climate-related risks are
integrated into our business strategy and decision making
in areas such as operational resilience, customer service,
and supply chain management, and, where appropriate,
capital allocation. In order to deliver on our strategy, our
approach is to identify climate-related risk factors and
opportunities which have potential to impact our business
activities over short-term, medium-term and long-term
time horizons. In doing this, we consider the climate-related
risks and opportunities in the context of the products and
services we provide to our customers, as well as those that
relate to our operation and infrastructure.
Our time horizons explained
We use the following time horizons to classify climate-
related risks and opportunities, aligned to our strategy and
business plans. These time horizons are consistent with
other risks that we manage; however, we acknowledge
that the time horizon over which climate-related risks will
manifest themselves may be a significantly longer time
horizon than we experience with other risk types:
5 Short term: Zero to one year – Accounts for any
climate-related risks and opportunities that are deemed
material to our annual reporting cycle and associated
operational activities.
5 Medium term: One to five years – Accounts for the
financial and operational planning we use, as well as
the goal date for the science-based targets we set in
January 2024.
5 Long term: Five or more years – Takes account of
whether the transition to net zero is progressing or
failing, and whether exposure to any physical risks is
being adequately priced in.
Climate-related risks
We continue to use two major risk categories: physical
risks (which include acute, extreme weather events, and
chronic, long-term climate shifts in the UK), and transition
risks (which relate to regulatory changes, technological
innovations and customer demand changes that may
occur while transitioning to a low-carbon economy).
Risk type Description and business impact Time horizon(s)
Physical (acute)
Specific weather-related events (e.g., heavy rain, high winds or periods of drought)
could result in flooding, storms or wildfires which could have an impact on
infrastructure, causing damage to buildings and other assets, leading to wide-scale
disruption to service delivery. The successful delivery of our strategy is dependent
on the protection of our colleagues, customers, and business infrastructure
and processes.
Short and medium term
Physical (chronic)
Chronic climate-related events, such as rising sea levels, coastal changes and higher
average temperatures and rainfall, could impact regions and infrastructure that
are material to our own facilities/business premises, as well as the operations of the
organisations in our direct and indirect supply chains. Such physical risks could lead to
indirect economic and social impacts through supply chain disruptions, subsequent
impacts from infrastructure damage (e.g. in relation to transport, communication and
manufacturing processes) or market shifts (such as increases in insurance premiums).
Long term
Transition (policy/legal)
New or additional climate-related laws, regulations or contractual commitments (e.g.
those that apply to energy usage, business travel or GHG emissions) may result in
increased compliance costs, taxes on emissions, penalties or restrictions that relate to
our business models and our stakeholders.
Medium and long term
Transition (reputation)
Our customers, colleagues, investors, regulators and other stakeholders expect us to
take appropriate measures to reduce our contribution to climate change. Our brand
is essential to the growth and success of our business. Damage to our reputation as a
result of poor environmental performance, including the failure to meet any climate-
related commitments or regulatory expectations, could result in negative media
attention and may impact customer or investor demand or result in a loss of existing
talent or the inability to attract new talent.
Short, medium
and long term
Sustainability continued
Our sustainability strategy continued
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
24
Climate-related opportunities
We have also identified two opportunities that are likely to arise as result of the transition to a low-carbon economy which
we anticipate manifesting in the short, medium and long term. These relate to meeting the needs of our customers as
climate-related policies are implemented and continuing to improve the energy and resource efficiency of our operations
and infrastructure.
Opportunity type Description and business impact Time horizon(s)
Products and services
We continue to monitor opportunities to adapt our business models whereby we can
develop and introduce new products and services which meet both the needs of our
customers and the requirements of emerging climate-related policies (e.g. in relation
to the financing of battery electric vehicles (BEVs)). See page 29 for more information.
Medium and long term
Resource efficiency
and resilience
We continue to identify opportunities by which we can improve the energy efficiency
of our operations and infrastructure to ensure that we reduce their carbon intensity
and that they are resilient. During 2024, this has involved complying with Phase 3 of the
Energy Savings Opportunities Scheme (ESOS).
Short, medium
and long term
Scenario analysis
Scenario analysis is a key tool to identify the potential impact of climate-related risks and opportunities on our business,
strategy and financial planning. Our analysis makes use of the Group’s financial forecasts, operational footprint, customer
data, supply chain information and environmental data, to create a representation of Vanquis Banking Group. To support
this, the three climate scenarios developed by the Network for Greening the Financial System (NGFS) set out below have
been used for a second year to support the assessment of the risks we have identified, which categorise climate scenarios
into the following three transition types, which provide a plausible representation of future climate based on potential
trajectories of future levels of greenhouse gas emissions: Orderly, Disorderly, and Hot House World.
NGFS scenarios
NGFS Net Zero 2050 (Orderly) NGFS Fragmented World (Disorderly) NGFS Current Policies (Hot House World)
Global warming is limited to 1.5°C through
the introduction of stringent climate policies
and innovation, reaching net zero CO
2
emissions globally around 2050. Carbon
Dioxide Removal is used to accelerate the
decarbonisation but kept to the minimum
possible and broadly in line with sustainable
levels of bioenergy production. Physical risks
are relatively low but transition risks are high.
Therefore, we have selected this scenario as
it aligns with the Group’s ambition to achieve
net zero GHG emissions by 2040.
This scenario illustrates the adverse
consequences of delayed and divergent
climate policy ambitions globally which lead
to high physical and transition risks. Countries
without net zero targets follow current
policies, while other countries achieve them
only partially (e.g. 80% of the target). Climate
scenarios in the Disorderly case can limit
warming to <2°C, resulting in low physical
risks, but may demonstrate higher transition
risks compared to the Orderly scenario. This
scenario has been selected as it describes
the mitigations required across the economy
to limit warming to <2°C.
This scenario assumes that only currently
implemented climate policies are
maintained, with no further strengthening.
Global GHG emissions grow until 2080,
leading to about 3°C of warming and
irreversible changes such as higher sea
level rise. It is considered the best suited to
assessing physical risks according to the
NGFS. This scenario is being used because
there is potential for the Group and its key
stakeholders to be impacted by the physical
risks associated with climate change that
could occur as a result of there being
limited or no economy-wide mitigation
measures in place.
In analysing the results of our scenario analysis, we have used a financial impact to represent the estimated loss to the
Group’s revenues over the next five years assuming that no mitigating action is taken. This impact has been rated in the
following way: high (a loss impacting the income statement by more than 20% and/or by more than £20m); medium (a
loss impacting the income statement by between 10% and 20% and/or between £5m and £20m); and low (a loss impacting
the income statement by between 5% and 10% and/or by between £1m and £5m).
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Our climate strategy continued
The impact of climate-related risks and opportunities on our businesses, strategy and financial planning
Physical risks Acute risks Chronic risks
Scenario Orderly Disorderly Hot House World
NGFS Net Zero 2050 NGFS Fragmented World NGFS Current Policies
Description
In this scenario global warming is
limited to 1.5°C through stringent
climate policies and innovation, with
the goal of reaching net zero CO
2
emissions around 2050. It assumes
that ambitious climate policies
are introduced immediately. In this
scenario, physical risks, which broadly
encompass the quantification of a
company or country’s exposure to
natural catastrophes that could be
reliably tied to climate change and a
warming environment, are relatively
low. However, transition risks are high.
This scenario assumes a delayed and
divergent climate policy response
among countries globally, leading
to elevated transition risks in some
countries and high physical risks
everywhere else due to the overall
ineffectiveness of the transition to a
net zero economy.
This scenario works on the basis
that only current enacted policies
continue, resulting in increased
physical risks. Emissions will
continue to rise until 2080, leading
to approximately 3°C of warming
and acute and chronic physical risks
encompassing irreversible changes
such as heightened sea levels
and severe drought in a range of
geographical locations.
NGFS risk rating
Low Medium High
Financial impact/
risk to Group
Low Low Medium
Time horizon
Short and medium term Medium and long term Long term
Impact
In this scenario, there is likely to be an
increase in the instances of extreme
weather events such as heavy rain,
high winds and heatwaves. For
Vanquis, the impacts of these events
are likely to be minimal.
While climate-related physical risks
also increase in this scenario, the
impact caused by, for example,
extreme weather patterns, is much
smaller than in the Hot House World
scenario. This is because this scenario
assumes that global climate policies
in some countries and sectors are
partially successful in lowering global
GHG emissions, which mitigates
the most extreme changes in the
climate. This is likely to result in more
vulnerable parts of the world being
exposed to the impacts of the long-
term changes in climate and weather
patterns. In the UK, there would likely
be significant regional variability
in flooding impacts but it should
be noted that, according to the
Flood Re scheme, large areas of the
country are not materially impacted
by flood risk. However, it is likely that
this scenario would result in more
instances of extreme weather events,
such as heatwaves, heavy rainfall and
high winds, which could disrupt work
environments and routines.
The greatest impact in physical risk
is seen in this scenario as the cost
of damage caused by inland and
coastal flooding, high winds and
subsidence is expected to increase
as the global mean temperature
rises. This could pose a threat to the
Group’s properties and infrastructure
which, in turn, could impact our
insurance or reinsurance costs, as
insurance companies could face
higher payouts due to climate-related
damages. This scenario could also
have the greatest consequences in
terms of colleagues’ productivity as
extreme weather events may disrupt
work environments and routines
which could have implications for our
customers.
Sustainability continued
Our sustainability strategy continued
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Physical risks Acute risks Chronic risks
Scenario Orderly Disorderly Hot House World
NGFS Net Zero 2050 NGFS Fragmented World NGFS Current Policies
Mitigation
measures
Vanquis continues to adopt the following actions in order to mitigate against the physical risks described above:
continuing to maintain and test business continuity plans to ensure the continuity of our operations in a range of
situations, including those where an extreme weather event occurs; implementing measures to improve energy efficiency
across the Group on an ongoing basis; and shifting to more sustainable, low-impact resources and having a series of
targets to achieve this aim (for example, to ensure that we use 100% renewable energy across the Group).
In terms of Vanquis Banking Group’s exposure to physical risks, although it is accepted that extreme weather events will
increase in number and severity compared to the present, they are unlikely to be as severe as those expected under the
‘Current Policies’ scenario. Also, the direct financial impacts associated with these events are considered to be minimal
for the Group because its four main offices are leased, and insurance is in place to help mitigate the impacts of such
physical risks. We will continue to monitor the exposure of our main offices to surface water flooding and river/sea flooding
using resources made available by the Environment Agency. According, to the Agency’s National Flood Risk Assessment
(NaFRA) data (January 2025), which uses bespoke software to integrate detailed local flood risk models – both its own and
those of local authorities – into a national picture, the long-term flood risk relating to our four main properties is as follows:
Surface water flooding River and sea flooding
Property
Yearly chance
of flooding
Yearly chance
of flooding between
2040 and 2060
Yearly chance
of flooding Y% o
Bradford Medium High Very low Very low
Chatham Very low Very low Very low Very low
London Very low Very low Very low Very low
Petersfield Very low Very low Very low Very low
While NaFRA data indicates the long-term risk of surface water flooding in the area where our Bradford-based head office
is located is high, it should be noted that there have been no incidents of flooding since the premises were built in 2010.
Further, in 2025, we will relocate our Bradford office to an area where the risk of surface water flooding is low and the risk of
river flooding is very low. We will continue to monitor the Environment Agency’s NaFRA data to assess the exposure of the
Group’s main premises to long-term flood risk.
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Sustainability continued
Our sustainability strategy continued
Our climate strategy continued
The impact of climate-related risks and opportunities on our businesses, strategy and financial planning continued
Transition risks Policy and legal risks
Scenario Orderly Disorderly Hot House World
NGFS Net Zero 2050 NGFS Fragmented World NGFS Current Policies
Description
Policy and legal risks that are associated with climate change continue to evolve. The actions that relate to this risk
category seek to achieve two key objectives: limit and, ultimately, stop the activities that contribute to the effects of
climate change and promote actions that support adaptation to a changing climate. This will necessitate the switching
to alternative sources of energy such as solar, wind or nuclear, as well as the deployment of carbon, capture and storage
(CCS). In addition, deployment of Carbon Dioxide Removal (CDR) technologies will compensate for the GHG emissions
by removing carbon from the atmosphere. The above scenarios use three different models to provide estimates of
uncertainty. In the medium term, the amount of CO
2
emissions under the ‘Current Policies’ scenario differs considerably.
There are also different estimates for when net zero CO
2
emissions must be reached in order to limit warming to 1.5°C.
A significant shift towards emissions-neutral alternatives in all sectors is needed to replace fossil fuels and carbon-
intensive production and consumption. In order to facilitate this transition, policymakers will increase the implicit cost
of GHG emissions. In the meantime, climate policies may result in higher costs due to the prolonged development and
deployment of alternative technologies. According to the NGFS scenarios, higher carbon emissions imply strict policies,
and a carbon price of around $160 per tonne would be needed by 2030 to encourage a transition to net zero by 2050. In
addition, the Bank of England’s scenario work indicates the price of carbon would need to increase from where it currently
is, at $32 per tonne, to $150 per tonne by 2030, rising to $900 per tonne by 2050. It should also be noted that governments in
other jurisdictions are enforcing strict policies which bring different costs and benefits.
NGFS risk rating
Medium High Low
Financial impact/
risk to Group
Low Low Low
Time horizon
Medium and long term Long term Medium and long term
Impact
This scenario assumes a decline
in total global GHG emissions, with
advanced economies leading the
way, met through a combination
of policy and legal interventions
resulting in the rapid deployment
of clean energy technologies,
energy efficiency and consumer
demand reduction for carbon
intensive products and services. In
this scenario, it is anticipated that
carbon removal costs are predicted
to be volatile which could have
implications for Vanquis in terms
of its ability to achieve its net zero
by 2040 ambition. As such, the
uptake and costs associated with
carbon removal will continue to be
monitored. Further, if the price of
carbon increases as expected in
this scenario, there is scope for the
costs associated with our operations
and travel and transport to increase
which could have implications for the
Group’s revenues. Our current analysis
indicates that the Group’s exposure
to this risk is low as, despite the
anticipated increasing carbon price,
the costs associated with our scope
1 and 2 GHG emissions remain below
the financial impacts (see page 25)
which are used to estimate the loss
to the Group’s revenues over the next
five years assuming no mitigating
action is taken.
This scenario assumes a delayed and
divergent climate policy response
among countries globally. This
sees countries with net zero targets
partially achieving them and the
other countries continuing with
current policy and legal interventions.
In these circumstances, carbon
prices and amounts of investment
are different across geographies, with
some countries’ ambitious efforts
being undermined by limited action
in some others. At the same time,
climate policies differ significantly
across sectors; the transport and
buildings sectors experience carbon
prices three times as high as the rest
of the economy. The combination
of these misaligned efforts across
countries and sectors leads to higher
transition risks which could contribute
to decreasing the Group’s revenues.
In this scenario, we would not see
the impact of transition risks, but we
would expect to see the impact of
physical risk in the long term. However,
as discussed above, we would
expect an adverse overall economic
outcome, but do not consider it
possible to accurately quantify
these impacts.
Mitigation
measures
The actions the Group will adopt in order to mitigate against these transition risks and ensure that our strategy responds
to any potential opportunities include: analysing the impact of the price of carbon on our operations and travel and
transport activities on an annual basis to determine whether there are any revenue implications; continuing to engage
with our customers on the benefits of using our Vehicle Finance products to purchase BEVs/hybrid vehicles, and at the
same time, engaging with our stakeholders to gain further insight into the used BEV market and the current state of the
charging infrastructure in the UK (see page 29); and continuing to monitor customer default rates due to increased costs
(e.g. as a result of energy cost increases).
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Transition risks Reputational risks
Scenario Orderly Disorderly Hot House World
NGFS Net Zero 2050 NGFS Fragmented World NGFS Current Policies
Description
Climate change has been identified as a potential source of reputational risk tied to changing customer or community
perceptions of an organisation’s contribution to or detraction from the transition to a lower-carbon economy.
NGFS risk rating
Low Low Medium
Financial impact/
risk to Group
Low Low Low
Time horizon
Short, medium and long term Medium and long term Medium and long term
Impact
Failure to act in a proportionate way
to the climate change agenda has
potential to damage the Group’s
reputation which could impact
customer or investor demand or
result in a loss of existing talent or the
inability to attract new talent. This, in
turn, could result in adverse revenue
implications in the short, medium and
long term. To help mitigate this risk,
the Group is committed to reaching
net zero by 2040 by equalising or
lessening the emissions that are
released into the atmosphere and
has also set SBTi-approved carbon
reduction targets. In addition, the
Group remains committed to sharing
information on its environmental
performance generally, and the
climate risk agenda specifically,
with stakeholders through its annual
disclosures and submissions to, for
example, the CDP.
In this scenario, it is anticipated that
the potential reputational damage
described in relation to the ‘Net Zero
2050’ scenario could apply leading to
negative media attention or changes
in consumer, colleague, investor
and other stakeholder preferences
which could contribute to reducing
the Group’s revenue and/or market
share. As such, the Group will continue
to deliver on its net zero by 2040
ambition and SBTi-approved carbon
reduction targets, as well as engage
with its stakeholders.
In this scenario, as mentioned
above, it is expected that global
climate policy ambition would be
severely delayed. This could lead to
negative media attention or changes
in consumer, colleague, investor
and other stakeholder preferences
which could contribute to reducing
the Group’s revenue and/or market
share. However, it is anticipated that
these impacts could take longer to
be realised or could be generated by
specific stakeholders or in specific
locations (e.g. within the Group’s
supply chain).
Mitigation
measures
The actions the Group will adopt in order to mitigate against these transition risks and ensure that our strategy responds
to any potential opportunities include: continuing our net zero target by 2040 journey by continuing to adopt sustainable
energy sources, implement energy efficiency measures and engage with our suppliers to encourage them to reduce their
own carbon emissions; delivering on our SBTi-approved carbon reduction targets; and ensuring that the remuneration of
the executive directors is partly linked to our progress in meeting the Group’s climate-related goals and targets.
Climate-related opportunities
We continue to review opportunities that will enable
us to introduce new products to our customers which
accommodate their needs and meet emerging climate-
related policy and regulatory changes. The most obvious of
these opportunities relates to enabling our Vehicle Finance
customers to use their loans to purchase battery electric
vehicles (BEVs) or hybrid electric vehicles.
However, the affordability of BEVs continues to be the
main barrier to ownership for the Group’s Vehicle Finance
customers. The average loan amount for our Vehicle
Finance customers stood at £8,728 in 2024. This compares
to the average price of a used battery electric vehicle
(BEV) which, in 2024, was £26,139 (source: Auto Trader
Retail Price Index – December 2024). Of the over 107,800
‘live’ customers that are currently served by our Vehicle
Finance business, 606 have purchased a BEV car, and
31 a BEV light commercial vehicle (see tables below for
further information).
Further, the state of BEV charging infrastructure in the UK
continues to influence uptake of BEV vehicles. According to
a National Audit Office (NAO) report published in December
2024, the UK is on track to meet its target of 300,000 charge
points by 2030, but there are still challenges regarding their
location and accessibility. The NAO report underlines the
need for greater focus on ensuring that more charge points
are available in rural areas and regions outside London and
the South East.
New/used Vehicle finance
New 0.66%
Used 99.34%
Total 100.00%
Fuel type Moneybarn
Diesel 58.19%
Petrol 37.47%
Electric 1.09%
Hybrid electric 2.33%
Electric diesel 0.14%
Gas bi-fuel 0.03.%
ND 0.75%
Total 100.00%
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Sustainability continued
Our sustainability strategy continued
Our climate strategy continued
Climate-related opportunities continued
We are now also able to report on the carbon intensity of
the vehicles that our loans finance (see table below).
CO
2
classification (kg CO
2
e per mile) Moneybarn
0 = > x < 50 4.09%
50 > = x < 100 9.77%
100 > = x < 110 13.38%
110 > = x < 120 15.86%
120 > = x < 130 14.87%
130 > = x < 140 12.73%
140 > = x < 150 8.09%
150 > = x < 200 18.07%
> 200 2.89%
ND 0.25%
Total 100.00%
The resilience of our strategy, taking into consideration
different climate-related scenarios, including a 2°C
or lower scenario
Our sustainability strategy focuses on our customers,
colleagues and suppliers, the communities we serve
and the environment, and supports us to deliver strong
Company performance. This means that climate change
and how our business and key stakeholders respond and
adapt to it are important parts of our overall sustainability
strategy. The analyses we have undertaken to date, the
summaries of which are set out above, show that the policy
and legal risks and reputational risks associated with the
transition to a low-carbon economy, as well as the physical
risks associated with climate change, are most material to
our business activities and key stakeholders and, therefore,
have potential to impact the Group in the short, medium
and long term. While our internal processes determined
that these risks are not likely to have a material impact on
our business over our stated time horizons, we nonetheless
maintain robust mitigation strategies to improve our
resilience to the impacts of climate change. The NGFS Net
Zero 2050 scenario would continue to have the biggest
impact on the Group in the short to medium term before
any mitigating actions were considered or taken into
account. This is primarily due to the potential for increases
in the price of carbon to have an impact on the cost of our
energy use, business and other operating costs.
The NGFS Fragmented World scenario reveals higher levels
of disruption as a result of increases in extreme weather
events and other natural disasters compared with the NGFS
Net Zero 2050 scenario. However, the actions and outline
transition plan that are set out above, will enable the Group
to address any of the concerns associated with these
scenarios as they will contribute to reducing our exposure
to both transition and physical risks.
Under the NGFS Current Policies scenario, despite there
being much uncertainty about the impacts of climate
change, we can expect our business and our stakeholders
to be impacted by more extreme physical risks in the longer
term, as well as a lack of policies to support the transition
to a low-carbon economy. In these circumstances, the
Group would have to ensure that adequate measures were
in place to manage and address the physical risks and
their potential to impact our operations, customers and
other stakeholders.
We continue to use climate modelling and scenario
analysis to ensure that our strategy of understanding and
assessing the risks associated with climate change and
the impact on Vanquis Banking Group’s financial results
continues to evolve so that we can further improve our
resilience and respond to any related opportunities.
In preparing the Group’s financial statements (see pages
130 to 199), we have considered the impact of the results
of our scenario analysis and climate-related risks on our
financial performance, and while the effects of climate
change represent a source of uncertainty, there has not
been a material impact on our financial judgements and
estimates due to the physical and transition climate-
related risks in the short to medium term.
Climate transition plan: progress update
We are committed to doing the things that are within our
power to create the right operating conditions that will
enable us to deliver on our net zero by 2040 ambition. We
recognise, however, that we do not have full control over the
delivery of this ambition as it will require collaboration and
cooperation with other key stakeholders (e.g. Government,
regulators, customers, etc.).
An outline of our climate transition plan, was first set out
in our Annual Report and Financial Statements 2022. This
provided information on our climate ambitions and how we
could address climate risks and opportunities. We will use
the UK’s Transition Plan Taskforce framework and guidance
to inform the development and content of our transition
plans further in the future. Our transition plan activities have
continued to focus on the following areas:
5 Reducing our scope 1 and 2 GHG emissions via
the continued implementation of energy efficiency
measures, use of sustainable fuels and behavioural
change measures, and by monitoring the development
of low-carbon solutions.
5 Reducing our scope 3 GHG emissions by engaging with
our suppliers to set their own carbon reduction targets,
reducing the absolute GHG emissions associated
with business travel, colleague commuting, water use
and waste generation, and by continuing to monitor
developments in the BEV market.
To support our net zero by 2040 ambition and the work we
deliver as we develop our transition plan, we engage with
our key stakeholders to get their input and support. Set out
below are examples of stakeholders we have engaged with
during 2024.
Engaging with our customers
As we support the transition to clean energy, we want to
ease the pressure on our customers by providing support
in areas such as the energy efficiency measures they can
implement at home and with regard to battery electric
vehicles. For example, through our Vehicle Finance business
we provide our customers with guidance on the benefits of
owning an electric vehicle and the cheapest way to charge
the vehicle’s battery.
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Engaging with industry and other stakeholders
The Group takes part in a number of forums and working
groups with the aim of engaging with and influencing UK
Government policy regarding the climate change agenda.
This is principally done through our membership of UK
Finance. For example, Company representatives engage
with UK Finance’s sustainability working group which
enables the business to keep up to date with developments
relating to climate policy and participate in member
responses to the UK Government.
Engaging with colleagues
We engage with colleagues on the work we are delivering
on the climate risk agenda through communication
channels such as our Group-wide intranet. Colleagues
are also required to take a mandatory e-learning module
on climate change every two years. Finally, we offer our
colleagues volunteering opportunities which support
our net zero ambition. For example, in 2024, this involved
supporting colleagues to take part in tree planting with the
Yorkshire Dales Millennium Trust and the Tree Council.
Engaging with investors
The main means by which we inform our investors of our
work in relation to the climate change agenda is through
the publication of our Annual Report and Accounts. We also
inform and listen to investors through the submissions we
make to the main sustainability investment indices and
rating agencies. In 2024, this involved making submissions
to and engaging with CDP, Dow Jones Sustainability Indices,
FTSE4Good and ISS ESG.
Dependence on government policy
In order to deliver on our transition plan and achieve our
net zero by 2040 ambition, we will need clear government
action on policy and regulation to create the conditions
whereby new low-carbon technologies can be developed
and consumers can be supported to adopt them. Without
progress on this, transitioning to a low-carbon economy
will be challenging. While we are able to reduce the carbon
intensity of our own operations and influence those from
whom we procure goods and services, when it comes to
decarbonising the UK economy as a whole, Vanquis is just
one of many organisations that will have a role to play.
How we identify, assess and manage
climate-related risks
Our processes for identifying and assessing
climate-related risk
We have an established risk management and internal
control framework to identify, assess, measure, monitor and
report the climate-related risks and opportunities we face
as a business. We use this framework to identify potential
exposure to climate-related risks via the associated
physical risks (which include acute, extreme weather events,
and chronic, long-term climate shifts), and transition
risks (which relate to regulatory changes, technological
innovations and customer demand changes that may
occur while transitioning to a low-carbon economy). In
doing so, we use the time horizons described above to
classify the climate-related opportunities and risks, aligned
to our strategy and business plans.
As with all the principal risks, and any sub-category risks,
this framework sets out the high-level policy requirements
and control principles that are in place and those
responsible for managing both the overall risk and the
relevant mitigating controls for further information. It
also adopts an enterprise approach, enabling a single
view of all the current and emerging risks and consistent
management of those risks across the Group. To support
the framework to be effective, the following attributes are
applied: risk culture, risk appetite, risk governance and a
three lines of defence approach to management and
control (see pages 48 to 55 for more information).
In the Group’s newly agreed risk classifications, climate
risk is a level 1 risk which sits within Regulatory principal risk
(P2) (see page 51 for more information). This is because
the Group’s long-term success is dependent on the
sustainability of its operations and business models, and
the resilience of its supply chain. By integrating climate risk
within our framework, it is possible to assess how it interacts
with other material principal risks, including those that relate
to credit, capital, operations, legal and governance matters
and conduct and regulations. All risks are monitored and
reviewed throughout the course of the year to identify
changes that could impact the risk profile.
Our processes for monitoring and managing
climate-related risks
To ensure the ongoing monitoring and management of
the transition and physical risks referenced above and
their potential financial impact on our business we use
a number of processes during the year. These include:
monthly risk appetite reporting using metrics which relate
to carbon pricing, customer default rates, operational
impacts associated with extreme weather events and the
progress being made in relation to our net zero target, and
a risk control self-assessment (RCSA) process for climate
risk which enables us to identify, analyse and understand
the related controls that are in place, and to evaluate
these against our risk appetite and the desired risk levels, to
determine whether any improvements need to be made.
Regular updates are also provided to the Board’s Risk
Committee on the progress made in terms of delivering
mitigating activities which relate to the Group’s climate risk.
The Group’s cross-functional CRC also supports the
embedding of the risk management approach for
identifying and assessing climate-related risks and
mitigating controls. Based on the monitoring that has been
undertaken over the course of the past 12 months, the CRC
continues to recommend that a ‘risk cautious’ appetite
for exposure to climate risk is adopted and supports the
implementation of a control framework that prevents
significant customer or stakeholder detriment, regulatory
non-compliance and/or reputational damage as a result of
climate change.
We continue to use scenario analysis to quantify the
climate-related risks that are material to Vanquis Banking
Group to carry out an initial evaluation of their size, scope
and impact and test the resilience of both our business
strategy and our operations. This enables the business,
through the CRC, to better understand and prioritise the
management and mitigation of any risks.
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31
Sustainability continued
Our sustainability strategy continued
How we identify, assess and manage
climate-related risks continued
How we integrate climate-related risks into our risk
management policies and processes
The climate-related risks and opportunities we have
identified are integrated within our risk management and
internal control framework and are continually monitored.
This enables us to evaluate the significance of our risks
based on their likelihood and impact and to prioritise their
management on an ongoing basis. Through this framework,
we also monitor the environment for new and emerging
risks, and keep up to date with any evolving regulatory
requirements. For example, through the Climate Risk
Committee meetings that took place during 2024, we have
been able to monitor developments regarding the work of
the UK Transition Plan Taskforce.
The metrics and targets used by the Group to
assess and manage relevant climate-related
risks and opportunities where such
information is material
The metrics we use to assess climate-related risks and
opportunities in line with our strategy and risk
management process
We use the following metrics to measure the potential
financial impact of climate-related risks and opportunities
on our business and to measure our scope 1, scope 2 and
scope 3 GHG emissions, as well as to track overall progress
including against our ambitions and initiatives.
Risk/opportunity
related category Aspect Metric Targets Progress
Policy and legal
GHG emissions Scope 1, 2 and 3 GHG
emissions reporting.
See GHG emissions reporting
for energy and water use, and
waste management.
See our environmental KPI results
and GHG emissions table on page
33 of this report and the ESG data
table on the Group’s website.
Science-based
targets
Carbon reduction. Reduce scopes 1 and 2 GHG
emissions by 39.9% by 2028
from a 2021 base year.
78% of suppliers by spend
covering purchased
goods and services will
have science-based
targets by 2027.
Our scopes 1 and 2 GHG emissions
have reduced by 60% from a 2021
base year.
Currently, 41% of our suppliers
by spend have set science-
based targets.
Energy source
Renewable energy Renewable energy use. Continue to use 100%
renewable electricity across
our business premises by
December 2024.
We continue to use 100%
renewable energy across our
business premises.
Market
opportunities
Customer
engagement
Customer sentiment
and perception
regarding their ability
to transition to a low-
carbon economy as
well as the Group’s ESG
performance.
Monitor the number of
Group customers using our
Vehicle Finance products to
purchase BEVs and hybrid
electric vehicles.
See pages 29 and 30.
Monitor customer attitudes
and perceptions towards
buying BEVs.
See page 31.
Engage with policymakers to
support the uptake of BEVs by
consumers in the mid-cost
and near-prime parts of the
consumer credit market.
See pages 30 and 31.
Reputation
Supplier
due diligence
Monitor supply chain
activities in line with
the Group’s ESG
commitments and
Corporate Environmental
Management Policy.
See SBTi-approved target
above. Also, engage with
100% of materially significant
suppliers to determine their
exposure to climate risks.
All materially significant suppliers
continue to be engaged on the
climate risk agenda via our due
diligence process.
Investor relations Investor sentiment and
perception regarding
the Group’s ESG
performance.
Continue to participate in
CDP, the FTSE4Good Index,
MSCI, and the S&P Global
Corporate Sustainability
Assessment.
During 2024, we continued
to engage with the CDP, the
FTSE4Good Index, MSCI, and
the S&P Global Corporate
Sustainability Assessment.
Policy/liability
Executive
remuneration
The remuneration of
the executive directors
is partly linked to our
progress in meeting the
Group’s climate-related
goals and targets.
Please refer to the Directors’
Remuneration Report on
pages 91 to 113.
Please refer to the Directors’
Remuneration Report on
pages 91 to 113.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
32
Risk/opportunity
related category Aspect Metric Targets Progress
Physical risks
Weather patterns Operational impacts
caused by severe
weather events
and changes in
weather patterns.
Monitor increases in
operating costs (e.g.
associated with increased
insurance premiums and
potential for reduced
availability of insurance on
assets in ‘high risk’ locations).
In addition to continuing to monitor
increases in operating costs, we
use the Environment Agency’s
National Flood Risk Assessment
data to monitor the exposure of
our main offices to surface water
flooding and river/sea flooding.
Our scope 1, scope 2 and scope 3 greenhouse
gas (GHG) emissions, and related risks
Operational emissions
We have set out below our GHG emissions on an absolute
CO
2
e basis in accordance with Streamlined Energy and
Carbon Reporting (SECR) policy requirements.
Streamlined Energy and Carbon Reporting
The Group reports its GHG emissions and energy usage
data in accordance with the UK SECR policy that has been
implemented through the Companies (Directors’ Report)
and Limited Liability Partnership (Energy and Carbon Report)
Regulations 2018. The table below covers the Group’s
performance for 2023 and 2024. The scope 1 and scope 2
GHG emissions, and energy use figures relate to the UK.
2023 2024
Scope 1 GHG emissions (tonnes of CO
2
e)
1
Gas use 186 107
Diesel and petrol use 15 5
Scope 2 GHG emissions (tonnes of CO
2
e)
Electricity use (market-based emissions) 556 371
Electricity use (location-based emissions) 604 389
Scope 3 GHG emissions (tonnes of CO
2
e)
Scope 3 associated ‘well-to-tank’ emissions 81 275
Scope 3 category 1 – purchased goods
and services
2,3
20,210 23,439
Scope 3 category 3 – fuel and energy-related
activities (not included in scope 1 and 2) 233 147
Scope 3 category 5 – waste generated
in operation 10 4
Scope 3 category 6 – business travel
4
688 1,080
Scope 3 category 7 – employee commuting
5
724
6
1,124
Scope 3 category 13 – downstream leased
assets (market based)
7
- -
Scope 3 category 15 – investments
8
303,846 262,417
Total energy consumed (kilowatt hours) 4,389,415 2,462,245
Scope 1 and 2 (and associated scope 3)
emissions intensity ratio (kg of CO
2
e/
per customer) 0.59 0.69
Emissions calculation methodology and basis of preparation
1 The market-based emission factors from two suppliers are in CO
2
and
not CO
2
e (i.e. do not include non-CO
2
emissions); however, the variance
between CO
2
and CO
2
e is considered to not be material. The supplier
emissions factors used in the market-based method covers the period
1 April 2023–31 March 2024 only.
2 When calculating the suppliers’ carbon emissions using the spend-based
method, we used the UK Government Department for Business, Energy &
Industrial Strategy which was published in June 2023 and present data from
2019. However, due to inflation, an inflation rate of £1.02 has been applied
to ensure accuracy and transparency. Specific GHG emission conversion
factors that relate to specific SIC code categories have been applied to 77%
of the Group’s suppliers by spend, with a SIC code average conversion factor
applied to the remaining 23% of suppliers by spend.
3 In the absence of wastewater treatment volume data for some offices, we
have assumed that the wastewater treatment volume figures are the same
as the water supply volume figures; this approach results in an overestimate
of the total water treatment volumes.
4 The significant increase in business travel emissions is due to corresponding
increase in the amount of business travel that colleagues have engaged in
to destinations associated with our outsource partners.
5 Employee Commuting to Work GHG emissions (tCO
2
e) are based on a 2024
employee survey. The significant increase in employee commuting GHG
emissions is due to a corresponding increase in colleagues travelling to our
main business premises.
6 This figure was reported as 9,766 tonnes of CO
2
e in 2023 but has been
restated to 724 tonnes of CO
2
e to correct a reporting error.
7 The office that was leased by the Group during 2023 is no longer being
leased by the Group.
8 The emissions from the vehicles that are financed by the Group are based
on the number of live vehicle financial agreements for the 2024 reporting
period. The vehicle emission factors are in CO
2
and not CO
2
e (i.e. do not
include non-CO
2
emissions); however, the variance between CO
2
and CO
2
e
is not considered to be material.
Data dependencies and limitations
We recognise that there are certain limitations in climate
data which have potential to affect our climate metrics and
targets, and, in turn, their usefulness in terms of informing
our strategic decision making. Due to the limited availability
of publicly available, accurate, consistent and comparable
climate-related data (for example, in relation to our scope
3 emissions), there are a number of assumptions and
judgements that have been made in order to undertake
scenario analyses and model our risk exposures. The most
important are:
Calculating our scope 3 upstream emissions
Our scope 3 upstream emissions for category 1 (purchased
goods and services) are calculated using a spend-based
methodology which involves estimating these emissions
based on the value of the goods and services that we
purchase from our suppliers. This is achieved by calculating
the economic value of the goods and services we procure
and multiplying this figure by emission conversion factors
which, in our case, are set by the UK Government. While this
is an accessible and affordable methodology, it can lead
to some volatility in the scope 3 category 1 emissions data
that is reported because of its reliance on estimates and
average emission factors. Further, our ability to identify,
analyse, and monitor emissions reduction efforts related
to purchased goods and services is restricted when the
spend-based method is employed. This is because the
main way to reduce emissions when a spend-based
method is used is to reduce spending which is not a viable
option and may not align with our wider business goals.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
33
Our sustainability strategy continued
Data dependencies and limitations continued
Calculating our scope 3 downstream emissions
Our scope 3 category 15 (investments) GHG emissions
which relate to the vehicles financed by the Group are
based on the number of live Vehicle Finance agreements
during the 2024 calendar year reporting period and are
calculated using average CO
2
emissions data that is held
by our Vehicle Finance business and an assumption that,
on average, our customers travel 12,000 miles per year.
Limitations of climate scenario analysis
An important aspect of our climate-related financial
disclosure involves undertaking an analysis using
prescribed scenarios. It should be noted that these
scenarios are not forecasts and do not seek to predict
future outcomes. Rather, they are forward-looking
projections of risk outcomes that focus on: identifying
physical and transition risk scenarios; linking the impacts of
the scenarios to financial risks; assessing any sensitivities
to those risks; and extrapolating the impacts of those
sensitivities to calculate an aggregate measure of
exposure and potential losses. They do not and cannot
reflect all potential future pathways. Furthermore, the NGFS
scenarios that are used in our analysis may overestimate
or underestimate systemic climate-related risks.
Cautionary statement
This disclosure is presented for information and reference
purposes only and should not be treated as giving any
form of advice. Its preparation is based on reviews and
analysis of our internal data, which is from management
systems separate from those that form part of our financial
reporting internal controls framework. Whilst statements
made within the disclosure are presented in good faith
and based upon sources expected to be reliable, their
accuracy is not guaranteed. For certain information within
the disclosure, preparation has included various key
judgements, assumptions, and estimates, some of which
are summarised above. Where information is presented
from a public or third-party source, it has not been
assured in accordance with the International Standard
on Assurance Engagement (ISAE) 3000 (Assurance
Engagements other than Audits or Reviews of Historical
Financial Information) and the relevant subject matter
specific ISAE standard for GHG data (ISAE 3410, Assurance
Engagements on Greenhouse Gas Statements). Any third-
party opinion or views disclosed in this report are those of
the third parties themselves, and not of Vanquis Banking
Group. The Group recognises that climate-related reporting
is not yet subject to the same standardised disclosure
framework as traditional financial reporting which has
potential to result in non-comparable information or
measures between companies and between reporting
periods as disclosure frameworks continue to evolve.
Sustainability continued
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
34
Financial review
ʥʣʥʧˣ˘˥˙ˢ˥ˠ˔ˡ˖˘˥˘Є˘˖˧˦
the operational turnaround
Despite a meaningful adjusted and statutory loss in 2024,
the Group now has a cleaner and lower-risk balance sheet
following the completion of the Vehicle Finance Stage 3
receivables review and the addressing of one-off items
linked to the comprehensive balance sheet review.
We have adopted a measured approach to Credit Cards
growth, testing and learning to ensure growth is sustainably
profitable. We now have a clearer understanding of the cost
of risk in Vehicle Finance, and established a robust post-
charge-off asset policy and debt sales programme.
We have delivered strong growth in Second Charge
Mortgages since the expanded launch in May 2024, with
interest earning balances over £200m, and strong growth
in savings, including an expansion into more flexible retail
notice and easy access products, with the Group now over
92% retail deposit funded (December 2023: 84%).
Costs were well controlled, including the delivery of greater
than £60m of committed transformation cost savings by the
end of 2024, while investing in the technology transformation
of the business via the Gateway programme.
The Group remains highly liquid and capital levels support
planned future growth.
Income statement
2024
£m
2023
(restated)
£m
Change
%
Interest income 565.4 556.0 2
Interest expense (145.4) (113.4) (28)
Net interest income 420.0 442.6 (5)
Non-interest income 38.5 46.2 (17)
Total income 458.5 488.8 (6)
Impairment charges (191.0) (165.5) (15)
Risk-adjusted income 267.5 323.3 (17)
Operating costs (403.8) (335.3) (20)
Statutory loss before tax (136.3) (12.0)
Tax credit 17.0 0.3
Statutory loss after tax (119.3) (11.7)
Add back:
Tax credit (17.0) (0.3)
Exceptional costs 24.1 21.4 (13)
Amortisation of
acquisition intangibles 6.2 7.9 22
Goodwill write-off 71.2 — (100)
Adjusted (loss)/profit before tax
(34.8) 17.3
Adjusted operating costs (302.3) (306.0) 1
Certain alternative performance measures (APMs) have
been used in this report. See pages 197 to 199 for an
explanation of their relevance as well as their definition.
In line with these changes, the Group has rationalised
its use of APMs, which are summarised on pages 197 to
199 including an explanation of their relevance as well as
their definition.
Income
Total income reduced 6% to £458.5m, driven by 4% lower
gross customer interest earning balances at £2,308m
and higher funding costs, partially offset by the benefit of
repricing initiatives in Credit Cards and Vehicle Finance, and
increased Liquid Asset Buffer income.
Net interest income decreased 5% to £420.0m. Within
this, interest income increased 2% to £565.4m driven by
repricing initiatives in Credit Cards and Vehicle Finance,
and increased Liquid Asset Buffer income. This was partially
offset by lower gross customer interest earning balances
and the mix effect of growing lower-risk and lower-margin
Second Charge Mortgages. Interest expense increased
28% to £145.4m, as maturing fixed-term deposits were
refinanced at higher current market rates.
NIM, calculated as net interest income as a percentage of
average gross interest earning receivables, decreased to
18.4% (2023: 18.6%). Excluding Second Charge Mortgages,
NIM was 18.9% (2023:18.6%), reflecting the benefit of the
repricing initiatives. Non-interest income reduced 17% to
£38.5m reflecting lower fee and commission income.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
35
Impairment
Impairment charges increased 15% to £191.0m reflecting the
impact of the Vehicle Finance Stage 3 receivables review
and the non-repeat of impairment releases in 2023. Credit
risk remained broadly stable in the underlying book.
Impairment charges driven by originations were £44.7m
lower year-on-year in line with reduced new business
volumes and credit risk in the underlying book improved
£27.7m driven by positive stage migrations.
2023 benefited from post-model adjustment and other
model redevelopment releases of £74.5m, which did not
repeat in 2024. This included provisions no longer required
in Credit Cards and Vehicle Finance, arising from IFRS 9
model refinements of £57.7m, and the full release of the
cost-of-living post-model adjustment of £10.8m.
The Vehicle Finance Stage 3 receivables review reduced
derecognition of Stage 3 interest by £17.6m and increased
write-offs by £21.9m following the establishment of the
Vehicle Finance post charge-off asset policy, resulting in a
much better performing portfolio.
The macroeconomic environment, the minimal impact
of the cost-of-living crisis and the growth in lower-risk
customer and product segments, such as Second Charge
Mortgages, meant underlying impairment remained benign,
with credit quality and delinquency trends broadly stable.
Cost of risk, calculated as impairment charges as a
percentage of average gross customer interest earning
balances, increased to 8.4% (2023: 7.0%).
Risk-adjusted margin, calculated as risk-adjusted income
as a percentage of average gross customer interest
earning balances, decreased to 11.7% (2023: 13.6%) as a
result of the reduced NIM and higher cost of risk.
Adjusted operating costs
Operating costs increased 20% to £403.8m including goodwill
write-off of £71.2m relating to the Moneybarn business, as the
Group prioritises capital deployment for growth into Second
Charge Mortgages and Credit Cards in the near-term.
Exceptional costs were £24.1m (2023: £21.4m), including
transformation costs of £21.1m (2023: £17.0m), comprising
redundancy and outsourcing costs of £9.7m (2023: £9.4m),
property exit costs of £3.5m (2023: £4.1m) and strategic
consultancy costs of £7.9m (2023: £3.5m).
Amortisation of acquisition intangibles reduced to £6.2m
(2023: £7.9m) following the completion of the Moneybarn
intangibles amortisation in August 2024.
Excluding exceptional costs, amortisation of acquisition
intangibles and goodwill write-off described above, adjusted
operating costs decreased 1% to £302.3m. This delivered an
adjusted cost: income ratio of 65.9% (2023: 62.6%).
Transformation cost savings increased £48.9m year on
year. When coupled with 2023 transformation cost savings
of £15.4m, £64.3m of savings were delivered by the end
of 2024, higher than the committed £60m. These savings
were largely offset by increased complaint costs of £20.9m
driven by higher FOS fees due to an increase in unmerited
claims received from CMCs, one-off items linked to the
comprehensive balance sheet review of £10.2m, and
increased costs linked to growth initiatives and inflation.
The Group has continued investment in the diversification of
customer propositions, and the technology and operations
investment associated with the Gateway technology
transformation programme. Cost management has been
embedded as a core discipline throughout the Group with
the transformation cost saving commitment increased
from £60m by the end of 2024 to £75m by the end of 2025,
reflecting an additional £15m of committed savings in
2025, and £23m-£28m of savings through the Gateway
programme in 2026 and 2027.
Loss before tax
The Group’s statutory loss before tax was £(136.3)m
(2023: £(12.0)m).
The Group’s adjusted loss before tax, excluding adjusting
items of exceptional costs, amortisation of acquisition
intangibles and goodwill write-off, was £(34.8)m
(2023: adjusted profit of £17.3m).
Tax
The tax credit of £17.0m (2023: tax credit of £0.3m) broadly
reflects the mainstream corporation tax rate of 25.0%
(2023: 23.5%) on the loss before tax of £(65.1)m excluding the
goodwill write-off of £(71.2)m, which was non-tax deductible.
The Group’s adjusted loss before tax generated a tax credit
of £10.0m (2023: tax charge of £5.9m), exceptional costs
generated a tax credit of £5.5m (2023: tax credit of £4.3m)
and amortisation of acquisition intangibles generated a tax
credit of £1.6m (2023: tax credit of £1.9m).
Loss after tax
The Group’s statutory loss after tax, including adjusting items
of exceptional costs, amortisation of acquisition intangibles
and goodwill write-off, was £(119.3)m (2023: £(11.7)m).
The Group’s adjusted loss after tax was £(24.8)m
(2023: adjusted profit of £11.5m).
Adjusted ROTE and EPS
The Group’s adjusted ROTE decreased to (7.0)% (2023: 1.9%)
and the adjusted basic EPS decreased to (9.7)p (2023: 4.5p)
per share, reflecting the adjusted loss before tax.
Summarised balance sheet
2024
£m
2023
£m
Change
%
Assets
Cash and balances at
central banks 1,004 743 35
Amounts receivable
from customers
1
2,154 2,156 —
Pension asset 28 38 (26)
Goodwill and other intangibles 63 147 (57)
Other assets 126 111 14
3,375 3,195 6
Liabilities
Retail deposits 2,428 1,951 24
Bank and other borrowings
2
410 583 (30)
Trade and other payables 46 44 5
Other liabilities 50 48 4
2,934 2,626 12
1 Amounts receivable from customers are presented net of £1m (2023: £3m)
fair value adjustment for portfolio hedged risk. Underlying net receivables
were £2,155m (2023: £2,159m).
2 Bank and other borrowings in 2024 are presented net of £3m (2023: £1m)
fair value adjustment for hedged risk. Underlying bank and other borrowings
were £413m (2023: £583m).
Financial review continued
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
36
Assets increased 6% to £3,375m driven by a 35% increase
in cash and balances at central banks to £1,004m, of which
£947m (December 2023: £682m) represented high quality
liquid assets (HQLA) placed with the Bank of England. This
was partially offset by a 57% reduction in goodwill and
other intangibles to £63m, driven by the goodwill write-off
of £(71.2)m relating to the Moneybarn business, as the
Group prioritises capital deployment for growth into Second
Charge Mortgages and Credit Cards in the near-term.
Amounts receivable from customers were stable at
£2,155m (December 2023: £2,159m), as a 12% reduction in
gross receivables to £2,416m driven by the Vehicle Finance
Stage 3 receivables review was offset by a commensurate
reduction in Expected Credit Losses (ECL) to £262m
(December 2023: £580m). Gross customer interest earning
balances decreased 4% to £2,308m, as reductions in Credit
Cards, Vehicle Finance and Personal Loans balances were
partially offset by growth in Second Charge Mortgages.
Liabilities increased 12% to £2,934m, as retail deposits
increased by 24% to £2,428m driven by growth in more
flexible retail notice and easy access accounts, partially
offset by a reduction in fixed-term products. This was partially
offset by a 30% reduction in bank and other borrowings to
£410m driven by the full repayment of Term Funding for SMEs
(TFSME) early given the strength of the deposit franchise.
Liquidity and funding
HQLA of £947m (December 2023: £682m) was almost
entirely held in the Bank of England reserve account. This
represented significant level of excess liquidity and a
liquidity coverage ratio of 359% (December 2023: 1,263%).
Retail deposit funding increased 25% to £2,399m and was
able to deliver the required funding base at an attractive
cost compared to wholesale alternatives. Within the retail
deposit base, fixed-term products reduced 25% to £1,415m
and were replaced by retail notice accounts of £608m
(December 2023: £42m) and easy access accounts of
£376m (December 2023: £nil). The Group is now significantly
funded by retail deposits, at 92.1% (December 2023: 83.7%)
of total funding.
Ongoing funding diversification is provided by modest
levels of private securitisation and Bank of England funding
collateralised by both Vehicle Finance and Credit Card
assets. The Group has no senior unsecured wholesale
funding, although maintains access to the wholesale
markets via a £2bn Euro Medium Term Note programme.
The Group’s cost of funds rose to 5.1% (December 2023: 4.4%),
as maturing fixed-term products, although reducing, were
refinanced at higher rates.
Capital
The Group maintains a robust capital position with a Tier
1 ratio of 18.8% (December 2023: 19.9%). This represents a
surplus of £99m of Tier 1 capital above the Group’s Tier 1
capital requirement and regulatory combined buffers of
13.4%. The 1.1% reduction in the Tier 1 ratio in 2024 was driven
by the statutory loss after tax for the year after adjusting
for goodwill and intangibles write-off and intangibles
amortisation, which are deducted from capital.
Risk weighted assets (RWAs) decreased to £1,835m
(December 2023: £1,976m), primarily reflecting the stable
net receivables balance being driven by lower risk weight
density Second Charge Mortgages, more than offset by
reductions in RWAs of higher risk weight density Credit
Cards, Vehicle Finance and Personal Loans receivables.
The Group’s leverage ratio of 13.9% (December 2023: 15.9%)
remains comfortably above the minimum requirement.
Pillar 3 disclosures
Pillar 3 disclosure requirements are set out within the
Disclosure (CRR) part of the PRA rulebook. The consolidated
disclosures of the Group, for the 2024 financial year, have
been issued concurrently with the Annual Report and
Accounts and can be found on the Group’s website,
www.vanquisbankinggroup.com.
Summary balance sheet and financial metrics
Balance Sheet
2024
£m
2023
(restated)
£m
Change
%
Gross customer interest
earning balances 2,308 2,401 (4)
Average gross customer
interest earning balances 2,286 2,376 (4)
Gross receivables 2,416 2,739 (12)
Net receivables 2,155 2,159 —
Closing tangible equity 359 394 (9)
Average tangible equity 377 418 (10)
Selected key metrics
2024
%
2023
(restated)
%
Change
%
Asset yield 22.7% 22.1% 0.6%
Net interest margin (NIM) 18.4% 18.6% (0.2)%
Total income margin (TIM) 20.1% 20.6% (0.5)%
Cost of risk (8.4)% (7.0)% (1.4)%
Risk-adjusted margin (RAM) 11.7% 13.6% (1.9)%
Adjusted cost: income ratio 65.9% 62.6% (3.3)%
Adjusted ROTE (7.0)% 1.9% (8.9)%
Selected per share metrics p p %
Adjusted basic earnings
per share (9.7) 4.5
Dividend per share — 6.0 (100)
Tangible Net Asset Value
(TNAV) per share 140 155 (10)
Capital, liquidity and funding metrics
2024
%
2023
(restated)
%
Change
%
Tier 1 ratio 18.8% 19.9% (1.1)%
Risk weighted assets (RWA) (£m)
1,835 1,976 (7)%
High quality liquid assets
(HQLA) (£m) 947 682 39%
Liquidity coverage ratio (LCR) 359% 1,263%
Dave Watts
Chief Financial Officer
13 March 2025
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
37
Operating review
Product trading performance
Detailed analysis of the product contribution to the trading results of the Group can be found on page 39 for Credit Cards,
page 40 for Vehicle Finance, page 41 for Second Charge Mortgages, page 42 for Personal Loans, and page 43 for Corporate
Centre including Snoop.
Segment analysis – Adjusted product contribution
2024
£m
Credit
Cards
Vehicle
Finance
Second
Charge
Mortgages
Personal
Loans
Corporate
Centre
incl. Snoop Total
Interest income 406.3 133.1 4.8 15.4 5.8 565.4
Interest expense (79.6) (38.5) (2.9) (3.4) (21.0) (145.4)
Net interest income 326.7 94.6 1.9 12.0 (15.2) 420.0
Non-interest income 35.3 — — — 3.2 38.5
Total income 362.0 94.6 1.9 12.0 (12.0) 458.5
Impairment charges (123.9) (60.4) (0.2) (5.7) (0.8) (191.0)
Risk-adjusted income 238.1 34.2 1.7 6.3 (12.8) 267.5
Adjusted operating costs
1
(185.3) (42.2) (0.2) (10.5) (64.1) (302.3)
Adjusted PBT/(LBT) 52.8 (8.0) 1.5 (4.2) (76.9) (34.8)
2023 (restated)
£m
Credit
Cards
Vehicle
Finance
Second
Charge
Mortgages
Personal
Loans
Corporate
Centre
incl. Snoop Total
Interest income 371.0 150.3 0.4 25.9 8.4 556.0
Interest expense (51.6) (28.7) (0.2) (4.0) (28.9) (113.4)
Net interest income 319.4 121.6 0.2 21.9 (20.5) 442.6
Non-interest income 43.8 2.0 — — 0.4 46.2
Total income 363.2 123.6 0.2 21.9 (20.1) 488.8
Impairment charges (125.5) (20.4) — (19.6) — (165.5)
Risk-adjusted income 237.7 103.2 0.2 2.3 (20.1) 323.3
Adjusted operating costs
1
(172.3) (51.9) (0.7) (17.3) (63.8) (306.0)
Adjusted PBT/(LBT) 65.4 51.3 (0.5) (15.0) (83.9) 17.3
1 Adjusted operating costs are stated before exceptional items, amortisation of acquisition intangibles and goodwill write-off.
Credit Cards – Proactive volume management in 2024, positioned for profitable growth
in 2025
The Group’s Credit Cards business is a leading player in the
non-prime Credit Card market. In 2023 and 2024, Vanquis
received the Moneyfacts Consumer Award for Best Credit
Builder Card Provider of the Year.
The business offers credit card products to a broad
spectrum of customers but is focused particularly on
providing access to credit card customers who may
struggle to obtain one from a mainstream provider.
Customers are offered four different credit card products
– the Credit Builder Card, Balance Transfer Card, Purchase
Card or Balance Transfer and Purchase Card.
Vanquis Trustpilot rating:
4.2*
Customers are supported through great service whether
it be in app or via our customer service teams. From a
service rating perspective, Vanquis Credit Cards is rated
Great on Trustpilot, based on over 36k reviews. We aim to
make our customer experience effortless, and these results
demonstrate the progress we have made.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
38
12 months ended 31 December
2024
£m
2023
(restated)
£m Change
Total customer numbers (’000) 1,267 1,376 (8)%
Gross customer interest
earning balances 1,278 1,424 (10)%
Average gross interest
earning balances
1
1,313 1,416 (7)%
Gross receivables 1,310 1,475 (11)%
Net receivables 1,150 1,278 (10)%
Interest income 406.3 371.0 10%
Interest expense (79.6) (51.6) (54)%
Net interest income 326.7 319.4 2%
Non-interest income 35.3 43.8 (19)%
Total income 362.0 363.2 —
Impairment charges (123.9) (125.5) 1%
Risk adjusted income 238.1 237.7 —
Adjusted operating costs
2
(185.3) (172.3) (8)%
Adjusted PBT contribution
3
52.8 65.4 (19)%
Asset yield
4
27.9% 24.7% 3.2%
Net interest margin
5
24.9% 22.6% 2.3%
Total income margin
6
27.6% 25.7% 1.9%
Cost of risk
7
(9.4)% (8.9)% (0.5)%
Risk adjusted margin
8
18.1% 16.8% 1.3%
Financial performance
Total customer numbers decreased 8% to 1,267k reflecting
a comprehensive review of customer cohorts by risk
profile, vintage and acquisition channel. This review drove
proactive volume management and as a result, growth
actions were moderated to ensure the future sustainable
profitability of the portfolio.
Credit Cards – Proactive volume management in 2024, positioned for profitable growth
in 2025 continued
Great service, good starter card.
Very happy with the app, I’ve never
had any problems, just had a
balance transfer that’s saved
me a good amount of interest!”
Vanquis customer
Period-end gross customer interest earning balances
decreased 10% to £1,278m and period-end net receivables
decreased 10% to £1,150m.
Total income was stable at £362.0m (2023: £363.2m), with
net interest income increasing 2% to £326.7m and non-
interest income decreasing 19% to £35.3m. Net interest
margin increased 2.3% to 24.9% and total income margin
increased 1.9% to 27.6%.
Interest income increased 10% to £406.3m driven by the
improvement in asset yield from repricing initiatives, which
increased 3.2% to 27.9%, and increased Liquid Asset Buffer
income. This was partially offset by the reduction in gross
customer interest earning balances.
Interest expense increased 54% to £79.6m, as market
savings rates remained elevated and customers with
maturing fixed-term products moved onto higher yielding
products, impacting the Group’s funding cost.
Impairment charges reduced marginally to £123.9m (2023:
£125.5m), reflecting lower origination charges in line with
reduced new business volumes. Underlying credit quality
improved year on year. Impairments in 2023 benefited from
a £17.0m release of post-model adjustments following IFRS 9
model enhancements and the full release of the £10m cost-
of-living post-model adjustment. Cost of risk increased to
9.4% (2023: 8.9%).
Risk-adjusted income was stable at £238.1m (2023: £237.7m)
with an increased risk-adjusted margin of 18.1% (2023: 16.8%).
Adjusted operating costs increased 8% to £185.3m, driven
by the significant increase in complaint costs from FOS
fees related to a rise in unmerited claims from CMCs.
Transformation savings were partially offset by inflation and
investment in the business.
Adjusted PBT contribution was £52.8m (2023: £65.4m).
1 Average of gross customer interest earning balances for the 12 months
ended 31 December using a 13-point month end average.
2 Adjusted operating costs are stated before exceptional items
and amortisation of acquisition intangibles.
3 Adjusted PBT contribution is stated as profit before tax before exceptional
items and amortisation of acquisition intangibles.
4 Interest income from customer receivables for the 12 months ended
31 December as a percentage of average gross customer interest
earning receivables.
5 Net interest income for the 12 months ended 31 December as a percentage
of average gross customer interest earning receivables.
6 Total income for the 12 months ended 31 December as a percentage of
average gross customer interest earning receivables.
7 Impairment charges for the 12 months ended 31 December as a percentage
of average gross customer interest earning receivables.
8 Total income less impairment charges for the 12 months ended 31 December
as a percentage of average gross customer interest earning receivables.
Find out more on our website:
vanquisbankinggroup.com
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
39
12 months ended 31 December
2024
£m
2023
(restated)
£m Change
Total customer numbers (’000) 110 112 (2)%
Gross customer interest
earning balances 765 859 (11)%
Average gross customer
interest earning balances
1
825 836 (1)%
Gross receivables 832 1,144 (27)%
Net receivables 735 776 (5)%
Interest income 133.1 150.3 (11)%
Interest expense (38.5) (28.7) (34)%
Net interest income 94.6 121.6 (22)%
Non-interest income — 2.0 (100)%
Total income 94.6 123.6 (23)%
Impairment charges (60.4) (20.4) (196)%
Risk adjusted income 34.2 103.2 (67)%
Adjusted operating costs
2
(42.2) (51.9) 19%
Adjusted (LBT)/PBT
contribution
3
(8.0) 51.3
Asset yield
4
16.1% 18.0% (1.9)%
Net interest margin
5
11.5% 14.5% (3.0)%
Total income margin
6
11.5% 14.8% (3.3)%
Cost of risk
7
(7.3)% (2.4)% (4.9)%
Risk-adjusted margin
8
4.1% 12.3% (8.2)%
The Group’s Vehicle Finance business, Moneybarn, is a
significant player in the non-prime UK vehicle finance market.
The business consists of experts in helping customers to access
finance when they might have struggled to get approval from
mainstream lenders. Vehicle Finance customers represent one
in five of UK adults who have a poor credit history but need a
reliable car, motorbike, or van to suit their lifestyle and financial
situation. Our core product is a Conditional Sale Agreement,
which is a type of vehicle finance that helps spread the cost
of a used vehicle over time, instead of paying for it all upfront.
This is different to the other types of vehicle finance, like Hire
Purchase (HP) or Personal Contract Purchase (PCP), as a
Conditional Sale Agreement has no additional fee to own the
vehicle; once the customer has made the final repayment, they
legally own the vehicle. A Conditional Sale Agreement uses a
fixed APR, so monthly payments are predictable and remain
the same for the duration of the agreement, which is typically
between 36 and 60 months.
Good customer outcomes are important to us, and once
a customer is with us, we’re focused on helping them to
achieve the best outcomes possible, whether that’s simply
paying their finance each month until they own their used
vehicle, or by supporting them if they’re able to settle their
agreement early. We also understand that customers may
experience difficulties during their agreement, and we’re
focused on supporting them should that happen. We have
a range of options that allow us to help customers get back
on track, or to otherwise exit the agreement in the ‘best way
Vehicle Finance – 2024 results impacted by Stage 3 receivables review, enabling future
optimisation of the portfolio
possible’. From a service rating perspective, Moneybarn is
rated 4.4/5 on Trustpilot, based on over 14k reviews.
Financial performance
Total customer numbers decreased 2% to 110k driven by
repricing and credit tightening initiatives. A new Vehicle
Finance lending decision engine was introduced in 2024
enabling a more granular level of portfolio segmentation
and delivering a stronger platform to optimise higher-
margin customer segments in 2025.
Following the Stage 3 receivables review, period-end gross
customer interest earning balances decreased 11% to
£765m driven by an updated charge-off policy reclassifying
Stage 3 impaired loans to post-charge-off assets. This
resulted in a clearer cost of risk outlook for the portfolio.
Period-end gross receivables reduced 27% to £832m, as
in addition to the reduction in customer interest earning
balances, shortfall debt of £230m was removed and
replaced with a post-charge-off asset population in
1H24. This refined the approach to write-offs and a debt
sales programme was launched, with two debt sales
completed in 2H24.
Period-end net receivables decreased 5% to £735m, as
a 74% reduction in expected credit losses (ECL) to £96m
partially offset the reduction in gross receivables. Stage
3 ECL reduced £268m to £57m driven by the reduction
in Stage 3 balances and a revised definition of default
reclassifying £127m of balances from Stage 3 to Stage 1.
Total income decreased 23% to £94.6m, which represented
all net interest income. Net interest margin and total income
margin decreased 3.0% and 3.3% respectively to 11.5%.
Interest income decreased 11% to £133.1m driven by the
reduction in gross customer interest earning balances.
The asset yield decreased 1.9% to 16.1%, reflecting reduced
higher-margin Stage 3 balances and credit tightening,
partially offset by repricing initiatives.
Interest expense increased 34% to £38.5m, as market
savings rates remained elevated and customers with
maturing fixed-rate savings products moved onto higher
yielding products, impacting the Group’s funding cost.
Risk-adjusted income fell 67% to £34.2m, as a result of
impairment charges rising to £60.4m (2023: £20.4m),
including the impact of the Stage 3 receivables review.
Impairments in 2023 benefited from a £47.0m release
of provisions no longer required following IFRS 9 model
refinements and recalibration. Underlying credit quality
improved year on year. Cost of risk increased 4.9% to 7.3%
and risk-adjusted margin fell 8.2% to 4.1%.
Adjusted operating costs decreased 19% to £42.2m, driven
by transformation savings partially offset by investment in
the business.
Adjusted LBT contribution was £(8.0)m (2023: PBT
contribution of £51.3m).
Moneybarn Trustpilot rating:
4.4*
Find out more on our website:
vanquisbankinggroup.com
Operating review continued
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
40
I’ve been with them for over five years
now, and I can honestly say they’re
an amazing company. Their customer
service is top notch - they’re super
friendly and always ready to help.
And let’s not forget about their credit
card service - it’s way better than any
other competitor! Overall, I’ve had
an incredible experience with them.”
Vanquis customer
Find out more on our website:
vanquisbankinggroup.com
Second Charge Mortgages – Strong growth in a growing market, following successful launch
in May 2024
12 months ended 31 December
2024
£m
2023
£m
Total customer numbers (’000) 3.7 0.1
Gross customer interest earning balances 217 2.7
Average gross customer interest
earning balances
1
69 0.4
Gross receivables 226 2.8
Net receivables 225 2.8
Interest income 4.8 0.4
Interest expense (2.9) (0.2)
Net interest income 1.9 0.2
Total income 1.9 0.2
Impairment charges (0.2) —
Risk adjusted income 1.7 0.2
Adjusted operating costs
2
(0.2) (0.7)
Adjusted PBT/(LBT) contribution
3
1.5 (0.5)
Asset yield
4
7.0%
Net interest margin
5
2.8%
Total income margin
6
2.8%
Cost of risk
7
(0.3)%
Risk adjusted margin
8
2.5%
The Group’s Second Charge Mortgages business offers
this product to customers via origination partnership
agreements with Interbridge Mortgage and Selina Finance.
The launch of these partnership arrangements occurred
in May 2024.
A second charge mortgage, sometimes referred to as
a homeowner loan, is a way for customers to borrow
additional money when they already have a mortgage.
They can then use the additional loan to make home
improvements, consolidate debts, or to help complete
a project.
Financial performance
Total customer numbers increased to 3.7k (December 2023:
0.1k) following the successful launch of the forward flow
agreement with Interbridge Mortgages and an expanded
partnership with Selina Finance.
Period-end gross customer interest earning balances
were £217m (December 2023: £2.7m) and period-end net
receivables were £225m (December 2023: £2.8m), which
includes deferred acquisition costs.
Total income increased to £1.9m (2023: £0.2m), which
represented all net interest income. Net interest margin and
total income margin was 2.8%.
Interest income was £4.8m (2023: £0.4m) with an asset yield
of 7.0%. Interest expense was £2.9m (2023: £0.2m).
Risk-adjusted income was £1.7m (2023: £0.2m), including
impairment charges of £(0.2)m (2023: £0.0m). Cost of risk
was 0.3% and risk-adjusted margin was 2.5%.
Adjusted operating costs were £0.2m (2023: £0.7m),
reflecting the limited fixed costs associated with the
business given the origination partnership arrangements
in place.
Adjusted PBT contribution was £1.5m (2023: LBT contribution
of £(0.5)m).
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
41
Personal Loans - Reduced balances in 2024
12 months ended 31 December
2024
£m
2023
£m Change
Total customer numbers (’000) 24 44 (45)%
Gross customer interest
earning balances 49 116 (58)%
Average gross customer
interest earning balances
1
79 123 (36)%
Gross receivables 49 117 (58)%
Net receivables 44 102 (57)%
Interest income 15.4 25.9 (41)%
Interest expense (3.4) (4.0) 15%
Net interest income 12.0 21.9 (45)%
Total income 12.0 21.9 (45)%
Impairment charges (5.7) (19.6) 71%
Risk-adjusted income 6.3 2.3 174%
Adjusted operating costs
2
(10.5) (17.3) 39%
Adjusted LBT contribution
3
(4.2) (15.0) 72.0%
Asset yield
4
19.5% 21.0% (1.5)%
Net interest margin
5
15.2% 17.8% (2.6)%
Total income margin
6
15.2% 17.8% (2.6)%
Cost of risk
7
(7.2)% (15.9)% 8.7%
Risk-adjusted margin
8
8.0% 1.9% 6.1%
The Group’s unsecured Personal Loans business provides
customers with a broader range of borrowing options,
with a product tailored to the non-prime market.
Most customers take out a personal loan to either
consolidate other debts or to enable them to make home
improvements, although the full range of reasons for
borrowing includes a wide range of purposes.
Operating review continued
When selecting their loan, customers look for a loan
with repayments over a period that make their monthly
payment affordable, at the lowest possible price (APR).
From extensive market research, Vanquis Personal Loan
customers value repayment certainty and flexibility if
circumstances change, so we offer fixed APRs for the period
of the loan. There are no penalty fees for additional interest
charged for missed or late payments and there is no
retention of interest when customers pay off the loan early.
At the Group’s strategy update in March 2024, it was
announced this business was under review and as such the
portfolio has been in run-off in 2024.
Financial performance
Total customer numbers decreased 45% to 24k driven by
the run-off of the existing book.
Period-end gross customer interest earning balances
decreased 58% to £49m and period-end net receivables
decreased 57% to £44m.
Total income decreased 45% to £12.0m, which represented
all net interest income. Net interest margin and total income
margin was 15.2%.
Interest income decreased 41% to £15.4m driven by the
reduction in gross customer interest earning balances.
The asset yield decreased 1.5% to 19.5%. Interest expense
decreased 15% to £3.4m.
Risk-adjusted income increased to £6.3m (2023: £2.3m),
as a result of impairment charges reducing 71% to £5.7m.
Cost of risk reduced to 7.2% (2023: 15.9%) and risk-adjusted
margin increased to 8.0% (2023: 1.9%).
Adjusted operating costs decreased 39% to £10.5m in line
with the reduced size of the business.
Adjusted LBT contribution was £(4.2)m (2023: £(15.0)m).
Find out more on our website:
vanquisbankinggroup.com
When I needed to build my credit score after
some money problems Vanquis was there
to offer help. Been with them 10+ years with
no problems. Their customer service is
excellent. They are always keen to listen
and help. Thank you, Vanquis.”
Vanquis customer
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
42
Adjusted operating costs include operations, technology
and support functions which collectively serve the needs
of the wider Group, in addition to Snoop costs. These costs,
excluding exceptional costs, amortisation of acquisition
intangibles and goodwill write down, were broadly flat at
£64.1m (2023: £63.8m), reflecting a full year of Snoop costs,
which was acquired in August 2023.
Adjusted LBT contribution was £(76.9)m (2023: £(83.9)m).
Snoop – helping customers track spend, budget
and save money
Snoop is an award-winning fintech that uses open banking
and Expand AI to help users save money and manage their
finances more effectively. The app helps customers build
their financial capability, and targets annual savings of up
to £1,500. Snoop demonstrably improves financial wellbeing
with over 13k 4 and 5-star reviews. As such, it is an important
part of the Group’s customer proposition.
Leveraging Snoop’s innovative technology and data
capabilities is also unlocking valuable opportunities for the
Group. This included the launch of an Easy Access Savings
proposition embedded within the Snoop app at the end of
2024. The Group also continues to actively promote Snoop
to the Vanquis customer base. This helps position the Group
as a relevant presence in their daily lives, drive improved
creditworthiness and support improved borrowing and
debt management.
Snoop’s impact extends beyond individual users, offering
businesses valuable insights into evolving consumer
spending behaviours. Further scaling the business will
enrich Snoop’s data insight proposition and enhance the
Group’s overall data capabilities.
Snoop App Store rating:
4.6*
Snoop Google Play rating:
4.5*
Find out more on our website:
vanquisbankinggroup.com
12 months ended 31 December
2024
£m
2023
£m Change
Interest income 5.8 8.4 (31)%
Interest expense (21.0) (28.9) (27)%
Net interest income (15.2) (20.5) 26%
Non-interest income 3.2 0.4
Total income (12.0) (20.1) 40%
Impairment charges (0.8) — (100)%
Risk adjusted income (12.8) (20.1) 36%
Adjusted operating costs
2
(64.1) (63.8) —
Adjusted LBT contribution
3
(76.9) (83.9) 8%
Exceptional costs (24.1) (21.4) (13)%
Amortisation of acquisition
intangibles (6.2) (7.9) 22%
Goodwill write-down (71.2) — (100)%
Statutory LBT contribution (178.4) (113.2) (58)%
Financial performance
Total income was a net expense of £(12.0)m (2023: £(20.1)m),
with net interest income improving to a net expense
of £(15.2)m (2023: £(20.5)m) and non-interest income
increasing to £3.2m (2023: £0.4m) driven by fees and
commissions income from Snoop.
Interest income of £5.8m (2023: £8.4m) represented interest
on cash reserves in the Bank of England reserve account.
Interest expense of £21.0m (2023: £28.9m) represented
residual funding costs not allocated to the respective
businesses.
Corporate Centre including Snoop
Great budgeting app. I wouldn’t be
without this app, so much so that
I’ve just renewed my subscription
for another year. I can see my
spending habits really clearly
(bit of an eye opener on my Amazon
and Just Eat purchases). Here’s to
another year of Snooping.”
Snoop customer
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
43
Section 172(1) statement
Principal decisions
Decisions made by the Board are
guided by the Group’s purpose,
culture and strategy with the
intention to be effective and
deliver long-term sustainable
value for our stakeholders. The
principal decisions taken by the
Board can be found on pages
45, 64 and 72 and our Board’s
activities for 2024 are set out on
pages 65 and 66.
Examples of how the
directors have discharged
their responsibilities under s.172
are integrated throughout the
Strategic Report and Governance
Report; please see the table
opposite for references. Detail
about how our Board has led the
Group’s strategy can be found
on pages 64 to 66.
Section 172 provision Relevant disclosure Pages
(a) The likely
consequences
of any
decision in
the long term
Chairman’s Statement 4-5
Business model 12-13
Strategy 11
Sustainability 16-34
Non-financial and sustainability
information statement
46-47
Risk management and principal risks 48-55
Viability statement 56
Board focus areas during 2024 65-66
Stakeholder engagement
and decision making
70-74
Governance Report 57-121
Nomination and Governance
Committee Report
78-81
Directors’ Remuneration Report 91-113
(b) The interests
of the
Company’s
employees
Chairman’s Statement 4-5
CEO’s Review 6-8
Sustainability – our colleagues 19-20
Risk management and principal risks 48-55
Chairman’s Introduction to Governance 57-58
Board focus areas during 2024 65-66
The Board: our culture 67-69
Stakeholder engagement
and decision making
70-74
Our Designated Non-Executive
Colleague Champion
73
(c) The need to
foster the
Company’s
business
relationships
with suppliers,
customers
and others
Chairman’s Statement 4-5
CEO’s Review 6-8
Business model 12-13
Strategy 11
Sustainability 16-34
Key performance indicators 14-15
Non-financial and sustainability
information statement
46-47
Risk management and principal risks 48-55
Stakeholder engagement
and decision making
70-74
Engagement with shareholders 74
(d) The impact
of the
Company’s
operations
on the
community
and the
environment
Chairman’s Statement 4-5
CEO’s Review 6-8
Sustainability – Community
Foundation overview
20-22
Sustainability - TCFD disclosure 22-23
Non-financial and sustainability
information statement
46-47
Our sustainability strategy 18-34
Stakeholder engagement
and decision making
70-74
(e) The
desirability of
the Company
maintaining
a reputation
for high
standards
of business
conduct
Chairman’s Statement 4-5
CEO’s Review 6-8
Strategy 11
Sustainability 16-34
Sustainability – TCFD disclosure 22-23
Non-financial and sustainability
information statement
46-47
Stakeholder engagement
and decision making
70-74
Board focus areas during 2024 65-66
The Board: our culture 67-69
Composition, succession and evaluation 75-77
Audit Committee Report 82-87
Risk Committee Report 88-90
(f) The need
to act fairly
as between
members of
the Company
Stakeholder engagement
and decision making
70-74
Investor relations 74
Board focus areas during 2024 65-66
Directors’ Remuneration Report 91-113
Business model 12-13
In performing their duties during 2024
the directors have acted in a way that
they considered, in good faith, would be
most likely to promote the success of the
Company for the benefit of its members,
and with regard to the matters set out in
section 172(a)–(f) of the Companies Act
2006 (s.172).
Engaging with stakeholders
We adopt stakeholder engagement
processes that encourage meaningful
dialogue and effective collaboration with
our stakeholders. We recognise that our
stakeholders have differing interests and
have a variety of preferred methods of
engagement, and we respond to these
accordingly. Culturally we intend for
the principles of s.172 to be embedded
within our decision-making process and
work to identify the impact and likely
consequences of our decisions on our
stakeholders, facilitated by our approach
to reporting.
Our stakeholders, how we’ve engaged
with them during 2024 and the outcomes
of this engagement can be found on
pages 70 to 74.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
44
Find our principal risks
on pages 51 to 55
P
Links to risks Links to s.172
(f) The need to act fairly as between
members of the Company
(a) The likely consequences of any
decision in the long term
(b) The interests of the
Company’s employees
(c) The need to foster the Company’s
business relationships with
suppliers, customers and others
(d) The impact of the Company’s
operations on the community
and the environment
(e) The desirability of the Company
maintaining a reputation for high
standards of business conduct
The Board firmly believes that incorporating a wide range of
stakeholder perspectives in its discussions and decisions is
essential for making balanced and well-informed choices.
Over the last four years, we have continued to embed s.172
impact analysis into our Board reporting where a decision
is being made. This approach helps draw out for the Board
the often differing priorities and interests of the Group’s
stakeholders and assists the Board to make decisions that
balance these, whilst aligning with the Group’s purpose,
culture and strategy. We have chosen examples of principal
decisions that we believe demonstrate this commitment
and showcase the decision-making process and the
Board’s considerations when reaching its conclusion.
Principal decisions are on pages 45, 64 and 72.
Principal decision: the launch of easy access and cash ISA products
The Board approved the launch of easy access and cash ISA savings products, which were considered by the Board as meeting a wider
range of customer needs, encouraging financial planning and aligning to the future funding strategy of the Group.
Decision-making process
In February 2024 the Board received a proposal to consider the
introduction of easy access and cash ISA savings accounts (the
products). The Group already offered fixed-term savings accounts
which were a primary source of funding but were typically popular
with more affluent customers. The addition of the products was
also expected to help diversify the Group’s funding streams whilst
improving the Group’s product offering for its customers and was a
key activity in supporting delivery of the Group’s strategy.
Customer and shareholder
The Board discussed the addressable market for the products which
together represented 70% of the overall UK savings market. The Board
determined that a genuine need had therefore been identified. Target
market and fair value assessments had been completed for the
products with positive results that recommended they be introduced.
The Board noted that the products provided an accessible savings
opportunity for the Group’s less affluent customers who might
wish to start or maintain an emergency savings pot. The aspiration
to help individuals save money was aligned to that of the FCA to
support a healthy and successful financial system that promotes
effective competition.
The Board noted that there were a number of expected treasury
management benefits to the Group. Concentration risk and
competitive pressures would reduce from a funding perspective.
Cash ISAs represented a better value of funding and had the potential
to save the business annual interest expenses. The Board noted the
positive impact on the balance sheet for the benefit of shareholders
and the contribution to the overall long-term sustainability of
the Group.
Challenges
The Board explored whether the Group had performed a suitable
risk assessment and had reliably assessed the potential impact
on customers and colleagues. The Board sought and received
assurance that there was a suitable product management
structure in place and sufficient in-house expertise to administer
the accounts to a high standard.
The Board received confirmation that appropriate arrangements
had been made to manage the liquidity risk of deposits when
customers were able to withdraw funds at short notice, a new area
of activity for the Group. The Board approved the prudent liquidity
strategy that had been proposed. All balances for the products were
to be held as excess liquidity allowing time for sufficient behavioural
analysis to be performed. The Board noted the approach was cautious
and sensible and would be examined to the satisfaction of the
Prudential Regulation Authority (PRA) as part of the Internal Liquidity
Adequacy Assessment Process (ILAAP).
Overall, the introduction of the products was thought to be low
risk from a conduct risk perspective with well-established market
standard terms and conditions for the products.
Balancing stakeholder interests
The Board carefully considered the risks and benefits of the
products as they pertained to its stakeholders. The Board noted
that the introduction of a broader range of savings products would
be of benefit to the Group’s customers, in particular easy access
accounts provided a more accessible and flexible form of saving
for the Group’s typical customer demographic than fixed-term
accounts which tied up savings for set periods of time.
In making this decision, the Board expected the products to
contribute to the long-term success of the Group to the benefit
of its colleagues and shareholders.
Links to stakeholders
Links to risks
P1
P2
P5
Links to strategic themes
Links to s.172
Decision making for
long-term success
Strategic themes
Customer centricity
Insightful risk management
Efficient organisation
Digital, tech, data
and analytics
A great people proposition
Links to stakeholders
Customers
Regulators and
Government
Colleagues
Shareholders
Suppliers
Communities
Key
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Vanquis Banking Group plc Annual Report and Accounts 2024
45
Pages
Business model
The Group’s purpose is to
deliver caring banking so our
customers can make the most
of life’s opportunities.
For further information, see the Our strategy and Our business model sections of
this report.
Pages 11 to 13
Colleagues
We know that when
colleagues feel healthy,
well and engaged, they
can reach their maximum
potential and deliver their
best work. As such, the Group
is committed to continuing to
build and sustain an inclusive
workplace culture, where
all our colleagues can be
themselves and thrive. This
is key to the delivery of our
strategy and ensuring that
we are best placed to deliver
for the diverse customer
base we serve.
Due diligence processes: Enhancements were made to all our family friendly
policies during 2024. We also aligned our sick pay, overtime and on call policies,
offered private medical insurance and introduced LinkedIn Learning for all
colleagues. Finally, our five Affinity Groups (which focus on gender, race, disability,
LGBTQ+ and social mobility) have continued to provide both a sounding board and
spring board for ideas, as well as a platform for transformative action.
Relevant policies: Inclusion and Diversity Policy, Family Friendly Policy, Mental Health
& Wellbeing Policy.
Principal risks: People risk and operational risk.
Metrics: Colleague engagement is monitored and assessed through an annual
Great Place to Work survey which measures colleagues’ views and experiences. Also,
the Group’s mandatory learning covers all the important things colleagues need
to know about working at Vanquis so we can protect our business, customers and
colleagues. By being a signatory to the HM Treasury Women in Finance Charter, the
Group is committed to improving female representation at senior management and
director level and has set a target to have 40% female representation in the Group’s
senior management population by December 2026. We also monitor a range of
diversity metrics which are reported in our Nomination Committee Report.
Pages 19 and 20
Page 70
Pages 117 and 118
Climate and environment
We recognise that the growth
and sustainability of our
business depend on the
resilience of our operations,
supply chains, and the
communities where our
customers and colleagues live
and work. As such, we seek to
minimise our environmental
impacts and work with others
to take action on the globally
important issue of climate
change. Playing our part in
tackling climate change is
aligned with our purpose to
deliver caring banking which
is why we are committed to
supporting the UK’s transition
to a low-carbon economy and
ensuring that we understand
the risks and opportunities
that climate change
presents to our business
and key stakeholders.
Due diligence processes: The Group continues to produce climate-related financial
reports that are in line with the recommendations of the Task Force on Climate-
related Financial Disclosures which enables us to comply with the FCA’s Listing Rule
6.6.6(8), and meet the requirements of the Climate-related Financial Disclosure
(CFD) Regulations 2022 and the UK Companies Act (that is, sections 414CB(2A)(a to
h). The Group’s supplier due diligence processes and procedures involve engaging
with suppliers to understand their exposure to material climate-related risk and
carbon reduction commitments. A Group-wide environmental management system
(EMS) has been in place for almost 20 years.
Relevant policies: Environmental Management Policy, Climate Principal Risk Policy
and Procurement Policy.
Principal risks: Business performance risk, customer risk and regulatory risk.
Metrics: Pursuant to the FCA’s Listing Rule 6.6.6(8) and the Companies (Directors’
Report) and Limited Liability Partnership (Energy and Carbon Report) Regulations
2018 and the Companies (Strategic Report)(Climate-related Financial Disclosure)
Regulations 2022, the Group publishes an annual TCFD report and discloses
comprehensive environmental data in its Annual Report and Accounts. The Group
also makes an annual submission to the CDP. Finally, the Group manages and
reduces its impact on the environment via an environmental management system
that is certified to international standard ISO 14001:2015.
Pages 22 to 34
Page 71
Pages 119
Non-financial and sustainability information statement
The information presented here, including the sections referenced, represents the Group’s non-financial and sustainability
information statement as required by sections 414CA and 414CB of the Companies Act 2006. The table below outlines our
policies across certain key, non-financial areas and cross references to where further information on these themes can be
found in other areas of this report. A summary is also provided of how the Group goes about managing the non-financial
and sustainability aspects of its business and measuring its performance.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
46
Pages
Social matters
Through the Vanquis
Foundation, we are committed
to improving the lives of
children and young people
by providing educational
and social development
opportunities which support
financial and social inclusion.
In 2024, we allocated £1.4m to
support a range of charitable
and community partners.
Due diligence processes: The activities and initiatives that are delivered via the
Group’s Foundation are reviewed and approved by the Group Executive Committee
and Group plc Board on an ongoing basis. This involves ensuring that the Group’s
investments have a sustainable benefit to the communities it serves and the
business itself. A dedicated Group team is responsible for the design, development
and delivery of the Group’s Foundation. During 2024, the activities and initiatives that
the Group supports were reviewed with the changes made approved by the Group
Executive Committee.
Relevant policies: Community Involvement Policy and Volunteering and Matched-
Funding Policy.
Principal risks: People risk and regulatory risk.
Metrics: The Group reports on the amount it has invested in its community
activities, as well as the social impacts that have been delivered, in its Annual
Report and Accounts. The Group’s annual Great Place to Work surveys are also used
to understand colleagues’ understanding of, and engagement with, the Group’s
community investment programme. Finally, the Group monitors and reports the
number of hours volunteered by colleagues throughout the year.
Pages 20 to 22
Human rights
The Group is committed to
supporting and respecting
human rights and, as such,
is opposed to slavery and
human trafficking in both
its direct operations and in
the indirect operations of
its supply chains. As such,
the Group will not knowingly
support or do business with
any organisation involved in
slavery or human trafficking.
Due diligence processes: The Group has well-established supplier due diligence
processes and procedures to manage supply chain-based risks and ensure
suppliers comply with the Group’s policy requirements and meet legislative
requirements, including those that relate to the Modern Slavery Act 2015. Across
the Group, all new suppliers are assessed for the types of potential risks they
pose and are sent questionnaires covering issues such as financial stability, data
protection, information security, business continuity, regulatory compliance, and
corporate responsibility.
Relevant policies: Human Rights and Modern Slavery Policy, Procurement Policy,
Diversity Policy and Whistleblowing Policy.
Principal risks: Regulatory risk, people risk and customer risk.
Metrics: Pursuant to section 54(1) of the UK Modern Slavery Act 2015, we produce
a Modern Slavery Statement, see www.vanquis.com.
Page 18
Anti-corruption and bribery
The Group has a
zero-tolerance approach to
acts of bribery and corruption.
We also always seek to protect
our customers, colleagues
and other key stakeholders
from financial crime.
Due diligence processes: The Group has a zero-tolerance approach to bribery and
corruption and all colleagues undertake mandatory training on these topics, as well
as on fraud and anti-money laundering. Comprehensive processes are in place to
enable colleagues report concerns regarding these issues The Audit Committee
oversees compliance with the Corporate Hospitality Policy and the Board oversees
the Whistleblowing Policy.
Relevant policies: Anti-Bribery and Corruption Policy, Corporate Hospitality Policy,
Whistleblowing Policy.
Principal risks: Customer risk and regulatory risk.
Metrics: Completion of mandatory training is monitored; whistleblowing reports
are overseen by the Board; and any matters relating to corporate hospitality are
monitored by the Audit Committee.
Page 119
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Vanquis Banking Group plc Annual Report and Accounts 2024
47
R
i
s
k
c
u
l
t
u
r
e
Risk management and principal risks
Optimising an effective risk
management framework
and culture
In 2024, we provided insight, support and challenge
to the Group’s strategic plans and transformation
programmes, helping to stabilise the business,
enhance efficiency and better serve our customers.
These efforts lay the foundations for safe and
sustainable growth.”
Joe Sweeney
Chief Risk Officer
Risk management
and internal control
framework
The risk management and
internal control framework
sets out how we manage
risk consistently across
the Group, including the
governance structures and
roles and responsibilities
in place to achieve this. It
supports the escalation
of material risks, which
create the most significant
exposures to the Group’s
strategy and operations,
and aggregated reporting
to the Group’s Board, Risk
Committee and executive
management to inform
decision making. The core
components are illustrated
on the right:
Risk
management
and internal
control
framework
Risk
governance
Integrated
assurance and
accountability
Risk appetite
Risk and control
assessment,
monitoring and
reporting
Risk
identification
R
i
s
k
s
t
r
a
t
e
g
y
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
48
Risk culture
Our risk culture is imperative
in driving the right
outcomes as a business
for all our key stakeholders.
The risk management and
internal control framework
places significant emphasis
not just on what we deliver,
but how it is delivered in
the level of risk we are
willing to take. The following
components assist in
promoting a strong risk
culture within our Group:
Risk strategy
Managing risk is critical to
enable us to optimise our
shareholder return whilst
maximising our business
opportunities and positive
outcomes for all our key
stakeholders, which include
shareholders, customers,
colleagues and regulators.
It is underpinned by six
strategic risk objectives:
Culture driver Description
The Group’s
business model
Alignment between the Group’s profit incentives
and good customer and stakeholder outcomes.
The Vanquis Way reflects the unique culture and
working environment we want to create for the
Group. It guides our decisions and reminds us of
what is important when we work with customers,
communities and colleagues.
Colleagues are aware of their accountabilities in
managing risk and these are embedded in role
descriptions and performance objectives (financial
and non-financial).
Senior leaders are incentivised consistently with
the Board’s stated risk culture to drive fair customer
and other risk outcomes. A risk adjustment process
is in place, reinforced through the Senior Managers
and Certification Regime (SMCR).
There are sufficient skilled and trained resources to
deliver against business expectations.
Individual
accountability
and performance
management
The Vanquis
Way
Remuneration
Skills and
capabilities
Maintaining operational resilience
and business capabilities.
Maintaining a secure and efficient
capital and funding structure.
Delivering sustainable growth and
returns to our shareholders.
Optimising our reputation and
becoming the trusted bank for our
target customers.
Establishing a strong risk and
customer-led culture.
Managing execution risk
associated with strategic and
operational change activity.
1.
3.
5.
2.
4.
6.
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Vanquis Banking Group plc Annual Report and Accounts 2024
49
Risk management and principal risks continued
Risk appetite
The Group defines its risk appetite as the amount and type
of risk it is prepared to seek, accept or tolerate as we pursue
our goals. Setting this clearly helps us make decisions
aligned with our strategy.
We have redeveloped our risk appetite framework, ensuring
our strategic vision is executed within the parameters of
our Board-approved risk appetite metrics and thresholds.
If these are breached, we are prompted to review and
potentially adjust our approach. A suite of measures
has also been developed for management use to
monitor ongoing adherence to risk appetite statements.
Together, these concepts provide guardrails for controlled,
sustainable growth.
Risk identification
Our risk classification captures our principal risks and their
corresponding level 1 risks across our four risk pillars that
support the delivery of our strategic risk objectives. Each
risk is allocated an executive owner, in line with the process
risk ownership and reinforcing operational and regulatory
responsibilities. Our risk classification is reviewed on an
annual basis to ensure that the risks remain up to date,
comprehensive and reflective of our high-level exposures.
We recognise the changing landscape we operate in so
capture our emerging risks to anticipate adverse scenarios
from potential threats to proactively prepare, recover
and adapt. We consider external factors such as political,
economic, social and technological categories. This
complements existing regulatory and prudential horizon
scanning processes.
Risk and control assessment,
monitoring and reporting
We apply a standardised and consistent process for the
identification, assessment, measurement and ongoing
review of risks and supporting control environment, driven
by the Risk and Control Self-Assessment (RCSA) process.
Regular monitoring allows us to track shifts in risk levels
and see how effective our controls are. Reporting these
findings at all levels ensures transparency, enabling quick,
informed decision making. This dynamic approach to risk
management keeps us alert and adaptable, allowing us to
prioritise risks requiring the most attention and resources.
Integrated assurance and accountability
The three lines of defence model strengthens our
approach to risk management by clearly defining roles and
responsibilities across the Group to manage risk. The first
line of defence owns and manages risks day to day within
appetite, including the design and operation of the controls
across the Group; the second line of defence establishes
the risk management and internal control framework and
provides risk-based oversight; and the third line of defence
offers independent and objective assurance. This structure
not only provides a robust framework for accountability but
also aligns us with best practices in governance, reinforcing
trust in our overall risk management process.
We apply an Integrated Assurance Framework (IAF), which
combines and complements the planning, execution
and issue management activities of assurance teams
operating across the three lines of defence, supported by
an automated and integrated risk management system.
The IAF incorporates requirements from the updated UK
Corporate Governance Code, particularly regarding the
oversight and reporting of material controls effectiveness.
Risk governance
We have refreshed our risk governance structure to
strengthen our ability to identify, assess, manage and
report risks, while supporting the Group in responding to the
changing internal, external and regulatory environments.
We have established the Executive Risk Committee to
support the Board Risk Committee in the management of
the Group’s current and emerging risks in a sustainable
manner with the Board retaining overall responsibility for
the effective management of risk. Below these, there are
several committees established to monitor the principal
risks and uncertainties, including the oversight of a robust
control environment and escalation of matters through the
risk governance structure.
As the Group continues its turnaround, we are
strengthening our risk foundations to remain
aligned with our purpose, customer priorities
and market position in a challenging macro
environment. We continue to embed a strong
risk-aware culture and control environment,
ensuring that everyone takes ownership.”
Joe Sweeney
Chief Risk Officer
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Vanquis Banking Group plc Annual Report and Accounts 2024
50
Principal risks and uncertainties
Our top current and emerging risks and how we are managing these are summarised over the next few pages.
Risk Pillar 1: Customer and conduct
We deliver fair customer outcomes and meet the expectations of our regulators.
Principal risk
P1
Customer
The risk that failing to
understand or address
customer needs could
lead to dissatisfaction,
poor customer
outcomes, reduced
loyalty and reputational
damage, impacting
revenue and long-term
business sustainability.
Links to strategic
themes
Key considerations
We successfully met our Consumer Duty Day Two requirements and remain focused on embedding these principles
to mitigate the risk of poor outcomes, particularly for customers requiring early intervention strategies or those with
vulnerable characteristics.
Complaints have been a key focus throughout the year due to the continuing high level of CMC-driven responsible lending
complaints, the vast majority of which are not upheld by us or the FOS. The enactment by the FOS to commence charging
professional representatives £250 from 1 April when referring cases to the FOS is expected to reduce referrals from CMC
complaints and our costs. Our request for a judicial review, along with a number of other credit providers, on the FOS
interpretation of out of jurisdiction complaints has been accepted and we await hearing dates.
Mitigating actions
5 Senior management oversight of customer outcomes has been enhanced through the implementation of the
Customer Committee and will be strengthened by the improved customer outcome dashboard once implemented.
5 Delivery of enhanced strategies to support customers who have characteristics of disclosed vulnerability or additional
needs for support are underway and our approach will be reconciled with the findings from the FCA review of firms’
treatment of customers in vulnerable circumstances.
5 Our arrears and forbearance approaches are being revised to align to the new FCA Handbook Rules PS24/2:
Strengthening protections for borrowers in financial difficulty, which replaced the Tailored Support Guidance (TSG).
P2
Regulatory
The risk that non-
compliance with all
regulatory and legal
requirements and
expectations could lead
to financial penalties,
legal action, operational
disruptions and
long-term damage to
reputation.
Links to strategic
themes
Key considerations
The recent Court of Appeal judgment regarding vehicle finance commission disclosure introduces stricter standards on
commission disclosures, requiring that commission amounts are explicitly disclosed, and that customer consent is clearly
obtained particularly affecting dealer-broker relationships. Whilst Moneybarn is in a stronger position than the lenders
named within the judgment, the business still faces potential customer complaints.
Several consultations are underway to simplify aspects of the regulatory handbook and proposed amendments to the
UK GDPR and Consumer Credit Act, which could result in significant changes to implement over the next 12-24 months.
The transition towards a ban on new combustion engine vehicles by 2035 is closely monitored from both a climate
risk and business performance risk perspective. Whilst it presents a potential impact on our ability to offer sustainable
vehicle financing options and services at pace, there are opportunities to introduce new Vehicle Finance products
to customers.
Mitigating actions
5 Moneybarn’s historical practices, while previously compliant with the FCA’s Consumer Credit sourcebook (CONC), were
adjusted in October to meet the expanded requirements on commission disclosures following the Court of Appeal
ruling (see the Contingent liabilities section regarding Vehicle Finance commissions on pages 193 and 194).
5 Strong and proactive regulatory relationships with regular lines of communication are in place with both the FCA
and PRA, which have been kept abreast of our strategic initiatives, key risk management activities and responses to
regulatory developments e.g. complaints issues on an industry-wide basis and welcoming the FOS fees consultation.
5 We have strengthened our SMCR processes by clarifying and aligning responsibilities to the process risk ownership
within the risk management and internal control framework and Group Delegated Authorities Manual. Senior
management functions have attested to these.
5 The financial reporting framework is being refreshed to provide clear principles and controls to ensure consistency,
accuracy, transparency and compliance with applicable accounting standards and regulations in the preparation,
presentation and disclosure of our financial statements.
5 The Group uses scenario analysis to assess the potential impact of climate change on our business, which identified
our strategy remains resilient to climate-related risks and opportunities. Further detail of the governance and
management of the climate-related risks and opportunities and our TCFD summary can be found in Our sustainability
strategy from page 18.
Strategic themes
Customer centricity Insightful risk
management
Efficient organisation Digital, tech, data
and analytics
A great people
proposition
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Vanquis Banking Group plc Annual Report and Accounts 2024
51
Risk management and principal risks continued
Risk Pillar 1: Customer and conduct continued
We deliver fair customer outcomes and meet the expectations of our regulators.
Principal risk
P3
Financial
crime
The risk that failure to
detect and prevent
financial crime and
fraud could result in
customer detriment,
regulatory fines,
reputational damage
and financial loss.
Links to strategic
themes
Key considerations
The financial services industry continues to suffer from high levels of fraud. The Group has dedicated fraud and financial
crime strategic and operational teams, which monitor, investigate and report suspicious activity to meet regulatory
obligations and protect the Group and our customers from financial crime and fraud.
Mitigating actions
5 A combined detection strategy across our fraud and financial crime systems has been designed to combat the risk of
money mules and first party fraud.
5 We upgraded our application fraud detection system for Cards, which is underway for Vehicle Finance, to include a
machine learning model. This has increased our capability to detect fraudulent applications and materially reduced
fraud rates.
5 Know Your Customer and onboarding controls are being strengthened through greater use of electronic and biometric
checks on new customers.
5 The mobile app is being developed with the capability to detect suspicious activity in relation to account takeover and
digital wallet fraud.
Risk Pillar 2: Financial
We manage our credit risk exposures, supported by financial strength and liquidity in normal and stressed conditions.
Principal risk
P4
Capital
The risk that
inadequate capital
resources or poor capital
planning could result
in an inability to meet
financial obligations,
regulatory breaches
and financial instability,
potentially threatening
the long-term viability
of the Group.
Links to strategic
themes
Key considerations
The Group and Bank maintain sufficient capital resources, both in terms of amount and quality, to support the business
strategy and meet the stressed scenarios identified in the Internal Capital Adequacy Assessment Process (ICAAP).
Throughout the year, the Group and Bank have maintained capital ratios in excess of regulatory requirements (see the
Capital risk management section on pages 147 and 148 for the Group’s capital position). The capital position has and will
continue to be a key area of focus during 2025 as we turnaround and grow the business.
The PRA has published several publications on changes to the capital regulatory framework under the strong and simple
framework. As a Small Domestic Deposit Taker (SDDT), the Group is eligible for the regime. The changes to regulation are
not expected to have a material impact on the Group’s capital requirements.
Mitigating actions
5 The capital framework is reviewed by the Board as part of the annual ICAAP. The Assets and Liabilities Committee
(ALCO) is responsible for managing the balance sheet structure, including the capital plan and its risks.
5 Capital risk appetite metrics are reported monthly at ALCO meetings and quarterly to the Risk Committee and Board.
5 The Group and Bank maintain capital resources to meet Pillar 1 and Pillar 2 capital requirements as identified through
the ICAAP, the most significant elements being credit and operational risks.
5 We have constructive engagement with the PRA regarding our approach to capital management.
5 We are developing an enhanced stress testing model to clearly delineate first and second line of defence
responsibilities.
P5
Funding and
liquidity
The risk that the Group
has insufficient financial
resources to meet its
obligations (cash or
collateral requirements)
as they fall due, resulting
in the failure to meet
regulatory liquidity
requirements, or is
only able to secure
such resources at
excessive cost.
Links to strategic
themes
Key considerations
The Group and the Bank maintain sufficient liquid assets, both in terms of amount and quality, to meet daily cash flow
needs and stressed scenarios driven by the Group’s own risk assessment and regulatory requirements. Throughout the
year, the Group and Bank have maintained funding and liquidity ratios in excess of regulatory requirements. Liquid assets
solely comprise reserves held with the Bank of England (see the Liquidity risk section on pages 144 to 146).
The Group has in place a Core UK Group (CUG) waiver, which enables the Group to lend retail deposit funding raised in
VBL to Moneybarn. The financial performance of Moneybarn is monitored to ensure that the conditions of the CUG waiver
continue to be met.
As an SDDT, the changes to the regulatory framework under the strong and simple framework have not had a material
impact on the Group’s liquidity requirements.
Mitigating actions
5 The funding and liquidity framework is reviewed by the Board as part of the annual Internal Liquidity Adequacy
Assessment Process (ILAAP). The ALCO is responsible for managing the balance sheet structure, including the funding
plan and its risks.
5 Funding and liquidity metrics are monitored through daily liquidity reporting and reported monthly at ALCO meetings
and quarterly to the Risk Committee and Board.
5 To ensure that there is no significant risk that liabilities cannot be met as they fall due, business cash flows are
managed and stress tested. The Group and Bank maintain liquid assets in excess of the anticipated outflows and
management buffers as assessed under internal stress test scenarios (90-day stress) and the regulatory prescribed
liquidity coverage ratio (30-day stress).
5 The Group has increased its retail deposit offering through the launch of Easy Access and Notice Accounts, enabling
it to repay wholesale sources of funding and all funds drawn under the Bank of England TFSME. The OBAN notes, used
to support the TFSME drawings, have been retained to provide a source of contingent liquidity.
Principal risks and uncertainties continued
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Vanquis Banking Group plc Annual Report and Accounts 2024
52
Risk Pillar 2: Financial continued
We manage our credit risk exposures, supported by financial strength and liquidity in normal and stressed conditions.
Principal risk
P6
Market
The risk that fluctuations
in market prices, such
as interest rates, could
negatively impact
the Group’s financial
performance, resulting in
losses or disruptions.
Links to strategic
themes
Key considerations
The Group and Bank are primarily exposed to Interest Rate Risk in the Banking Book (IRRBB) and do not take significant
unmatched positions or operate trading books. The Group and Bank have remained within risk appetite throughout
the year (see the Market risk section on pages 146 and 147).
Mitigating actions
5 The market risk framework is reviewed by the Board as part of the annual market risk assessment process. The ALCO
is responsible for managing the balance sheet structure, including the methodology for assessing and managing
market risks.
5 Market risk appetite metrics are reported monthly at ALCO meetings and quarterly to the Risk Committee and Board.
Metrics are set for earnings at risk, market value sensitivity, economic value of equity and basis risk. This includes the risk
under different interest rate risk scenarios as prescribed by regulation.
5 The Group continues to enhance its approach to market risk management, including increasing hedge accounting
capacity and making operational improvements. In addition, as the Group navigates the changing and competitive
interest rate environment, pricing actions and behavioural profiles will be reviewed in the IRRBB assessment.
Principal risk
P7
Credit
The risk that customers
may default on their
obligations, leading to
financial losses, impaired
asset quality and
reputational damage.
Links to strategic
themes
Key considerations
Credit risk is fundamental to achieving our strategic objectives. To strengthen our capabilities, we have established a credit
risk programme with a clear roadmap of deliverables and investment in processes and people.
The Group is exposed to credit risk at all stages in the customer lifecycle. The exposure to this risk can vary as a result of
customer behaviour and macroeconomic factors (see the Credit risk section on page 144).
Mitigating actions
5 The appointment of a new Head of Credit Risk has led to a restructure of the credit risk team and the development of
the credit risk programme, ensuring credit risk is at the forefront of business decisioning.
5 The credit risk responsibilities between the first and second lines of defence have been formally separated, with a credit
risk oversight team established to commence assurance activity in 2025, as part of the IAF.
5 The Credit Committee meets monthly to oversee the credit risk management of our portfolios and performance
against key metrics, including action to address breaches, and tracking progress against the credit risk programme.
5 Development and implementation of the Cards and Vehicle Finance acquisition scorecards are complete and focus is
shifting to ongoing model management to maintain and optimise our credit decisioning capabilities.
5 Credit and affordability strategies continue to be reviewed and enhanced to keep pace with changing market and
economic conditions, and are progressively underpinned by data with an increased use of internal behavioural scores.
Risk Pillar 3: Operational
We ensure operational risk is minimised through effective people, processes and systems aligned to our strategic goals.
Principal risk
P8
Operational
The risk that failures
in processes, systems
or human error could
result in business
disruptions, financial loss,
regulatory action, poor
customer outcomes and
reputational damage.
Links to strategic
themes
Key considerations
Operational risk is inherent to our Group’s activities and heightened as we deliver our activities, utilising in-house capability
and third-party and outsourced business support, and deliver transformation programmes to turn around the business.
The updated UK Corporate Governance Code has emphasised the need for the Board to establish and maintain the
effectiveness of the risk management and internal control framework, including the Group’s material controls.
Mitigating actions
5 Integrated assurance activity has been developed as a result of the updated UK Corporate Governance Code.
The identification of material controls is pivotal to the IAF, providing a foundation for targeted assurance activities.
5 Assurance activities include the delivery of key strategic programme and their interdependencies, which are managed
consistently by adherence to the change delivery framework.
5 The outsourced model in customer operations continues to mature and our partners are providing robust servicing
and support to our customers. Further enhancements are planned throughout 2025 as we roll out new technology
and implement revised arrears and forbearance approaches.
5 We have enhanced our outsourced complaints handling capability, with Artificial Intelligence (AI) automating
complaint logging, reducing unprocessed complaints and addressing CMC activity.
5 During 2024, a strategic tool for managing operational resilience was implemented. Scenario testing will continue to
be undertaken to identify vulnerabilities and weaknesses, feeding into remediation plans for continuous resilience
improvement to meet regulatory expectations.
5 Management of our material outsourcers and critical third parties and suppliers, which directly impact our important
business services, are subject to ongoing oversight and performance programmes through the third-party risk
management framework.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
53
Risk management and principal risks continued
Principal risks and uncertainties continued
Risk Pillar 3: Operational continued
We ensure operational risk is minimised through effective people, processes and systems aligned to our strategic goals.
Principal risk
P9
Technology
and
information
security
The risk that inadequate
technological, security
and data infrastructure
and failure to upgrade
systems could lead to
operational inefficiencies,
data breaches, service
disruptions, a lack
of scalability and
reputational damage.
Links to strategic
themes
Key considerations
We have been making positive progress to deliver Gateway to implement a single technology platform and address the
risks exposed from operating across three segregated technology stacks, which support our products in their existing state,
and reduce our technical debt.
The multi-year security programme to deliver improvements to the Group’s security posture, which commenced in 2022,
continues to progress into 2025 and beyond as we respond to new and emerging threats, and address those identified by
the Red Team test performed in H2 2023.
As we continue to explore the use of AI, Machine Learning (ML) and large language models, we need to ensure we
utilise them in a controlled manner; have an understanding of their capability; manage risks to our data security and
integrity; and correctly perform processes in ways that are ethical and improve the customer and colleague experience.
Additionally, there is a risk that we fail to leverage AI, which may leave us at a disadvantage to competitors who are able to
utilise and integrate this technology into their business models.
Mitigating actions
5 An organisational design for cyber and information security has been implemented using a consolidated security
technology stack, supported with a new, strategic Security Operations Centre (SOC) provider, which was onboarded
during 2024.
5 A Zero Trust/E5 programme is underway to deploy protection and defence against our endpoints, mobile devices and
servers, whilst generating consistent security logging and event alerts for analysis and response.
5 We are developing an AI policy and framework for implementation as we explore and integrate AI and ML technology
into our processes to manage our emerging risk exposure, including against data, security and compliance standards.
5 The data and analytics programme will provide the simplification and consolidation of all data across the business,
resulting in a centralised and consistent dataset, improving the customer journey, operational efficiency and the ability
to produce management information in a timely and valuable manner.
P10
People
The risk that poor
recruitment practices,
insufficient employee
training or low
engagement levels
caused by poor culture
and compliance could
lead to operational
inefficiencies and
reputational damage.
Links to strategic
themes
Key considerations
As part of the Group’s turnaround and strategic reprioritisation, our overall headcount has been reduced to improve
operational efficiency, reflect our smaller size and simplify our processes. This has heightened people risk at various points.
We continue to advocate and deliver against our Great Place to Work action plan to boost staff engagement, recognising
this importance against the delivery of our strategy.
A Colleague Survey was conducted on our behalf by Great Place to Work in December 2024. We scored 60% for our overall
colleague engagement score, which has increased from 53% at the end of December 2023, demonstrating our progress
against plan during a challenging year. Further details can be found on page 20.
Mitigating actions
5 Our One Vanquis programme has been running throughout the year to bring different elements of the colleague
experience together through aligned technology, tools and data and refresh our colleague proposition.
5 Changes to our operating model are subject to a structured programme of risk management and governance
to minimise operational disruption and promote colleague wellbeing.
5 We launched the LEAD Forum, comprising our most senior leaders across the business, to champion and drive
the implementation of our strategy, embed our culture and help us shape and adjust as we go.
5 We have implemented the Development Centre to enhance colleagues’ skills, performance and careers through
a suite of online learning and development tools.
5 We maintain management responsibilities maps and succession plans, which are in place for executive management
and senior colleagues.
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
54
Risk Pillar 4: Strategic
We seek new business opportunities, which are aligned to our customer, regulatory and commercial objectives.
Principal risk
P11
Model
The risk that incorrect
assumptions, poor design
or outdated data within
models used for decision
making could lead to
unintended outcomes,
financial loss or
operational inefficiencies.
Links to strategic
themes
Key considerations
Models are widely used across the Group and play an important role in helping achieve key business decisions, risk
management and strategic objectives. The use of models carries inherent risk to the Group due to their underlying
assumptions, methodologies and complexities. Effective model governance, oversight and validation of models are key
in mitigating model risk across the Group.
Given the UK regulatory developments on model risk management and the increased use of AI and ML models, we are
closely monitoring the impact they pose to enhance our model risk management framework, policy and standards.
Mitigating actions
5 IFRS 9 models have been redeveloped and validated, including the model monitoring and supporting metrics, to further
enhance the accuracy of ECL calculations. Key models that are used for credit decisioning and pricing have been
redeveloped to support new business strategies.
5 The model inventory has been strengthened through clear model ownership and additional responsibilities for owners
to verify the accuracy of their model inventory records and drive completeness and interdependencies.
5 The updated model inventory has been used to inform model tiering, which drives the model governance prioritisation,
including independent model validation. Tier 1 models, which include IFRS 9, credit and pricing models, are being
prioritised for model validation and governance given their high business impact to the Group.
5 Our level 1 model risk classification has been mapped to the PRA’s model risk management principles with clear
delineation across the three lines of defence to improve ownership and oversight. We are updating our model risk
management framework, policy and standards to align to the PRA’s expectations.
P12
Business
performance
The risk that poor
performance of key
business processes,
such as financial
management,
operations or customer
service, could lead
to financial losses,
reduced market share,
threat to the Group’s
long-term viability and
reputational damage.
Links to strategic
themes
Key considerations
The interim results identified a number of issues with our financial management and strategic decisions resulting in
some one-off items and a prior year adjustment. Challenging decisions have been made to manage our FY24 business
performance. However, we approach 2025 with increased clarity and stability to successfully reposition ourselves and
deliver on our purpose.
As we continue to turn around the business and seek to strengthen and grow it in an effectual and sustainable manner,
which meets the needs of all our stakeholders, effective risk management is critical to both the delivery of our strategic
priorities and maintaining our existing commitments in a safe and controlled way. We need to remain cognisant of the
emerging threats arising from geopolitical tensions and the volatile macroeconomic backdrop.
Mitigating actions
5 The forecasting and budgeting models have been reviewed and are currently being validated by the second line of
defence to address gaps and ensure supporting documentation is in place. Once completed, they will be subject to
second line of defence assurance.
5 We are establishing a formal financial forecasting framework for approval to incorporate the changes in design to the
financial forecasting controls.
5 The Product and Pricing Committee provides governance over pricing strategies. During the year, we have carried out
initial repricing initiatives on Cards and completed a repricing programme for Vehicle Finance. Our enhanced pricing
models will allow us to become more dynamic with our pricing and apply risk-based pricing mechanisms to generate
revenue, in line with Consumer Duty.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
55
Viability statement
In accordance with the 2018 FRC Corporate Governance
Code, the directors confirm that they have a reasonable
expectation that the Group will be able to continue to
operate and meet its liabilities as they fall due over the next
three years to 31 December 2027 (the Viability Period). The
Viability Period represents the period over which the Board
has a reasonable degree of confidence over anticipated
events, including prospects for the macroeconomy, and
also provides an appropriate outlook over the medium
to long term.
In making the Group viability statement, the directors
have made an assessment of the Group’s current
financial position and prospects, as outlined within the
Strategic Report, together with the principal risks and other
factors likely to affect the Group’s future performance
and development. This assessment is made following
consideration of a wide range of information, including:
5 the Group’s corporate plan, updated in 4Q24 to capture
latest outer year projections, which sets out financial,
capital, liquidity and funding projections, together with
an overview of relevant risks;
5 the principal and emerging risks which could impact
the performance of the Group;
5 a severe but plausible stress testing scenario,
which is designed to assess the potential impact
of certain underlying risks on the Group’s capital
and funding resources, together with the availability
and effectiveness of mitigating actions; and
5 reverse stress testing analysis, which is designed
to assess the point at which the Group is no longer
a viable concern.
The Group’s corporate plan was approved by the Board
in December 2024. In doing so, the Board has reviewed
detailed forecasts for the three-year period to December
2027 and considered less detailed forecasts for 2028
and 2029. These higher-level, outer year forecasts do
not contain any information which would cause different
conclusions to be reached over the longer-term viability
of the Group.
The Group’s annual planning process takes into account
the Group’s strategic objectives and business model. The
business model focuses on relatively short-term lending
to consumers and operates conservative underwriting.
The plan makes certain assumptions about the regulatory
environment, future economic conditions and anticipated
changes within the markets in which the Group operates
and also makes an assessment of the Group’s ability to
fund new business growth. The Board obtains independent
assurance from Group Risk over the alignment of the
corporate plan with the Group’s strategy and the Board’s
risk appetite. Specific focus is placed on capital risk as well
as liquidity and funding risk. The assessment also considers
the key risks which may impact delivery of the Group’s
operating plan. The Group’s principal risks are included
on pages 51 to 55.
The corporate plan is based on a macroeconomic scenario
which was in line with market consensus estimates, and
which assumes that the UK economy remains constant,
with expectations of low levels of GDP growth through
2025 driven by a sustained elevated UK Bank Rate and a
higher tax burden. Inflation is expected to remain around
2.7% in early 2025 before subsequently falling through the
second half of 2025 and beyond. The plan assumes that the
UK unemployment rate remain broadly stable in 2025 and
2026, peaking at 4.5% in 2026.
The Board conducts a number of specific reviews of
the corporate plan provided by Group and functional
management, alongside other regular briefings on and
discussion of new strategies, business developments and
current financial performance. These reviews consider
a range of market opportunities and developments,
together with associated risks from within the Board’s
risk appetite framework.
The Group manages its liquidity to meet the Overall
Liquidity Adequacy Rule (OLAR) and to ensure that it can
meet its liabilities as they fall due. The level of liquidity
required by the OLAR is determined by the Internal Liquidity
Adequacy Process Assessment (ILAAP) and is based on an
analysis of the Group’s business as usual forecast cash
requirements but also considers their predicted behaviour
in stressed conditions. In recognition of the waiver received
in November 2022, which allows Vanquis Bank Limited to
fund the vehicle finance business, the ILAAP also includes
an assessment of the liquidity needs of the wider Non-Bank
Group. The waiver is due to be renewed for a further three
years in October 2025. The Group has sufficient access to
liquidity resources, including retail deposits, secured funding
on its assets and access to wholesale markets. Furthermore,
the Group has plausible options available to it, should the
need arise, to either reduce the liquidity requirements or
increase the amount of liquidity it has (or can raise).
The corporate plan has been stress tested using a
severe macroeconomic scenario, a higher interest rate
environment with the UK unemployment rate rising to
approximately 8.1%. The stress test scenario takes into
account the availability and effectiveness of mitigating
actions which could be taken by management to avoid
or reduce the impact of the macroeconomic stress. These
management actions could include but are not restricted
to restricting variable pay, reducing lending growth, and/
or changing the dividend payout. The corporate plan
has also been reverse stress tested to the point of non-
viability after reflecting available mitigating actions. The
viability assessment concluded that the Group’s viability
only comes into question under an unprecedented
macroeconomic scenario.
The outcome of the pending Supreme Court hearing
on Vehicle Finance Commission scheduled for 1-3 April
2025 remains uncertain. A possible scenario has been
considered as part of the stress testing. See note 33 for
further details.
The directors also considered it appropriate to prepare the
financial statements on the going concern basis, as set out
on page 120 and page 135.
Dave Watts
Chief Financial Officer
13 March 2025
Strategic report
Vanquis Banking Group plc Annual Report and Accounts 2024
56
Chairman’s introduction to governance
Governance supported by
our purpose and culture
Dear Shareholder
I am pleased to introduce the Corporate Governance
Report for 2024 on behalf of the Board. In 2024 the Group
continued to face significant headwinds. Whilst the
macroeconomic environment improved somewhat, an
element of uncertainty endured, speculative complaints
from CMCs continued, and the Group was required to
recognise £40m of one-off items during the first half of
the year. The latter provided greater clarity on the Group’s
financial position, while a strong focus on operational
efficiency delivered over £60m in cost savings. Together,
these factors have strengthened stability, supporting the
Group’s ongoing operational turnaround. You can read
about the Group’s strategy and activities undertaken during
the year to position the Group for success on pages 1 to 34.
The following pages explain the Group’s governance
structure and key activities undertaken by the Board and
its committees during the year to ensure effective decision
making and oversight of our strategy, business model
and performance. The report also describes how we have
applied and complied with the UK Corporate Governance
Code 2018 (the Code) during the year.
Our purpose and culture
The Board’s activity is always guided by the Group’s
purpose (page 2) and culture (page 67), and the delivery of
sustainable value for our shareholders. The Board continues
to provide oversight and challenge to the executive to
ensure that strategy is delivered and that strategic aims
align with the Group’s purpose (page 11). Despite the
challenges during the year, you can see some of our
governance highlights across the page.
Board composition, succession
and effectiveness
The Board recognises its need to evolve alongside the
business and adapt to the external business environment.
There were several Board changes during 2024. Andrea
Blance stepped down on 1 February 2024 after seven years
of service and was replaced as SID by Angela Knight and as
Chair of the Remuneration Committee by Graham Lindsay.
Elizabeth Chambers and Margot James stepped down
effective on 15 May 2024. On 27 March, the Group appointed
three new non-executive directors, Karen Briggs, Oliver Laird
and Jackie Noakes. These appointments brought additional
financial services, banking, regulatory, risk and compliance
expertise and experience to the Board, and I am pleased
to report that Board dynamics and discussions have been
accordingly enhanced during the course of the year. On
29 January 2025, Angela Knight and Paul Hewitt stepped
down from the Board, both having served in excess of six
years. I want to reiterate my thanks to Angela and Paul
for their valuable contribution and commitment to the
Board through a challenging period. As a result of Angela’s
departure, I am delighted to report that Michele Greene
assumed the position of Senior Independent Director.
This year, the Board took a hybrid approach to its
performance review, the results of which are detailed
on page 77. I am pleased to report that the Board was
commended for its collaborative dynamic and its support
for executive management during a challenging period for
the business. As a Board, we will continue to reflect on areas
for improvement throughout the year and consider how
best to leverage Board skills and experience to assist in the
business turnaround.
Our governance structure is designed to
drive the Group’s transformation, building
a sustainable business model, with the
goal of delivering lasting value for
customers, colleagues, and shareholders.”
Sir Peter Estlin
Chairman
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
57
Effective risk management and governance
Robust risk management remains core to the Group’s
governance framework and has been even more pertinent
during the Group’s ongoing transformation. You can read
about the Board’s consideration of risk on page 66 and in
our Audit and Risk Committee Reports on pages 82 to 90.
Stakeholders and section 172 of the
Companies Act 2006
The Group recognises that effective engagement with our
shareholders, employees and wider stakeholders is key to
sustainable success and this underpins all our decision
making. Under section 172 of the Companies Act 2006,
directors must act in a way they consider, in good faith,
would be likely to promote the success of the Company
for the benefit of its shareholders as a whole. Our Section
172 Statement, which explains how the directors have
discharged their responsibilities during the year under
review, can be found on pages 44 and 45.
Annual General Meeting
Our AGM will be held at 1.00pm on 14 May 2025 at the offices
of Clifford Chance LLP, 10 Upper Bank Street, Canary Wharf,
London E14 5JJ. I look forward to meeting shareholders at
the AGM, together with my fellow directors.
Sir Peter Estlin
Chairman
13 March 2025
34%
women in senior management (2026
target: 40%)
4.2
average score out of 5 rating the Board’s
level of skills, experience and knowledge
81%
colleague participation rate for the
GPTW survey
Governance at a glance
Governance highlights
5 Ensuring the business is ready
for the updated UK Corporate
Governance Code.
5 Conclusion of shareholder asset
reunification exercise.
5 Further streamlining of the Group’s
corporate structure.
This report explains the main aspects of the Company’s governance
structure and how the Company has applied the principles and
complied with the provisions of the Code. The Corporate Governance
Statement also explains compliance with the FCA’s Disclosure
Guidance and Transparency Sourcebook. The UK Corporate
Governance Code is published by the Financial Reporting Council
(FRC) and is available on its website, www.frc.org.uk. The Board
considers that for the year ended 31 December 2024 the Company
complied with the provisions of the 2018 UK Corporate Governance
Code (the Code), with the exception of a limited period of non-
compliance with Provisions 24 and 32 of the Code. As reported last
year, the stepping down of Andrea Blance on 1 February 2024 meant
that both the Audit and Remuneration Committees operated with
only two members until 27 March 2024. The Board and Nomination
and Governance Committee agreed that this temporary non-
compliance was appropriate given that it would be time limited,
the impending appointment of additional non-executive directors,
and that both committees retained sufficient skills and expertise to
discharge their duties. Furthermore, at the time of non-compliance
the Company had been outside of the FTSE 350 since September
2023; the Code notes that audit and remuneration committees of
smaller companies are permitted to have two members. Further
information on the Company’s corporate governance arrangements
and compliance with the Code can be found as follows:
Page
Code
principles
Board leadership and Company purpose 57
Chairman’s introduction to governance 57
Our Board 59 A
Division of responsibilities 62 F, G, H, I
Setting our strategy 64 C
Promoting long-term sustainable success:
Board focus areas during 2024 65 A
The Board: our culture 67 B
Stakeholders and decision making 70
Stakeholder engagement and
decision making 70 D, E
Effective engagement with shareholders
and stakeholders: investor relations 74 D
Composition, succession and evaluation 75
Board composition 75 J, K
Director induction and training 76
Assessing Board performance – annual
Board evaluation 77 L
Nomination and Governance
Committee Report 78 J, K
Audit, risk and internal control 82
Audit Committee Report 82 M, N
Risk Committee Report 88 O
Directors’ Remuneration Report 91
Directors’ Report 114 P, Q, R
40% Board female
representation (as at
31 December 2024)
Male 6
Female 4
Chairman’s introduction to governance continued
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
58
Our Board
Sir Peter Estlin
Chairman
N
Appointed as Chairman: 15 September 2023
Joined the Board: 19 April 2023
Tenure: 1 year
Career and experience:
Peter is a senior finance professional with a
35-year career in banking and finance with PwC,
Citigroup and Barclays. Peter was knighted in
2020 for his services to international business,
skills and inclusion. He also served as the 691st
Lord Mayor of the City of London from 2018 to
2019 and has been an Alderman for the City
since 2013. Having qualified as a Chartered
Accountant with Coopers & Lybrand in 1993,
where he later became a Partner, he held the
role of CFO for the Asia Pacific and, latterly,
the Global Corporate and Investment Bank
businesses at Citigroup. From 2008 Peter held
senior roles at Barclays plc including Group
Financial Controller, CFO of the Retail and
Business banking division and acting Group CFO.
Peter’s contribution to the Board, key
strengths, skills and reasons for re-election:
Peter is a commercially and strategically astute
CFO and non-executive director who brings
both breadth and depth of banking experience,
including retail banking, and is an experienced
chairman.
5 A strong leader with significant finance and
accounting experience gained in professional
services and banking, further complemented
by expertise across systems management,
financial reporting and accounting, investor
relations, treasury management, and mergers
and acquisitions.
5 Extensive governance experience, across the
private, public and charitable sectors.
5 Wealth of knowledge of the financial markets
and experience of implementing strategy and
delivering significant corporate transactions,
and transformation projects.
Current external appointments:
5 Non-executive director of NM Rothschild Ltd,
Supervisory Board member at Rothschild
WAM Co and Rothschild & Co and of the
Institute for Apprenticeships and Technical
Education (IfATE).
5 Chair of FutureDotNow and Association
of Apprentices.
5 Trustee at Ironmongers Trust Company.
5 Alderman for City of London Corporation.
5 Director at Revolut Newco UK Ltd.
Board of Directors
Ian McLaughlin
Chief Executive Officer
D
Appointed: 1 August 2023
Tenure: 1 year
Career and experience:
Ian has extensive banking experience across
mortgages, wealth management, savings,
insurance and motor finance. From 2019, Ian
was the CEO of Bank of Ireland (UK) Plc. He
has served as a non-executive director on
bank and technology company boards and
from 2012, held senior retail banking roles at
Royal Bank of Scotland (now NatWest Group)
including developing specialist consumer and
commercial financial services propositions.
Ian’s contribution to the Board, key strengths,
skills and reasons for re-election:
Ian is a highly experienced chief executive officer
and board director with extensive experience in
banking and investment management. He has a
strong track record of delivering growth through
improving customer service and enhancing
distribution volumes and channels.
5 A deep knowledge of the financial services
industry and regulatory environment.
5 Experience in managing complex
transformation programmes, providing
clarity on strategy, purpose and culture, whilst
overseeing successful operational delivery.
5 Delivering market leading customer
propositions that provide excellent
customer outcomes.
5 Leading brand, product and
proposition development.
5 Non-executive director experience.
Current external appointments:
5 UK Finance Limited.
Committee key:
A
Audit Committee
D
Disclosure Committee
N
Nomination and Governance Committee
Re
Remuneration Committee
Ri
Risk Committee
Committee Chair
Michele Greene
Senior Independent
non-executive director
N
Ri
Appointed: 9 March 2023
Tenure: 2 years
Career and experience:
Michele is a highly experienced finance
professional at executive and board level.
She has held senior roles at Virgin Money and
MBNA Europe Bank and, prior to that, she worked
across various finance functions at Goldman
Sachs, Credit Lyonnais and KPMG Dublin. At
Virgin Money, Michele was Director of Strategic
Development, where she was responsible
for establishing a credit card business on a
newly built IT platform and was subsequently
appointed as the Managing Director of the
Virgin Money Digital Bank. In 2018 Michele
co founded Mololo Limited, a boutique advisory
company specialising in helping companies in
the payments and unsecured lending space.
Michele’s contribution to the Board, key
strengths, skills and reasons for re-election:
Michele has over 25 years’ experience of
financial services and retail banking, particularly
in the areas of payments and digital innovation.
Michele has built significant experience in
the development and growth of successful
banking businesses.
5 Chartered Accountant and experienced
business executive and finance professional
with a strong track record as a CFO and MD.
5 Deep knowledge within the consumer credit,
card payments and digital banking sector.
5 Proven ability to build effective working
relationships with key stakeholders, including
regulators, investors and analysts.
5 Non-executive director and chair experience.
Current external appointments:
5 Executive Director and co-founder of
Mololo Limited.
5 Non-executive director of Bank of Ireland
Group plc, J&E Davy Unlimited and, East End
Fair Finance Limited.
1 Paul Hewitt stepped down on 29 January 2025.
2 Angela Knight stepped down on 29 January 2025.
Paul Hewitt
1
Angela Knight
2
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
59
Board of Directors continued
Karen Briggs
Independent
non-executive director
A
N
Ri
Appointed: 27 March 2024
Tenure: <1 year
Career and experience:
Karen is a qualified accountant with over
30 years’ experience, having held many senior
leadership roles at KPMG UK, including as Head
of Risk Consulting and Head of Tax, Pensions
and Legal Services. Throughout her career she
has had a focus on financial services, AI, big
data and technology. She was a Board member
for K Capital, KPMG’s £100m global technology
investment fund
, where she led the development
and management of up to £100m of AI, cyber,
data and other solutions. In 2020 she led the
Forensic & Litigation Consulting and Technology
practices of FTI in EMEA and focused on strategic
leadership to drive transformational growth.
Karen’s contribution to the Board, key
strengths, skills and reasons for re-election:
In addition to her financial services expertise,
Karen has also been a senior banking regulator
and worked on the highest profile banking
investigations globally. Karen is a highly
experienced leader focused on leading complex
global regulatory, forensic and financial crime
assignments for financial institutions, other
regulated entities and regulators.
5 Extensive experience of working with audit
committees, and familiarity with accounting
and assurance.
5 Brings extensive experience of designing,
implementing and overseeing large scale
remediation programmes across a variety of
sectors covering risk, assurance, compliance,
conduct, regulation, and data/technology.
5 Non-executive director experience.
Current external appointments:
5 Chair of Audit & Risk Committee and
Independent Council Member of Imperial
College London.
5 Non-executive director and Trustee of Invictus
Games Foundation Board.
5 Advisory Council Member for Elevate City,
a women’s leadership network.
5 Chair of Audit Committee and non-executive
director of SMBC Bank International plc and
Happold LLP.
5 Chair of Audit & Risk Committee and
non-executive director of Chubb Underwriting
Agencies Limited.
5 Non-executive director of Chubb European
Group SE.
5 Senior Strategic Advisor to
Eversheds International LLP/Konexo
through Karen Briggs Limited.
Graham Lindsay
Independent
non-executive director
A
N
Re
Appointed: 1 April 2019
Tenure: 5 years
Career and experience:
Graham held a number of senior executive roles
at Lloyds Banking Group over a 40-year period,
including responsibility for the Lloyds branch
network, HR Director of the Retail Bank and as
Group Responsible Business Director. Graham
joined the Wonga UK board in 2016 as part of
the new leadership team engaged to improve
the business and deliver change following
regulatory approval.
Graham has been a Board member of the
Institute of Banking & Financial Services and sat
on the Professional Standards Board. He is Senior
Independent Director at One Family, a Trustee
of Break Charity and an Emeritus Trustee of The
Brain Tumour Charity.
Graham’s contribution to the Board, key
strengths, skills and reasons for re-election:
Graham brings to the Board extensive
experience in commercial, private and retail
banking and a deep understanding across
all distribution channels. Graham has had
demonstrable success in focusing organisations
on their customers, ensuring they are at the
heart of decision making and product design.
Graham also has a strong appreciation of the
Group’s regulatory environment.
5 Extensive customer knowledge, strong
customer focus and a track record of enabling
and overseeing businesses to ensure that they
put the customer at the heart of what they do.
5 Significant stakeholder engagement
experience.
Current external appointments:
5 Senior Independent Director at OneFamily
and Chair of the Pension Trustee Board.
5 Trustee of Break Charity.
5 Emeritus Trustee of The Brain Tumour Charity.
5 Director at Family Assurance Staff Pension
Scheme Trustees Ltd.
Dave Watts
Chief Financial Officer
D
Appointed: 1 November 2023
Tenure: 1 year
Career and experience:
Dave is a highly experienced banking CFO who
worked for HSBC for nearly 30 years in a variety
of roles at the global, regional and business
levels. He notably was part of the team that
established the UK ring fence bank of HSBC and
was subsequently the CFO and an Executive
Director of HSBC UK Bank plc from 2017-2021.
Most recently, Dave served as CFO and Executive
Director of HSBC Bank plc, which managed
HSBC’s business in Europe (ex. UK). Between
2015 and 2018, he was the CFO of HSBC Bank
plc. Dave’s prior roles were outside of personal
banking and wealth, including global CFO
roles for commercial banking, global banking,
operations and technology. Dave qualified
as a Chartered Accountant with KPMG and is
a qualified treasurer.
Dave’s contribution to the Board, key
strengths, skills and reasons for re-election:
With over 35 years of financial services
experience, Dave has a proven track record of
executing strategy and delivering on significant
challenging multi-year transformations
and projects.
5 A highly experienced finance leader
with extensive banking experience.
5 A strong treasury background with
experience in challenging liquidity, funding
and capital matters, in entities with differing
regulatory requirements.
5 A proven track record of enhancing
engagement and relationships with various
external stakeholders, including regulators.
5 A strong cost management capability
having led numerous cost management
and reporting initiatives.
5 Non-executive director experience.
Current external appointments:
5 Non-executive director of CAF Bank.
Governance
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60
Jackie Noakes
Independent
non-executive director
N
Ri
Re
Appointed: 27 March 2024
Tenure: <1 year
Career and experience:
Jackie is a senior leader with extensive
experience in large scale business and
technology transformation across banking
and insurance. She has significant executive
experience at board level having performed
roles as CEO, chief operating officer, and
CIO. Jackie has non-executive experience in
mutual and listed plc businesses. In September
2018 she joined the Bank of Ireland as Group
Chief Operating Officer and played a key
role in delivering bank-wide transformation.
This included enhancements to the group’s
information security management and cyber
risk protection measures. Jackie held several
roles at Legal & General including leading the
company’s £105bn savings business.
Jackie’s contribution to the Board, key
strengths, skills and reasons for re-election:
Jackie works at executive level to lead, shape
and deliver strategic business change,
undertaking the management of acquisitions
and divestments as well as designing and
implementing enterprise-wide transformation
and regulatory compliance.
5 A strong customer focus, leveraging data
and insights to drive continuously improved
experiences and customer journeys.
5 Has specific skills and experience across
payments, technology, operations, information
security, and strategic data transformation.
5 Extensive experience in financial services
and a strong track record in delivering on
business transformation.
5 Non-executive director experience.
Current external appointments:
5 Director at SLFC Services Company (UK)
Limited.
5 Director at The Scottish Mutual Assurance
Society.
5 Director at Pearl Group Services Limited.
5 Director at PGMS (Glasgow) Limited and PGS
2 Limited.
5 Director at Reassure UK Services Limited.
5 Group Chief Operating Officer of the Phoenix
Group.
Oliver Laird
Independent
non-executive director
A
N
Re
Appointed: 27 March 2024
Tenure: <1 year
Career and experience:
Oliver is a highly experienced board level chief
finance officer and non-executive director with
extensive finance and regulatory experience
in financial services, manufacturing and
consultancy having been CFO at Lookers plc
(£4bn revenue car retailer, 6,500 employees),
CFO at First Direct, director of central finance at
Lloyds Banking Group and finance director of
Co-op Insurance. He has held non-executive
director and audit committee chair roles across
a range of sectors.
Oliver’s contribution to the Board, key
strengths, skills and reasons for re-election:
Oliver is financially literate and will be able to
confirm the integrity of internal controls and
financial reporting and determine how risk will
be evaluated, calibrated, and managed. He
displays an engaging leadership style with
effective communication skills and is objective
and independently minded, prepared both to
challenge and support management yet still be
a team player.
5 A highly experienced finance leader with
extensive banking experience.
5 A strong CFO background with experience
in financial analysis and planning, statutory
regulatory reporting, investment and capital
structure decisions, and group tax and
treasury management.
5 A commercially focused executive with a
proven track record of building business
and delivering strategic change and
improvements that drive uplifts in profits,
increase shareholder value and improve the
control environment.
5 Non-executive director experience.
Current external appointments:
5 Chair of Audit Committee and Board member
of Beverley Building Society.
5 Non-executive director and Audit Committee
Chair of the Shepherds Friendly Society.
5 Non-executive director and Audit Committee
Chair of the UK Board of Paysafe Limited.
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Vanquis Banking Group plc Annual Report and Accounts 2024
61
Division of responsibilities
The Board operates in accordance with the Group’s governance
framework, articulated in the Group’s Delegated Authorities Manual,
Board Governance Manual, Board and Committee Terms of Reference
and Matters Reserved for the Board.
The Board establishes the Group’s strategy and purpose, and holds management accountable for the delivery of
long-term success and shareholder value. The Board oversees the execution of strategy, whilst also maintaining an
effective risk management and internal control framework.
The Board
The Board is primarily responsible for setting the Group’s strategy for delivering long-term value to our
shareholders and other stakeholders, providing effective challenge to management concerning the
execution of the strategy and ensuring the Group maintains an effective risk management and internal
control system.
Executive directors
The Group’s executive directors – the CEO and CFO – are responsible for all matters pertaining to
the Group’s performance and day-to-day management. The executive directors are assisted by the
Executive Committee which supports the operation of the business and informed decision making
on matters not reserved for the Board or Board committees.
The Executive Committee is supported by two senior executive management committees, the Executive
Risk Committee and the Group and Bank ALCO.
The Board delegates certain matters to its committees
Our strategy
see page 11
See page 82
for the
Committee’s
role and
responsibilities
See page 88
for the
Committee’s
role and
responsibilities
See page 91
for the
Committee’s
role and
responsibilities
See page 78
for the
Committee’s
role and
responsibilities
Managing risks
see page 48
Board composition
see page 75
Section 172(1)
Statement
see page 44
Board activities
see page 65
Audit
Committee
Risk
Committee
Remuneration
Committee
Nomination and
Governance
Committee
Disclosure
Committee
Shareholders and other stakeholders
Governance framework
Case study
Governance: flow of information
The Group’s Audit Committee scrutinised the requirements of the revised UK Corporate Governance Code at
its July and November meetings, noting that the Board would be required to attest to the effectiveness of the
Group’s material controls. The Audit Committee tasked the Risk function to refine the Group’s definition of material
controls, ensure they were identified and mapped to the Group’s principal risks, and agree the parameters for the
effectiveness assessment. The Executive Risk Committee (ERC), reporting to the Group Risk Committee, then became
the governance forum for in-depth scrutiny of the Group’s material controls framework, engaging in substantive
debate around all elements of the project. The outcome of the ERC’s deliberations was then presented in a formal
paper for Risk Committee approval in January 2025. You can read more about the Risk Committee’s consideration
of material controls in our Risk Committee Report on page 90.
Governance
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62
Independence of the NEDs and conflicts
of interest
The Board and Nomination and Governance Committee
review the independence and time commitment of NEDs
on appointment and thereafter annually, taking into
account the requirements of the Code. Time commitment
is also reviewed where an additional external appointment
for a director is proposed. During 2024, the Board approved
the appointments of:
5 Peter Estlin as advisor to, and subsequently NED on
the Board of, Revolut Newco UK Limited;
5 Karen Briggs as NED on the Board of Buro Happold
and of Chubb European Group SE;
5 Graham Lindsay as Trustee of Break Charity;
5 Oliver Laird as NED and Audit Committee Chair of
Shepherds Friendly Society; and
5 Ian McLaughlin on the Board of UK Finance Limited.
Independence of the Board
(excluding the Chairman) (as at 31 December 2024)
78%
of our Board (excluding the
Chairman) are independent
non-executive directors
Independent 78%
Executive 22%
Clearly defined roles and responsibilities
We define the separate roles and responsibilities of our Chairman, CEO and SID in writing and they are available on our
website, www.vanquisbankinggroup.com.
Chairman, Sir Peter Estlin
5 Builds and leads an effective and appropriately
skilled Board, which challenges management
on the execution of strategy
5 Promotes best practice Board behaviours through
effective chairing and the encouragement of
constructive challenge and openness
5 Ensures that the Board promotes high standards of
corporate governance and models Company culture
5 Engages with stakeholders to inform decision making
Senior Independent non-executive director,
Michele Greene
5 Acts as a sounding board for the Chairman and
an intermediary for other NEDs, as required
5 Leads the performance review of the Chairman
5 Is available to shareholders outside of the normal
communication channels
General Counsel and Company Secretary,
Michael Mustard
5 Advises on legal, governance, and Board
procedural matters
5 Ensures the Board has high-quality information,
and the resources required to function effectively
5 Facilitates discussion between the Board and
executive management
5 Leads on delivery of corporate governance
requirements and the Board effectiveness evaluation
Non-executive directors
5 Provide independent and constructive challenge
5 Scrutinise the performance of management
5 Develop strategy using their experience and
expertise from other sectors
5 Chair the Remuneration, Nomination and
Governance, Risk and Audit Committees
Chief Executive Officer, Ian McLaughlin
5 Manages the day-to-day operations of the Group
to execute the Board agreed strategy and deliver
the Group’s purpose
5 Leads executive management in the implementation
of Board decisions and promoting Company culture
5 Manages the Group’s risk profile in accordance
with Board direction
5 Demonstrates ethical leadership and models
accountability and transparency
Chief Financial Officer, Dave Watts
5 Leads the Group Finance function in the delivery
of Group strategy
5 Is responsible for capital management,
financial reporting and effective financial processes
and controls
5 Liaises with investors alongside the CEO
Executive Leadership Team
5 Supports the CEO in the development and
implementation of strategy, and the embedding
of culture
5 The Executive Committee is comprised of the
Chief Executive Officer, Chief Financial Officer, Chief
Risk Officer, Chief Customer Officer, Chief Operating
Officer, Director of the CEO Office, Chief Digital and
Analytics Officer, and Group General Counsel and
Company Secretary
Designated Non-Executive Colleague Champion,
Graham Lindsay
5 Seeks to understand the views of colleagues
5 Attends Colleague Forums and other colleague
engagement events
5 Articulates the views of colleagues at
Board meetings
All Directors are required to disclose to the Board any
interests which may pose a conflict in relation to their duty
to promote the best interests of the Group.
The Board concluded that all Directors continue to be
independent and have sufficient time to discharge their
duties to the Company. As a result, all are recommended
for re-election at the 2025 AGM.
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Vanquis Banking Group plc Annual Report and Accounts 2024
63
Setting our strategy
Principal decision: TFSME early repayment
In September 2024, the Board approved the early repayment of the Group’s TFSME (Bank of England Term Funding Scheme for SMEs)
drawings ahead of the contractual maturity.
Decision-making process
The Group’s governance structure facilitated the Board’s decision
making. The proposal was originally considered by the Group Executive
Committee and the Assets and Liabilities Committee, having been
put forward by the treasury team. Both committees discussed and
challenged the proposal, including ensuring that adequate supporting
information was provided to facilitate the Board’s decision. The paper
was ultimately tabled and approved by the Board.
Considerations and challenges
In making the decision, the Board had regard to the Group’s funding plan,
previously approved by the Board in March 2024. The risks of refinancing
and the Group’s contingent liquidity were central considerations when
debating the merits of early repayment. The materials presented to the
Board noted the importance of liquidity to the Group’s overall safety and
soundness, and how it determined the amount of lending available to the
customer base. The Board was provided with information on the Group’s
current liquidity status and the consequences of early repayment.
Balancing stakeholder interests
The Board recognised that the Group’s level of liquidity directly
influences the amount of available lending for the customer base.
The Board acknowledged that the Group’s regulators also expect
to see evidence that the Bank is managing its funding and liquidity
risk on a forward-looking basis and in line with the funding plan.
The Board also considered regulatory concerns around a TFSME
maturity concentration risk as a key element of its debate. The Board
was assisted in its consideration of stakeholder interests by the
Group’s Board paper template which specifies that the impact of any
proposition on all stakeholder groups is considered.
Links to stakeholders Links to strategic themes Links to risks
Links to s.172
P1
P2
P5
Strategic themes
Find our key risks on
pages 48 to 55
P
Links to risks
Customer centricity
Insightful risk management
Efficient organisation
Digital, tech, data
and analytics
A great people proposition
Links to s.172Links to stakeholders
Customers
Regulators and
Government
Colleagues
Shareholders
Suppliers
Communities
(f) The need to act fairly as between
members of the Company
(a) The likely consequences of any
decision in the long term
(b) The interests of the
Company’s employees
(c) The need to foster the Company’s
business relationships with
suppliers, customers and others
(d) The impact of the Company’s
operations on the community
and the environment
(e) The desirability of the Company
maintaining a reputation for high
standards of business conduct
The Group’s strategy is outlined on page 11, while pages 65 and 66
highlights the Board’s key activities over the year, including its oversight
and the strategic direction behind major decisions.
Customer
centricity
Insightful risk
management
Efficient
organisation
A great people
proposition
Digital, tech, data
and analytics
Our strategy
Key
The Group’s principal risks to the delivery of strategy
are detailed on pages 51 to 55. The Group’s effective
governance matrix (page 62) facilitates the delivery of
strategy. Whilst the Board retains responsibility for the
approval of the Group’s strategic direction, it delegates
responsibility, as needed, to both its committees and
executive management. The Board and its committees
receive regular KPIs to monitor the implementation of
strategy.
The principal decision detailed below illustrates the role
of the governance structure in the delivery of strategy.
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64
Board meeting agendas are collaboratively developed by the Chairman,
CEO and General Counsel and Company Secretary. Board meetings aim
to achieve a balance between performance review and forward-looking
strategic focus. Governance matters and matters reserved for the Board
under the Group’s Delegated Authorities Matrix also inform the requirements
of each meeting’s agenda. The Board’s decision making is supported
by strategic KPIs and management information.
Strategy
Links to s.172 Links to stakeholders
Received – and challenged – regular updates on the progress
of our strategy throughout the year.
Considered a review of the current sector landscape and the
position of the Company therein, including competitor analysis.
Received and challenged ‘deep dives’ into the Group’s
different products, including Vehicle Finance, Cards and
Second Charge Mortgages.
Reviewed and scrutinised longer-term possibilities for the Group.
Initiated a ‘turnaround priorities’ focus to ensure that key priorities
were afforded sufficient Board attention.
Budget, financing and performance
Links to s.172 Links to stakeholders
Approved the 2025 budget and received regular updates on
performance against the 2024 budget throughout the year.
Reviewed and approved changes to the Group’s intra-group
funding arrangements and capitalisation levels of subsidiaries.
Reviewed and approved the half and full-year results,
quarterly updates, and the payment of a dividend for the 2023
financial year.
Oversaw the Group’s successful cost efficiency project to reduce
the overall cost base.
IT, cyber and resilience
Links to s.172 Links to stakeholders
Reviewed the Technology Roadmap and considered significant IT
risks. This included consideration of how technology would link to
strategy and ‘future-proof’ the business.
Considered how the integration of Snoop into the business
could positively impact the way in which the business – and its
customers – leveraged technology capability.
Reviewed and approved the Group’s ICAAP and ILAAP.
Received an update on the potential role, usage, and risks posed
by Artificial Intelligence.
Promoting long-term sustainable success: Board focus areas during 2024
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Vanquis Banking Group plc Annual Report and Accounts 2024
65
Governance and risk
Links to s.172 Links to stakeholders
Received regular updates from the Chief Risk Officer, including
assessments of current risk and regulatory horizon scanning.
Engaged in extensive debate around the Company’s risk appetite
and approved the parameters of risk appetite across key metrics
including capital and liquidity.
Received regular updates on the level and impact of complaints.
This included an assessment of options to address the issue and
a consideration of the wider external threat landscape.
Received an investor update, including an overview of investor
perception, priorities and engagement options. The Board also
approved the AGM notice and correspondence.
Approved an action plan to ensure compliance with the updated
UK Corporate Governance Code and the ongoing Companies
House reform.
People and culture
Links to s.172 Links to stakeholders
Reviewed the results of the annual Colleague Survey, considering
key themes and insights, and approved an action plan.
Received substantive updates on culture and considered
corresponding action plans. At the Board’s request, consideration
of the impact of culture was embedded into strategic updates.
Received an update on whistleblowing activity.
Received an annual health and safety update.
Considered ways to improve and optimise colleague
engagement and workforce policies and practices.
Customer and regulatory
Links to s.172 Links to stakeholders
Received regular updates on the embedding of the
FCA’s Consumer Duty and the efficacy of processes to
ensure compliance.
Listened to recorded customer calls to gain further customer
insight and suggest improvements to the customer experience.
Received advice and debated the potential impact of the recent
Court of Appeal motor finance ruling.
Reviewed and approved the launch of two new products – a cash
ISA and easy access savings.
Areas of focus in 2025 include:
5 the development of the Cards business;
5 the external environment including complaints;
5 the long-term future strategy; and
5 the further embedding of the aspired culture.
Promoting long-term sustainable success: Board focus areas during 2024 continued
Governance
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66
Our values define our culture and shape how we engage with each other and our customers. By fostering a strong culture
of accountability, we are setting the business up for long-term success.
This year we have made progress across a number of areas laying the foundations of a supportive and inclusive culture,
guided by the feedback received from colleagues in our 2023 annual colleague engagement survey. However, recent
business performance and colleague redundancies this year mean culture remains a key area of focus for 2025.
Our Great Place to Work (GPTW) survey carried out in December 2024 sought colleague feedback on what it’s like to work
at Vanquis and where we can do better. We worked with the Chairman to include new questions asking colleagues to
describe our culture today, and what they aspire for our culture to become in the future. Highlights of the survey results
can be found on page 68.
Cultural
indicator How it is overseen
Leading
by example
The Board plays a key role in supporting the embedding of the desired culture through leading by
example. This is underpinned by an appropriate flow of information, enabling the Board and its
committees to oversee management and challenge performance, culture and strategy. Our Board
understands that a strong culture, supported by good governance, enables long-term growth and
generates sustainable value for our stakeholders. You can also read about how the Board has had
regard to the interests of our stakeholders and their s.172 responsibilities to deliver long-term growth
on pages 44 to 45.
We have a Designated Non-Executive Colleague Champion, Graham Lindsay, who is also the Consumer
Duty Champion. This is a key role in facilitating the Board’s oversight of our customer-focused culture.
The Board recognises the importance of colleague feedback to embedding our culture and taking
action when needed. Our Designated Non-Executive Colleague Champion attends Colleague Forum
meetings and undertakes other colleague engagement, sharing colleague views in order to shape Board
discussions and consideration. You can read more about this on page 73. The Board also attended a
number of informal sessions held throughout the year with our colleagues.
Our inclusion and diversity ambition remains to build and sustain an inclusive culture and diverse
workforce which will help us to respond to the needs of our customer base and support our purpose to
deliver caring banking so our customers can make the most of life’s opportunities. This year we have
continued to make progress in creating an inclusive and healthy culture, working towards our I&D targets
(see page 80 for examples). However, we know that there is more to do and as we develop our plans, the
Board is monitoring the evolving landscape of regulatory change in this space. With the appointment
of Oliver Laird to the Board earlier this year and 40% female Board representation during 2024, we are
meeting the target set by the Parker Review. Our inclusion community has delivered a variety of events
to celebrate and raise awareness of inclusion and diversity this year, encouraging involvement from
colleagues. Using the planned launch of the new HR system, we have the opportunity to renew focus on
improving the quality of our I&D data that colleagues share with us. It is the Board’s aim to achieve the
min. 80% target completion rate which will allow us to produce disability and ethnic pay gap reporting
and further workforce analysis. Our Nomination and Governance Committee oversees our performance
in relation to diversity and inclusion, and further details can be found on pages 78 to 81. On the Board our
non-executive directors play an important role in supporting our diversity ambitions.
The Board: our culture
Embedding our business values is essential to building a strong
culture - a key strategic differentiator that drives our purpose,
mission, and long-term success.
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67
The Board: our culture continued
Cultural
indicator How it is overseen
Embedding
our culture
In June, a colleague networking event in Bradford was held whereby nominated colleagues met with the
Board for a speed networking event facilitating both insight and colleague engagement. The Board also
introduced ‘New Joiner Sessions’, where the Board invited anyone who had recently joined the business to
meet a Board member for an informal coffee and chat.
Our Chairman, Sir Peter Estlin, also participated in some functional Town Halls where colleagues had the
opportunity to ask questions of the Board. Most recently, Peter joined the Finance Town Hall. He also joined
the Colleague Forum meeting in April and also the first of 2025 in January.
Graham Lindsay, Chair of the Remuneration Committee and Colleague Champion, continued to attend
Colleague Forum sessions regularly and was seen as a welcome member by the Colleague Forum
representatives. Graham has also run dedicated Q&A sessions with the Colleague Forum providing an
opportunity to ask questions of the Board.
The Board receives updates on colleague initiatives designed to embed culture. A social committee was
established by colleagues, in response to colleague feedback. Events have been run this year which
focused on bringing people together, encouraging colleagues to come into the office and driving cross-
team collaboration.
Our Disability Affinity Group partnered with our learning and development team to improve the digital
learning offering, making sure it’s accessible for all colleagues. The Group is working with Tech & Change on
trialling accessible supportive software including ‘Dark Reader’ software (which adjusts displayed colours),
and this is now going live on Edge (internet browser) which will support neurodivergent colleagues.
In May 2024 we launched our Women in Leadership Network to establish and foster a connected network of
support and sponsorship for all senior women across the Group throughout their leadership journey.
Assessing and
monitoring
our culture
In addition to the colleague engagement reported above, the Board and its committees monitor the
alignment of the Group’s culture with our purpose, values and strategy, through a variety of mechanisms,
cultural indicators and reporting lines including those summarised below:
5 feedback via the Colleague Forum and Designated Non-Executive Colleague and
Customer Champion;
5 feedback on our colleague and cultural surveys;
5 monitoring whistleblowing cases;
5 risk adjustment assessment of remuneration outcomes;
5 monitoring of our control environment, including internal and external audit actions;
5 our risk framework and risk culture are overseen by the Risk Committee; and
5 gender pay gap disclosures.
The timing of the GPTW survey, which is supported and reviewed by the Board, followed a sustained
period of significant change for the business, including a change in the senior management team, the
redefining of business priorities and a significant reduction in headcount, but showed an 81% participation
rate (2023: 70%). The results demonstrate high colleague engagement levels and progress on last year’s
action planning initiatives. The survey results were encouraging but we recognise that there remains
work to do and our target remains achieving GPTW certification, which is a key measure of success and
validation of our people and culture work.
As part of the GPTW survey we also asked colleagues to describe our culture (today and what they aspire
to). There is lack of alignment in how colleagues perceive and describe our organisational culture and a
greater focus on culture is needed going forward, and in particular to support our business turnaround.
Our highest-scoring areas (90%+ favourable) aligned well with UK best workplace benchmarks in three
key categories:
1. Fair Treatment: Colleagues reported strong satisfaction with our inclusive practices, confirming fair
treatment regardless of age, sexual orientation, race, and gender.
2. Work Environment: Colleagues overwhelmingly consider their workplace physically safe.
3. Facilities: Our workplace amenities were highly rated as contributing to a positive working environment.
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68
Cultural
indicator How it is overseen
Aligning
culture and
incentives
Our reward framework and incentives are important for encouraging desired behaviours and culture.
We invest in our colleagues through recognition, reward, development, and wellbeing. Colleagues
are recognised through our ‘Way to Go!’ recognition platform. Additionally, our ‘Perks at Work’ scheme
provides in-store and online rewards, discounts, online training, and mental wellbeing courses. The
Remuneration Committee reviews workforce remuneration policies and practices alignment, and
assesses with the Company’s culture and strategy. Gender pay gap disclosures are reviewed annually
to ensure consistency with the Company’s values. Further work of the Remuneration Committee can be
found on pages 91 to 113.
During the year, our Designated Non-Executive Colleague Champion worked with the reward team. The
Colleague Forum was engaged and regarding our reward framework discussed how executive director
remuneration aligns with the pay of the wider colleague population. The engagement concluded that
executive remuneration matches the Company’s pay policy.
Colleague
wellbeing
The Board recognises the importance of promoting a positive culture of mental health and wellbeing. All
colleagues should feel respected and supported, regardless of their backgrounds or experiences. During
the year we launched our virtual GP service with BUPA, and we invited all colleagues to become members
of our corporate private medical insurance. We offered a continued programme of webinars to help
support colleagues during the year including LGBT Great allyship and being a carer for your partner.
All colleagues have access to wellbeing and health services, resources, and support through our external
partnerships and internal support networks, which are highlighted below:
5 Access to our confidential Employee Assistance Programme (EAP) provided by Legal & General.
This 24/7 service offers compassionate support to our colleagues, helping them navigate any
challenges they may face at home or at work.
5 Access to BUPA’s Wellness + App, which gives colleagues access to digital GP services, treatment
with digital physios and mental health specialists. Additionally, all colleagues are offered membership
of our private medical insurance scheme.
5 Internal Mental Health First Aiders available to provide support.
5 Discounted gym memberships.
5 Collaboration with Bank Workers Charity to deliver a series of webinars throughout the year that
explore wellbeing and inclusion topics.
The Board understands that leaving a job due to redundancy can be challenging. In 2024, we provided
support for colleagues during this transition. We offered access to a professional outplacement service,
which included support from a personal career coach. We arranged internal workshops that focused on
essential skills, such as CV writing and interviewing techniques. We also provided wellbeing support to
help colleagues build resilience and manage uncertainty.
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69
Stakeholder engagement and decision making
Understanding and effectively communicating with our stakeholders
is essential to the Group’s long-term success.
The Group’s stakeholder engagement strategy provides a framework for communication that enables the Board to adopt
effective engagement methods that deliver well-considered and balanced decisions.
Our s.172 Statement, which describes the impact of stakeholder engagement on the Board’s decision making, can be found
on pages 44 and 45 and has been incorporated throughout our Strategic and Governance Reports. You can read more
about our purpose, and the evolution of our mission and strategy in the Strategic Report.
Effective stakeholder communication
Customers
Our customers are central to our purpose.
For more information about who our
customers are and the products we
provide, please refer to pages 12 and 13.
Customer interests and our areas
of focus
5 Access to useful financial products that
meet their needs and help to manage
everyday spending.
5 Financial knowledge, budget setting
and understanding credit.
5 Receiving reliable and high-quality
service.
5 Establishing dependable financial
relationships to help borrow healthily and
manage through life’s unexpected events.
Board and Company engagement
5 Continued support and guided
oversight of the execution of the Group’s
customer-centric strategy.
5 The Board has overseen the introduction
of easy access savings products as
described in our principal decision
on page 45.
5 The Board has approved the Group’s
Consumer Duty Annual Report submission
in July 2024 which you can read about in
our principal decision on page 72.
5 The Board has overseen the
enhancement of customer
forbearance options, including those
for vulnerable customers.
5 The Board regularly monitors customer
service quality including through
listening to customer calls with a range
of outcomes.
5 The Board supported focus on a digital
first customer experience. Our improved
mobile app has been developed during
2024 and is due to be launched in 2025.
Outcomes and impact
on decision making
5 Broadened our product range, including
easy access savings accounts that
are more typically suited to our
customer base.
5 Customers and good customer
outcomes are embedded into the
Group’s priorities, purpose and values.
5 Regular training, monitoring and
upskilling of agents to continually
improve customer service performance.
5 Development of digital app and
customer web portal benefiting from
expertise of Snoop colleagues. Work
is on track for implementation of the
Gateway platform by the end of 2025.
5 Introduction of Snoop credit score
and Snoop savings product.
5 Enhanced vulnerability training for all
non-customer facing colleagues.
5 New caps and limits for the application
of late charges and overlimit fees on
credit cards.
5 Partnerships with Fair Finance
and Income-Max.
Colleagues
Our talented and passionate colleagues
are critical to the success of our business.
Colleague interests and our areas
of focus
5 Supporting our customers and delivering
great service.
5 Understanding their role in the success
of our business.
5 Leadership, career development, training,
remuneration and benefits.
5 Company culture, wellbeing, inclusion
and diversity and work-life balance.
5 Tools and resources.
Board and Company engagement
5 The CEO publishes a weekly video blog
(vlog) for colleagues.
5 Our Chairman and CEO have visited
office locations in person during
the year to meet with colleagues
at networking events.
5 Monthly live ‘Stay Connected’ events
include business performance updates
and real time question and answer
sessions with the CEO and broader ExCo.
These events are very well attended and
recordings and transcripts are made
available for those colleagues unable
to attend.
5 All colleagues were invited to attend
specialist information sessions such
as those regarding our outsource
providers, our customers and our mobile
app development.
5 Colleagues were invited to attend
ExCo roadshows and question and
answer sessions.
5 Graham Lindsay, the Designated Non-
Executive Colleague Champion, has visited
offices and attended regular Colleague
Forums and reported verbally to the Board.
5 Colleague Forums meet regularly to
discuss key topics and feed back to
senior management and the Board.
5 Our inclusion and diversity focused
affinity groups are active and
well established.
5 The Great Place to Work survey has been
completed to gather valuable colleague
insights (see page 20).
Outcomes and impact on
decision making
5 Colleague survey results fed back to
the Board, action plans developed and
focus sessions held (see page 68).
5 Introduction of the LEAD forum, LinkedIn
Learning and Connected Leaders.
5 LGBT Great Silver Standard.
5 Colleague Forum supported colleagues
with the collective consultation on the
Group’s restructure and a number of
colleagues’ recommendations and
counter-proposals were accepted.
5 Snoop Plus was provided to colleagues
for free.
5 Customer Hub for colleagues on the
internal intranet providing a centre for
excellence in customer information and
research helping to embed customers
at the heart of decision making
and continue to develop customer
knowledge throughout the business.
Links to strategic themes
Links to s.172
Links to strategic themes
Links to s.172
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
70
Investing and rewarding our workforce
Launched in 2023, The Vanquis Way provides a strong cultural foundation shaped by our colleagues. During the year we
enhanced our performance management framework to align colleague objectives with our values, ensuring both what has
been achieved and how it has been achieved are assessed monthly. To support career growth, colleagues have access to a free
online Development Centre with high-quality training tools. We have also updated our Group Reward Framework and family-
friendly policies, while aligning pay dates across the Group.
Environment
We are committed to minimising our
environmental impacts and working
with others to take action on the globally
important issue of climate change. Our
climate-related financial disclosure is
structured to be consistent with the four
pillars and 11 recommended disclosures of
the Task Force on Climate-related Financial
Disclosures (TCFD) and the requirements
of the Climate-related Financial Disclosure
(CFD) Regulations 2022 and the UK
Companies Act. Please see pages 22 to 34
for more information.
Environment interests and our
areas of focus
5 Climate-related values, behaviours
and targets.
5 Sustainable business practices.
5 Supporting initiatives to manage climate
change risks and opportunities.
Board and Company engagement
5 Board and Audit Committee approved
the Group’s TCFD content in the Annual
Report and Accounts.
5 Climate risks in the Risk Management
and Internal Control Framework.
5 Inclusion of climate-related performance
metrics within the remuneration of
Executive Directors.
5 Climate risk content and performance
information included in the Group’s
ICAAP.
Outcomes and impact on
decision making
5 Climate risk management and
reporting that are consistent with
UK regulatory requirements.
5 Climate risk reclassified.
5 Board approval of the Group’s ICAAP.
5 Science-based targets considered.
Regulators and
Government
We aim to deliver caring banking with
heart for our customers and stakeholders.
Our strategy, Purpose and values are
designed to help us deliver a positive and
effective risk culture that is focused on
good conduct and outcomes. We remain
committed to maintaining an open and
honest relationship with our regulators.
Please see page 16 for more information.
Regulators and Government
interests and our areas of focus
5 Conduct, compliance and fair treatment
of stakeholders.
5 Risk-based and customer-centric
leadership and culture.
5 Well-administered, appropriately
designed products with fair terms
and good outcomes.
Board and Company engagement
5 Regular engagement meetings have
been held with the CRO, CFO and CEO
and the Group’s regulators.
5 Key regulatory interactions, insights and
areas of regulatory focus are reported to
the Board via the Chief Risk Officer Report.
5 Tripartite meetings with the FCA and FOS
have been held to provide consistent
information about the Group’s complaint
pipeline and how it is being managed.
5 Risk Committee has scrutinised and
recommended to the Board the
2024 ILAAP and ICAAP for approval
(see page 89).
5 The Group CEO joined the Board of UK
Finance on 1 July 2024.
5 The Group is a member of the UK
Finance and Leasing Association.
5 The Board approved the operational
resilience self-assessment attestation
and action plan on 15 May 2024.
5 Board approved the Consumer Duty
annual Board report on 29 July 2024.
Outcomes and impact on
decision making
5 The PRA completed a Liquidity Supervisory
Review Process of the Group in the second
half of 2024 confirming the removal of the
Group’s IRRBB scalar in the PRA Buffer.
5 In July 2024 the Group received its Periodic
Summary Meeting letter and responded
to the PRA in December 2024 to confirm
all actions had been completed.
5 Board members have met with senior
leaders at the FOS and the SRA to discuss
CMC complaints and behaviours and the
impact on the Group’s customers and
other stakeholders.
5 On 11 March 2024 the Group filed a legal
claim against the claims management
company TMS Legal.
Communities
We recognise the importance of supporting
our communities through colleague
volunteering, community investment and
long-term charitable and community
organisation partnerships.
Community interests and
our areas of focus
5 Financial education, social mobility and
inclusion and addressing the root causes
of social or financial exclusion.
Board and Company engagement
5 Our Group CEO recorded a ‘Number
Natter’ podcast with founder of National
Numeracy Sam Sims on National
Numeracy Day 22 May 2024, of which the
Group is a Lead Supporter.
5 The Group hosted an inspirational session
for 45 female students aimed at motivating
young women to develop careers in
technology. ExCo and the Board met
with the students to discuss their skills
and aspirations.
5 Colleagues’ fund-raising is matched
pound for pound up to £500 per year.
5 Colleague paid volunteering time is
supported for one day per year and a
range of opportunities to volunteer are
provided for colleagues.
Outcomes and impact on
decision making
5 A total of 2,500+ volunteering hours were
recorded by colleagues in 2024.
5 A wide variety of team challenges have
been offered to colleagues including
challenges with an environmental
focus or a particular diversity and
inclusion focus.
5 We partner with Ahead Partnership,
Plain Numbers and National Numeracy
to promote financial inclusion.
5 We continue to support the School
Uniform Project to provide uniforms to
those in need via School-Home Support.
5 £1.4m has been invested in our
community support programmes.
5 We are an official delivery partner
for Bradford UK City of Culture 2025
supporting children and young people to
engage in cultural activities during 2025.
Links to strategic themes
Links to s.172
Links to strategic themes
Links to s.172
Links to strategic themes
Links to s.172
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
71
Stakeholder engagement and decision making continued
Principal decision: Consumer Duty annual Board report and attestation
The Board approved the Group’s Consumer Duty annual Board report and attestation to the FCA
Strategy and culture
As part of the FCA’s Consumer Duty firms are required to complete an
annual Consumer Duty board report. 2024 was the first year that the
requirement was introduced, and our Board helped shape the Group’s
first annual Consumer Duty report prior to its submission to the FCA.
The Board had already approved a customer-centric approach in its
approval of the Group’s strategy. Two in-depth research projects were
commissioned to understand our target market and our proposition.
A Chief Customer Officer role was created and Jill Armstrong joined
the organisation in February 2024 and created a single, unified
customer office in July supporting the end-to-end needs of customers
and providing career development opportunities for colleagues.
The structure was deliberately customer centric and designed to
deliver a solid foundation to deliver the approved strategy.
Data quality
Understanding the Consumer Duty and how it could be applied and
integrated into our Group began in 2023. The annual Consumer Duty
report was deliberately structured to effectively communicate the
changes that the Group had made following the Consumer Duty
to promote consistent, fair and open communication and avoid
foreseeable harm. The Board received evidence that demonstrated
the practical improvements that had been applied to areas such as:
customer terms and conditions; the website and mobile app; and fees
and charges.
Links to stakeholders
Links to risks
P1
P2
P12
Links to strategic themes
Effective Board challenge
The Board commissioned a continuous monitoring review from
Internal Audit of the Consumer Duty programme of work which
confirmed that plans were being executed on time.
The Board in its Board meetings and through direct meetings with
the Board’s Consumer Champion Graham Lindsay and the Chief Risk
Officer provided input to the final report. To enable clear oversight
of the programme the report provides a RAG rating across all key
action areas. Furthermore, a 12-month forward-looking delivery plan
for embedding and continuous improvement was included. This
structure also serves to support conversations with our regulator.
Under the conduct principal risk reporting the Risk Committee
received regular updates regarding the Group’s execution and
embedding of the Consumer Duty, including the impact of actions
and changes on the Group’s customers and the quality and fairness
of customer outcomes.
Stakeholder outcomes
The Board was aligned in acknowledging that focus on customer
outcomes and developing a customer-centric culture would
contribute positively to the long-term success of the business.
The Board recognised as positive for stakeholders as a whole the
delivery of the Group’s customer-centric strategy and purpose.
For customers our arrears and forbearance approaches have been
enhanced in line with the requirements to strengthen protections
for borrowers in financial difficulty. Delivery of enhanced strategies
to support customers who have disclosed vulnerability or who
have additional needs for support continues to be a focus area
during 2025.
Links to s.172
Stakeholder engagement in action
Listen
The strategy seminar on
27 March 2024 provided
investors and analysts an
opportunity to attend and
ask questions of our CEO,
CFO and other key executive
team members.
Learn
Key issues raised by investors
were their uncertainty
regarding complaints costs,
visibility on the cost of risk in
the Vehicle Finance portfolio
and how the Group could
demonstrate a clear path to
receivables growth.
Respond
The Group’s Q3 trading statement on
7 November 2024 provided the market
with clarity regarding the cost of risk of the
Vehicle Finance portfolio and information
regarding complaints costs and activity.
The statement also confirmed that the Group
would continue to conduct Vehicle Finance
lending through intermediaries which have
commission disclosures in line with the
Court of Appeal judgment relating to Vehicle
Finance commission disclosure practices.
Listen
Direct market research was
undertaken as part of the new
mobile app development.
Learn
Insights were gained into
customer experience,
including how easily
participants were able to
understand the information
being presented to them and
how intuitively they were able
to navigate the app in order
to manage their account.
Respond
The new app is being built with large action
buttons and clear language regarding
the customer’s balance, pending balance
and available funds.
Listen
As part of the strategy led
digital-first approach the
Group launched a Bring Your
Own Device (BYOD) Policy for
colleagues.
Learn
Colleague feedback was
gathered through the
Colleague Forum and
identified opportunities for
more inclusivity in both the
BYOD Policy and how it was
being communicated.
Respond
The BYOD Policy and communications
were updated to be more accessible
and inclusive.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
72
Suppliers
Suppliers support us to deliver quality
services to our stakeholders. We are
committed to building strong relationships
with our suppliers supported by robust
procurement policies and processes to
help us to reduce costs, improve efficiency
and deliver high-quality products and
services to our customers.
Supplier interests and our areas
of focus
5 Sustainable business, contract
performance, customer service, risk
management, prompt payment and
commitment to tackling climate change.
Board and Company engagement
5 Board reviewed and approved the
Group’s corporate policy statements and
the 2024 Modern Slavery Statement.
5 Board considered two of the Group’s
significant supplier contracts.
Outcomes and impact on
decision making
5 The Board monitored performance of
the three material customer service
outsource partners and oversaw plans to
ensure colleague competency, training
and health and safety arrangements.
5 Consistent engagement delivered
through application of the Group’s
Supplier Relationship Management
Framework.
5 A supplier lifecycle hub was published
on the intranet for colleagues to provide
easy access to supplier relationship
management information improving
experience for colleagues and suppliers.
5 Our standard payment terms are aligned
to the Prompt Payment Code (30 days).
5 The Board approved the Group’s
operational resilience self-assessment
document and oversaw execution of the
action delivery plan to achieve compliance
with the 2025 regulatory date.
Links to strategic themes
Links to s.172
Great colleagues are the
cornerstone of every great
business.”
Graham Lindsay
Designated Non-Executive Colleague Champion
Graham Lindsay, Designated
Non-Executive Colleague Champion
Role overview
I am proud to be the Board’s Designated Non-Executive
Colleague Champion, a role which I have performed for the
past three years. In this role I am responsible for engaging
with our colleagues on behalf of the Board, bringing
colleague viewpoints to Board discussions and supporting
colleagues’ interests. I am a firm believer that colleagues
are the cornerstone of every great business. As a member
of the Group Board and Nomination and Governance
Committee and Chair of the Remuneration Committee
I am well positioned to fulfil the role and have extensive
experience, as set out in my biography on page 60.
I regularly visit our offices and attend the Colleague
Forum both in person and remotely where I listen and
talk to colleagues. I discuss with colleagues the work of
the Board in areas of common interest. I report to the
Board verbally on my colleague engagement work and
highlight colleague insights when providing my input to
Board decisions. Directly engaging with our colleagues
promotes transparency and openness and fosters trusted
relationships between colleagues and the Group’s senior
leadership team.
Engagement activities in 2024
2024 has been a year of operational turnaround for the
Group and our colleagues have had to remain resilient. There
have been many changes required, including organisational
design changes, to transform the business and I have been
impressed by our colleagues’ attitude and tenacity which
has been outstanding. The Colleague Forum was exemplary
again this year in supporting those colleagues impacted
as the business was restructured and helped to ensure
that communication was effective and comprehensive
support services were made available to colleagues. I have
raised colleague feedback in Board meetings, such as the
technology challenges colleagues can face with legacy
systems, and am pleased to see the positive progress being
made with the Gateway implementation. I invited one of the
Colleague Forum Chairs to meet with me and the CEO to
discuss their role within the Forum.
This year in June I, along with the Head of Reward, discussed
remuneration with the Colleague Forum, including the
Directors’ Remuneration Report, executive remuneration
and wider colleague remuneration. The session was an
open conversation, interactive and especially beneficial
for me as Chair of the Remuneration Committee.
I particularly enjoyed the more informal networking events
that have been arranged with colleagues this year which
have helped colleagues get to know my fellow Board
members, some of whom are new to the business.
Priorities for 2025
I shall continue to meet regularly with our colleagues
through my attendance at the Colleague Forum and
through site visits to perform my role as Designated
Non-Executive Colleague Champion. In 2025 some of our
Board and colleague engagement events will focus on new
starters to help build relationships early with colleagues. The
discussion regarding remuneration will continue to be run
annually as required by the Corporate Governance Code.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
73
Stakeholder engagement and decision making continued
Effective engagement with
shareholders and stakeholders:
investor relations
The Group’s strategy seminar held on 27 March 2024
marked a reset of the strategic direction for Vanquis
following the new CEO and CFO joining the Company in
the second half of 2023. It was generally well received
by investors and included an outline of the plan to
deliver profitable sustainable growth and attractive
returns, a refreshed customer proposition, and details
of the Group’s focus on technology transformation and
operational efficiency.
The Group’s trading update on 11 March 2024 led to a 50%
drop in share price, driven by lower consensus income
expectations and rising complaint costs from unmerited
CMC claims.
A further trading update on 16 July 2024, announcing a
comprehensive balance sheet review, impacted investor
sentiment but saw a smaller 6% decline, as it was viewed
as addressing legacy issues.
Investor uncertainty deepened in late October following the
Court of Appeal’s judgment on Vehicle Finance commission
disclosure, adding pressure to the share price ahead of the
Supreme Court appeal process.
Despite the impact of these events, the Group’s share
register remained relatively consistent, with a number
of core holders adding to their positions during the year
and new investors joining the register. These investors
are generally strong believers in the strategy of Vanquis
and the opportunity that exists and are supportive of the
management team to execute the operational turnaround.
There was regular shareholder engagement throughout
the year. Investor interaction with the CEO, CFO and Head
of Investor Relations was particularly extensive after the
full-year 2023 results and strategy seminar in March, interim
results at the start of August, and first quarter and third
quarter trading statements. The Chairman also participated
in investor engagement.
Interaction with shareholders and sell side analysts covering
Vanquis has become more systematic, including regular
touch points and the collation of consensus estimates.
The Board is committed to maintaining effective
engagement and active dialogue with its shareholders.
In addition to the ongoing investor meetings and
conferences, the following methods of engagement
and materials are available to shareholders:
The Annual Report
The Annual Report provides a comprehensive overview
of the Company’s purpose, strategy and progress against
objectives and is complemented by regular market
updates, including quarterly trading updates.
The Annual General Meeting (AGM)
Shareholders have the opportunity to further engage
with and directly question the Board at the AGM. They
are encouraged to participate in the AGM process and
vote on all resolutions on an individual basis or by proxies.
This year our AGM will be held in London.
The Group website and shareholder correspondence
The Group website provides comprehensive information
about the Company, its divisions and product offerings,
and Board members. Our dedicated ‘Shareholder Hub’
provides up to date information on our strategy, the
latest results presentations, RNS announcements and
our investment case.
Shareholders
Our shareholders share our purpose and
invest for our future success. Please see
page 8 for our investment case.
Shareholder interests and our
areas of focus
5 Sustainable growth, return on investment,
and social and environmental impact.
Board and Company engagement
5 A strategy seminar was held on 27 March
2024 setting out our strategy. In addition,
trading updates were provided via the
London Stock Exchange on the Group’s
performance and strategy and followed
by roadshows with investors. Feedback
from our corporate broker was distributed
to the Board and senior management
after updates were made to the market.
5 Our AGM was held on 15 May 2024
at which investors were invited to be
present and free to ask questions
directly, in addition to casting votes
on the resolutions.
5 Chairman, CEO, CFO and Interim Head
of Investor Relations have written to
and met with investors and analysts
and reported back to the Board.
5 Our new Head of Investor Relations
presented an Investor Plan, Shareholder
Engagement and Competitor Analysis
report to the Board in November 2024.
Outcomes and impact on
decision making
5 Our Annual Report and Accounts along
with all other investor communications.
5 We received votes representing
approximately 78% of our issued share
capital at our 2024 AGM.
5 A market update on 16 July 2024 was
made ahead of the interim results to
confirm the findings of a comprehensive
balance sheet review which had
resulted in the revaluation of some
historical balances and resetting market
expectations regarding ROTE and capital.
5 We completed an asset reunification
programme helping reunite £88k in
previously unclaimed dividends.
Links to strategic themes
Links to s.172
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
74
1
9 1
2
10
3
8 1
4
7 3
5
5 4
6
10
7
10
8
7
9
10
10
6 1
11
4 5
12
8 2
13
7 1
14
6 3
15
10
16
7 3
17
9 1
18
5 3
19
8 1
Composition, succession and evaluation
Board composition (as at 31 December 2024)
Member attendance at Board and committee meetings in 2024
The table below sets out the Board and committee attendance during the year. Attendance is shown as the number of
meetings attended out of the total number of meetings possible for each individual director. Attendance was very strong
during the year at both scheduled and additional meetings. The Board continues to be satisfied that each director is
able to allocate sufficient time to the Company. The Chair of each committee reports regularly to the Board on how that
committee has discharged its responsibilities. The absences shown below were a result of an urgent personal matter or a
pre-arranged commitment.
Board member Board Ad hoc
Audit
Committee Ad hoc
Nomination
and
Governance
Committee Ad hoc
Remuneration
Committee Ad hoc
Risk
Committee Ad hoc
Total number of meetings 9 4 6 4 5 3 4 2 5 2
Sir Peter Estlin 9/9 4/4 — — 5/5 3/3 — — — —
Ian McLaughlin 9/9 4/4 — — — — — — — —
Dave Watts 9/9 4/4 — — — — — — — —
Andrea Blance
1
1/1 — — — — 3/3 — 1/1 — —
Graham Lindsay 9/9 4/4 — — 4/5 3/3 4/4 2/2 — —
Paul Hewitt
2
9/9 4/4 6/6 4/4 5/5 3/3 — — 5/5 2/2
Elizabeth Chambers
3
4/4 2/2 — — 2/2 3/3 — — 2/2 1/1
Angela Knight
4
9/9 4/4 6/6 4/4 5/5 3/3 — — 5/5 2/2
Margot James
5
4/4 2/2 — — 2/2 3/3 1/1 1/1 — —
Michele Greene 8/9 3/4 — — 4/5 3/3 — — 5/5 2/2
Karen Briggs
6
6/6 1/2 4/4 4/4 3/3 — 2/2 2/2 — —
Jackie Noakes
7
6/6 1/2 — — 3/3 — — — 3/4 1/1
Oliver Laird
8
6/6 1/2 4/4 4/4 3/3 — 2/2 2/2 — —
1 Andrea Blance stepped down on 1 February 2024.
2 Paul Hewitt stepped down on 29 January 2025.
3 Elizabeth Chambers stepped down on 15 May 2024.
4 Angela Knight stepped down on 29 January 2025.
5 Margot James stepped down on 15 May 2024.
6 Karen Briggs was appointed on 27 March 2024.
7 Jackie Noakes was appointed on 27 March 2024.
8 Oliver Laird was appointed on 27 March 2024.
Board gender
diversity
Board ethnic
diversity
Board
tenure
Executive Committee
and direct reports
Male 6
Female 4
White 90%
Ethnically diverse 10%
0-2 years 7
2-5 years 1
5-9 years 2
Male 59%
Female 41%
Board Skills Matrix
This Board Skills Matrix represents the number of directors with core or supplemental
capability in areas that are relevant to the Group’s business model and strategy. A core
capability is one of the strongest areas of a director’s skill and expertise, where they bring
significant value to Board discussions. A supplemental capability is an area where the
director has enough knowledge and experience to carry out their role. This Board Skills Matrix,
together with the biographies on pages 59 to 61, shows the combined strength of our Board in
areas central to delivering the Group’s strategy.
Category
1. Leadership: culture and ethics
2. Strategy
3. Audit and financial reporting
4. Customers
5. Product development
6. Banking
7. UK banking regulation
8. Shareholder engagement
9. Change management
10. Secured loans
11. Cards (near to sub-prime)
12. HR, talent and employee engagement
13. IT and digital initiatives
14. Capital management and treasury
15. Risk management
16. M&A transactions
17. Regulatory landscape and engagement
18. Cyber crime
19. Environmental impact
Core capability Supplemental capability
Vanquis Banking Group plc Annual Report and Accounts 2024
75
Governance Financial statementsStrategic report Shareholder information
Director induction, training and evaluation
Board evaluation
In accordance with best practice and the UK Corporate
Governance Code, the Board’s formal annual effectiveness review
is conducted by an external facilitator every three years. The next
external review will take place in 2025. In 2024, the Board decided
to enhance the review process by adopting a hybrid approach.
The Chairman and General Counsel and Company Secretary
agreed that the internal questionnaires would be complemented
by a Board discussion, facilitated by an external third party,
Independent Audit*. The discussion explored what Board members
felt worked well and what they would like to see done differently.
The discussion afforded the Board dedicated time to reflect
on their own performance and ways of working and promoted
transparent dialogue.
Following the Board discussion, and as reported in 2023,
Board members were asked to complete internally produced
questionnaires which required assessments of Board performance
as a whole, individual performance, individual skills, committee
effectiveness and Chairman performance. Key management
stakeholders were also asked to provide anonymised feedback on
Board interactions. The results of the assessments were collated
by the General Counsel and Company Secretary and tabled for
Board and Nomination and Governance Committee review. The SID
led discussion on the Chair’s performance in the absence of the
Chairman. Each Board member was also subject to an individual
performance discussion with the Chairman. The Nomination and
Governance Committee agreed the action plan arising from the
2024 Evaluation, the results of which are detailed below.
2022
External
2023
Internal
2024
Hybrid
2025
External
Director induction process
In 2024 three new non-executive directors joined the
business and each went through a comprehensive and
tailored induction plan. Our induction programme is
designed to give directors an in-depth understanding
of the business and its purpose, culture and values.
The programme includes meetings with members of the
Group Executive Committee and other key stakeholders,
which may include the Group external auditor, external
advisors, our brokers, and representatives from the
FCA and PRA.
During the year, Oliver and Karen visited the Bradford office
and met with members of the ExCo to discuss business
priorities and strategic progress, as well as other specific
issues, as required.
All new directors are provided with full access to our
secure electronic reading room within our Board meeting
software, which provides induction materials such as Group
policies, structure charts, Terms of Reference, Delegated
Authorities Manual, broker notes, and past Board and
committee meeting papers and minutes. During 2024,
there were a number of product deep dives – detailed
below – which provided the new appointees with a deeper
insight into the business and refreshed the knowledge of
longstanding members.
During 2024, the directors were provided with deep dives,
teach-ins, briefings and presentations on a range of key
subjects, including the following:
5 Vanquis Assist - Forbearance Overview;
5 Snoop Deep Dive;
5 Vehicle Finance Deep Dive; and
5 Cards Deep Dive.
Ongoing director training
It is important that our directors are made aware of any
upcoming developments and receive training tailored
to their roles at the Company, given the ever-changing
economic and regulatory environment.
Directors undertake training both as a whole Board
and based on individual requirements to assist them
in carrying out their duties and responsibilities. At least
annually, the Chairman discusses with each director
his or her contribution to the work of the Board and
personal development needs, with each member
being required to retain a record of their continuous
professional development.
Director training schedule 2025
Examples of the training expected to form part of the 2025
training programme include:
5 Cyber/Ransomware;
5 MAR/PDMR Training;
5 Culture;
5 Artificial Intelligence; and
5 Recovery Plan Training.
The director training is overseen by the General Counsel
and Company Secretary and can be internally or externally
facilitated, with sessions typically originating from technical
Board discussions or an identified training opportunity.
Directors are requested to refresh their understanding of
current obligations and recent developments in areas
pertinent to their role; they are also given access to an
external online academy tool which provides a wide
array of briefings, education and bespoke training. The
General Counsel and Company Secretary is reactive to
any emerging training needs in response to the wider
business environment.
Each year management carries out a fit and proper
assessment for all senior managers and certified
colleagues under the SMCR process. This process involves
requesting annual learning and development plans which
are forward looking for our executive team members. The
talent team is also engaged in the process to ensure all
annual mandatory training has also been completed.
* No conflict of interest with any Board member was identified.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
76
Board evaluation: striving for continuous improvement
Progress made against the 2023 action plan
Agreed actions Progress made during 2024
Review the approach and oversight of NED and senior management
succession planning.
There was significant change in both the Board and the workforce,
including at senior management level, during 2024. There was a
clear recognition of the need to right-size and appropriately skill the
Board and wider workforce proportionate to the current size and
composition of the Group; this directly influenced appointments
and organisational change during the year.
Keep under review the appropriate size, composition, skills and
experience and diversity in the Board as part of succession planning
and Board appointment processes. Include a focus on technology
skills as part of proactive succession planning.
The Nomination and Governance Committee Report provides detail
on this action (page 79). Size, composition, skills and diversity were the
central drivers of Board appointments throughout the year.
Consider whether the CCE Committee’s work would be
better placed under the Board and/or other committees to
enhance oversight.
The work of the CCE Committee was successfully amalgamated into
the Board agenda plan, effectively streamlining the governance
process and freeing up Board member time.
More site visits and focus on engagement with the Executive
Committee and wider management and workforce.
Members of the Board visited our Bradford, Chatham and
Petersfield sites. There were also a number of informal Board
and colleague events.
Review the Board meeting agenda and management reporting
to improve the Board’s oversight and discussions on areas of
strategic importance.
Board reporting templates were refreshed during the year to
encourage more concise reporting. The Board agenda planner was
reviewed to ensure matters of strategic importance were prioritised.
In January 2025 a new performance reporting template was
introduced.
Results of 2024 Board and Committee Effectiveness Review
Strengths identified Agreed actions/focus areas for 2025
The Board was regarded as effective, appropriately diverse, skilled,
and experienced with recent appointments having enhanced
Board composition.
Maintain the ongoing review of Board skills and composition.
Technology skills and the need for increased diversity of age and
ethnicity were noted as key areas for monitoring.
Many of the action areas identified were already in progress,
indicating the Board’s commitment to continuous improvement
throughout the year.
Consider reducing the size of the Board, relative to the reduced size
of the business.
The Board dynamic was regarded as collaborative and as having
been supportive to management throughout the challenging
turnaround period.
Consider whether the governance structure could be streamlined
and optimised to avoid unnecessary duplication between the Board
and committees.
Board stakeholder relationships were rated highly, particularly the
relationship with the CEO.
Consider extending the remit of the Nomination and Governance
Committee to include governance, freeing space on the Board
agenda for other strategic issues.
Committees were regarded as having discharged their
duties effectively.
Encourage more informal engagement between Board members
and the wider workforce.
Chairman effectiveness review Individual director effectiveness
Board members responded to a series of questions on the Chair’s
performance. The feedback was collated by the General Counsel
and Company Secretary and a report compiled in collaboration
with the SID. The SID conducted a confidential discussion with Board
members in the absence of the Chairman and held an individual
performance review with the Chairman.
The responses to the questionnaire commended the Chairman
on his evident commitment to relationship building, ‘hands-on’
approach and appropriate balance of support and challenge.
The Chair’s proactive engagement outside of meetings, including
regular feedback and encouragement to fellow directors, was also
noted. The Chair’s effective running of meetings and evident levels
of pre-meeting preparation were unanimously praised.
Directors suggested that during 2025, the Chairman could
encourage greater equality of participation in meetings, continue
to support management on the business turnaround and recognise
the level of challenge currently faced by management.
Board members were asked to complete a self-assessment,
which then formed the basis for individual performance discussions
with the Chairman.
Board members generally felt that they balanced external
commitments well and had sufficient time to discharge their
responsibilities. They generally rated their relationships with their
fellow Board members and with management highly, though
the level of change throughout the year was recognised as
having impacted this. Board members suggested that additional
opportunities for engagement would enhance relationships
in general.
Board members rated their relationship with the Company Secretariat
highly and looked forward to enhancing governance processes
further under the new General Counsel and Company Secretary.
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Vanquis Banking Group plc Annual Report and Accounts 2024
77
Role of the Committee
The Nomination and Governance Committee is responsible
for overseeing:
5 the evaluation of the Board and its committees which includes
overseeing the Board’s composition, size and structure,
including the Board committees, so that it remains appropriate
and effective in order to deliver the Company’s strategy;
5 the Board appointment and succession planning processes;
5 the Group’s talent management framework and senior
management succession planning to ensure the Group’s
leadership needs are met now and in the future; and
5 the diversity of the Board and the Group’s talent pipeline
to meet the Group’s diversity objectives and to increase
the percentage of roles held by women and other
underrepresented groups across the Group.
Ensuring effective leadership for
long‑term sustainable success
Dear Shareholder
I am pleased to present the important work undertaken
by the Nomination and Governance Committee during
2024. The Committee continues to be comprised of all the
non-executive directors, whose biographies (pages 59-61)
and meeting attendance (page 75) are detailed earlier in
this report.
The Board underwent significant change during 2024, first
with the stepping down of Andrea Blance in February, as
reported last year, followed by the appointment of Karen
Briggs, Oliver Laird and Jackie Noakes in March. Elizabeth
Chambers and Margot James stepped down in May,
electing not to put themselves forward for re-election at
the 2024 AGM. I would like to reiterate my thanks to Andrea,
Elizabeth and Margot, for their many years of valuable
contribution to the Group Board. The evolution of the Board
aligns with the continued transformation of the Group as
it seeks to deliver the best results for all stakeholders and
position itself for sustainable growth.
All Board appointments are informed by the balance of
skills, experience, and diversity required to optimise the
Board’s composition (see pages 63 and 75). The annual
Board effectiveness review, reported on page 77, and
the Board Skills Matrix, updated annually, are key tools in
assisting the Committee to discharge its duties and the
Group to execute its strategy. In December 2024, following
the output of the Board effectiveness evaluation, it was
agreed that the Committee would expand its remit to
oversee governance, both facilitating the streamlining
of the Board agenda and ensuring sufficient focus on
governance matters, particularly given the impending
changes to the UK Corporate Governance Code.
Diversity 14%
Succession and talent 23%
Board composition
and appointments
36%
Governance 27%
The Committee’s Terms of
Reference are available at:
www.vanquisbankinggroup.com
Nomination and Governance Committee Report
The Committee strives to deliver exceptional
results for all stakeholders and the evolution
of the Board is vital in positioning the Group
for sustainable growth.”
Sir Peter Estlin
Nomination and Governance Committee Chair
Allocation of time
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
78
Following conclusion of the Board meeting held on
29 January 2025, Paul Hewitt and Angela Knight stepped
down from the Board. As a consequence, Michele Greene
was appointed as Chair of the Risk Committee and Senior
Independent Director, succeeding Angela, and Oliver Laird
as the Chair of the Audit Committee, succeeding Paul.
Following discussions throughout 2024 on succession
planning, it was decided Angela and Paul would not be
replaced to reduce the size of the Board to mirror the
smaller, more agile shape of the Group, whilst maintaining
an appropriate balance of skills on the Board. It is therefore
recommended that all of the current directors be
reappointed at the forthcoming AGM.
Overseeing the Group’s diversity targets to ensure a diverse
leadership and workforce was another focus area of the
Committee during the year. This has been a primary focus
for the Committee in the past year, and it will remain a
critical area of emphasis as we move into 2025.
Board recruitment process
The Committee leads the process for appointments,
ensuring that plans are in place for orderly succession
to both Board and senior management positions,
and oversees the development of a diverse pipeline
for succession.
During the year, a search for non-executive directors was
conducted by leveraging our own internal executive search
capabilities and therefore reaching a significantly wider
candidate population than using external search firms as
we did in 2023. We used a formal appointment process
which is rigorous and transparent to ensure we satisfied
regulatory requirements.
The Committee evaluated the current Board composition
and skill-set, combined with a forward-looking view of
business needs, to develop a role profile for new Board
members. The priorities and core requirement of the
search were:
5 bringing senior commercial/digital and/or financial/risk
leadership experience across the financial services sector;
5 knowledge of consumer credit, cards and digital
payments markets and expertise in the application
of technology in these areas; and
5 having the breadth and ability to join key committees
on appointment, and to offer optionality to chair a
committee and/or act as SID in due course.
Additionally, the search was focused on a diverse and
inclusive choice as this was a priority across all diversity
measures. Following this process Jackie Noakes, Oliver
Laird and Karen Briggs were appointed to the Board as
non-executive directors on 27 March 2024.
Board evaluation
The Board Skills Matrix (BSM) complements the Board
evaluation (pages 75 to 77) and is used to assess each
member of the Board against the skills and experience
areas identified as requirements for the Board. This is
reviewed on an annual basis and was reviewed in October
2024. Given the recent changes in leadership and need
for ongoing review of Board succession plans, the BSM
was refreshed to ensure optimal alignment with business
needs. Following completion by each director, their scores
were collated and there were clear improvements in
several areas demonstrating the Board’s commitment to
continuous improvement. There remained areas for the
Committee to remain cognisant of, including the need for
digital and technological expertise and a desire to continue
to improve Board diversity.
Talent management and succession
The Committee continued to proactively review talent
management and succession across the organisation,
notwithstanding the challenges experienced following the
need for further redundancies.
Significant progress has been made on succession
planning in the last few years with six of our current
directors having a tenure of less than two years on the
Board, the changes being stated within this report. The 2024
BSM will be used to identify any skill gaps which may need
to be met in the future.
The Committee also oversaw the mandatory and
regulatory learning completion for the Group’s material risk
takers and senior manager function holders.
Inclusion and diversity
You can read about our approach to diversity and inclusion
on pages 19 and 20. Our Inclusion and Diversity (I&D) Policy,
which includes our Board Diversity Policy, is designed to
promote equality, diversity and inclusion across all parts
of the Group and aims to ensure that we have an inclusive
and positive working culture that supports equality,
inclusion and diversity and to create an environment where
everyone feels included and valued. Our I&D Policy covers
a range of protected characteristics including age, gender,
ethnicity, sexual orientation, disability or educational,
professional and socio-economic backgrounds. The
policy seeks to enable all colleagues to reach their full
potential and contribute fully to the success of the business.
By delivering our I&D and Board Diversity Policies’ key
aims, we believe that we can support the delivery of our
strategy through leveraging the benefit of a wider range of
perspectives and ideas, contributing to a high-performing
and effective leadership team which brings greater diversity
of thought to better respond to our diverse customer base
and stakeholder views. By having a diverse Board, and
Board committees, we believe the Board is better placed to
challenge management, consider stakeholder views, make
better decisions and deliver the Group’s strategic aims.
During the year, the Committee reviewed progress against
our diversity objectives and our compliance with the diversity
requirements set out in UK Listing Rule 6.6.6. The Group is a
signatory to the Women in Finance Charter and is committed
to achieve 40% female representation in senior management
by 31 December 2026. The following achievements were
reviewed and discussed by the Committee overleaf.
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Vanquis Banking Group plc Annual Report and Accounts 2024
79
Inclusion and diversity continued
Gender balance
5 Celebrated International Women’s Day with a Time to
Talk session hosted by the chief internal auditor and
Founder of Snoop.
5 A team of colleagues from across the business
attended Women in Data’s hackathon at its flagship
event, connecting us with hundreds of women from
the industry and raising brand awareness in this area.
Our brand partnership with Women in Data continues
into 2025.
5 Hosted a ‘Step into Tech’ workplace visit for 45
students aimed at motivating young women to
develop careers in the world of technology as part of
our SWITCH’D programme (to support the pipeline of
female talent in these areas).
5 Established the Women’s Network and launched a
mentoring programme for female talent.
5 Seven of our female colleagues were nominated at the
Women in Credit awards with two collecting awards.
LGBTQ+
5 Awarded the Silver Standard for LGBTQ+ diversity,
equality and inclusion excellence in financial services
by LGBT Great for the second year running.
5 Colleagues were invited to become part of the LGBT
Great mentoring programme.
5 Our LGBTQ+ Group celebrated Pride Month by sharing
colleagues’ stories that highlighted the intersectional
challenges between heritage, culture, and sexuality.
Social mobility
5 National Apprenticeship Week 2024 was celebrated
by the Social Mobility Affinity Group.
5 Through our longstanding partnership with National
Numeracy, supported National Numeracy Week,
alongside the Professional Darts Corporation.
5 Signed the Vision for Literacy pledge along with
more than 100 UK businesses to address falling
literacy levels and improve the life chances of young
people today.
Wellbeing
5 Celebrated colleagues who have caring
responsibilities during Carers Week by sharing
colleague stories and hosting, in partnership with the
Bank Workers Charity, a webinar on ‘Being a Carer’,
providing practical advice, tools and resources.
5 Launched a virtual GP service with BUPA, and we
invited all colleagues to become members of our
corporate private medical insurance.
5 The Group’s diversity objectives as set out in
2023 remained fit for purpose, and no changes
were made.
Board diversity objectives Progress against objectives
To maintain a minimum of 40% women (including those self-
identifying as women) on the Board.
Throughout 2024 the Board maintained a 40% female Board. As at the
date of this report it had reduced to 37.5% as a result of the re-sizing of
the Board. As reported above, diversity remains a key focus for Board
appointment processes.
To maintain for at least one of the senior Board positions (Chair,
CEO, SID or CFO) to be a woman (including those self-identifying
as a woman).
This objective was achieved when Andrea Blance stepped down in
February and was replaced as SID by Angela Knight. This was then
maintained in January 2025 when Angela stepped down and was
replaced by Michele Greene.
To maintain a minimum of one Board director from an ethnically
diverse background in support of the Parker Review target.
Whilst the Group is not currently captured by the targets set by
the Parker Review, we achieved this target as of 27 March 2024.
Diversity, including ethnic diversity, remains a key focus of our Board
appointment process and we continue to work with our external
recruitment partners to drive diverse candidate shortlists.
The Board will support and monitor Group activities undertaken
to meet its diversity objectives and to increase the percentage
of senior management roles held by women and other
underrepresented groups across the Group.
The Committee continues to develop talent management and
succession plans, whilst also continually assessing and strengthening
the Group’s I&D strategy and initiatives. The Committee aims to
cultivate a diverse talent pipeline that represents a broad spectrum of
experiences and perspectives.
To ensure Board appointment ‘long-lists’ reflect the Board’s
diversity commitments.
Our Board Diversity Policy confirms our commitment that all shortlists
for our Board and senior management positions are balanced from a
gender perspective. This remained a key focus for the Chairman and
Nomination and Governance Committee as part of the recruitment
process during 2024.
To ensure a rounded and diverse Board and Executive Committee,
appointments will be made on merit, taking into account different
backgrounds, diverse experience, perspectives, personalities, skills
and knowledge, and alignment with the Group’s culture.
As required by our I&D Policy, including the Board Diversity Policy,
appointments are made on merit, taking into account diversity and
alignment with the Group’s culture. Diversity forms a key consideration
of Board appointment and succession planning processes. You
can read more about our Board appointment processes on pages
76 and 79.
Nomination and Governance Committee Report continued
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
80
Explanation against UKLR 6.6.6(9) and data under UKLR 6.6.6(10)
As at the Company’s chosen reference date, 31 December 2024, and in line with FCA UK Listing Rule 6.6.6(9), the Group
confirms it has met the targets for at least 40% female representation on the Board and one of the senior positions of Chair,
SID, Chief Executive or Finance Director to be held by a woman, with Andrea Blance being replaced by Angela Knight. As at
the date of this report, Michele Greene was appointed SID on 29 January 2025 with female representation on the Board at
37.5% due to the reduction in the size of the overall Board. The Company also confirms that it has met the target for one
director to be from an ethnic minority background following the appointment of a new NED on 27 March 2024. A crucial
component of enhancing diversity is the accurate collection of gender and ethnic diversity data. Our approach has been
both consistent and carefully implemented, ensuring that we have a reliable understanding of the current state of diversity
within our Board and senior management teams. The data collection process involved issuing a survey via a secure
platform, designed in collaboration with our data protection team to adhere strictly to all data protection regulations.
Before launching the survey, we conducted a thorough briefing for all participants. It was essential to clarify the purpose
of this data collection and highlight its significance. By fostering a culture of transparency, we aimed to encourage open
participation, allowing Board members to understand the valuable insights that such information could provide for our
diversity initiatives.
Gender representation as at 31 December 2024
Board Executive Committee
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
Men 6 60% 3 5 62.5%
Women 4 40% 1 2 25.0%
Prefer not to say/other/unspecified — — — 1 12.5%
Ethnic representation as at 31 December 2024
Board Executive Committee
Number of
Board members
Percentage
of the Board
Number of senior
positions on the
Board (CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other white
(including minority-white groups) 9 90% 4 7 87.5%
Mixed/multiple ethnic groups — — — — —
Asian/Asian British — — — — —
Black/African/Caribbean/Black British 1 10% — — —
Other ethnic group — — — — —
Not specified/prefer not to say — — — 1 12.5%
Sir Peter Estlin
Nomination and Governance Committee Chair
13 March 2025
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Vanquis Banking Group plc Annual Report and Accounts 2024
81
Role of the Committee
The Committee assists the Board and is responsible for
overseeing the following:
Financial reporting
5 monitoring the integrity of the financial statements, and
any other published financial information, and reviewing the
significant financial reporting judgements therein;
5 advising the Board on the Annual Report and Accounts,
including whether it is fair, balanced and understandable;
5 assisting the Board in assessing the Company’s going concern
status and ongoing viability;
External audit
5 conducting the tender process and recommending to
the Board the appointment, remuneration and terms of
engagement of the external auditor;
5 reviewing and monitoring the independence and objectivity
of the external auditor;
5 assessing the effectiveness of the external auditor;
5 implementing and monitoring the Group’s policy on
non-audit-services;
Internal Audit
5 assessing and monitoring the effectiveness of the Group’s
Internal Audit function, including approving the annual Internal
Audit Plan; and
Internal controls and processes
5 reviewing and monitoring the effectiveness of the Group’s
system of internal financial and operational controls.
Audit, assurance and
internal control
Dear Shareholder
On behalf of the Committee, I am pleased to present the
Audit Committee Report for the year ended 31 December
2024, which details how the Committee has discharged its
role and duties during the year.
The Committee’s membership was subject to change
during 2024. Andrea Blance stepped down on 1 February
2024, leaving the Committee with only two members, Paul
Hewitt and Angela Knight. On 27 March 2024, Karen Briggs
and I joined the Committee. On 29 January, Paul Hewitt and
Angela Knight stepped down from the Board and I assumed
the role of Chair of the Committee, joined by Karen Briggs
and Graham Lindsay as members. I would like to thank Paul
Hewitt for his contribution as Audit Committee Chair and
his guidance to the Committee during the year. Members’
meeting attendance can be viewed on page 75 and details
of their qualifications, skills and experience are set out in the
‘Our Board’ section on pages 59 to 61 of the Governance
Report. As a whole, the Committee is experienced and
has competence and relevant financial services sector
experience, meeting the experience and expertise criteria
set out in the 2018 UK Corporate Governance Code and the
FCA Disclosure Guidance and Transparency Rules (DTRs).
The Committee annually reviews its own effectiveness and
its adherence to its Terms of Reference. The annual Board
evaluation page 77 concluded that the Audit Committee
operated effectively during the year, which included
members’ assessment of the Committee’s composition,
duration, frequency, quality of deliberation and challenge,
quality of papers and the effectiveness of its reporting to the
Board. The Committee also concurred that it had adhered
to its Terms of Reference during the period.
The updated UK Corporate Governance Code and the
attendant broadening in scope of the Audit Committees
and the External Audit: Minimum Standard, was a focus for
the Committee during the year. The Committee reviewed
the continued evolution of the Finance function, embedding
the transformation exercise and systems transformation
commenced in the prior years. IFRS 9 model development,
implementation and validation was a consistent agenda
item throughout the year. An ad hoc Committee was
convened to scrutinise the review of the balance sheet
which ultimately led to the correction of historic balances
relating to Vehicle Finance Stage 3 receivables impacting
both prior periods and the current year as announced to
the market on 16 July 2024, and the recognition of a number
of one-off items in relation to 2024.
I look forward to reporting directly to shareholders at the
Annual General Meeting on 14 May 2025.
The Committee’s Terms of
Reference are available at:
www.vanquisbankinggroup.com
Audit Committee Report
During 2024, the Committee continued its focus
on strengthening internal controls and IFRS 9
model development and validation.”
Oliver Laird
Audit Committee Chair
Governance 12%
Financial reporting 33%
External audit 17%
Internal audit 23%
Management reporting 15%
Allocation of time
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
82
Key Committee activities in 2024 Committee priorities in 2025
5 Reviewed the significant accounting judgements at half year
and full year.
5 Reviewed and recommended for approval the half-year and
full-year financial statements, including a consideration of the
going concern assumption and viability statement at year end.
5 Reviewed the external auditor’s year-end findings and conclusions.
5 Reviewed and approved the non-audit fees policy; external auditor
interim review; external audit fees; external auditor interim review;
and external auditor proposed 2024 plan.
5 Reviewed and approved the Internal Audit Charter; statement of
independence and objectivity and effectiveness; self-assessment;
and 2024 Internal Audit Plan.
5 Continued to review and challenge the IFRS 9 model
implementation, validation and resulting financial impact,
following the rebuild in FY23.
5 Scrutinised a gap analysis of the Group’s integrated assurance
framework against the requirements of the updated UK Corporate
Governance Code and oversaw the development of a risk
management and internal control framework to align with the
new Code provisions.
5 Confirmed sufficient distributable reserves and recommended
payment of the 2023 final dividend (paid May 2024).
5 Considered the Group’s readiness for a future external audit
tender under the requirements of the Audit Committees and the
External Audit: Minimum Standard.
5 Considered the potential impact of the Court of Appeal judgment
on motor finance commissions.
5 Approved the appointment process for, and subsequent
appointment, of a new Internal Audit Director.
5 Held regular private sessions with the chief internal auditor and
external auditor to facilitate transparent dialogue in the absence
of executive management.
5 Continued embedding of the integrated assurance framework and
risk management and internal controls framework across the three
lines of defence.
5 Continued monitoring of the legislative and regulatory landscape
in relation to audit reform and controls enhancements.
5 Continued focus on enhancing the control environment across
the Group and on developing improved IT controls reliance.
5 Continuing to independently oversee IFRS 9 model development,
monitoring and calibration, and monitoring progress against all
internal and external audit findings raised.
5 Further development of data analytics in the Internal Audit function,
building on enhancements made during 2024.
5 Oversight of the new global internal audit standards
implementation.
5 Ensuring the Committee complies with the requirements of the
updated UK Corporate Governance Code.
Fair, balanced and understandable
Having regard to Provision 25 of the Code, and the Board’s
responsibilities therein, the Committee considered whether
the 2024 Annual Report and Financial Statements, when
taken as a whole, was fair, balanced and understandable.
The Committee adopted the same robust process as in
prior years to justify the statement. This included:
5 reviews to provide input, and feedback incorporated
into subsequent drafts;
5 oversight of the process, evaluation and verification
by Group senior management;
5 external evaluations of the Remuneration and
Governance Reports respectively; and
5 private sessions with the external auditor.
As part of the year-end processes, the Committee
considered management’s areas of significant judgements,
estimation, and uncertainty and emerging issues as set out
in the financial statements on pages 130 to 196, and with
the external auditor, scrutinised and challenged the going
concern assumptions.
In assessing compliance with the Code, the Committee
considered the following criteria:
Is the report fair?
5 Is it a full reflection of events throughout the year
and consistent with messages communicated
throughout the year?
Is the report balanced?
5 Is the narrative reporting consistent with the
financial reporting?
5 Are the statutory and adjusted measures
appropriately balanced?
Is the report understandable?
5 Is it presented in a logical order and using
clear language?
5 Are important messages clearly highlighted as such?
5 Is information shown in tabular or graphic form where
this would assist the reader?
Conclusion: The Committee concluded that, in its opinion,
the 2024 Annual Report and Financial Statements, when
taken as a whole, was fair, balanced, and understandable,
and recommended this assessment to the Board.
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Vanquis Banking Group plc Annual Report and Accounts 2024
83
Financial reporting process, internal control and risk management systems
Internal Audit and the Group Risk functions provide regular reports to the Committee in respect of the effectiveness of risk
management systems and internal controls. Recommendations are agreed with management and progress is monitored
by the Committee. In November 2024, the Internal Audit function noted improved internal reporting of control deficiencies.
The Group has been working on two long-term improvement programmes, with progress as described below.
Area for improvement previously identified Progress to date
Implementation of a Group-wide integrated
risk system
The integrated assurance framework is now embedded and supported by the
Group-wide risk system, Riskonnect. During the year, Internal Audit conducted
a review of the use of Riskonnect and identified further areas for improvement,
requiring work from both risk owners and the Risk function. The updated UK Corporate
Governance Code requires further development of the Group’s risk management
and internal controls framework, which was the focus of substantive development
work during 2024, and refinements will continue into 2025.
The IT platform modernisation
A transformation programme is being executed which, over the next two years,
will see all products on a unified, modern cloud-based technology platform.
The transformation activity continues on track and control issues within the legacy
IT estates will be fixed strategically through the transformation. The Committee
received a detailed update on IT controls reliance remediation during the year. It is
anticipated that the automation of many controls will enhance the overall control
environment and reduce the dependence on manual intervention.
March 2025 GIA year‑end opinion
In March 2025, Internal Audit confirmed that the Group’s
control environment remained stable during 2024. The
known control issues within the legacy IT estates, including
access management, remain unchanged and should be
fixed strategically through the IT platform modernisation.
Management has an improved awareness of the
control environment as the new executive team have
assessed their respective structures, team capabilities
and processes. Robust action plans are in place which
align to the programme of transformation activity. The
risk management framework has continued to embed
throughout 2024 with improved visibility and monitoring
of the Group’s principal risks. During 2024, all risks captured
within the Group-wide risk system, Riskonnect, have been
subject to review by owners and/or delegates to evaluate
the efficacy and confirm if these remain appropriate
and effective.
The Committee received updates on the development
of the IFRS 9 models throughout the year and this
remained a key focus area, with significant progress made
during the period. In December 2024, the Committee
received a comprehensive update on all models used
across the Group, following an Internal Audit report on
model risk management. The report identified areas for
improvement in model documentation, monitoring and
inventory. A consequent action plan had been developed
for implementation in 2025. The external audit team
also regularly reviews the evolution of the IFRS 9 models.
Annually, Deloitte LLP provides a management letter which
identifies significant internal controls matters and the
management response.
Internal Audit
The purpose of the Group Internal Audit (GIA) function is
to strengthen Vanquis Banking Group’s ability to create,
protect, and sustain value, by providing the Board and
management with independent, risk-based, and objective
assurance, advice, insight, and foresight. GIA has full
and unrestricted access to all functions, data, records,
information, physical property, and personnel pertinent
to carrying out Internal Audit responsibilities.
The Group operates an in-house GIA function, managed
by the Internal Audit Director, who reports to the Committee
at each meeting and is a permanent attendee. The
Committee appointed a new Internal Audit Director in
December 2024, following a rigorous recruitment and
selection process. If required, the function is supported
by specialist third parties under the terms of the Group’s
non-audit services policy. The Committee approves an
annual GIA plan, against which it scrutinises progress and
approves amendments where necessary. The GIA plan is
designed to provide optimal risk coverage and is therefore
reactive to emerging risks. The Committee is satisfied
that GIA is both independent and effective and has the
appropriate skills, experience and resources, either in house
or through specialist third parties, to fulfil its mandate.
Independence
As required under the Institute of Internal Auditors Code of
Practice, the Internal Audit Director has no responsibilities
outside of oversight of the Internal Audit function, and
reports directly to the Chair of the Committee, with an
administrative reporting line to the Group Chief Executive.
The Committee holds regular private sessions with the
Internal Audit Director, who also meets privately with the
Chair at least quarterly or upon request.
Independence of the Internal Audit function is confirmed by
the Internal Audit Director through an annual attestation.
Effectiveness
The Internal Audit Charter is approved annually, and the
Committee regularly monitors progress against the plan.
Confirmation is also provided that the function remains
appropriately resourced and has sufficient expertise to
carry out its mandate. The Internal Audit Director is actively
encouraged to raise any concerns during each private
session with the Committee.
Audit Committee Report continued
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84
External audit
Appointment and tenure
In accordance with Group policy, a formal tender process
for the position of external auditor was conducted in 2020
and Deloitte LLP was selected for a further period of 10 years.
The Committee has the authority to commission a formal
tender process at any time it is deemed in the Group’s best
interest. The Committee considered the Group’s tender
readiness position during the year, under the requirements
of the updated UK Corporate Governance Code.
The Committee concluded that Deloitte LLP continued
to perform in line with expectations and remained
independent of the Group, and will recommend to
shareholders reappointment at the 2025 AGM.
Effectiveness
The Committee continues to hold private sessions with
the external auditor, in the absence of executive directors
or management. Six sessions were held during the year.
The sessions facilitate open and forthright discussions
and provide a forum for Deloitte to raise any concerns.
In addition to this, the Chair meets with the audit partner
at least quarterly or upon request.
Throughout the year, the external auditor challenged
management and demonstrated professional scepticism,
notably, during discussions around the historical balance
sheet revaluations required in July 2024.
The external auditor and audit quality are assessed
annually using scores and feedback from the Committee
and wider stakeholders in the audit process across the
Group. Feedback and scores are shared with the external
auditor, and an action plan is developed for remediation
requirements. The Committee, the Finance function and the
external auditor take a collaborative approach to agreeing
the half-year and year-end processes.
The main remediation needs identified in relation to
the 2023 audit related to expectation and deadline
management. The overall conclusion was that Deloitte LLP
remained effective.
Independence and objectivity
The Committee ensures adequate safeguards are in place
to ensure the independence and objectivity of external
audit. These include:
5 a policy that restricts the recruitment of individuals
employed by the external auditor into positions that
provide financial reporting oversight or exercise
influence over financial and regulatory statements;
5 non-audit work is subject to the policy detailed below
and the non-audit team does not prepare anything
which would be relied upon in the Group audit;
5 work performed is subject to an independent
professional standards review and Engagement
Quality Control Review process;
5 the Committee considers the reappointment of
the external auditor, including the rotation of the
audit partner, annually. The review considers both
independence and effectiveness, primarily using
a scorecard system. The lead audit partner, Kieren
Cooper, has been in place since May 2022; and
5 the external auditor attests its independence and
objectivity to the Committee on an annual basis.
Non‑audit work
The Group has a formal policy on the use of the external
auditor for non-audit work, adhering to the EU Audit
Directive and Regulations, which is reviewed annually.
The policy stipulates that non-audit work should only be
awarded to the external auditor, over alternative suppliers,
where there is clear rationale to do so and following a
rigorous procurement process. All awards of non-audit work
to the external auditor are monitored to ensure that their
independence, or perception thereof, is not compromised
or undermined. The Chair of the Audit Committee must
approve, in advance, any single award of non-audit work
which has a value in excess of £50,000 per annum, or a
programme of non-audit work with an aggregated value
in excess of £50,000 per annum. Where the value is in
excess of £250,000, the approval by a quorum of the Audit
Committee is required in addition to the Chair’s approval.
Approvals are also subject to the cap on non-audit services
as outlined in the policy. Deloitte LLP’s fees for non-audit
work during the year were £0.4m (2023: £0.3m). The ratio
of audit to non-audit fees was 5.8:1.
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85
Significant issues and areas of judgement
The critical accounting assumptions and key sources of estimation uncertainty considered by the Committee in relation
to the Annual Report and Financial Statements 2024 are outlined on pages 140 and 143. In addition to the matters set out
below, the Committee also considered the going concern statement set out on page 123. The Committee discussed these
with the external auditor during the year and, where appropriate, these have been addressed as areas of audit focus as
outlined in the Independent Auditor’s Report on pages 122 to 129.
Issue Judgement Actions
Impairment of amounts
receivable from customers
Receivables are impaired on
recognition in accordance
with IFRS 9. The assessment
of credit risk and therefore
impairment allowance should
be probability weighted, and
should utilise all information
available, including past
events, current conditions
and supportable forecasts of
economic conditions at the
reporting date. An assessment
of macroeconomic factors,
including the latest economic
forecasts, is also required to
estimate expected losses.
Judgement is applied to the impairment
allowance required. This includes whether past
performance provides a reasonable estimate of
future losses implicit within the PD, LGD and EAD.
During the prior year, the Group refined and
recalibrated its impairment provisioning models to
better reflect the evolving receivables mix; this led
to a release of c.£57.7m of impairment provision in
FY23 and was recognised as a model underlay. The
models were fully implemented in the current year
and the post-model adjustments (PMAs) released.
In 2024, a review of the Vehicle Finance Stage 3
balances was undertaken resulting in receivables
eligible for debt sale being fully charged off and a
post-charge-off asset (PCOA) being recognised.
As part of that review, it was identified that cash
flows expected to be received from contracts
projected to be received from customers on
contracts identified for debt sale were being
included beyond the expected sale date in
addition to the cash flows from the debt sale. This
led to a lower ECL provision being recognised. As a
result, the Group retrospectively restated its results.
A number of PMAs were recognised reflecting
model refinements and calibrations in the IFRS
9 models.
The macroeconomic model is expected to be
redeveloped in 2025; however, for 2024 a model
overlay has been recognised utilising data from a
third party. The model predicts industry level write-
off rates using a combination of interest rates on
credit cards, unemployment rate, debt to income
ratios and a measure of macroeconomic volatility.
The Audit Committee reviewed and challenged the
key judgements applied throughout the year.
The embedding of the refined and recalibrated
IFRS 9 models, along with the updated model
monitoring capabilities was overseen by the
Committee, and the required ongoing monitoring
of these models together with associated controls
was reviewed and challenged.
The review of the Stage 3 balances was challenged
including the appropriateness of the prices and
assumptions applied in valuing the PCOA.
The work performed by Deloitte LLP on challenging
the management assumptions is considered.
The findings are presented in Deloitte LLP’s report
to the Audit Committee which is challenged with
knowledge of the latest circumstances. The work
performed by Group Internal Audit is considered,
in particular, on technology, financial and
operational controls.
Goodwill and investment
in subsidiaries
Goodwill and investment in
subsidiaries are reviewed
at each balance sheet for
impairment. The carrying
values are compared to
discounted cash flows of
each business area they
relate to with any difference
written off/impaired in the
income statement.
Where cash flow forecasts are
used, the future value in use
is assessed over the useful
remaining life of the asset.
The key driver of the Goodwill impairment was
the cash flows to which the rates are applied.
The lower cash flows included in the latest
budget, particularly in relation to the Vehicle
Finance business, as the Board prioritises capital
deployment for growth into Second Charge
Mortgages and Credit Cards, have led to a
lower valuation.
The discounts rates has also increased due to
increases across all inputs, further impacting the
level of impairment required.
The Audit Committee reviewed and challenged the
key assumptions used in the calculations.
The work performed by Deloitte LLP challenging
the appropriateness of the assumptions used by
management was considered.
Audit Committee Report continued
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
86
Issue Judgement Actions
Contingent liabilities –
Vehicle Finance commissions
On 25 October 2024, the
Court of Appeal (CoA) ruled
against two lenders in three
cases involving commission
payments to motor finance
dealers. The lenders
successfully applied for
permission to appeal to the
Supreme Court, which is due
to be heard in early April 2025,
with the outcome expected
in late 2Q 2025 or early 3Q
2025. The judgment redefined
the legal duties of dealers
acting as credit brokers,
requiring clear disclosure of
commission amounts and
customer consent.
An assessment against IAS 37 to determine if a
provision should be recognised was performed.
Based on that review no provision has been
recognised in the FY24 accounts; however, a
contingent liability has been disclosed.
The Audit Committee reviewed and challenged
the assessment against IAS 37. This included
consideration of distinguishing factors of the
Moneybarn book from the cases that were the
subject of the CoA decision.
It also considered the contingent liability
disclosures in line with the requirements of
the standard.
The work performed by Deloitte LLP on the
assessment to not recognise a provision was
considered along with any consideration of the
contingent liability disclosure.
Retirement benefit asset
The valuation of the
retirement benefit asset is
dependent upon a series
of actuarial assumptions.
The key assumptions are
in respect of the discount
rate, inflation rates and
mortality rates used to
calculate the present value
of future liabilities.
Judgement is applied in formulating each of the
assumptions used in calculating the retirement
benefit asset. This considers any adjustments
made to the key judgements to ensure they
remain appropriate for the Group’s defined benefit
pension scheme.
The Company’s external actuary, Willis Towers
Watson, proposes the appropriate assumptions
and calculates the value of the retirement benefit
asset. The Committee considers the adjustments
made by management to the core assumptions
proposed by the actuary. The Committee also
considers the audit work performed by Deloitte
LLP on the assumptions and to what extent the
assumptions are within the suitable ranges of
assumptions based on audit experience.
Due to the materiality of the pension scheme asset
at 31 December 2024, the Audit Committee agreed
with management that it is no longer considered
a key accounting judgement for the Group.
Compliance statement
The Group has fully complied with the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit Committee Responsibilities) Order 2014 throughout the 2024 financial year.
Oliver Laird
Audit Committee Chair
13 March 2025
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Vanquis Banking Group plc Annual Report and Accounts 2024
87
Role of the Committee
The Committee assists the Board in its oversight of risk, ensuring
that the Group’s current and emerging risks are understood and
that there is an effective Risk Management and Internal Control
Framework in place.
The Committee’s principal areas of responsibility are as follows:
5 assessing the Group’s risk resource, strategy, culture and its
operating model for managing risk;
5 understanding the Board’s strategy, desired culture and
direction and identifying the key strategic and emerging risks
that could impact delivery;
5 endorsing an overall risk appetite and monitoring performance
against the agreed appetite;
5 reviewing and approving the Group’s ICAAP, ILAAP and Group
liquidity assessment, including the stress testing and capital
allocation approach;
5 in conjunction with the Audit Committee, reviewing the Group’s
capability to identify and manage new risk types, and keeping
under review the effectiveness of the Group’s risk management
and internal control framework; and
5 reviewing the Group’s management of anti-money laundering,
data protection and operational resilience.
Strong risk management to
support business turnaround
Dear Shareholder,
I am pleased to present the Risk Committee Report for
the year ended 31 December 2024 which is my first report
as Chair. As announced on 29 January 2025 Angela
Knight stepped down and I was appointed Chair of the
Committee. I’d like to thank Angela for her careful and
committed leadership. The Committee held seven meetings
in the year, two of which were specifically focused on
the ICAAP and ILAAP. The Committee performs an annual
effectiveness and adherence review and has covered all
the duties set out in its Terms of Reference.
The Committee membership has evolved during the year.
Jackie Noakes joined the Group and became a member
of the Risk Committee on 27 March 2024 and Elizabeth
Chambers stepped down on 15 May 2024. As announced
on 29 January 2025 Angela Knight and Paul Hewitt stepped
down, I assumed the Chair and Karen Briggs was appointed
as a member. Karen is also a member of the Audit
Committee. The biographies of all our members, which also
contain information about their qualifications, are available
on pages 59 to 61 and our Committee attendance is on
page 75. The Group’s CEO, CRO, Board Chairman, CFO,
Internal Audit Director and General Counsel also regularly
attend Risk Committee meetings.
The Committee receives a report from the Chief Risk Officer
(CRO) at each meeting to focus discussion on the top of
mind risks (top-down strategic and emerging risks) and the
principal risks (bottom-up all encompassing risks). Except
for the two ICAAP and ILAAP focused meetings, at each
regular meeting the Committee has:
5 reviewed and assessed the Group’s principal risks
including issues, emerging risks and material risk events
and assurance findings;
5 considered top of mind risks including regular detailed
reports regarding credit risk;
5 reviewed the risk appetite status and trends across
the principal risks;
The Committee’s Terms of
Reference are available at:
www.vanquisbankinggroup.com
Risk Committee Report
Given the challenging
macroeconomic environment,
the Committee’s role in providing
insightful and focused risk
management oversight
has been vital.”
Michele Greene
Risk Committee Chair
Top of mind, principal
and emerging risks
35%
Credit risk focus 10%
Risk appetite, framework
and policy
10%
Regulatory and prudential
risk reporting
20%
Risk management
effectiveness
5%
Governance and
external reporting
5%
Compliance and conduct 10%
Allocation of time
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Vanquis Banking Group plc Annual Report and Accounts 2024
88
5 received updates regarding compliance and
regulatory matters;
5 received a report on the status of complaints; and,
5 reviewed the minutes and actions from
previous meetings.
Committee report templates have been refreshed during
the year to support concise reporting. The Committee’s
work is well organised in an annual forward agenda planner
and agendas are structured precisely to facilitate the
effective use of time within meetings.
Key areas of focus
Credit risk
The Committee has received credit risk reports from the
Head of Credit Risk regarding portfolio performance,
stability and customer behaviours. More broadly the
Committee oversaw that a detailed end-to-end review
of credit risk arrangements was performed during the
year as part of the insightful risk management pillar of
the Group’s strategy. A credit risk programme of work has
been established with a clear roadmap of deliverables
and actions to be taken during 2025.
Model risk
Closely associated with credit risk, model risk increased
in the year following delays in the execution of our model
redevelopment and model validation plans. Overseen by
the Committee, the executive ownership of model risk has
evolved, and first line ownership of the model inventory
has been refreshed. Additional senior expertise has been
recruited into the first line to help accelerate execution of
the associated actions.
Business performance risk
The Committee has overseen execution of the strategy
through its monitoring of business performance risk.
The Committee has sought assurance from the second
line involvement and third line review and challenge of
the programme.
Technology and information security risk
The Group’s IT transformation has progressed consistently
throughout the year and as a result the Group’s exposure to
technology risk has improved. The Committee has overseen
the delivery of improved cyber security arrangements
including risk-related aspects of the Group’s IT infrastructure
transformation. The Committee continues to monitor the
Group’s exposure to IT risks arising from legacy systems
which reduces as the programme progresses.
People risk
Regrettably there were further redundancies during 2024
and people risk has therefore been heightened. Enhanced
monitoring of colleague attrition was performed until the
end of the consultation period. The Committee noted the
efforts of the People function to deliver the action plan
arising from the Great Place to Work survey feedback.
Capital risk and funding and liquidity risk
The Committee considered in detail the Group’s regulatory
documents during 2024.
Capital risk
The Committee studied the Group’s detailed analysis
of its risks and key assumptions in the ICAAP and the
methodology behind their establishment, alongside
the stress testing and scenario modelling that had
been applied to arrive at the proposed outcomes. The
Committee sought and received assurance that the
feedback received from the PRA as part of its Capital
Supervisory Review and Evaluation Process (C-SREP) had
been addressed.
Funding and liquidity risk
The Committee considered the Group’s liquidity risk drivers,
stress testing scenarios and stress testing results noting
the key methodologies that had been adopted in the ILAAP.
The PRA completed an Liquidity Supervisory Review and
Evaluation Process (L-SREP) in July 2024, the outcome of
which confirmed that the Group held appropriate levels of
liquid assets and acknowledged the enhancements made
to our approach to liquidity management.
Both documents were approved by the Committee, for
onward recommendation to the Board, in May 2024 and
you can read more about liquidity, funding and capital in
the Financial Statements on page 144 to 148.
Complaints
The Committee requested complaints be a standing
agenda item throughout 2024 and the Chief Operating
Officer has attended to present a report at each regular
meeting. The Committee has overseen the Group’s
complaints strategy from a risk management perspective
recognising the potential impact on several of the
Group’s principal risks including legal, regulatory and
operational risk.
Consumer Duty
The Committee has overseen the continued progress
of embedding Consumer Duty, including supporting the
Board’s first annual report on Consumer Duty and formal
attestation and submission the FCA in July 2024. You can
read more about Consumer Duty in on page 72.
Risk and control maturity
Building on the foundations put in place in 2023 through
the risk harmonisation programme the Committee
has overseen the continued enhancement of the risk
governance and operating model. The Executive Risk
Committee has been established, first line ownership of
process risk has been documented, a risk partner structure
has been implemented and the Riskonnect system
continues to embed.
Risk appetite
The Committee approved the Group’s risk appetite
framework in July 2024 which defines the amount of risk the
Group is prepared to be exposed to in pursuit of its strategic
objectives and delivery of day-to-day operations. The
Committee noted the principles applied in defining its risk
appetite and receives regular risk appetite data, supported
by plans for any ‘route-to-green’ activity for those metrics
that are not within appetite.
Principal and emerging risks
The Committee is responsible for supporting the Board
to assess the principal and emerging risks to the Group.
The Committee considers the top of mind and any other
risks that may impact the Group’s strategy and operations
and assesses its aggregated risk profile. Alongside the
CRO Report being provided to the Board for information,
I also provide the Board with a verbal update of matters
considered by the Risk Committee at each Board meeting.
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Vanquis Banking Group plc Annual Report and Accounts 2024
89
Principal and emerging risks continued
In July 2024 the Committee approved the Group’s risk
management framework including the risk measurement
methodology. The Committee brought forward the
review of the framework to January 2025 to align to the
2024 UK Corporate Governance Code. This included the
renaming of the risk management framework to the risk
management and internal control framework. The Group’s
risk classification was reviewed and approved by the
Committee in January 2025.
Insightful risk management is a strategic theme and you
can read about our strategic risk objectives and focus
areas in our Strategic Report on pages 11 and 15.
The report from our CRO including a description of our
principal risks and how they are being managed can be
found on pages 48 to 55.
Committee review of internal risk
management and controls
In accordance with the 2018 UK Corporate Governance
Code Principle O, applicable during the reporting period,
the Board has a responsibility to establish procedures to
manage risk, oversee the internal control framework, and
determine the nature and extent of the principal risks the
Company is willing to take in order to achieve its long-term
strategic objectives. Provision 29 requires the Board to
monitor the Company’s risk management and internal
control systems.
Following a detailed review by the Committee, the
directors can confirm that the Group’s key risks have
been robustly assessed and are effectively controlled.
In reaching this conclusion, the Risk Committee assessed
the following criteria:
5 the effectiveness and embeddedness of the risk
management framework including the Risk function’s
organisational design and three lines of defence model
during 2024 to ensure consistent management of risks;
5 key strategic decisions taken and executed in 2024
which alter the risk profile of the Group, including
offshoring operations, redundancies and changes in
organisational design structure and leadership;
5 an assessment of our relationships with our
regulators; and
5 other key indicators such as the number of and
management approach to open and overdue audit
actions, engagement with risk awareness activities and
risk awareness within first line management.
Future focus
Throughout 2025 I expect the Committee to focus on
business performance risk and implementation of the credit
risk programme, both of which are critical for the Group as
it executes its strategy. In addition, the Group continues to
experience challenges arising from the macroeconomic
environment. A keen forward-looking focus on external
threats including financial crime, complaints and the
Supreme Court’s ruling on the Court of Appeal judgment
regarding vehicle finance commission disclosures will
be important. I expect the Committee to consider the
risks arising from Artificial Intelligence, whilst recognising
it may also bring opportunities for the Group. Monitoring
the embedding of Consumer Duty, focusing on the fair
treatment of customers, robust internal controls and early
identification of customer vulnerability are essential for
the Committee as the Group continues to strengthen its
forbearance and vulnerable customer processes.
With these in mind the Committee priorities to protect
and advance the Group’s control environment during 2025
are set out in the table below.
Michele Greene
Risk Committee Chair
13 March 2025
Risk Committee Report continued
Key Committee activities in 2024 Committee priorities in 2025
5 Closely monitored the Group’s ‘top of mind’ risks and received
regular Group CRO reports outlining the Group’s strategic
and emerging risks.
5 Monitored external risks and emerging risks.
5 Performed enhanced monitoring of credit risk in light of changes
to the macroeconomic environment and strategy.
5 Confirmed the effectiveness of the Group risk management
framework following an internal review by management.
5 Closely monitored execution and people risk associated with
strategic and operational change activities.
5 Received reports from the Group MLRO Report regarding the
Group’s money laundering systems and controls, key financial
crime risks and issues, control gaps and associated action plans.
5 Approved the Group’s ILAAP, ICAAP and Pillar 3 Disclosures.
5 Approved the Group’s recovery plan and resolution plans.
5 Approved the Committee’s revised Terms of Reference
(ToR) and forward agenda planner and the Committee’s
effectiveness review.
5 Emerging risks with the potential to impact the Group’s strategy
including the Supreme Court judgment on vehicle finance
commission disclosures.
5 Risk strategy, profile and risk appetite.
5 Monitoring effectiveness of the risk-related benefits arising
from the Gateway technology transformation.
5 Oversee the evolution of the Group’s financial crime strategy.
5 Consumer Duty embedding, forbearance and vulnerable
customers processes.
5 Oversee delivery of the credit risk programme.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
90
Directors’ Remuneration Report
Committee members (attendance)
Graham Lindsay (Chair) (3/3 plus 3/3 ad hoc)
Karen Briggs (joined 27 March 2024) (1/1 plus 3/3 ad hoc)
Oliver Laird (joined 27 March 2024) (1/1 plus 3/3 ad hoc)
Andrea Blance
(stepped down 1 February 2024)
(1/1)
Margot James (stepped down 15 May 2024) (2/2 plus 1/1 ad hoc)
Role of the Committee
The Chairman, the Group Chief Executive Officer (CEO), Chief
Finance Officer (CFO), the People Director, the Head of Reward
and the Committee’s independent advisor (PwC) attend
Committee meetings by invitation. No person is in attendance
when their own remuneration is being discussed.
The report complies with the provisions of the Companies Act,
the Large and Medium-sized Companies and Groups (Accounts
and Reports) Regulations 2008 and the Listing Rules of the FCA.
The Company also follows the requirements of the UK Corporate
Governance Code (the Code) updated in July 2018.
Annual Statement by the Chair of
the Remuneration Committee
Dear Shareholder
On behalf of the Remuneration Committee (the Committee),
I am delighted to present the Directors’ Remuneration Report
for the year ended 31 December 2024. I would like to extend
my thanks to both Andrea and Margot who both stepped
down from the Committee on 1 February 2024 and 15 May
2024 respectively. I am delighted to welcome Karen Briggs
and Oliver Laird as new Committee members. The report
sets out how the Committee carried out its responsibilities
during the year and our approach to remuneration in 2024
and explains the rationale for our decision making.
2024 Group performance
2024 was a defining year for Vanquis – a year of strategic
clarity and transformation. While we faced challenges, we
also made significant progress in repositioning the business
for sustainable, profitable growth.
Since unveiling our new strategy in March 2024, we
have focused on stabilising the business and laying the
foundations for long-term success. This progress has been
underpinned by stable credit quality and the financial
resilience of our customers, reinforcing our confidence in
the future.
Our financial performance at the end of the year was
as follows:
5 adjusted (loss)/profit before tax (adjusted (L)/PBT) of
£(34.8)m (£17.3m (restated) in 2023);
5 adjusted Return on Tangible Equity (ROTE) of (7.0%)%
(1.9% in 2023); and
5 cost-income ratio (C:I) of 65.9% (62.6% in 2023).
The Committee’s Terms of
Reference are available at:
www.vanquisbankinggroup.com
In 2024, the Committee remained
focused on aligning executive
remuneration with Company
performance and the ongoing
business turnaround.”
Graham Lindsay
Remuneration Committee Chair
Remuneration
governance
30%
Annual bonus 25%
Share plans 30%
Risk 15%
Allocation of time
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Vanquis Banking Group plc Annual Report and Accounts 2024
91
2024 Group bonus pool
The financial element of the annual bonus was well below
threshold for 2024 for adjusted PBT, adjusted ROTE and
cost-income ratio and therefore there was nil vesting under
this element. Under the Group’s non-financial scorecard,
the Committee determined a vesting outcome of 60.3%,
which resulted in a total weighted vesting of 24.1% based on
performance against scorecard objectives.
In determining the final bonus outcome, the Committee
took into account a number of factors including the
overall business performance in 2024, and the wider
stakeholder experience. The Committee decided to exercise
discretion and make a downwards adjustment to the
bonus outcomes for all colleagues, including the current
executive directors, to zero. We have set out in more detail
the annual bonus results for 2024 on pages 100 and 101.
It is important to note that this outcome is in no way
reflective of the hard work and commitment our
colleagues have made throughout the year to keep our
business running and help our customers. I want to take
this opportunity to thank our colleagues for their efforts
in 2024 in such trying and difficult circumstances.
Wider workforce pay
Whilst remaining cognisant of the challenges that the
Group faced through the year, the Committee has also
been mindful of the need to retain and motivate our wider
staff population for the future stability of the business.
Our pay review in early 2024 focused on our lower paid
colleagues and a number of initiatives were implemented:
5 an overall pay budget of 4% for salary increases
effective 1 January 2024;
5 average increases of over 5.6% for colleagues who were
in roles at the lower levels and relatively lower paid; and
5 extension of the provision of medical insurance benefits
and virtual doctor access so that these are now
available to all colleagues.
In 2025, we intend to continue our focus on our colleagues
who are employed at the lower levels and from January
2025, the minimum full-time salary will be £26,000. We have
updated our minimum salary (above the Living Wage for
all) by level (and location) and actively distribute a larger
percentage of our salary review pool to those colleagues.
Executive director remuneration in 2024
Given the 2024 financial results of the Group, the
focus of the Committee was to ensure that this was
appropriately reflected in the remuneration decisions
made and outcomes were aligned to the wider
stakeholder experience.
RSP 2024 award grant
As reported in last year’s report, the Committee outlined
that it intended to grant an Restricted Stock Plan (RSP)
2024 to the executive directors (Ian McLaughlin and Dave
Watts) and this was granted on 7 May 2024. The Committee
determined there should be a downwards adjustment
of 44% made to the RSP 2024 grant to take into account
potential windfall gains and to ensure that the RSP operates
within the share dilution limits in the plan rules. Further
details are shared on page 102.
RSP 2021 award vesting
As reported in last year’s report, the interim performance
underpin assessment concluded that a downwards
adjustment of 25% should be applied to the vesting
outcomes of the RSP 2021 awards (which vested in August
2024) for the previous executive directors (Malcolm Le May
and Neeraj Kapur). Further details are shared on page
99 and 100.
RSP 2022 award vesting
The RSP 2022 award is scheduled to vest on 7 April 2025.
The Committee reviewed performance against the
underpin over each of the three years of the performance
period. With respect to performance in 2022, the Committee
was satisfied that the underpin was met. With respect to
2023, the Committee noted the underpin was not met
but that performance in respect of 2023 had been fully
reflected in the 25% downwards adjustment to the 2021 RSP
awards, as disclosed last year. With respect to performance
in 2024, the Committee identified three issues that created
the loss, these being the Vehicle Finance receivables review,
other one-off items and the in-year 2024 trading loss. The
Committee needed to determine how best to apportion
them, given that events in respect of a single year relate
to three RSP awards (2022, 2023 and 2024 RSP awards).
After careful consideration, the Committee concluded that
a total downwards adjustment of 30% should be applied
which is in line with decisions taken on previous RSPs but
that it would be unreasonable to apply the adjustment fully
in respect of a single RSP award. As a result, the decision
was taken to apply the adjustment equally across the
three RSP awards and hence a 10% downwards adjustment
will be made to each of the RSPs issued in 2022, 2023
and 2024. In addition, the Committee carried out an
assessment of dividend equivalents applied to this award
and determined that an additional downwards reduction
of 2.8% should be made to the vesting outcomes to reflect
the actual dividends paid over the vesting period. Both
these adjustments impact the previous executive directors
(Malcolm Le May and Neeraj Kapur). The Committee will
review this assessment again prior to final vesting and any
changes to the above assessment will be disclosed in the
2025 Directors’ Remuneration Report. Further details are
shared on page 103.
Deferred Bonus Plan (DBP) 2022
The Committee carried out an assessment of dividend
equivalents applied to the DBP 2022 award (which is due
to vest on 7 April 2025) and determined that a downwards
reduction of 2.8% should be made to the vesting outcomes
of the previous executive directors (Malcolm Le May and
Neeraj Kapur). Further details are shared on page 103.
Directors’ Remuneration Report continued
Governance
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92
Implementation of Directors’ Remuneration
Policy (the Policy) in 2025
The Committee considers that current Policy, approved at
the May 2023 AGM, has operated as intended and does
not require a fundamental change. We are proposing
to implement the Policy as follows in 2025 which in the
Committee’s view ensures that it will continue to operate
effectively in line with our strategic priorities and support
attraction and retention of key talent.
2025 salary increases
The executive directors and Executive Committee were not
considered as part of the salary review and have forgone
their annual salary increase to augment and redistribute
the salary pool outcomes to lower paid colleagues, who will
receive an average increase of 3.8%.
2025 annual bonus
There are no changes to annual bonus opportunity. The
performance metrics and their weightings will change from
adjusted to statutory reporting in 2025 in line with changes
to our financial guidance:
5 statutory PBT (25%), statutory ROTE (25%), and
cost-income ratio (10%); and
5 non-financial metrics (40%).
The metrics within the non-financial scorecard will continue
to align with our strategic priorities.
RSP 2025 grant
In light of the performance delivered in 2024 and the
Group’s current financial position, the Committee has
determined that it would not be appropriate to make any
RSP awards in April 2025. The Committee will, however,
review this position following the announcements of the
2025 half-year results, taking into account the Group’s
financial performance in the first half of the year, as
well as the shareholder and employee experience. If the
Committee does determine that it would be appropriate
to make 2025 RSP awards following this review, any
awards would be subject to underpin criteria, as set out
in our Policy, and will vest in three years from the date
of grant with an additional retention period of two years
after vesting. At the point of any grant the Committee will
determine whether any adjustment is required to take
into account any potential for windfall gains as per our
internal Policy. Irrespective of the decision made, a further
assessment on windfall gains will be carried out at vest as
per the RSP underpin requirements. The grant of the awards
will be confirmed via an RNS announcement in the usual
way and full details of the approach taken will be set out in
the 2025 Directors’ Remuneration Report.
2025 non-executive director (NED) fees
As reported last year, the NEDs took a significant reduction
in their fees for 2024. Following a review of fees, the
Committee (for the Chairman) and the Board (for the NEDs)
decided that there would be no change to the fees for 2025
and this aligns with the approach applied to the executive
directors and Executive Committee.
Conclusion
We recognise that it’s been another challenging year for the
business. The Committee believes that the decisions made
are mindful of appropriately reflecting the shareholder
experience over the course of the year. We have adjusted
pay to reflect this, while setting up the business and our
Executive team for future success and ensuring their
alignment with value creation for our shareholders.
In the rest of this report, we present the disclosures required
by regulations, as well as additional information to explain
how our executive remuneration aligns with our strategy,
with shareholder interests and with wider workforce pay.
I sincerely thank our colleagues for their hard work
throughout the year and our shareholders for their
continued support. I will be available at the Company’s
2025 AGM to answer any questions in relation to this
Remuneration Report.
Graham Lindsay
Remuneration Committee Chair
13 March 2025
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Vanquis Banking Group plc Annual Report and Accounts 2024
93
Directors’ Remuneration Report continued
The following section sets out:
5 an illustration of the operation of the Policy for 2025;
5 a summary of the executive directors’ single
total remuneration figures, and outcomes under
the 2024 Annual Bonus Plan and the RSP 2022
award; and
5 an overview of executive directors’ shareholdings.
Full details of the Policy can be found under the
Shareholder Hub section of our website
Salary: No increase from 2024
5 CEO: Ian McLaughlin: £725,000 (2024: £725,000)
5 CFO: Dave Watts: £550,000 (2024: £550,000)
Role-Based Allowance (RBA): No change from 2024
5 CEO: Ian McLaughlin: No RBA, 0% of salary
Eligibility under Director Remuneration Policy:
5 Maximum annual RBA grant for individual is 25% of salary
5 Delivered in shares and released in equal instalments over three years
Pension: No change from 2024
5 All EDs: cash payment of 10% of salary (in line with the wider workforce)
Benefits: No change from 2024
5 All EDs: Car allowance £10,000 (2024: £10,000). Eligible for life assurance,
private medical insurance and permanent health insurance
(no change)
5 Transitionary temporary travel allowance for Ian McLaughlin only.
£100,000 per annum and expires on 26 July 2025
Annual bonus: The performance metrics and their weightings will
change from Adjusted to Statutory reported in 2025.
5 Maximum opportunity:
5 CEO: 150% of salary
5 CFO: 125% of salary
5 Performance measures:
5 60% financial
5 statutory PBT 25% (2024: adjusted PBT 25%)
5 statutory ROTE 25% (2024: adjusted ROTE 25%)
5 Cost-income ratio 10% (2024: 10%)
5 40% non-financial will align to the 2025 strategy (Strategy, Customer,
People & Culture) and will be disclosed in the 2025 Directors’
Remuneration Report
5 Risk overlay and Tier 1 capital ratio underpin
5 Deferral: At least 40% deferred, vesting pro-rata over three years
in VBG shares
RSP:
5 Award level:
5 CEO: Maximum 100% of salary
5 CFO: Maximum 75% of salary (100% for RSP 2024 as part of his
joining package)
5 As a part of grant process, the Committee will consider individuals’
personal and business performance for the prior year and determine
whether the proposed level of grant remains appropriate
5 Underpins: The Committee will consider the following factors
(amongst others) when determining whether to exercise its discretion
to adjust the number of shares vesting:
5 whether threshold performance levels have been achieved for
the performance conditions for the Annual Bonus Plan for each
of the three years covered by the vesting period;
5 the underlying financial performance progression over the
vesting period;
5 whether there have been any sanctions or fines issued by a
Regulatory Body; participant responsibility may be allocated
collectively or individually;
5 whether there has been material damage to the reputation
of the Company; participant responsibility may be allocated
collectively or individually;
5 the potential for windfall gains;
5 the level of colleague and customer engagement over the vesting
period; and
5 the level of achievement of our approach to ESG as set out
by the Board
5 Vesting: Three years with a two-year holding period post-vesting
Shareholding requirement:
5 CEO/CFO: 200% of salary
5 Full requirement to be held for two years post-cessation
Further details on the implementation of the Policy, have been set out
later in this report under the ‘Directors’ Remuneration Policy in 2025’
section on pages 106 and 107.
Illustration of the Policy in 2025
Restricted Share Plan
CEO – 100% of salary
CFO – 75% of salary
Restricted
shares
Salary,
pension,
benefits
paid
Shares
vest after
3 years
Vested
shares
released
after
2 years
+1 +2 +3 +4 +5 +6
Minimum shareholding of 200% of salary
Vesting period
subject to continued
employment
and underpin
2-year
holding
period
(EDs only)
1/3 vest
1/3 vest
1/3 vest
Deferred
bonus
At least
40%
Cash
bonus
60%
Part of the bonus
is deferred into
shares vesting pro-
rata over 3 years
(no performance
conditions)
Annual bonus
CEO – 150% of salary
CFO – 125% of salary
Fixed remuneration
Year 0
(performance
year)
Remuneration at a glance
Governance
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94
Executive director 2024 remuneration outcomes
The charts below show an estimate of the remuneration that could be received by executive directors under
the Policy and how our performance has flowed through to the remuneration provided to our executive directors.
The full explanatory notes for each element of remuneration are detailed on pages 97 to 107 in the Annual Report on
Remuneration.
Remuneration (£’000)
Fixed
Annual bonus
RSP
Share price
Minimum Minimum
Ian McLaughlin, CEO Dave Watts, CFO
Maximum Single
figure
2024
2 3
Single
figure
2023
1
Single
figure
2024
2 3
Single
figure
2023
1
MaximumOn
target
3
On
target
Assumptions
5 Minimum pay is fixed pay only, i.e. salary + benefits + pension + RBA
(excluding travel allowance).
5 On-target pay includes fixed pay (excluding travel allowance),
60% of the maximum bonus (with maximum equal to 150% of
salary for the CEO and 125% for the CFO) and 100% vesting of the
RSP awards (with grant levels of 100% of salary for the CEO and
75% for CFO).
5 Maximum pay includes fixed pay (excluding travel allowance)
and assumes 100% vesting of both the annual bonus and the RSP
awards.
5 The illustration of ‘maximum’ assumes a 50% share price
increase on the RSP award over the vesting period and is shown
as ‘share price’.
5 All amounts have been rounded to the nearest £1,000.
810
810
2,187
725
653
810
2,985
725
363
1,088
810
910
393
910
393
617 617
206
617 617
1,442
413
413
617
1,923
413
688
617
104
1 Single figure for 2023 pro-rated to time served as executive director.
2 No Bonus has been paid for 2024 or 2023, see page 96 for details of the 2024 bonus.
3 CEO and CFO joined in 2023, therefore no RSP has vested.
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Vanquis Banking Group plc Annual Report and Accounts 2024
95
Directors’ Remuneration Report continued
Remuneration at a glance continued
2024 annual bonus outcome
The table below summarises performance against the targets set for the 2024 bonus and the outcome, before and after
Committee discretion.
Outcome
Threshold Target Maximum CEO CFO
75% 100% 125% Actual Weighting (IM) (DW)
Financial targets 60% 0% 0%
Adjusted (L)/PBT £9.3m £12.4m £15.5m £(34.8)m 25% 0% 0%
Adjusted ROTE 1.3% 1.7% 2.1% (7.0)% 25% 0% 0%
Cost-Income ratio 61.6% 61.6% 46.2% 66.2% 10% 0% 0%
Non-financial metrics 40% 24.1% 24.1%
Risk overlay Met Met
Tier 1 gateway
The Group achieved a Tier 1 ratio of 18.8%
(above our hurdle)
Scorecard outcome (as a % of maximum bonus) 24.1% 24.1%
Final outcome (as a % of maximum bonus) after Committee discretion 0% 0%
Link between remuneration and equity of the executive directors
We believe that equity has an important part to play in the remuneration of the executive directors. There is a need for the
executive directors to understand from first-hand experience the position of the shareholders and our RSP (and deferred
bonus schemes) are structured to support that understanding. This link has been strengthened in the last few years as we
require our executive directors to hold their shares for a period of two years post-departure. We monitor regularly that the
directors are on track to meet their obligations under the Share Ownership Policy, and we confirm, although they are early
in tenure, that the current CFO and CEO are both currently on track. To ensure that our executive directors are incentivised
to take a long-term, sustainable view of the performance of the Company, when we look at the remuneration paid in the
year, we also look at the total equity they hold, and its value based on the performance of the Company.
The table below sets out the number of shares beneficially owned and unvested share options subject to performance
awarded to the executive directors at the beginning and end of the financial year, and the impact on the value of these
shares taking the opening and closing price for the year.
2024
single
figure
£’000
1
Shares
held at
the start
of the year
Shares
held at
the end
of the year
4
Value of
shares at
the start of
the year
2
£‘000
Value of
shares at
the end of
the year
3
£’000
Difference
£’000
CEO (Ian McLaughlin) 910 1,028,939 1,895,865 1,329.4 843.7 (485.7)
CFO (Dave Watts) 617 40,000 704,893 51.7 313.7 262.0
1 Based on amount shown in the single figure of remuneration table.
2 Based on a closing share price on 29 December 2023 of £1.292.
3 Based on a closing share price on 31 December 2024 of £0.445.
4 Shares held at the end of the year include both shares owned outright and Unvested share options subject to performance (number of shares at grant) see page 104.
Governance
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96
Annual Report on Remuneration
Remuneration principles and alignment to the Corporate Governance Code
We strongly believe in fair and transparent reward throughout the organisation and when making decisions on executive
remuneration the Committee considers the context of wider workforce remuneration. This section shows how the 2018 Code is
embedded in our remuneration principles and how, in 2024, they are cascaded throughout the organisation. The table below
shows how the Policy is aligned with the factors set out in Provision 40 (which sets out a list of matters for the Remuneration
Committee to address when determining the Policy and practices – these fall under the headings of clarity, simplicity, risk,
predictability, proportionality and alignment to culture), and how our principles and Policy are aligned with the 2018 Code.
Our strategy (2024)
During the year we made significant strides in transforming Vanquis into a more customer-focused, efficient, and
resilient business. We are shifting from a product-led approach to a needs-driven, integrated model that better
serves customers and supports sustainable growth.
Our remuneration principles
5 Support delivery
of the Group’s
business
strategy, realise
our vision and
be customer
champion within
our sector.
5 Have flexibility in
delivering total
remuneration
outcomes
in changing
market,
economic,
commercial
and regulatory
circumstances.
5 Maintain a competitive reward and
recognition offering in the markets in
which we compete, thereby supporting
our talent attraction, engagement
and retention aims.
5 Ensure remuneration outcomes
are fair and consistent, reflect pay
for performance and are clear and
transparent for all our colleagues.
5 Support and mitigate any conflicts
of interests.
5 Manage remuneration opportunities
and outcomes for regulated colleagues
under the SMCR and material risk takers
under the Remuneration Code.
5 Support the effectiveness of the risk
management and internal control
framework and incentivise the delivery of
the business strategy within risk appetite
via a controls-based framework and
positive risk conduct culture.
5 Drive the Group’s ESG strategy, including
diversity, equality and inclusion agenda.
5 Align the interests of our colleagues with those
of our customers, regulators and shareholders.
How does the Committee address the requirements under Provision 40?
Cultural
alignment
5 The Committee
ensures that the
overall reward
framework
embeds our
purpose.
5 The Committee
reviews the
executive
reward
framework
regularly
to ensure it
supports the
Company’s
culture and
strategy.
5 The ED
Remuneration
Policy is
cascaded down
the organisation
ensuring that
there are
common goals.
Proportionality
5 Performance
measures
under the
annual bonus
as well as the
RSP underpin
are aligned with
the Company’s
scorecard
and the
payouts reflect
achievement
against the
target.
5 The Committee
may apply
discretion
to reduce
outcomes
under the
annual bonus
and RSP – if
they are
considered
inconsistent
with the
underlying
performance of
the business.
Simplicity
5 Policy for EDs is
simple and clear,
consisting of:
5 fixed pay
(salary,
benefits and
fixed pension
contribution)
set to reflect
the typical
rate provided
to the UK
workforce; and
5 variable pay
comprising an
annual bonus
scheme (partly
deferred into
shares) and
RSP awards
which provide
focus over the
long term.
5 The Committee
avoids
unnecessary
complexity in
operating the
arrangements.
Predictability
5 The Committee
sets specific
targets for
different levels
of performance
which are
communicated
to the EDs and
disclosed to
shareholders.
Clarity
5 Remuneration
arrangements
have defined
parameters
that can be
transparently
communicated to
shareholders and
stakeholders.
5 The Committee
consulted with
shareholders as
part of the design
phase of the Policy
approved at the
2020 GM and
re-approved at
the 2023 AGM.
5 How executives’
pay is set has
subsequently been
communicated
to the wider
workforce along
with how it is
aligned with
the Company’s
approach to wider
pay policy and
how decisions
are made by the
Committee.
Risk
5 Remuneration
arrangements are
designed to create a
robust link between
pay and performance,
thereby mitigating risk
of excessive reward.
5 Policy has safeguards
including Committee
discretion to adjust
incentive outcomes.
5 The Committee
ensures that a
significant portion of
reward is equity based
and has deferral
(40% of annual bonus
deferred in shares for
three years and all of
RSP is in shares) and
is thereby linked to
shareholder return.
5 Recovery provisions
such as malus and
clawback apply to
the Policy.
5 Executives are
required to build
significant personal
shareholdings in
the Company.
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Vanquis Banking Group plc Annual Report and Accounts 2024
97
Directors’ Remuneration Report continued
Remuneration governance
The Committee held three scheduled meetings in 2024 plus three ad hoc meetings. The following schematic sets out the
key considerations for the Remuneration Committee during 2024:
Governance Annual bonus Share plans
All
colleague
matters General DRR
Design Review Grant Review Risk Shareholders
January
March
April (ad hoc)
June (ad hoc)
July (ad hoc)
November
The CEO, CFO, Director of the CEO office, People Director and Head of Reward also attend meetings by invitation, to provide
advice and respond to specific questions. The CRO attends several meetings throughout the year to provide updates,
where necessary. The General Counsel and Company Secretary acts as secretary to the Committee. In no case is any
individual present when their own remuneration is discussed.
Advisors to the Committee
To ensure that the Company’s remuneration practices are in line with best practice, the Remuneration Committee
has appointed independent external remuneration advisors, PricewaterhouseCoopers LLP (PwC). This appointment in
2020 followed a competitive tender process. PwC attends meetings of the Committee. The Committee reviewed the
performance of PwC during 2024 and determined that it was strong, and that the appointment should continue into 2025.
Fees, on a time-spent basis, for the advice provided by PwC to the Committee during 2024 were £98,751 excluding
VAT (2023: £113,438). Other than in relation to advice on remuneration, PwC provides subject matter expertise support
to management on specific projects when requested. In 2024, this has included support in relation to regulatory and
accounting advice. The Committee is satisfied that PwC engagement partners and teams which provided remuneration
advice to the Committee do not have connections with the Group or the executive directors that may impair their
objectivity and independence.
Annual Report on Remuneration continued
Governance
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98
Single total figure of remuneration (audited)
The table below sets out a single total figure of remuneration for each director for the year ended 31 December 2024 and
the prior year:
Salary/fees
£’000
Role-Based
Allowance
(RBA)
£’000
Taxable
benefits
1
£’000
Annual
bonus
2
£’000
LTIS/RSP
4
£’000
Pension
3
£’000
Total
£’000
Total
fixed
remuneration
£’000
Total
variable
remuneration
£’000
Executive directors
Ian McLaughlin 2024 725 n/a 112 — — 73 910 910 —
2023 314 n/a 48 — — 31 393 393 —
Dave Watts
,
2024 550 n/a 11 — — 55 617 617 —
2023 92 n/a 3 — — 9 104 104 —
Non-executive directors
Sir Peter Estlin
4
2024 275 n/a 1 n/a n/a n/a 276 276 n/a
2023 116 n/a — n/a n/a n/a 116 116 n/a
Angela Knight 2024 109 n/a 1 n/a n/a n/a 110 110 n/a
2023 112 n/a — n/a n/a n/a 112 112 n/a
Paul Hewitt 2024 95 n/a 5 n/a n/a n/a 100 100 n/a
2023 112 n/a 5 n/a n/a n/a 117 117 n/a
Graham Lindsay 2024 90 n/a 5 n/a n/a n/a 95 95 n/a
2023 112 n/a 2 n/a n/a n/a 114 114 n/a
Michele Greene 2024 75 n/a — n/a n/a n/a 75 75 n/a
2023 71 n/a — n/a n/a n/a 71 71 —
Oliver Laird
5
2024 61 n/a — n/a n/a n/a 61 61 n/a
2023 — n/a — n/a n/a n/a — — n/a
Karen Briggs
5
2024 61 n/a — n/a n/a n/a 61 61 n/a
2023 — n/a — n/a n/a n/a — — n/a
Jackie Noakes
5
2024 57 n/a — n/a n/a n/a 57 57 n/a
2023 — n/a — n/a n/a n/a — — n/a
Andrea Blance
6
2024 8 n/a 3 n/a n/a n/a 10 10 n/a
2023 120 n/a 1 n/a n/a n/a 121 121 n/a
Elizabeth Chambers
7
2024 28 n/a 15 n/a n/a n/a 43 43 n/a
2023 96 n/a 14 n/a n/a n/a 110 110 n/a
Margot James
7
2024 28 n/a 1 n/a n/a n/a 29 29 n/a
2023 87 n/a — n/a n/a n/a 87 87 n/a
1 Executive directors receive standard market comparable benefits such as medical insurance. For the current CEO, the temporary travel allowance of £100,000 per
annum is included here. NEDs have travel expenses reimbursed and, to the extent that those are taxable, grossed up for tax and NIC.
2 40% of any annual bonus earned is deferred into shares for an additional three years (subject to continued service, in normal circumstances).
3 Pension participation is via a defined contribution plan (or cash alternative) with no executive director having a prospective entitlement under a defined benefit plan.
4 The 2023 figure includes a backdated payment of £55,261 made in January 2024 to cover the period as Chairman from 15 September 2023 to 31 December 2023.
5 Appointed 27 March 2024.
6 Stepped down 1 February 2024.
7 Stepped down 15 May 2024.
Payments made to past directors
Previous CEO (Malcolm Le May)
Following the announcement of Malcolm’s retirement on 24 January 2023, he was considered a good leaver and was
entitled to a 12-month notice period under this contract of employment. He stepped down from the Board as an executive
director on 1 August 2023 and in line with the Policy, he continued to receive his salary, role-based allowance, pension
and other benefits during the remainder of his notice period in accordance with his service agreement and the Policy.
The amounts received from 1 January 2024 to 24 January 2024 were salary (£47,241), role-based allowance (£7,086),
cash in lieu of pension (£4,724) and other benefits (£712). His RSP 2021 award, which was adjusted downwards by 25% (see
page 102), vested on 29 October 2024 with a value of £76,727. His unvested RSP and DBP awards for 2022 and 2023 will
vest on their normal vesting dates in line with the relevant rules and the Policy. DBP awards will vest in full subject to any
dividend equivalent adjustments and RSP awards will be time pro-rated to his last day of employment and subject to the
performance underpin any dividend equivalent adjustments. The shareholding requirement will continue to apply for a
period of two years from his date of cessation of employment in line with the Policy.
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99
Directors’ Remuneration Report continued
Payments made to past directors continued
Previous CFO (Neeraj Kapur)
As reported last year, on 7 August 2023 Neeraj informed the Board that he would be stepping down from his role and
as an executive director with immediate effect for personal reasons and Neeraj left employment on 23 February 2024.
The amounts received during 2024 from 1 January 2024 to 23 February 2024 were salary (£83,125), pay in lieu of notice
(£246,790), cash in lieu of pension (£8,313) and other benefits (£1,684). His RSP 2021 award, which was adjusted downwards
by 25% (see page 102), vested on 29 October 2024 with a value of £42,312. His unvested RSP and DBP awards for 2022 and
2023 will vest on their normal vesting dates in line with the relevant rules and the Policy. DBP awards will vest in full subject
to any dividend equivalent adjustments and RSP awards will be time pro-rated to his last day of employment and subject
to the performance underpin any dividend equivalent adjustments. The shareholding requirement will continue to apply for
a period of two years from his date of cessation of employment in line with the Policy.
No payments for loss of office were made in 2024.
2024 bonus outcome calculation (audited)
The bonus is based 60% on financial performance measures and 40% on non-financial performance measures. The tables
below set out performance against the targets set for the 2024 bonus and the outcome. The impact of significant one-off
adjustments reported in mid-2024 meant that the financial targets were not met for 2024.
Details of the financial assessment
Performance range
Financial targets
Threshold
75%
Target
100%
Maximum
125% Actual Weighting
Outcome
as % of max
Weighted
outcome
Adjusted (L)/PBT £9.3m £12.4m £15.5m £(34.8)m 25% 0% 0%
Adjusted ROTE 1.3% 1.7% 2.1% (7.0)% 25% 0% 0%
Cost-Income ratio 61.6% 61.6% 46.2% 66.2% 10% 0% 0%
Details of the non-financial assessment
The non-financial element was assessed at 60.3% achievement with this broken down, in 2024, as follows:
Strategic pillars Metric Assessment of non-financial metrics Rating
Strategy
Tech transformation
Delivery of four key tech
transformation programmes:
5 Gateway
5 Data Transformation
5 One Vanquis (single tenant)
5 HR Transformation
Gateway – remains on track and is due to complete by mid-2026, providing
us with a scalable, digital-first platform to support growth and delivering an
additional £23-28m in cost savings. Development of the new Vanquis mobile
app ahead of plan ready for implementation in 2Q25, further digitising the
customer service proposition.
Data Transformation – Good progress made on the build and deployment of
priority features, as aligned to our target architecture and Gateway roadmap.
One Vanquis – Successfully moved colleagues onto one IT platform, resulting in
improved colleague and customer experience, and reducing costs.
HR Transformation – On track to implement one HR system, aligning people
processes and technology, and enabling colleagues to be more efficient and
work more collaboratively.
Above target
(mid)
90%
Cards: widening of customer
base
We successfully repriced products across the portfolio on a risk-adjusted basis
and introduced new balance transfer products. The business comprehensively
reviewed customer cohorts by risk profile, vintage and acquisition channel. This
review drove proactive volume management and as a result, growth actions
were measured to ensure the future sustainable profitability of the portfolio.
Above target
(plus)
100%
Reducing card declines
Reducing card declines by
providing ‘not yet’ options for
customers.
While we did not deliver on this metric as originally envisaged, the Group has
advanced its “not yet” proposition for customers who may not be immediately
eligible for our products, but could be in the future. Instead of declining
customers, we have increased our focus on supporting these individuals with
money management tools through Snoop, or referrals to trusted partners such
as H&T Pawnbrokers and Fair Finance, so that when the time is right, they can
become part of our customer base.
Below
threshold
0%
Customer
Customer Satisfaction (CSAT)
CSAT performance throughout the year has remained broadly in line with
expectations. However, we experienced a decline in this spot score metric at year
end due to a change in how we survey customers. This change was part of our
ongoing efforts to improve customer insight to help us enhance our service.
Below
threshold
0%
Complaints
Complaints handling time
(excluding responsible lending)
Our Operations outsourcing programme was completed in 2024, and we have
seen significant improvement in this metric as we benefit from embedding our
blended operating model with the support of our outsource partners.
Above
target (plus)
100%
Annual Report on Remuneration continued
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
100
Strategic pillars Metric Assessment of non-financial metrics Rating
Colleague and
community
Colleague engagement
Great Place To Work Trust Index
Our Great Place To Work Trust Index increased 7 points from 53% (December
2023) to 60% (December 2024). This increase represents strong progress against
our plan, particularly in the context of a challenging year. An action plan has
been in place throughout the year to drive improved colleague engagement.
Key initiatives included the creation of the LEAD Forum for our senior leadership
population, our Connected Leaders development programme for all line
managers, and continued alignment and enhancement of colleague policies
and benefits.
On
target (mid)
60%
Diversity in leadership
Meeting the Women in Finance
Charter’s gender diversity
targets in senior management
by making progress
towards having 40% female
representation in VBG’s senior
management population by the
end of 2026
We signed up to the Woman in Finance Charter in 2019 and have set a target
to achieve 40% female representation in our senior leadership population by
the end of 2026. As we have delivered against our turnaround strategy, we
have right-sized the business and evolved our organisation design to ensure
we are operating as efficiently as possible. While we are below target, we have
maintained focus on our signature actions including establishing our Women in
Leadership network and Women’s Mentoring Programme, and improving gender
balance across our data and technology teams.
Below
target (mid)
25%
Colleague volunteering
Volunteering hours
delivered to support the
communities we serve
(ESG metric)
Colleagues can take two full day’s paid leave to volunteer for a community
organisation or charity of their own choosing. In addition, we offer a number of
Company-led opportunities to colleagues through the Vanquis Foundation, such
as team challenges supporting local community organisations and mentoring
programmes for children and young people.
On
target (mid)
60%
Risk overlay
A risk overlay approach was used for potential risk adjustment with a range of factual criteria for assessment agreed with
the Committee. This forms the basis of our Group variable risk adjustment framework and allows for a more flexible and
holistic approach to be adopted which considers not only the business outcomes (quantitative), but also how these have
been achieved (qualitative).
After discussion with the Group CRO, and the Chair of the Group Risk Committee, the Committee concluded that, overall,
the risk position has remained stable in 2024.
Remuneration Committee discretion – final outcome for 2024
In determining the final bonus outcome, the Committee took into account a number of factors including the overall
business performance, and the wider stakeholder experience. The Committee decided to exercise discretion and make a
downwards adjustment to the bonus outcomes for the executive directors to zero.
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101
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Scheme interests awarded in the year (audited)
Deferred Bonus Plan (DBP)
There were no DBP awards made during 2024 as a result of there being no bonus for performance year 2023 (as reported
last year).
RSP 2024 award grant
The RSP awards made during 2024 are set out below. As indicated in last year’s report, an award of 100% of salary was
made to both CEO and CFO despite the performance of the business in 2023 but conscious of the need to incentivise
the executive directors who were both new to the business. The Committee determined there should be a downwards
adjustment of 44% made to the RSP 2024 grant to take into account potential windfall gain (2023 RSP share price of
£1.844 vs 2024 RSP share price of £0.479) and to ensure that the RSP operates within the share dilution limits. There was no
adjustment made for dividend equivalents and the CSOP element of the RSP was not awarded. The face value is based
on the Company’s share price on 7 May 2024 of £0.479. The grant price is calculated using the average price of a Vanquis
Banking Group share for the five dealing days prior to grant and discounted from that price at grant to reflect the absence
of dividend equivalents during the vesting period.
Executive director Date of award
RSP award
(share options) Face value of award Date of vesting End of holding period
Ian McLaughlin 7 May 2024 847,599 £406,000 7 May 2027 7 May 2029
Dave Watts
1
7 May 2024 643,006 £308,000 7 May 2027 7 May 2029
1 The RSP 2024 grant for the CFO was 100% of salary for 2024 only and will revert to 75% of salary for any future grants.
These awards are conditional share awards without any performance targets. However, they are subject to underpins
that will apply over the initial three-year vesting period. The Committee will take into account the following factors
(amongst others) when determining whether to exercise its discretion to adjust the number of shares vesting:
5 whether threshold performance levels have been achieved for the performance conditions for the bonus for each of
the three years in the vesting period;
5 the underlying financial performance progression of the Group over the vesting period;
5 whether there have been any sanctions or fines issued by a regulatory body; participant responsibility may be
allocated collectively or individually;
5 whether there has been material damage to the reputation of the Company; participant responsibility may be
allocated collectively or individually;
5 the potential for windfall gains;
5 the level of colleague and customer engagement over the vesting period; and
5 the level of achievement of our approach to ESG as set out by the Board.
In all cases, vesting is subject to the Committee’s holistic assessment based on business performance, individual
performance or wider Group considerations. The RSP awards on vesting must be held (subject to sales to meet PAYE and
NIC liabilities) for a period of two years following vesting.
RSP 2021 award vesting (audited)
As noted in last year’s report, the Committee’s interim assessment as at 31 December 2024 suggested that a downwards
adjustment of 25% would be required for the RSP 2021 awards. A final review was carried out in July and October 2024 and
the Committee decided that for the previous CEO (Malcolm Le May) and previous CFO (Neeraj Kapur), there should be no
further adjustment made to the vesting outcomes and these vested on 29 October 2024. The Committee reassessed the
potential for windfall gains and decided that no further adjustment was required.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
102
RSP 2022 award vesting (audited)
The vesting of the RSP 2022 award is subject to an underpin which provides discretion for the Committee to consider
whether any adjustment to vesting should be made. The underlying desire was (and remains) to ensure that participants
have been positive custodians of: (i) the underlying financial health of the business; (ii) maintaining our reputation;
(iii) making progress on our strategic imperative of ‘being a leading specialist bank focused on underserved markets’;
(iv) ensuring that we meet our ESG commitments (and, in particular, our social commitments); and (v) appropriately
focused on our agreed risk appetite. The Committee reviewed performance against the underpin attached to the RSP 2022
awards (and the underlying desire as set out above) as at 31 December 2024 (the end of the last full performance year
prior to vesting), and took into account a number of factors, including:
5 formulaic threshold performance levels were exceeded overall for the performance conditions for the Bonus Plan for
one of the three years in the vesting period, i.e. 2022. The threshold was not met for the financial year 2023 or 2024
However, the Committee noted that the poor performance in 2023 was fully taken into consideration for the RSP 2021;
5 the financial performance progression of the Group over the vesting period was not in line with expectation;
5 the regulatory position of the Company remains positive and there have been no sanctions or fines issued by a
regulatory body;
5 the potential for windfall gains (see below);
5 there has been material damage to the reputation of the Group (as viewed by our investors) following the
announcement of the interim results for the six months ended 30 June 2023. The Committee noted that this was
considered and fully reflected in the RSP 2020 award vesting as previously disclosed; and
5 the level of colleague and customer engagement over the vesting period remains satisfactory.
The Committee also took into account the decisions made in relation to the 2024 annual bonus, RSP 2020 award vesting,
and RSP 2021 award vesting:
5 the poor financial performance of 2023 and 2024 meant that there was no bonus payout for the 2023 and 2024
performance years respectively for the RSP 2022 award recipients;
5 the significant reduction in share price over the vesting period; and
5 the adjustment for the previous RSP 2020 award to reflect the damage to the reputation of the Group (as viewed by our
investors), and the significant fall in share price in 2023 (underpinned by poor financial performance of 2023).
With respect to performance in 2024, the Committee needed to determine how best to apportion the issues that created
the loss, given that they spanned the RSP’s three-year period, these being the Vehicle Finance receivables review, other
one-off items and the in-year 2024 trading loss. After careful consideration, the Committee concluded that a total
downwards adjustment of 30% should be applied which is in line with decisions taken on previous RSPs but that it would be
unreasonable to adjust fully in any one year. As a result the decision was taken to apply equally across the three years and
hence a 10% downwards adjustment will be made to the RSP’s issued in 2022, 2023 and 2024.
This results in a 10% downwards adjustment to the RSP 2022 for the previous CEO (Malcolm Le May) and the previous CFO
(Neeraj Kapur), as well as to all other RSP 2022 award recipients.
The RSP 2022 award is subject to a dividend equivalent review at vest because the RSP 2022 award price was adjusted
downwards at grant to take into account forecast consensus dividends during the vesting period. The Committee has
reviewed the actual dividends paid during the vesting period (which were lower) and has exercised discretion and made
an additional downwards adjustment of 2.8% to the RSP 2022 award for the previous CEO (Malcolm Le May) and the
previous CFO (Neeraj Kapur). Downwards adjustments have been made to all other RSP 2022 award recipients.
Deferred Bonus Plan (DBP) 2022 award vesting (audited)
The DBP 2022 award is subject to a dividend equivalent review at vest because the DBP 2022 award price was adjusted
downwards at grant to take into account forecast consensus dividends during the vesting period. The Committee has
reviewed the actual dividends paid during the vesting period (which were lower) and has exercised discretion and made
an additional downwards adjustment of 2.8% to the RSP 2022 award for the previous CEO (Malcolm Le May) and the
previous CFO (Neeraj Kapur).
Fees from other directorships
Ian McLaughlin did not hold any external directorship for the period from 1 January 2024 to 31 December 2024. Dave Watts
has been a Non-Executive Director for CAF Bank since 23 August 2021. He receives no fees from this appointment.
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103
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Statement of directors’ shareholding and share interests (audited)
The table below shows the interests of the directors and connected persons in shares (owned outright or unvested) as at
31 December 2024. There has been a change to Dave Watts’ shares of 714 owned outright due to Buy as you Earn and no
further changes in any other of the directors’ interests in the period between 31 December 2024 and 28 February 2025.
Shares
owned
outright
Unvested
shares not
subject to
performance
Unvested
share options
subject to
performance
Vested but
unexercised
options
Total
scheme
interests
Shareholding
guideline
% of salary
Current
shareholding
% of salary
1
Guideline
met?
Executive directors
Ian McLaughlin
5
29,327 — 1,866,538 — 1,866,538 200% 2% No
Dave Watts 61,887 — 643,006 — 643,006 200% 7% No
Non-executive directors
Sir Peter Estlin
2
300,000 — — — — n/a n/a n/a
Angela Knight — — — — — n/a n/a n/a
Paul Hewitt 106,502 — — — — n/a n/a n/a
Graham Lindsay
5
65,405 — — — — n/a n/a n/a
Michele Greene — — — — — n/a n/a n/a
Oliver Laird 26,900 — — — — n/a n/a n/a
Karen Briggs — — — — — n/a n/a n/a
Jackie Noakes — — — — n/a n/a n/a
Andrea Blance
3
— — — — — n/a n/a n/a
Elizabeth Chambers 27,000 — — — — n/a n/a n/a
Margot James
4
— — — — — n/a n/a n/a
1 Rounded to the nearest whole percent. Shares owned outright and unvested shares not subject to performance are included when assessing current compliance
to shareholding guideline. Based on a closing share price on 31 December 2024 of £0.455.
2 Includes 50,000 shares held by a person closely associated with Sir Peter Estlin.
3 As at 1 February 2024.
4 As at 15 May 2024.
5 In addition to ordinary shares acquired during the financial year and those shares disclosed in previously Annual Reports, Graham Lindsay’s shareholding includes
an additional 3,617 ordinary shares which he acquired under a dividend reinvestment plan between Sept 2019 and May 2024 and Ian McLaughlin’s shareholding
includes an additional 876 ordinary shares which he acquired under a dividend reinvestment plan between Sept 2023 and May 2024.
The shareholding guidelines for the current executive directors have not yet been met but the Policy provides for sufficient
time to be compliant. A breakdown of the journey to compliance can be seen below.
Statement of directors’ compliance with the Share Ownership Policy
The following sets out the expected level of share ownership that the executive directors will acquire over the period 2024
to 2027. The current executive director holding requirement is 200% of base salary.
Assumptions
1 Only share awards held on 31 December 2024 are included. Future RSP and DBP awards yet to be granted
(for current executive directors (Ian McLaughlin and Dave Watts) are not included.
2 A 100% vesting outcome for RSPs 2023 and 2024 (interim assessment of 10% reduction is not yet reflected).
3 Figures are ‘net of tax’ and a personal tax rate of 47% over the period of vest.
4 Rounded to the nearest whole percent. Share price remains static, based on a closing share price on 31 December 2024
of £0.445.
Forecast ED shareholding position
200%
150%
100%
50%
0%
Own shares (purchased or vested buyout/DBP/RSP)
Unvested shares not subject to performance (DBP)
Unvested shares subject to performance (RSP)
Current CEO
(Ian McLaughlin)
62%
Current CFO
(Dave Watts)
33%
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104
Relative importance of spend on pay
The table below shows how the Company’s performance metrics compare to total colleague pay expenditure for the
financial years ended 31 December 2023 and 31 December 2024.
Relative importance of spend on pay 2024 2023 (restated)
Year-on-year
change
Shareholder distributions
1
£2.5m £38.4m (93)%
Net income £458.5m £488.8m (6)%
Adjusted (L)/PBT £(34.8)m £17.3m (301)%
Adjusted EPS (9.7)p 4.5p (316)%
All remuneration costs
2
£100.0m £111.7m (10)%
1 Reflects dividends only as there were no buybacks.
2 Remuneration costs include: aggregate gross wages and salaries paid to the Group’s employees and share-based payment charge as referred to in the
employment cost table on page 156.
Service contracts
The executive directors are employed under contracts of employment with the Company. The principal terms of the
executive directors’ service contracts are as follows:
Notice period
Executive director Position Date of contract From Company From director
Ian McLaughlin Chief Executive Officer 26 July 2023 12 months 12 months
Dave Watts Chief Financial Officer 1 November 2023 12 months 12 months
The Chairman and non-executive directors have letters of appointment. Dates of the directors’ letters of appointment are
set out below:
Name Date of original appointment Date and actual date of expiry
Sir Peter Estlin
1
19 April 2023 30 June 2027
Angela Knight 31 July 2018 30 June 2027
Paul Hewitt 31 July 2018 30 June 2027
Graham Lindsay 1 April 2019 30 June 2025
Michele Greene 9 March 2023 8 March 2026
Oliver Laird 27 March 2024 30 June 2027
Karen Briggs 27 March 2024 30 June 2027
Jackie Noakes 27 March 2024 30 June 2027
Andrea Blance 1 March 2017 1 February 2024
Elizabeth Chambers 31 July 2018 15 May 2024
Margot James 27 July 2020 15 May 2024
1 Sir Peter Estlin was appointed as director on 19 April 2023 and as Chairman on 15 September 2023.
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Directors’ Remuneration Report continued
Annual Report on Remuneration continued
Implementation of the Directors’ Remuneration Policy in 2025
The Policy was approved at the AGM on 15 May 2023 and will continue to apply until the 2026 AGM unless changes are
required. The table on page 94 at the beginning of the document Remuneration at a glance summarises the key features
of the Policy and how we plan to implement it in 2024/25. Full details of the Policy can be found under the Shareholder Hub
section of our website.
Element of
remuneration
Key features of Policy Implementation in 2025
Salary
An executive director’s base salary is set on appointment and reviewed
annually or when there is a change in position or responsibility.
When determining an appropriate level of base salary,
the Committee considers:
5 pay increases for other colleagues;
5 remuneration practices within the Group;
5 any change in scope, role and responsibilities;
5 the general performance of the Group and each individual;
5 the experience of the relevant director; and
5 the economic environment.
No salary increases to 2024 salaries for
CEO or CFO.
Ian McLaughlin
2025: £725,000
2024: £725,000
Dave Watts
2025: £550,000
2024: £550,000
Benefits
Benefits include market standard benefits (including medical and
health insurances).
Transitionary temporary travel allowance for
Ian McLaughlin only. £100,000 per annum and
expires on 26 July 2025.
Role-Based
Allowance
(RBA)
RBAs are non-pensionable and will be released in equal instalments over
three years in the form of shares.
The maximum annual value of an RBA grant for an individual is 25% of
base salary.
No change from 2023.
RBA of 0% of base salary.
Pension
The Company provides a pension contribution allowance that is fair,
competitive and in line with corporate governance best practice.
No change from 2024.
CEO and CFO: cash allowance, 10% of salary.
10% is the norm for the Group’s Pension Plan.
Annual bonus
The Committee will determine the maximum annual participation in the
Annual Bonus Plan for each year, which will not exceed 150% of base salary.
The Annual Bonus Plan is based on a mix of financial and strategic/operational
conditions and is measured over a period of one financial year.
The financial measures will account for no less than 50% of the
bonus opportunity.
There is no change from 2024.
Maximum opportunity:
5 CEO: 150% of salary.
5 CFO:. 125% of salary.
Financial performance measures:
5 statutory reported PBT (25%);
5 statutory reported ROTE (25%); and
5 cost-income ratio (10%).
40% non-financial will align to the 2025
business plan.
In addition, there is a risk overlay and Tier 1
capital ratio gateway.
Deferral:
At least 40% of the bonus is deferred, vesting
pro-rata over three years, in VBG shares.
Restricted
Share
Plan (RSP)
Awards are granted annually to executive directors in the form of conditional
awards or options. Awards vest at the end of a three-year period subject to:
5 the executive director’s continued employment at the date of vesting; and
5 the satisfaction of an underpin as determined by the Committee whereby
the Committee can adjust vesting for business, individual and wider
Company performance.
A two-year holding period will apply following the three-year vesting period
for all awards granted to the executive directors.
Upon vesting, sufficient shares may be sold to pay tax on the shares.
Change from 2024.
Last year we awarded, exceptionally, an RSP
at 100% of salary to the CFO (Dave Watts)
as part of his joining package. This was
subsequently discounted by 44% at grant
(see page 102). For future RSP awards, the
maximum award will revert to 75% of salary,
as previously disclosed.
The Committee has determined that no RSP
awards will be granted in April 2025 and will
review this position following the publication
of the Group’s H1 2025 results. Further details
are set out on page 93.
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Element of
remuneration
Key features of Policy Implementation in 2025
Shareholding
requirements
Normal shareholding requirement of 200% of salary.
Additional requirement to hold 200% of salary for two years following cessation
of employment.
Executive directors have agreed to be bound by the terms of the requirements
and Company Secretariat will monitor compliance.
No change from 2024.
The previous executive directors (Malcolm Le
May and Neeraj Kapur) will remain subject
to the post-employment shareholding
requirements in line with the Policy.
Malus
and clawback
Standard market practice (and regulatory requirements) and malus and
clawback provisions as at the time the Policy was adopted. (see below).
No change from 2024.
Chairman
and NED fees
Provides a competitive level of fees to support recruitment and retention of a
Chairman (and NEDs) with the necessary experience to advise, and assist, the
executives with establishing and monitoring the Group’s strategic objectives.
No change from 2024 for NEDs or
Chairman fees.
Malus and clawback
The Policy contains malus and clawback provisions which are aligned to the requirements set out in the FCA and PRA
regulations for a Tier 3 bank. Malus is the adjustment of the Bonus Plan payments or unvested long-term incentive awards
(including RSP awards) or the imposition of additional conditions because of the occurrence of one or more circumstances.
Clawback is the recovery of payments made under the Bonus Plan or vested long-term incentive awards (including RSP
awards) as a result of the occurrence of one or more circumstances. Clawback may apply to all or part of a participant’s
payment under the Bonus Plan or RSP award and may be effected, among other means, by requiring the transfer of shares,
payment of cash or reduction of awards or bonuses.
The circumstances in which malus and clawback could apply are as follows:
5 discovery of a material misstatement resulting in an adjustment in the audited accounts of the Group or any Group company;
5 the assessment of any vesting condition or condition in respect of an award under the Plan was based on error, or
inaccurate or misleading information;
5 the discovery that any information used to determine the award was based on error, or inaccurate or misleading information;
5 action or conduct of a participant which amounts to fraud or gross misconduct;
5 events or the behaviour of a participant have led to the censure of a Group company by a regulatory authority or have
had a significant detrimental impact on the reputation of any Group company provided that the Committee is satisfied
that the relevant participant was responsible or is attributable for the censure or reputational damage;
5 failure of risk management including but not limited to a material breach of risk appetite and regulatory standards;
5 material downturn in business performance as determined by the Committee; or
5 corporate failure.
The table below sets out the periods for malus and clawback which align to the FCA and PRA regulations. The Committee
believes that the rules of the plans and the Group’s Malus and Clawback Policy provide sufficient powers to enforce malus
and clawback where required. In 2024 the provisions set out under the Malus and Clawback Policy were not exercised.
Annual bonus (cash) Annual bonus (deferred shares) Restricted shares
Malus
Up to the date of the cash payment. To the end of the three-year vesting period. To the fifth anniversary of the award date.
Clawback
Clawback applies for a period of seven
years, extendable up to one year.
The total malus and clawback period may
be extended to 10 years where there is an
ongoing internal or regulatory investigation.
Clawback applies for a period of seven
years, extendable up to one year.
The total malus and clawback period may
be extended to 10 years where there is an
ongoing internal or regulatory investigation.
Two years following the fifth anniversary
of the award date.
The total malus and clawback period may
be extended to 10 years where there is an
ongoing internal or regulatory investigation.
NED fees for 2025
Both NED fees and the Chairman fees were reviewed with no change by the Board in December 2024 and the Committee in
January 2025.
2025 2024 % change
Chairman of the Board £275,000 £275,000 0%
Board fee
1
£70,000 £70,000 0%
Senior Independent Director £15,000 £15,000 0%
Committee Chair £20,000 £20,000 0%
Committee members £5,000 £5,000 0%
1 Board fee covers all duties, including service on the VBG and VBL Nomination Committees (NomCo) or Company subsidiaries.
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107
Directors’ Remuneration Report continued
Additional remuneration disclosures
Our approach to fairness and wider workforce considerations
This section of the report brings visibility of remuneration across the entire workforce together in one place. In this section,
we provide context to our director pay by explaining our colleague policies and our approach to fairness, including
the following:
5 the report received by the Committee on wider workforce pay policies and whether the approach to executive
remuneration is consistent and the alignment of the incentives operated by the Company with its culture and strategy;
5 general pay and conditions in the Group;
5 gender diversity and pay gap; and
5 comparison metrics on executive and colleague remuneration.
In order for the Committee to carry out its oversight review of wider workforce pay, policies and incentives, the Committee
receives a report annually from the Group setting out key details of remuneration throughout the Group.
Details of the information reviewed by the Committee and findings are set out below.
Overview of workforce remuneration and the Committee’s review
The table illustrates how the Remuneration Policy for executive directors in 2024 cascaded throughout the colleague population.
% of
workforce
Average
increase
in base
salaries
1
Variable pay
2
Share
plans
3
Pension
4
Benefits
5
Colleague group
Commission
schemes
Annual
bonus
Executive directors 0.2% 0.0% No All Yes Yes Yes
Senior management 3.9% 3.7% No All Yes Yes Yes
Management 26.5% 7.1% No All Yes Yes Yes
All other colleagues 69.4% 7.9% No All Yes Yes Yes
1 Base salaries:
5 Base salaries are market competitive and determined with reference to role type, location, responsibility (level), experience and market practice.
5 Annual salary increases are applied on an equitable and objective basis dependent on role type.
5 Includes 2024 pay review and compares 31 December 2023 with 31 December 2024 data.
5 Senior management excludes five promotions to either ExCo or MRT roles. With these promotions overall average for Senior Management would be 8.3%.
2 Variable pay:
5 In line with our approach to executive director remuneration, a proportion of the remuneration for the wider workforce is in the form of variable pay, linked to
the achievement of stretching targets that align with the Company’s strategic goals.
5 All colleagues are eligible for variable pay provided they have joined before 1 October of the previous performance year, are performing satisfactorily, and are
not under notice of termination. Variable pay is linked to the Group’s performance in the form of annual bonuses. Variable pay is determined with reference
to financial performance and/or the achievement of non-financial objectives which are aligned to the Group’s strategic priorities.
3 Share plans:
5 Only some management, and all senior management and executive directors participate in the RSP.
5 Historically, participation in the long-term incentive schemes has been limited since the Group’s variable pay arrangements provide the strong linkage
between workforce remuneration and the Group’s financial performance and/or strategic priorities.
5 All colleagues have access to share ownership schemes (SAYE (an all-employee plan enabling colleagues to save monthly and receive an option to purchase
Group shares at a discount following a minimum of three years) and SIP (an all-employee plan enabling the colleagues to purchase Group shares on a
monthly basis out of deductions from salaries, also receiving some Matching Awards from the Group)).
4 Pension:
5 Maximum employer contributions are consistent across the Group (maximum 10% employer contribution for the Group DC arrangements), with minor
deviations appropriate for role type or for historical reasons which were actively addressed in 2024. There also exists a NEST pension arrangement.
5 Benefits:
5 Consistent approach applied and determined with reference to role type, market practice and seniority.
The levels of remuneration and the types offered will vary across the Company depending on a colleague’s location, level
of seniority and role. The Committee is not looking for a homogeneous approach; when conducting its review, it is paying
particular attention to:
5 whether the element of remuneration is consistent with the Company’s remuneration principles;
5 if there are differences, whether they are appropriate; and
5 whether the approach is fair and equitable in the context of other colleagues.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
108
The key findings of the Committee’s holistic review for 2024 have been set out in the following table.
Element Findings
Salary
Average salary increases for colleagues across the Company are being applied on an equitable and objective basis.
All colleagues, whatever their age, are paid above the National Living Wage (on a full-time basis).
Pensions
All colleagues are eligible for enrolment in a defined contribution pension arrangement and all colleagues are now
eligible to join our main pension provider with the same terms and conditions across the Group.
Benefits
Benefits are offered according to the level of seniority of the role in line with market practice and Policy. Our bespoke
benefits offering is broadly in line with similar companies.
Incentives
All of our colleagues have the ability to share in the success of the Company through incentive compensation in the
form of variable pay linked to performance.
The Committee is satisfied that the approach to remuneration across the Company is broadly consistent with the
Company’s principles of remuneration and pay. Further, in the Committee’s opinion the approach to executive
remuneration aligns with the wider Group Remuneration Policy and there are no anomalies specific to the executive
directors that are outside of Policy.
Communication and engagement with colleagues
The Board is committed to ensuring there is an open dialogue with our colleagues and the Committee has the authority
to ask for additional information from the Company in order to carry out its responsibilities.
The Colleague Forum is an established arrangement to facilitate effective engagement between the Board and the
workforce and to encourage workforce participation in shaping strategic initiatives and seek views on key decisions.
It supports the Group in satisfying Provision 5 of the UK Corporate Governance Code 2018, as well as capturing meaningful
input and feedback from colleagues.
Our Colleague Forum has colleague representatives from across all areas and all levels of the business and meets
quarterly. The Designated Non-Executive Colleague Champion (who is also the Chair of the Remuneration Committee)
works closely with the Colleague Forum in his capacity as engagement sponsor on behalf of the Board to agree a rhythm
of dialogue and meeting attendance to further cement the link between the Colleague Forum and the Board.
Alongside the Colleague Forum, we commission an annual Colleague Engagement Survey, which is independently
administered by Great Place To Work, as a channel for colleague voice and feedback. The output from each Colleague
Engagement Survey is reviewed by the Board and appropriate actions are taken in response to any findings.
This is the third year that a consistent performance management framework was used fully across the Group to assess
colleagues’ performance and determine bonus allocations in line with the Group’s values. Work has continued on
harmonising pay and benefits opportunities for equivalent roles across all areas of the business through the reward
framework and the alignment of pension schemes across the Group was completed in 2024. We have also published
the minimum pay levels by level and location in our move to greater pay transparency.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
109
Directors’ Remuneration Report continued
Additional remuneration disclosures continued
Living Wage, equal opportunities and diversity initiatives
A summary of the Company’s general policies in relation to Living Wage, equal opportunities and diversity initiatives
as follows:
Policy Description
Living Wage employer
The National Living Wage is the amount of money all colleagues aged over 25 are legally entitled to. Our policy is to
ensure that all colleagues, whatever their age, are paid above the National Living Wage.
Equal opportunities
and diversity
initiatives
We foster an environment of equal opportunity across all employment practices - from hiring and training to
performance evaluations and career advancement. By embracing Inclusion and diversity, we harness the unique
perspectives, experiences, and insights of our team members to better serve both our customers and communities.
We demonstrate our commitment to Inclusion & Diversity through several key initiatives: our participation in the
Women in Finance Charter, our journey toward Disability Confident certification, and our achievement of Silver Status
from LGBT Great for LGBTQ+ DE&I excellence within Financial Services.
We encourage continuous development and training by offering a variety of learning opportunities that cater to the
diverse learning styles of our colleagues. In 2024, we continued to focus on developing a data-driven approach to
improve the quality of our diversity data and analysis. This has allowed us to set gender diversity targets at a more
granular level.
Furthermore, we continue to nurture our established partnerships with membership organisations to stay up to
date with industry standards and align our policies and processes with best practices. Through collaboration, we
can continuously improve our approach to inclusion, diversity and wellbeing, to create an inclusive and supportive
workplace for all.
Gender pay gap
We feel strongly about the importance of having a workforce which represents the customers we serve and the
communities we live and work in. We hire from diverse backgrounds, employing (as at 31 December 2024) 53.2% men
and 46.8% women across our business, and our recruitment policies, salary and bonus structures are designed to be
gender neutral.
Whilst the gender pay gap has improved in 2024 at a Group level, there is still further improvement needed. The Group
recognises that the key driver behind both our hourly rate and bonus gap is a higher proportion of male colleagues in
senior roles, and so we continue to remain focused on initiatives to increase female representation at senior management
and leadership level. This is evidenced further by our commitment to the Women in Finance Charter.
The Group Gender Pay Gap Reports which are communicated internally to our colleagues can also be found on
our website.
CEO pay ratio
For the purposes of calculating the CEO pay ratio, we have used Option A, which takes into consideration the full-time
equivalent basis of all UK employees and provides representative results of the employee pay conditions across the
Company. For 2024 only the current CEO (Ian McLaughlin) has been used. For 2023 the CEO pay used in these calculations
was the pro-rated blend of remuneration of the current CEO (Ian McLaughlin) and previous CEO (Malcolm Le May). The
table shows that the CEO pay ratio has been improving (i.e. decreasing) since 2021. The main reasons for this are: (1)
no salary increase for the CEO since 2022, (2) salary reviews since 2023 focused on the lower paid population, and (3)
structural changes made to the business.
The volatility in this ratio is caused by the fact that the CEO pay is made up of a higher proportion of incentive pay than that
of our colleagues, in line with the expectations of our shareholders. This introduces a higher degree of variability in his pay
each year which affects the ratio.
In order to normalise the impact year-on-year changes to short and long-term incentive payments, the information also
shows the normalised CEO pay ratio when ‘on-target’ bonus payouts are used in the calculation. In assessing our pay
ratio versus likely ratios from industry peers with a similar headcount, we believe that we are comparable but note that
annual and long-term incentive payments have varied considerably amongst this group. We also recognise that ratios
will be influenced by levels of colleague pay and, in the sector, colleague pay will be lower than in many other sectors of
the economy.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
110
Year
25th
percentile
pay ratio
Median
pay ratio
75th
percentile
pay ratio
2024 (actual) Option A 26.7:1 17.4:1 11.1:1
2023 (actual) Option A 34.7:1 23.8:1 13.1:1
2022 (actual)
1
Option A 55.1:1 36.7:1 20.3:1
2021 (actual) Option B 79.6:1 66.3:1 44.1:1
2020 (actual) Option B 28.9:1 26.9:1 21.3:1
2024 (incl. target bonus) Option A 43.3:1 27.1:1 17.1:1
2023 (incl. target bonus) Option A 56:1 37.3:1 20.7:1
2022 (incl. target bonus)
1
Option A 60.1:1 44.2:1 24.2:1
2021 (incl. target bonus) Option B 64.5:1 53.8:1 36.8:1
2020 (incl. target bonus) Option B 55.8:1 51.8:1 41.0:1
1 Restated (downwards) for 2022 due to the single figure of remuneration for 2022 being reduced as a result of the downwards adjustment to the CEO’s RSP 2020
which vested on 9 November 2023.
Base salary and total pay and benefits for CEO and colleague percentiles
2024
Base salary (£’000) 725
Total pay and benefits (£’000) 917
1
Colleague headcount at 31 December 2024 1,259
2
Base salary (£’000)
Colleague at the 25th percentile 29.7
Colleague at the 50th percentile 50.7
Colleague at the 75th percentile 71.8
Total pay and benefits (£’000)
Colleague at the 25th percentile 34.3
Colleague at the 50th percentile 52.8
Colleague at the 75th percentile 82.6
1 Includes all benefits including those that are not taxable benefits (Life Assurance/PHI).
2 Excludes 10 NEDs. Colleagues included in the CEO pay ratio are 1,583.
Total remuneration for each colleague was calculated on a full-time equivalent basis and the lower quartile, median and
upper quartile colleagues were identified as at 31 December 2024. Colleague total remuneration includes: basic salary,
pension, maternity/paternity pay, annual cash bonus and benefits. The total remuneration for the relevant colleagues was
compared to that of the CEO.
The Company believes that the median pay ratio for 2024 is consistent with the pay, reward and progression policies for
the Company’s colleagues. We also considered the pay composition of the colleagues who represent the median, lower
and upper quartiles and were comfortable that it fairly represents pay in the Company.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
111
Directors’ Remuneration Report continued
Additional remuneration disclosures continued
CEO pay against total shareholder return (TSR)
The chart below shows the single figure of remuneration for our CEO over time rebased to 2014. We have also included our
TSR performance over this period against the FTSE 250, based on £100 invested. The FTSE 250 was chosen as, in the opinion
of the Committee, the size and complexity of the Company make this an appropriate basis for comparison.
Pay performance: TSR chart
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CEO
1
PC PC PC MLM MLM MLM MLM MLM MLM
2
MLM IM IM
CEO single figure
of remuneration
(£’000) 7,500 6,315 962 71 1,387 1,507 818 1,972 2,056
3
551
4
393 910
Annual bonus/
earning 98 100 — — 69 53 — 96 78 — — —
LTIS/RSP vesting
(% of maximum) 100 100 — — — — — — 65 75 n/a n/a
1 Peter Crook (PC), Malcolm Le May (MLM) and Ian McLaughlin (IM).
2 The single figure of remuneration for 2022 has been restated (see 3 below).
3 The RSP 2020 award (which formed part of the CEO single figure of remuneration for 2022) is restated to reflect the 35% downwards adjustment applied in
November 2023.
4 The RSP 2021 award (which forms part of the CEO single figure of remuneration for 2023) reflects a 25% downwards adjustment as determined as part of the
interim assessment of the RSP 2021 award performance underpin.
The greater volatility of our CEO pay is due to the higher proportion of incentive pay in his package compared with that of
our colleagues, which introduces a higher degree of variability in his pay each year versus colleagues.
0
Value (£) (rebased)
Vanquis Banking Group plc FTSE 250 (excl. investment trusts) CEO pay
Dec 21Dec 20Dec 14 Dec 15 Dec 16 Dec 17 Dec 18 Dec 19 Dec 22
100
150
50
200
Dec 23 Dec 24
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
112
Percentage change in directors’ and colleagues’ remuneration
The Committee monitors the changes year on year between our directors’ pay and average colleague pay. As per
our Policy, salary increases applied to executive directors will typically be in line with those of the wider workforce. In
accordance with The Companies (Directors’ Remuneration Policy and Directors’ Remuneration Report) Regulations 2019,
the table below shows the percentage change from this financial year to previous financial year in executive director and
NED total remuneration compared to the change for the average of the percentage change for colleagues within the
Company. The comparator group is based on all colleagues.
Salary/fees Taxable benefits Short-term variable pay
2024
3
2023 2022 2021 2020 2024 2023
3
2022 2021 2020 2024 2023
3
2022 2021
1
2020
Executive directors
Ian McLaughlin
2
0% n/a n/a n/a n/a 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a
Dave Watts
2
0% n/a n/a n/a n/a 0% n/a n/a n/a n/a n/a n/a n/a n/a n/a
Non-executive directors
Sir Peter Estlin
5
67% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Paul Hewitt -3% 0% 9% 5% 0% 0% 67% 0% 50% n/a n/a n/a n/a n/a n/a
Angela Knight -15% 0% 9% 2% 0% n/a 0% n/a n/a n/a n/a n/a n/a n/a
Graham Lindsay -20% 0% 9% 8% 0% 150% -60% 150% -50% n/a n/a n/a n/a n/a n/a
Michele Greene -14% n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Oliver Laird n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Karen Briggs n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Jackie Noakes n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Average colleague 8% 10% 8% 3% 4% 24%
4
14% 59% 0% 7% n/a -100% -5% —
1
-54%
1 No bonus was paid in 2020 and therefore there is no meaningful comparison with 2021.
2 Reflects pro-ration for time as executive director in 2023.
3 2023 data is annualised for IM/DW/PE.2023.
4 Extension of the medical insurance benefits to all colleagues during 2024.
5 Sir Peter Estlin was appointed as director on 19 April 2023 and as Chairman on 15 September 2023.
All data rounded to the nearest whole percent.
Statement of shareholder voting
The table below shows shareholder voting results in respect of our 2023 Remuneration Report approved at the AGM held on
15 May 2024, and Directors’ Remuneration Policy approved at the AGM held on 25 May 2023.
Vote on 2023 Annual Remuneration Report at the 2024 AGM.
Number
of shares Percentage
For 194,800,439 97%
Against 5,097,130 3%
Withheld 32,254 n/a
Vote on Directors’ Remuneration Policy at the 2023 AGM.
Number
of shares Percentage
For 203,831,473 95%
Against 11,098,605 5%
Withheld 4,604 n/a
Graham Lindsay
Remuneration Committee Chair
13 March 2025
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
113
Our responsibilities as a listed business
In accordance with section 414C(11) of the Companies Act 2006, the directors present their report for the year ended
31 December 2024. Information relevant to the Directors’ Report that has been covered in the Strategic Report has been
listed below alongside its location. Both the Strategic Report and the Directors’ Report have been prepared and presented
in accordance with, and in reliance upon, applicable company law. The liabilities of the directors in connection with both
the Directors’ Report and the Strategic Report shall be subject to the limitations and restrictions provided by company law.
Other statutory information (including that required by Listing Rule 6.6.1(13))
Agreements with controlling shareholders Not applicable
Contracts of significance 193
Details of long-term incentive schemes 102 to 103
Directors’ indemnities 115
Dividends 116
Engagement with employees 70
How we had regard to suppliers, customers and others in a business relationship with the Group 70 to 74
Events post-balance sheet 195
Risk management including principal risks 48 to 55
Future business developments 4 to 15
Going concern and viability statement 56 and 123
Greenhouse gas emissions, energy consumption and efficiency 33
Interest capitalised Not applicable
Non-pre-emptive issues of equity for cash in relation to major subsidiary undertakings Not applicable
Non-pre-emptive issues of equity for cash Not applicable
No political donations 119
Parent participation in a placing by a listed subsidiary Not applicable
Provision of services by a controlling shareholder Not applicable
Publication of unaudited financial information Not applicable
Purchase of own shares Not applicable
Research and development 119 and 172
Share capital – structure, voting and other rights 116
Share capital – employee share plan voting rights 115
Shareholder waivers of dividends 117
Shareholder waivers of future dividends 117
Waiver of emoluments by a director 102
Waiver of future emoluments by a director 102 to 103
Articles of association
The directors’ powers are conferred on them by UK legislation and by the articles of association. Changes to the articles of
association must be approved by shareholders passing a special resolution and must comply with the provisions of the
Companies Act and the FCA’s Disclosure Guidance and Transparency Rules.
Directors’ Report
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
114
Corporate governance statement
The Board considers that the Company was compliant with
all the provisions of the 2018 UK Corporate Governance Code
(the Code) throughout 2024 other than as set out below.
The stepping down of Andrea Blance on 1 February 2024
meant that both the Audit and Remuneration Committees
operated with only two members until 27 March 2024. The
Board and Nomination and Governance Committee agreed
that this temporary non-compliance was appropriate given
that it would be time limited, the impending appointment
of additional non-executive directors, and that both
committees retained sufficient skills and expertise to
discharge their duties.
Furthermore, at the time of non-compliance the Company
had been outside of the FTSE 350 since September 2023;
the Code notes that audit and remuneration committees
of smaller companies are permitted to have two members.
On 26 March 2024, the Board approved the appointments
of three new non-executive directors with effect from
27 March 2024, with the Audit and Remuneration
Committees comprising of four and three members
respectively from that point. The Group was therefore
only non-compliant with Provisions 24 and 32 between
1 February 2024 and 27 March 2024.
The Group’s Corporate Governance Report is set out on
pages 57 to 121.
Directors
The membership of the Board and biographical details
of the directors at the year end are given on pages 59
to 61 and are incorporated into this report by reference.
Commentary about the Board’s composition and Board
tenure can be found on page 75.
All directors were present throughout 2024 and up to the
date of signing the Annual Report and Financial Statements
2024, other than:
5 Andrea Blance who stepped down from the Board on
1 February 2024;
5 Jackie Noakes, Karen Briggs and Oliver Laird who joined
the Board on 27 March 2024;
5 Elizabeth Chambers and Margot James who stepped
down from the Board on 15 May 2024; and
5 Angela Knight and Paul Hewitt who stepped down after
the Board meeting on 29 January 2025.
Appointment and replacement of directors
Rules about the appointment and replacement of directors
are set out in the Company’s articles of association. In
accordance with the recommendations of the Code,
all directors will offer themselves for appointment or
reappointment, as appropriate, at the 2025 AGM.
Directors’ indemnities
The articles of association permit the Company to indemnify
directors of the Company (or of any associated company)
in accordance with section 234 of the Companies Act.
The Company may fund expenditure incurred by directors
in defending proceedings against them. If such funding is
by means of a loan, the director must repay the loan to the
Company, if they are convicted in any criminal proceedings
or judgment is given against them in any civil proceedings.
The Company may indemnify any director of the Company
or of any associated company against any liability.
However, the Company may not provide an
indemnity against:
1. any liability incurred by the director to the Company
or to any associated company;
2. any liability incurred by the director to pay a criminal
or regulatory penalty;
3. any liability incurred by the director in defending
criminal proceedings in which they are convicted;
4. any liability incurred by the director in defending any
civil proceedings brought by the Company (or an
associated company) in which judgment is given
against them; or
5. in connection with certain court applications under
the Companies Act, no indemnity was provided and
no payments pursuant to these provisions were made
in 2024 or at any time up to the date of this report.
There were no other qualifying indemnities in place
during this period. The Company maintains both a deed
of indemnity in favour of the directors and directors’ and
officers’ liability insurance which gives appropriate cover
for any legal action brought against its directors.
Directors’ powers
Subject to the articles of association, UK legislation and any
directions given by special resolution, the business of the
Company is managed by the Board. The directors currently
have powers in relation to the issuing and buying back of the
Company’s shares, which were granted by shareholders at
the 2024 AGM along with the right to disapply pre-emption
rights in certain circumstances. The Board is seeking renewal
of these powers at the 2025 AGM.
Conflicts of interest
The Companies Act and the articles of association require
the Board to consider any potential conflicts of interest of
its members. The Board has a formal policy and operates
formal procedures regarding conflicts of interest in
order to identify and manage conflicts and to maintain
independent judgement. All members of the Board have
completed conflict of interest forms which are reviewed
annually. All directors have an ongoing duty to notify the
Company of any changes and to ensure that appropriate
authorisation is sought where required and are required
to renew and confirm their external interests annually. The
Board (excluding the director concerned) considers and, if
appropriate, authorises each director’s reported actual and
potential conflict of interest, taking into consideration what
is in the best interests of the Company and whether the
director’s ability to act in accordance with his or her duties
is affected. The Board will refer to the Conflict of Interest
Policy for the most appropriate mitigating control. Records
and Board minutes of all authorisations granted by the
Board and the scope of any approvals given are held
and maintained by the General Counsel and Company
Secretary.
Share capital
The Company’s issued ordinary share capital comprises
a single class of ordinary shares. The rights attached to the
ordinary shares are set out in the articles of association.
Each share carries the right to one vote at general meetings
of the Company. No new shares were issued to satisfy
awards made under the Long Term Incentive Scheme 2015
(LTIS), the Restricted Share Plan (RSP) or the Deferred Bonus
Plan (DBP).
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
115
Directors’ Report continued
Rights of ordinary shares
All of the Company’s issued ordinary shares are fully paid
up and rank equally in all respects and there are no special
rights with regard to control of the Company. The rights
attached to them, in addition to those conferred on their
holders by law, are set out in the articles of association.
There are no restrictions on the transfer of ordinary shares
or on the exercise of voting rights attached to them, except:
1. where the Company has exercised its right to suspend
its voting rights or to prohibit their transfer following
the omission by their holder or any person interested
in them to provide the Company with information
requested by it in accordance with Part 22 of the
Companies Act; or
2. where their holder is precluded from exercising voting
rights by the FCA’s Listing Rules or the City Code on
Takeovers and Mergers.
Directors’ interests in shares
The below interests include those held by connected
persons and interests in shares through the Company’s
share schemes.
Number of shares
31 December
2024
31 December
2023
Ian McLaughlin 1,895,865 1,028,939
Dave Watts 704,893 40,000
Sir Peter Estlin
1
300,000 100,000
Paul Hewitt
2
106,502 34,205
Jackie Noakes
3
— —
Karen Briggs
3
— —
Oliver Laird
3
26,900 —
Angela Knight
2
— —
Graham Lindsay 65,405 26,464
Michele Greene — —
1 Shareholding includes 50,000 shares held by a connected person.
2 Paul Hewitt and Angela Knight stepped down from the Board on 29 January
2025.
3 Jackie Noakes, Karen Briggs and Oliver Laird were appointed to the Board on
27 March 2024.
Between 31 December 2024 and 28 February 2025, being the
latest practicable date prior to publication, there has been
a change to Dave Watts’ shares of 714 owned outright due
to Buy as you Earn. There have been no further changes in
any other of the directors’ interests in the period.
Dividend waiver
Information on dividend waivers currently in place can be
found overleaf.
Substantial shareholdings
In accordance with the Disclosure Guidance and
Transparency Rules (DTR 5), the Company had been
notified that the following persons hold directly or indirectly
3% or more of the voting rights of the Company:
Interests as at 31 December 2024
Holders (descending %)
Interests as at 28 February 2025
(being the latest practicable date
before publication of the report)
Holders (descending %)
Schroder Investment
Management 19.93%
Schroder Investment
Management 19.98%
Redwood Capital
Management 17.49%
Redwood Capital
Management 17.49%
Artemis Investment
Management 9.96%
Artemis Investment
Management 9.97%
Janus Henderson
Investors 4.97%
Janus Henderson
Investors 4.71%
Premier Miton
Investors 4.08%
Premier Miton
Investors 4.02%
Hargreaves
Lansdown,
stockbrokers 3.99%
Hargreaves
Lansdown,
stockbrokers 3.92%
Harwood Capital 3.70% Harwood Capital 3.70%
Jasper Lake
Ventures Once LLP 3.12% NBIM 3.61%
All interests disclosed to the Company in accordance
with DTR 5 that have occurred since 28 February
2025 can be found on the Group’s website:
www.vanquisbankinggroup.com.
Profit and dividends
The operating profit before taxation, amortisation of
acquisition intangibles and exceptional items amounts to
adjusted (loss)/profit before tax £(34.8)m (2023: profit of
£17.3m (restated)). As at the date of this report, the directors
have declared dividends as follows:
Ordinary shares (p per share)
Interim dividend
2024 £nil
2023 (paid on 21 September 2023) 5p
Proposed final dividend
2024 £nil
2023 (proposed to be paid on 30 May 2024) 1p
Total ordinary dividend
2024 £nil
2023 6p
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
116
All-employee share schemes
The current schemes for employees resident in the UK are
the Vanquis Banking Group Savings-Related Share Option
Scheme 2022 (SAYE) and the Vanquis Banking Group Share
Incentive Plan 2022 (SIP). No SAYE scheme was offered to
employees in 2024. Share schemes are a long-established
and successful part of the total reward package offered
by the Company, encouraging and supporting employee
share ownership. The Company’s schemes aim to
encourage employees’ involvement and interest in the
financial performance and success of the Group through
share ownership. The Company’s SIP offers employees the
opportunity to further invest in the Company and to benefit
from the Company’s offer to match that investment on
the basis of one matching share for every four partnership
shares purchased.
Scheme title
Total
participants
as at
31 December
2024
Total
participants
as at
31 December
2023
SAYE 284 439
SIP 133 106
Executive share incentive schemes
Awards are also outstanding under the RSP, LTIS and DBP.
DBP awards were not granted during the year as no bonus
was paid for 2023. RSP options were granted under the RSP
on 7 May 2024. Further information is set out on page 102.
Vanquis Banking Group 2007 Employee
Benefit Trust (EBT)
The EBT, a discretionary trust for the benefit of executive
directors and employees, was established in 2007. The
trustee, SG Kleinwort Hambros Trust (CI) Limited, is not a
subsidiary of the Company. The EBT operates in conjunction
with the LTIS, RSP, RBA and DBP and either purchases shares
in the market or subscribes for the issue of new shares. The
EBT is funded by loans from the Company which are then
used to acquire, either via market purchase or subscription,
ordinary shares to satisfy awards granted under the LTIS,
RSP and DBP. Funds are used to acquire shares by way of
market purchase for the RBA.
For the purpose of the financial statements, the EBT
is consolidated into the Company and Group. As a
consequence, the loans are eliminated and the cost of the
shares acquired is deducted from equity as set out in note
30 on page 190 of the financial statements. In 2024, the EBT
agreed to satisfy awards granted during the year under the
RSP options under the RSP in relation to 5,112,263 shares in
the Company. In 2024, the EBT also agreed to satisfy awards
under the RBA of 10,148 shares in the Company by way of
market purchase in relation to 2024.
As at 31 December 2024, the EBT held the non-beneficial
interest in 1,020,669 shares in the Company (2023: 1,869,980).
The EBT may exercise or refrain from exercising any voting
rights in its absolute discretion and is not obliged to
exercise such voting rights in a manner requested by the
beneficiaries. The EBT waives its right to dividends in relation
to shares held in the trust.
Provident Financial Employee Benefit Trust
(the PF Trust)
The PF Trust, a discretionary trust for the benefit of executive
directors and employees, was established in 2003 and
operated in conjunction with the PSP. The trustee, Provident
Financial Trustees (Performance Share Plan) Limited, is
a subsidiary of the Company. The PF Trust has not been
operated with the Performance Share Plan (PSP) since 2012,
when the previous PSP expired. The PF Trust was wound
up in 2024.
Vanquis Banking Group BAYE Trust
(the BAYE Trust)
The BAYE Trust is a discretionary trust which was established
in 2013 to operate in conjunction with the SIP. Equiniti Share
Plan Trustee is trustee of the BAYE Trust. It is not a subsidiary
of the Company. The BAYE Trust is funded by loans from the
Company which are then used to acquire ordinary shares
via market purchase to satisfy the Matching Awards for
participants of the SIP.
For the purposes of the financial statements, the BAYE Trust
is consolidated into the Company and Group. Participants
in the SIP can direct the trustee on how to exercise its
voting rights in respect of the shares it holds on behalf
of the participant. As at 31 December 2024, the BAYE
Trust held the non-beneficial interest in 384,809 shares
(2023: 240,294 shares).
Colleague engagement and investing
in our workforce
We invest in our colleagues through recognition, reward,
development, wellbeing, the working environment and
culture. Colleagues are recognised through our ‘Way to
Go’ recognition platform and our ‘Perks at Work’ scheme,
where you can recognise colleagues for outstanding work,
providing support and generally exhibiting behaviours that
show they are living The Vanquis Way, the Group’s values.
You can also use the site to learn new hobbies and skills
through the Perks Community Online Academy and save
money on a wide range of expenses.
We have a Learning and Development hub which provides
colleagues with an online portal to enhance their skills,
performance and career. Colleagues are also provided
access to LinkedIn Learning which helps to support the
building of softer and technical skills.
We have a Group reward framework that enables clear
career progression and movement around the Group. We
have established mechanisms for colleague engagement
including having a Designated Non-Executive Colleague
Champion, a Colleague Forum, ‘Stay Connected’ and the
GPTW survey (see pages 66 and 68).
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
117
Directors’ Report continued
Colleague engagement and investing
in our workforce continued
Information relevant to how we invest in our colleagues and
where it can be found:
Information Location
Reward and recognition 92 and 108
Learning and development – management
programmes, apprenticeships, mandatory
e-learning and mentoring 15 and 70
Culture – equal opportunities, gender
diversity, other diversity and inclusion and
Colleague Survey results
5, 7, 67 to 69
and 70 to 81
Health and wellbeing – support and initiatives 69 and 80
Engagement – internal communication,
Colleague Survey, Workforce Panels
and Designated Non-Executive
Colleague Champion
7, 20, 66, 68
and 70
Equal opportunities and diversity
The Group is committed to employment policies which
follow best practice, based on equal opportunities for
all colleagues irrespective of gender, pregnancy, race,
colour, nationality, ethnic or national origin, disability, sexual
orientation, age, marital or civil partner status, gender
reassignment, religion or belief. The Group gives full and
fair consideration to applications for employment from
disabled persons, having regard to their aptitudes and
abilities. To read about our approach to diversity and
inclusion see pages 19 to 20.
As stated in 2023, we are members of the Government’s
Disability Confident Scheme for employers. Appropriate
arrangements are made for the continued employment
and training, career development and promotion of
disabled persons employed by the Group including making
reasonable adjustments where required. If a member of
staff becomes disabled, every effort is made by the Group
to ensure their continued employment, either in the same
or an alternative position, with appropriate retraining being
given if necessary.
Pensions
The Group operates two pension schemes in the UK.
Employee involvement in the Group defined benefit
pension scheme is achieved by the appointment of
member-nominated trustees and by regular newsletters
and communications from the trustees to members. In
addition, there is a website dedicated to pension matters.
The trustees manage the assets of the defined benefit
pension scheme which are held under trust separately
from the assets of the Group. Each trustee is encouraged to
undertake training and regular training sessions on current
issues are carried out at meetings of the trustees by the
trustees’ advisors. The trustees have a business plan and,
at the start of each year, review performance against the
plan and objectives from the previous year. In addition, they
agree objectives and a budget for the current year. The
trustees have a risk register and an associated action plan
and a Conflicts of Interest Policy, both of which are reviewed
at least annually. The trustees have implemented a de-
risking investment strategy which has been agreed with the
Company and is kept under close review. The objective of
the strategy is to reduce the risk that the assets would be
insufficient in the future to meet the liabilities of the scheme.
The Company has put Pension Trustee Indemnity Insurance
in place to cover all the Group’s pension schemes where
individuals act as trustees. The trustees are also protected
by an indemnity within each scheme’s rules and this
insurance effectively protects the Group against the cost of
potential claims impacting on the solvency of the pension
schemes. The Group operates a Group Personal Pension
Plan for employees who joined the Group from 1 January
2003. Employees in both these plans have access to
websites which provide information about their funds and
general information about the plan.
Compliance
The Risk and Audit Committees oversee compliance and
work together to review the systems and controls for the
prevention of bribery.
Health and Safety (H&S)
The Group is dedicated to upholding rigorous health and
safety standards across all working environments, for
colleagues, contractors, suppliers, and visitors. The Group
places a high priority on the health, safety, and wellbeing
of all individuals by clearly defining roles, assigning
responsibilities, and delegating authority to ensure effective
H&S management. In 2024, there was a strong focus on
providing H&S training for colleagues working both in
the UK and overseas to help them identify and address
risks. High levels of assurance in H&S performance were
achieved, leading to a decrease in accidents, and only one
Reporting of Injuries, Diseases and Dangerous Occurrences
Regulations (RIDDOR) reportable event. Thorough
accident investigations were conducted to prevent future
occurrences, while ongoing improvement remained a
central component of the health and safety strategy.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
118
Anti-bribery and corruption
The Group has a policy on anti-bribery and corruption
which reflects the requirements of the Bribery Act 2010.
The policy sets out the Group’s zero-tolerance approach
to bribery and corruption and its commitment to acting
professionally, fairly and with integrity in all its business
dealings and relationships, wherever it operates, and
implementing and enforcing effective systems and controls
to counter bribery and corruption. The policy applies to
all employees, contractors and directors in relation to
the business activities undertaken by, or on behalf of, the
Group. It also applies to any third party which is undertaking
business for or on behalf of the Group, which must comply
with the policy or maintain equivalent standards and
safeguards to prevent bribery and corruption. Under the
policy, all employees, contractors, directors and relevant
third parties of the Group and its divisions must comply with
the following minimum requirements:
5 they must not directly or indirectly engage in bribery or
corruption in any form; and
5 they also must not accept, solicit, agree to receive,
promise, offer or give a bribe, or facilitate payment,
kickback or other improper payment.
The policy also states that if an employee, contractor,
director or relevant third party of the Group or its divisions
becomes aware of a breach of the above minimum
requirements they must immediately comply with
applicable reporting protocols and procedures. The
Group MLRO is the responsible person within the Group for
receiving reports, and, as soon as is reasonably practicable,
reports the incident to the Deputy Company Secretary.
The Group provides anti-bribery and corruption training to
all colleagues.
Related policies
Gifts and Corporate Hospitality Policy
The Group has a Corporate Hospitality Policy which sets
out the Group’s requirements for the review, approval and
documentation of any gifts or corporate hospitality which
are accepted, offered or provided. The Risk Committee
oversees the Gifts and Corporate Hospitality Policy.
Whistleblowing Policy
The Group has a Whistleblowing Policy which is overseen
by the Board. The Group is committed to fostering a culture
of openness, honesty and accountability and requires the
highest possible standards of professional and ethical
conduct. Should any Group colleagues have any reportable
concerns, these can be raised anonymously either internally
or through the Group’s external third-party helpline
facility as detailed in the Group Whistleblowing Policy.
The Group has appointed a Whistleblowing Champion,
being a non-executive director with responsibility for
ensuring and overseeing the integrity of the Group’s
arrangements on whistleblowing, including policies and
procedures. A Group Whistleblowing Forum is in place
which reviews management information on whistleblowing
disclosures and grievances and agrees on escalations
to the Board. It also considers any concerns regarding
persistent trends and shares best practice. The Group
provides whistleblowing training to all colleagues, including
executive directors.
Overseas branches
The Group has no overseas branches.
Political donations
The Group neither made any political donations nor
incurred any political expenditure during the year.
Research and development
The Group’s research and development activities have
predominantly related to the development of the Gateway
platform as set out in note 19 on page 172 of the financial
statements.
Environment and greenhouse gas emissions
The Group’s Greenhouse Gas (GHG) and energy use
reporting is undertaken in accordance with our obligations
under both The Companies Act 2006 (Strategic Report and
Directors’ Report) Regulations 2013 and the UK Government’s
Streamlined Energy and Carbon Reporting (SECR) policy
that has been implemented through The Companies
(Directors’ Report) and Limited Liability Partnership (Energy
and Carbon Report) Regulations 2018. These emissions are
reported in accordance with WRI/WBCSD GHG Protocol.
For more information, please refer to pages 22 to 34.
The Group’s total GHG emissions, in tonnes of CO
2
equivalent (CO
2
e), along with details of our energy use
and an intensity ratio, are reported in the table on page
33. SLR Consulting Limited has provided limited level ISAE
3000 (Revised) assurance in respect of this data. Its full,
independent assurance statement is available online at:
www.vanquisbankinggroup.com/sustainability. Where
challenges have occurred in obtaining data, estimates
have been used and assured by SLR Consulting.
The Group’s Climate Risk Committee, which is chaired by
Joe Sweeney, the Group Chief Risk Officer, and includes
senior representatives from functions such as Finance,
Risk, Operations and Sustainability, continues to support
the business to assess, manage and report material
climate-related risks and opportunities, and ensure that we
continue to meet the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD). This is
done through the production of a climate-related financial
disclosure that is structured in such a way that that it is
fully consistent with the four pillars and 11 recommended
disclosures of the TCFD and therefore meets the
requirements of the Climate-related Financial Disclosure
(CFD) Regulations 2022 and the UK Companies Act (that
is, sections 414CB(2A)(a to h)). The Group’s 2024 climate-
related financial disclosure is set out on pages 22 to 34.
To help us to manage and reduce our wider impacts on
the environment the Group continues to have in place
an Environmental Management System (EMS). Our EMS
helps us to identify, assess and reduce key environmental
risks and impacts; set and deliver against environmental
targets; and ensure our legal compliance. This EMS is
independently audited each year against the requirements
of the international management standard ISO 14001:2015.
Following the environmental audits carried out in 2024,
all the Group’s business premises in Bradford, London,
Chatham in Kent and Petersfield in Hampshire were
re-certified to comply with the international standard
ISO 14001:2015.
Important events since the end of the
financial year (31 December 2024)
See note 35 on page 195.
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Vanquis Banking Group plc Annual Report and Accounts 2024
119
Directors’ Report continued
Financial instruments
Details of the financial risk management objectives and
policies of the Group and the exposure of the Group to
credit risk, liquidity risk and market risk are included on
pages 144 to 148 of the financial statements.
Significant agreements
There are no agreements between any Group company
and any of its employees or any director of any Group
company which provide for compensation to be paid to
an employee or a director on termination of employment
or for loss of office as a consequence of a takeover of
the Company.
Directors’ responsibilities
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
The directors have chosen to prepare both the Group
and parent company financial statements under United
Kingdom adopted International Accounting Standards.
Under company law the directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Company
and of the profit or loss of the Company for that period.
In preparing these financial statements, International
Accounting Standard 1 requires that directors:
5 properly select and apply accounting policies;
5 present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information;
5 provide additional disclosures when compliance with
the specific requirements of the financial reporting
framework is insufficient to enable users to understand
the impact of particular transactions, other events and
conditions on the entity’s financial position and financial
performance; and
5 make an assessment of the Company’s ability to
continue as a going concern.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Directors’ responsibility statement
We confirm that to the best of our knowledge:
5 the financial statements, prepared in accordance with
the relevant financial reporting framework, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
5 the Strategic Report includes a fair review of the
development and performance of the business and the
position of the Company and the undertakings included
in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
they face; and
5 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 Company’s position, performance, business
model and strategy.
The directors are also required by the FCA’s Disclosure
Guidance and Transparency Rules (DTR) to include a
management report containing a fair review of the
business of the Group and the Company and a description
of the principal risks, emerging risks and uncertainties
facing the Group and Company.
The Directors’ Report and the Strategic Report constitute
the management report for the purposes of DTR 4.1.5R and
DTR 4.1.8R. The directors are responsible for keeping proper
accounting records that are sufficient to:
5 show and explain the Company’s transactions;
5 disclose with reasonable accuracy at any time the
financial position of the Company and Group; and
5 enable them to ensure that the financial statements
and the Directors’ Remuneration Report comply with
the Act and, as regards the Group financial statements,
Article 4 of the IAS Regulation. They are also responsible
for safeguarding the assets of the Company and the
Group and taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Annual Report and Financial Statements 2024 will
be published on the Group’s website in addition to the
paper version.
The directors are responsible for the maintenance and
integrity of the Group’s website. Legislation in the United
Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in
other jurisdictions.
Governance
Vanquis Banking Group plc Annual Report and Accounts 2024
120
Responsibility statement
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors are required to prepare the Group financial
statements in accordance with relevant IFRS and IFRIC
interpretations and the Companies Act 2006.
The directors who held office during the financial year and
to the date of this report were as follows:
Sir Peter Estlin Chairman
Ian McLaughlin Chief Executive Officer
Dave Watts Chief Financial Officer
Jackie Noakes Independent Non-Executive Director
Karen Briggs Independent Non-Executive Director
Oliver Laird Independent Non-Executive Director
Graham Lindsay Independent Non-Executive Director
Michele Greene
Senior Independent Non-Executive
Director
Disclosure of information to auditor
In accordance with section 418 of the Act, each person who
is a director as at the date of this report confirms that:
5 so far as they are aware, there is no relevant audit
information of which the Company’s external auditor is
unaware; and
5 they have taken all steps that ought to have been taken
as a director in order to make themselves aware of any
relevant audit information and to establish that the
Company’s external auditor is aware of that information.
Auditor
Deloitte LLP, the external auditor for the Company, was first
appointed in 2012 and, following a tender process in 2020,
a resolution proposing its reappointment was passed at
the 2024 AGM. The reappointment of Deloitte LLP as the
Company’s external auditor is proposed at the 2025 AGM.
2025 AGM
The 2025 AGM will be held at the offices of Clifford Chance
LLP, 10 Upper Bank Street, Canary Wharf, London E14 5JJ, on
14 May 2025 at 1.00pm. The Notice of AGM, together with an
explanation of the items of business, will be contained in the
circular to shareholders dated 14 March 2025 and will be
available on our website, www.vanquisbankinggroup.com.
Approved by the Board on 13 March 2025 and signed by
order of the Board.
General Counsel and Company Secretary
13 March 2025
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
121
Independent auditor’s report to the members of Vanquis Banking Group plc
1. Opinion
We have audited the financial statements which comprise:
5 the consolidated income statement;
5 the consolidated statement of comprehensive income;
5 the consolidated and parent company balance sheets;
5 the consolidated and parent company statements of
changes in equity;
5 the consolidated cash flow statement;
5 the material accounting policy information; and
5 the related notes 1 to 36.
The financial reporting framework that has been applied
in their preparation is applicable law and United Kingdom
adopted international accounting standards and as
regards the parent company financial statements,
as applied in accordance with the provisions of the
Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit of the
financial statements section of our report.
We are independent of the Group and the parent company
in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements. The non-audit services provided to
the Group and parent company for the year are disclosed in
note 5 to the financial statements. We confirm that we have
not provided any non-audit services prohibited by the FRC’s
Ethical Standard to the Group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current
year were:
5 the estimation of expected credit losses in Credit Cards
and Vehicle Finance; and
5 the appropriateness of the contingent liability for
Vehicle Finance commissions.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the Group and parent company financial statements was £4.41m and £4.19m
respectively which was determined on the basis of 1% of net assets, with the parent company materiality being capped
at 95% of Group materiality.
Scoping
The Group has moved from five operating segments to four in the current year, being: Credit Cards, Personal Loans,
Second Charge Mortgages and Vehicle Finance. There is also the Corporate Centre which includes Snoop, Operations,
Technology & Change, and support Functions which collectively serve the needs of the wider Group.
Snoop, previously presented as a separate segment, is now included within the Corporate Centre segment. This
reclassification aligns with IFRS 8 from a quantitative perspective and management’s internal reporting structure.
Therefore, our Group audit scope focused on Credit Cards, Personal Loans, Second Charge Mortgages and Vehicle
Finance, which, together with the parent and corporate centre entities, account for 100% of the Group’s net assets.
Significant
changes in
our approach
Some significant changes in our approach include:
1. New key audit matter relating to the appropriateness of the contingent liability for Vehicle Finance commissions
2. Removal of Pension obligation as a key audit matter
1. As detailed in section 5.2 below, we have identified a new key audit matter in the current year relating to the
appropriateness of the contingent liability for Vehicle Finance commissions due to uncertainty and judgement
resulting from the Court of Appeal ruling and over whether a provision or contingent liability is required.
2. In the prior year, the valuation of the pension obligation was identified as a key audit matter due to the
involvement of judgement in reflecting the actuarial valuation of the asset and liabilities of the defined benefit
pension scheme at the balance sheet date under IAS 19 Employee Benefits. The valuation of the pension obligation
involves judgement in relation to inflation, discount and mortality rates, with the most critical element identified
as the discount rate assumption.
During the current year, we observed a stabilisation of market conditions and reduced fluctuations in the actuarial
assumptions underpinning the valuation of the obligation. As a result, the area no longer exhibits the same level of
risk or requires a significant amount of audit effort. Hence, it is not considered a key audit matter in the current year.
Report on the audit of the financial statements
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
122
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and parent company’s ability to continue to adopt the going
concern basis of accounting included:
5 obtaining an understanding of relevant controls around management’s going concern assessment and forecasting
process at both a divisional and Group level;
5 evaluating management’s going concern assessment, which includes stress testing and point of non-viability (’PONV’)
analysis, giving specific consideration to the Court of Appeal hearing regarding Vehicle Finance commissions, in order
to understand, challenge and assess the key judgements made by management;
5 reading correspondence with regulators to understand the capital and liquidity requirements imposed on the Group by
the Prudential Regulation Authority (‘PRA’), and evaluating any changes to those requirements;
5 reviewing the most recent Internal Capital Adequacy Assessment Process (‘ICAAP’) and Internal Liquidity Adequacy
Assessment Process (‘ILAAP’), with support from our prudential regulation specialists, and assessing management’s
capital and liquidity projections and stress testing, evaluating key assumptions and methods used in the capital and
liquidity stress testing models;
5 assessing and evaluating the forecasts, with support from our prudential regulation specialists including reconciliation
of the opening capital and liquidity ratios to the year-end common reporting framework regulatory submissions and
assessing whether the year-end balance sheet within the model was consistent with the audited position;
5 challenging the cash flow forecast assumptions within the Group’s corporate plan including key growth rate
assumptions through a review of their budgeted cash flows in future periods. We have also performed an assessment
over the forecasting accuracy in the previous years;
5 challenging the availability and effectiveness of mitigating actions which could be taken by management to avoid or
reduce the impact of macroeconomic stress; and
5 reviewing the financial statement disclosures in respect of going concern and considering whether they are consistent
with the knowledge we obtained during the course of the audit.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s and parent company’s ability to continue as a
going concern for a period of at least 12 months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Estimation of expected credit losses in Credit Cards and Vehicle Finance
Key audit matter
description
The Group holds portfolios of receivables from credit cards, personal loans, second charge mortgages and vehicle
financing arrangements, totalling £2,154.6m (2023 (restated): £2,159.0m), net of provisions. The Group’s provision for
impairment against amounts receivable from customers is £261.8m (2023 (restated): £581.9m).
Within Credit Cards, management has recognised a total ECL provision of £160m (2023 (represented): £197.1m) on gross
receivables of £1,309.9m (2023 (represented): £1,474.8m), representing a decline in ECL coverage ratio from 13.4% to 12.2%
over the period.
Within Vehicle Finance, management has recognised a total ECL provision of £96.5m (2023 (restated): £368.1m) on
gross receivables of £831.9m (2023: £1,144.2m), representing a decline in ECL coverage ratio from 31.2% to 11.6% over the
period. The decrease has been mainly driven by removal of Stage 3 impaired loans that met the criteria under the new
charge-off policy and classified separately under post-charge-off assets (‘PCOA’).
The IFRS 9 Financial Instruments expected credit losses on amounts receivable from customers are determined by
modelling expected credit performance of the receivables’ portfolios. The underlying modelling techniques are complex
and involve significant judgements regarding the quantum and timing of expected future cash flows to calculate
expected credit losses. Given the material impact of the significant judgements involved, we also consider there is a
risk of potential fraud due to the potential ability of management to introduce inappropriate bias to judgements made
in the estimation process.
Report on the audit of the financial statements continued
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
123
Independent auditor’s report to the members of Vanquis Banking Group plc continued
5. Key audit matters continued
5.1. Estimation of expected credit losses in Credit Cards and Vehicle Finance continued
Key audit matter
description
continued
IFRS 9 requires that an impairment assessment should be the best estimate of expected credit losses and that
reasonable forward-looking information should be incorporated into the calculation as at the balance sheet date.
The uncertainties in the macroeconomic environment mean there exists a wide range of scenarios with different loss
outcomes. Management has recognised a model overlay utilising data from a third party. The model predicts industry
level write-off rates using a combination of interest rates on credit cards, unemployment rate, debt to income ratios
and a measure of macroeconomic volatility. There is significant judgement in determining the probability weighting
of the scenarios adopted by management and the associated assumptions.
The expected credit loss provision estimate is driven by account-specific estimation of probability of default (‘PD’),
exposure at default (‘EAD’) and loss given default (‘LGD’) which represent the key areas of judgement.
Management has continued to conduct model redevelopment and calibration activities during the year, across both
Credit Cards and Vehicle Finance. We have pinpointed our key audit matter to the redevelopment of the macro-PD
model including the appropriateness of the macroeconomic scenarios and VF LGD model resulting in a net post-model
adjustment (‘PMA’) of £3.8m being recognised at year end; and also model changes related to the Group’s review into
VF Stage 3 assets with the creation of the post-charge-off asset (‘PCOA’) of £17.3m at year end and the associated prior
year restatement of £16.1m where it was identified that cash flows expected to be received from contracts projected to
be received from customers on contracts identified for debt sale were being included beyond the expected sale date
in addition to the cash flows from the debt sale.
Further detail in respect of these is set out in the statement of accounting policies, including the critical accounting
judgements and key sources of estimation uncertainty on page 141 to 143, the amounts receivables from customers
in note 12 of the financial statements and also within the Audit Committee report in page 86.
How the scope
of our audit
responded to the
key audit matter
Within Credit Cards and Vehicle Finance we obtained an understanding of relevant controls relating to the identification,
valuation and recording of expected credit losses.
In respect of the macroeconomic scenarios applied we involved our economics specialist to assess the appropriateness
of the shape of the unemployment rate and debt to income curves and the respective weightings attached to the curves,
whilst also testing the underlying data used in this assessment for completeness and accuracy. We also benchmarked
the underlying unemployment economic variables against various external sources including His Majesty’s Treasury
forecasts, the Prudential Regulation Authority, the Office for National Statistics, and other available data.
We have evaluated the competence, capabilities and objectivity of management’s third party expert involved in
providing the historical economic data and forward-looking scenarios used by them in determining the industry-wide
write-off. We have worked with our credit modelling specialists to perform analysis and test the reasonableness of the
scalars prepared by the management based on the industry level write-off rates provided by the third party.
We involved our credit risk modelling specialists to assist in our assessment and challenge of management’s model
methodology related to their redevelopment and calibration activities and assessed the methodology for Credit Cards
and Vehicle Finance against the requirements of IFRS 9. In performing these procedures, we further considered whether
there were any indicators of bias in the methodology applied by management or in the estimation of the amount and
timing of expected future cash flows, through a stand back assessment performed on the ECL coverage ratios derived
from the models, post the application of the PMAs.
In respect of the PMAs recognised within Credit Cards and Vehicle Finance for the macro-PD model and VF LGD model,
with the involvement of our credit risk modelling specialists, we have tested that the methodology changes have
been reflected in the creation of the PMAs through assessment of the underlying scripts, tested the completeness and
accuracy of the data used to form the PMAs and evaluated management’s conclusions regarding the appropriateness
of these changes in the current macroeconomic environment.
In respect of the PCOA within Vehicle Finance we have tested a cohort of accounts against management’s charge-off
criteria and assessed the key assumptions within the valuation of the PCOA including the timing and price of any
debt sales.
Key observations
We considered the redevelopment of the macro-PD model and VF LGD model, which also encompasses model changes
related to the Group’s review into VF Stage 3 assets to be reasonable. Overall, based on our work performed, we found
that the provision for expected credit losses in Credit Cards and Vehicle Finance is appropriate.
Report on the audit of the financial statements continued
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
124
5. Key audit matters continued
5.2. The appropriateness of the contingent liability for Vehicle Finance commissions
Key audit matter
description
In October 2024, the Court of Appeal ruled against two other lenders in three cases involving commission disclosure
payments to motor finance dealers. The judgment redefined the legal duties of dealers acting as credit brokers,
requiring clear disclosure of, and consent to, the existence, nature and amount of any commission paid. The lenders
successfully applied for permission to appeal to the Supreme Court, which is due to be heard in early April 2025.
Moneybarn, as subsidiary of Vanquis Banking Group, offers vehicle finance through intermediaries, with the majority
of these intermediaries being independent credit brokers.
Following the Court of Appeal ruling the Group reviewed its lending practices and has assessed that there are material
factors distinguishing the Moneybarn book from the cases in the Court of Appeal judgment (including the commission
disclosures provided to customers). As such, the Group has assessed to not provide for any amounts in this respect.
This is due primarily to the conclusion of the aforementioned review which has been aided by the Group obtaining
external legal advice, but also the uncertainty of the outcome of the Supreme Court appeal and/or any further judicial
or regulatory intervention and other mitigating factors which would need to be considered to reliably measure any
provision required under IAS 37 Provisions, Contingent liabilities and Contingent Assets.
Our key audit matter is based on the critical accounting judgement over whether a provision or contingent liability
is required. Given the significant level of management judgement involved and incentive to not provide we have
concluded this is a potential fraud risk.
Details of the contingent liability are included in note 33 and critical accounting judgement are disclosed within the
Statement of Accounting Policies on page 143 and the Audit Committee Report on page 87.
How the scope
of our audit
responded to the
key audit matter
We obtained an understanding of relevant controls relating to the review of the Group’s assessment related to the
Court of Appeal ruling.
We have assessed the IAS 37 criteria to determine if a provision or contingent liability should be recognised. With the
involvement of our conduct risk specialists, we have evaluated external legal opinions obtained by the Group and the
Group’s assessment of their business practices which they believe are substantially different to other lenders and the
cases involved in Court of Appeal judgment. As part of the review, we have evaluated the competence, capabilities,
and objectivity of management’s external legal advisor. In performing these procedures, we further considered
whether there were any indicators of management bias on critical judgements made.
We also assessed the appropriateness of the disclosures in the financial statements.
Key observations
Overall, based on our work performed, the treatment of a contingent liability in respect of the Court of Appeal ruling
on Vehicle Finance commissions is considered appropriate.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in
planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
Materiality
£4.41m (2023: £5.83m) £4.19m (2023: £5.53m)
Basis for
determining
materiality
1% of net assets (2023: 1% of net assets) 1% of net assets (2023: 1% of net assets) capped at 95% of
Group materiality
Rationale for
the benchmark
applied
Our benchmark upon which materiality is determined is consistent with the prior period. We determined that net assets
continue to be a more stable and relevant measure used by investors, regulators and stakeholders when assessing the
performance and longer-term prospects of the Group and parent company as well as the importance of net assets to
the Group’s regulatory capital position.
Report on the audit of the financial statements continued
Group materiality
£4.41m
Net assets
£441.2m
Component performance
materiality range
£0.05m to £4.19m
Audit Committee
reporting threshold
£0.22m
Net assets Group materiality
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Vanquis Banking Group plc Annual Report and Accounts 2024
125
Independent auditor’s report to the members of Vanquis Banking Group plc continued
6. Our application of materiality continued
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent company financial statements
Performance materiality
65% (2023: 70%) of Group materiality 65% (2023: 70%) of parent company materiality
Basis and rationale for
determining performance
materiality
In determining performance materiality, we considered a number of factors, including: our understanding of
the control environment and controls reliance obtained, our understanding of the business, and the number
of uncorrected misstatements identified in the prior year.
We have reassessed the performance materiality threshold to 65% of materiality in the current year to
incorporate: the ongoing uncertainties in respect to the overall level of strategic change and transformation
across the organisation over the past year, the prior period restatement of Vehicle Finance Stage 3
receivables (disclosed on page 135 of the Annual Report), and the continuing controls issues identified by our
IT specialists which prevented us from taking a controls reliance approach over the credit card cycles (see
section 7.2 of our report).
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of £0.22m
(2023: £0.29m) as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.
We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation
of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
The Group has four operating segments in the current year being: Credit Cards, Personal Loans, Second Charge Mortgages
and Vehicle Finance. There is also the Corporate Centre which includes Snoop, Operations, Technology & Change, and
support Functions which collectively serve the needs of the wider Group.
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement at the Group level.
Our Group audit scope focused on Credit Cards, Personal Loans, Second Charge Mortgages and Vehicle Finance, which
together with the parent company and corporate centre entities, account for 100% of the Group’s net assets. Credit Cards,
Personal Loans, Second Charge Mortgages and Vehicle Finance are all led by the Group audit engagement partner.
7.2. Our consideration of the control environment
We identified the financial reporting, lending, and deposit business cycles as the most relevant to the audit, including the
identification, valuation and recording of expected credit losses. Due to continuing control deficiencies first noted in the
prior year, we only planned and successfully executed a controls reliance approach for retail deposits. As noted on page 84
of the Audit Committee Report, the known control issues within the legacy IT systems are expected to be fixed strategically
through the IT platform modernisation.
In response to these deficiencies, we adopted a fully substantive approach to testing and did not place reliance on IT
controls. This has been discussed within the Audit Committee Report set out on page 84.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential impact of climate change on the Group’s business and its
financial statements.
The Group continues to develop its assessment of the potential impacts of climate change which is currently being
considered over the short term (zero to one year), medium term (one to five years) and long term (five or more years) time
horizons within the Strategic Report on page 24.
As part of our audit, we have obtained management’s climate-related risk assessment and held enquiries with the Head of
Sustainability, the Chief Risk Officer and the Finance team to understand the process of identifying climate-related risks, the
determination of mitigating actions and the impact on the Group’s financial statements. Management has identified there
to be no material impact arising from climate change on the judgements and estimates made in the financial statements
as explained in the statement of accounting policies disclosure on page 141.
We performed our own qualitative risk assessment of the potential impact of climate change material misstatement. Our
procedures included reading disclosures included in the Strategic Report with the involvement of our climate change
and sustainability specialists and audit team consideration as to whether they are materially consistent with the financial
statements and our knowledge obtained in the audit. We also evaluated whether appropriate disclosures have been made
in the financial statements.
Report on the audit of the financial statements continued
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
126
8. Other information
The other information comprises the information included in the Annual Report, other than the financial statements and our
Auditor’s Report thereon. The directors are responsible for the other information contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the 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 the directors either intend to liquidate the Group or the parent company or to cease
operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor’s Report.
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
5 the nature of the industry and sector, control environment and business performance including the design of the
Group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
5 the Group’s own assessment of the risks that irregularities may occur either as a result of fraud or error that was
approved by the Board;
5 results of our enquiries of management, the directors and the Audit Committee about their own identification and
assessment of the risks of irregularities, including those that are specific to the Group’s sector;
5 any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances
of non-compliance including the Court of Appeal ruling on Vehicle Finance commissions as disclosed in note 33
to the financial statements;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected
or alleged; and
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and
5 the matters discussed among the audit engagement team and relevant internal specialists, including tax, valuations,
pensions, financial instruments, share-based payments, data analytics, information technology, prudential regulatory,
conduct risk and regulatory, climate change and sustainability, macroeconomic and credit risk modelling specialists,
regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
Report on the audit of the financial statements continued
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Vanquis Banking Group plc Annual Report and Accounts 2024
127
Independent auditor’s report to the members of Vanquis Banking Group plc continued
11. Extent to which the audit was considered capable of detecting irregularities, including fraud
continued
11.1. Identifying and assessing potential risks related to irregularities continued
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation
for fraud and identified the greatest potential for fraud in the following areas: the estimation of expected credit losses
in Credit Cards and Vehicle Finance and the appropriateness of the contingent liability for Vehicle Finance commissions.
In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk
of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group operates in, focusing on
provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures
in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act,
UK Listing Rules, pension legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material
penalty. These included the regulation set by the Financial Conduct Authority and the Prudential Regulation Authority
relating to the Group’s regulatory capital and liquidity requirements.
11.2. Audit response to risks identified
As a result of performing the above, we identified the estimation of expected credit losses in Credit Cards and Vehicle
Finance and the appropriateness of the contingent liability for Vehicle Finance commissions as key audit matters related
to the potential risk of fraud or non-compliance with laws and regulations. The key audit matters section of our report
explains the matters in more detail and also describes the specific procedures we performed in response to those key
audit matters.
In addition to the above, our procedures to respond to risks identified included the following:
5 reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as having a direct effect on the financial statements;
5 enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation
and claims;
5 performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
5 reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing
correspondence with the Prudential Regulation Authority, the Financial Conduct Authority and HMRC; and
5 in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of
a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the
normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
5 the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
5 the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in
the course of the audit, we have not identified any material misstatements in the Strategic Report or the Directors’ Report.
Report on the audit of the financial statements continued
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
128
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained
during the audit:
5 the directors’ statement with regard to the appropriateness of adopting the going concern basis of accounting
and any material uncertainties identified set out on page 135;
5 the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why
the period is appropriate set out on page 56;
5 the directors’ statement on fair, balanced and understandable set out on page 83;
5 the Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out
on pages 89 and 90;
5 the section of the Annual Report that describes the review of effectiveness of risk management and internal control
systems set out on page 90; and
5 the section describing the work of the Audit Committee set out on pages 82 to 87.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
5 we have not received all the information and explanations we require for our audit; or
5 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
5 the parent company financial statements are not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of directors’ remuneration
have not been made or the part of the Directors’ Remuneration Report to be audited is not in agreement with the
accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit Committee, we were appointed by the directors on 29 June 2012 to audit
the financial statements for the year ending 31 December 2012 and subsequent financial periods. The period of total
uninterrupted engagement including previous renewals and reappointments of the firm is 13 years, covering the years
ending 31 December 2012 to 31 December 2024.
15.2. Consistency of the audit report with the additional report to the Audit Committee
Our audit opinion is consistent with the additional report to the Audit Committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R – DTR
4.1.18R, these financial statements form part of the Electronic Format Annual Financial Report filed on the National Storage
Mechanism of the FCA in accordance with DTR 4.1.15R – DTR 4.1.18R. This Auditor’s Report provides no assurance over whether
the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R – DTR 4.1.18R.
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
13 March 2025
Report on other legal and regulatory requirements continued
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Vanquis Banking Group plc Annual Report and Accounts 2024
129
Financial statements
Consolidated income statement
For the year ended 31 December
| Group | |||
| 2023 | |||
| 2024 | (restated) 1 | ||
| Note | £m | £m | |
Interest income | 2 | ||
Interest expense | 3 | ( | ( |
Net interest income | |||
Fee and commission income | 4 | ||
Fee and commission expense | 4 | ( | ( |
Net fee and commission income | 4 | ||
Other income | |||
Total income | |||
Impairment charges | 12 | ( | ( |
Risk-adjusted income | |||
Operating costs | ( | ( | |
Statutory loss before taxation | 1,5 | ( | ( |
Tax credit | 6 | ||
Statutory loss for the year attributable to equity shareholders | ( | ( | |
| Add back: | |||
Tax credit | 6 | ( | ( |
Amortisation of acquisition intangibles | 19 | ||
Exceptional items | 1 | ||
Goodwill write-off | 18 | ||
Adjusted (loss)/profit before tax | ( |
1 Refer to accounting policies for detail of restatement.
Consolidated statement of comprehensive income
For the year ended 31 December
| Group | |||
| 2023 | |||
| 2024 | (restated) 1 | ||
| Note | £m | £m | |
Loss for the year attributable to equity shareholders | ( | ( | |
| Items that will not be reclassified subsequently to the income statement: | |||
– actuarial movements on retirement benefit asset | 21 | ( | |
– tax on items taken directly to other comprehensive income | 6 | ( | |
– impact of change in UK tax rate on items in other comprehensive income | 6 | ( | |
Other comprehensive (expense)/income for the year | ( | ||
Total comprehensive expense for the year | ( | ( |
1 Refer to accounting policies for detail of restatement.
Loss per share
For the year ended 31 December
| Group | |||
| 2023 | |||
| 2024 | (restated) 1 | ||
| Note | pence | pence | |
Basic | 7 | ( | ( |
Diluted | 7 | ( | ( |
1 Refer to accounting policies for detail of restatement.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
130
Dividends per share
For the year ended 31 December
| Group | |||
| 2024 | 2023 | ||
| Note | pence | pence | |
Interim dividend | 8 | ||
Final dividend | 8 |
The total cost of dividends paid in the year was £2.5m (2023: £38.4m).
Balance sheets
Group | Company | |||||
| At | At | |||||
| At | 31 December | 1 January | At | At | ||
| 2023 | 2023 | 31 December | ||||
(restated) 1 | (restated) 1 | 2023 | ||||
| Note | £m | £m | £m | £m | £m | |
| Assets | ||||||
Cash and cash equivalents | 11 | 10.5 | 14.7 | |||
Amounts receivable from customers | 12 | — | — | |||
Trade and other receivables | 13 | 768.4 | 914.9 | |||
Investments held at fair value through profit and loss | 14 | — | — | |||
Current tax asset | — | — | ||||
Property, plant and equipment | 15 | 0.5 | 0.7 | |||
Right of use assets | 16 | 7.4 | 10.9 | |||
Goodwill | 18 | — | — | |||
Other intangible assets | 19 | 1.4 | 1.7 | |||
Investment in subsidiaries | 20 | 247.9 | 241.6 | |||
Retirement benefit asset | 21 | 27.8 | 38.2 | |||
Derivative financial instruments | 22 | 0.6 | 1.0 | |||
Deferred tax assets | 23 | — | — | |||
Total assets | 1 | 1,064.5 | 1,223.7 | |||
| Liabilities and equity | ||||||
| Liabilities | ||||||
Trade and other payables | 24 | 20.9 | 235.4 | |||
Current tax liabilities | 8.2 | 3.1 | ||||
Provisions | 25 | 5.6 | — | |||
Lease liabilities | 26 | 11.3 | 13.6 | |||
Retail deposits | 27 | — | — | |||
Bank and other borrowings | 27 | 204.7 | 205.7 | |||
Derivative financial instruments | 22 | 1.7 | 3.0 | |||
Deferred tax liabilities | 23 | 5.6 | 7.8 | |||
Total liabilities | 1 | 258.0 | 468.6 | |||
| Equity attributable to owners of the parent | ||||||
Share capital | 29 | 53.2 | 53.2 | |||
Share premium | 276.3 | 276.3 | ||||
Merger reserve | 280.5 | 280.5 | ||||
Other reserves | 31 | 10.0 | 11.3 | |||
Retained earnings | ( | ( | ( | 186.5 | 133.8 | |
Total equity | 1 | 806.5 | 755.1 | |||
Total liabilities and equity | 1,064.5 | 1,223.7 |
1 Refer to accounting policies for detail of restatement.
In accordance with the exemption allowed by section 408 of the Companies Act 2006, the Company has not presented its
own income statement or statement of other comprehensive income. The retained profit for the financial year reported in
the financial statements of the Company was £62.3 m (2023: £34.5 m).
Company Number – 668987
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Vanquis Banking Group plc Annual Report and Accounts 2024
131
Statements of changes in shareholders’ equity
| Share | Share | Merger | Other | Retained | |||
| capital | premium | reserve | reserves | earnings 1 | Total | ||
Group | Note | £m | £m | £m | £m | £m | £m |
At 31 December 2022 | ( | ||||||
Prior year adjustment 1 | ( | ( | |||||
At 1 January 2023 | ( | ||||||
Loss for the year 1 | ( | ( | |||||
| Other comprehensive income/(expense): | |||||||
– actuarial movements on retirement benefit asset | 21 | ||||||
– tax on items taken directly to other comprehensive income | 6 | ( | ( | ||||
– impact of change in UK tax rate 1 | 6 | ( | ( | ||||
Other comprehensive income for the year 1 | |||||||
Total comprehensive expense for the year 1 | ( | ( | |||||
Dividends (note 9) | ( | ( | |||||
Issue of share capital | |||||||
Share-based payment charge | 30 | ||||||
| Transfer of share-based payment reserve on vesting | |||||||
of share awards | ( | ||||||
At 31 December 2023 1 | ( | ||||||
At 1 January 2024 | ( | ||||||
Loss for the year | ( | ( | |||||
| Other comprehensive income/(expense): | |||||||
– actuarial movements on retirement benefit asset | 21 | ( | ( | ||||
– tax on items taken directly to other comprehensive income | 6 | ||||||
Other comprehensive expense for the year | ( | ( | |||||
Total comprehensive expense for the year | ( | ( | |||||
Dividends (note 9) | ( | ( | |||||
Share-based payment charge | 30 | ||||||
| Transfer of share-based payment reserve on vesting | |||||||
of share awards | ( | ||||||
Purchase of shares for share awards | ( | ( | |||||
At | ( |
1 Refer to accounting policies for detail of restatement.
Other reserves are further analysed in note 31.
Financial statements continued
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
132
Statements of changes in shareholders’ equity continued
Company Note
Share
capital
£m
Share
premium
£m
Merger
reserve
£m
Other
reserves
£m
Retained
earnings
£m
Total
£m
At 1 January 2023 52.6 273.5 280.5 11.6 130.3 748.5
Profit for the year — — — — 34.5 34.5
Other comprehensive income/(expense):
– actuarial movements on retirement benefit asset 21 — — — — 6.4 6.4
– tax on items taken directly to other
comprehensive income — — — — (1.5) (1.5)
– impact of change in UK tax rate — — — — (0.1) (0.1)
Other comprehensive income for the year — — — — 4.8 4.8
Total comprehensive income for the year — — — — 39.3 39.3
Dividends (note 9) — — — — (38.4) (38.4)
Issue of share capital 0.6 2.8 — — — 3.4
Share-based payment charge 30 — — — 2.5 — 2.5
Transfer of share-based payment reserve on vesting
of share awards — — — (2.6) 2.6 —
Share-based payment movement in investment
in subsidiaries — — — (0.2) — (0.2)
At 31 December 2023 53.2 276.3 280.5 11.3 133.8 755.1
At 1 January 2024 53.2 276.3 280.5 11.3 133.8 755.1
Profit for the year — — — — 62.3 62.3
Other comprehensive income/(expense):
– actuarial movements on retirement benefit asset 21 — — — — (11.6) (11.6)
– tax on items taken directly to other
comprehensive income — — — — 2.9 2.9
Other comprehensive expense for the year — — — — (8.7) (8.7)
Total comprehensive income for the year — — — — 53.6 53.6
Dividends (note 9) — — — — (2.5) (2.5)
Share-based payment charge 30 — — — 1.5 — 1.5
Transfer of share-based payment reserve on vesting
of share awards — — — (1.7) 1.7 —
Share-based payment movement in investment
in subsidiaries — — — (1.1) — (1.1)
Purchase of shares for share awards — — — — (0.1) (0.1)
At 31 December 2024 53.2 276.3 280.5 10.0 186.5 806.5
The full merger reserve is considered distributable.
Other reserves are further analysed in note 31.
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Financial statements continued
Statements of cash flows
For the year ended 31 December
Group | Company | ||||
| 2024 | 2023 | 2024 | 2023 | ||
| Note | £m | £m | £m | £m | |
| Cash flows from operating activities | |||||
Cash generated from/(used in) operations 1 | 34 | (23.5) | 248.0 | ||
Finance costs paid | ( | ( | (31.0) | (55.3) | |
Finance income received | 15.9 | 24.4 | |||
Tax received/(paid) | ( | — | — | ||
Net cash generated from/(used in) operating activities | (38.6) | 217.1 | |||
| Cash flows from investing activities | |||||
Purchase of intangible assets | 19 | ( | — | — | |
Purchase of property, plant and equipment | 15 | ( | ( | — | (0.3) |
Proceeds from sale of available for sale investment | — | — | |||
Acquisition of a subsidiary | ( | — | — | ||
Dividends received from subsidiaries | 32 | 40.0 | — | ||
Net cash generated from/ (used in) investing activities | ( | 40.0 | (0.3) | ||
| Cash flows from financing activities | |||||
Proceeds from bank and other borrowings 2 | — | — | |||
Repayment of bank and other borrowings 2 | ( | ( | — | (163.5) | |
Payment of lease liabilities | ( | ( | (3.0) | (4.4) | |
Dividends paid to Company shareholders | ( | ( | (2.5) | (38.4) | |
Proceeds from issue of share capital | 29 | — | 0.1 | ||
Purchase of own shares for share awards | ( | (0.1) | — | ||
Net cash used in financing activities | ( | ( | (5.6) | (206.2) | |
Net increase/(decrease) in cash, cash equivalents and overdrafts | (4.2) | 10.6 | |||
Cash, cash equivalents and overdrafts at beginning of year | 14.7 | 4.1 | |||
Cash, cash equivalents and overdrafts at end of year | 10.5 | 14.7 | |||
| Cash, cash equivalents and overdrafts at end of year comprise: | |||||
Cash at bank and in hand | 11 | 10.5 | 14.7 | ||
Overdrafts (held in bank and other borrowings) | 27 | ( | ( | — | — |
Total cash, cash equivalents and overdrafts | 10.5 | 14.7 |
1 The classification of certain cash flows has been represented in 2023, impacting £1,100.0m in proceeds and £284.8m in repayments related to bank and other
borrowings. These amounts, which are no longer considered to be financing cash flows, are now reported within cash generated from operations as an £815.2m
movement in retail deposits.
Cash at bank and in hand includes £948.7 m (2023: £681.5 m) in respect of the liquid asset buffer, including other liquidity
resources, held by Vanquis Bank Limited in accordance with the PRA’s liquidity regime.
Financial statements
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Statement of accounting policies
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Change in presentation on primary statements continued
| 2023 | VF | VF | Fraud | 2023 | |
| as reported | restatement | representation | representation | restated | |
| £m | £m | £m | £m | £m | |
Interest income | 556.0 | — | — | — | 556.0 |
Interest expense | (113.4) | — | — | — | (113.4) |
Net interest income | 442.6 | — | — | — | 442.6 |
Fee and commission income | 44.2 | — | — | — | 44.2 |
Fee and commission expense | (1.7) | — | — | — | (1.7) |
Net fee and commission income | 42.5 | — | — | — | 42.5 |
Other income | 3.7 | — | — | — | 3.7 |
Total income | 488.8 | — | — | — | 488.8 |
Impairment charges | (166.1) | (7.6) | — | 8.2 | (165.5) |
Risk-adjusted income/(expense) | 322.7 | (7.6) | — | 8.2 | 323.3 |
Operating costs | (327.1) | — | — | (8.2) | (335.3) |
Statutory loss before taxation | (4.4) | (7.6) | — | — | (12.0) |
Tax (credit)/charge | (1.6) | 1.9 | — | — | 0.3 |
Statutory loss for the year attributable to equity shareholders | (6.0) | (5.7) | — | — | (11.7) |
Gross customer interest earning balances | 2,351.1 | — | 51.6 | (1.6) | 2,401.1 |
Post-charge-off asset (PCOA) | 299.2 | — | (51.6) | — | 247.6 |
Deferred acquisition costs (DAC) | 89.6 | — | — | 89.6 | |
Other | 1.0 | — | — | — | 1.0 |
Gross receivables | 2,740.9 | — | — | (1.6) | 2,739.3 |
Impairment provision | (565.8) | (16.1) | — | 1.6 | (580.3) |
Net receivables | 2,175.1 | (16.1) | — | — | 2,159.0 |
Statement of accounting policies continued
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Interest income continued
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Leases continued
The Group and Company as a lessee continued
Statement of accounting policies continued
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Amounts receivable from customers continued
% | Method | |
Land | Nil | — |
| Over the | ||
| Leasehold improvements | lease period | Straight line |
| Equipment (including | ||
computer hardware) | 10 to 33 1/3 | Straight line |
| Reducing | ||
Motor vehicles | 25 | balance |
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Statement of accounting policies continued
Financial statements
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Taxation continued
Deferred tax continued
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Critical accounting judgements and key
sources of estimation uncertainty continued
Amounts receivable from customers (note 12)
Group: £2,153.7m (2023: £2,155.8m) continued
Critical accounting judgements continued
| Scenario for year | ||||
ended 2024 | Base | Upside | Downside | Severe |
Weighting | 60% | 15% | 20% | 5% |
2025 | 4.4 | 4.0 | 5.0 | 5.5 |
2026 | 4.5 | 4.1 | 6.3 | 7.6 |
2027 | 4.5 | 4.2 | 5.9 | 7.9 |
2028 | 4.5 | 4.2 | 5.3 | 6.8 |
2029 | 4.5 | 4.2 | 5.1 | 6.4 |
Five-year peak | 4.5 | 4.3 | 6.5 | 8.3 |
| Scenario for year | ||||
ended 2023 | Base | Upside | Downside | Severe |
Weighting | 60% | 15% | 20% | 5% |
2024 | 4.5% | 3.9% | 4.8% | 5.1% |
2025 | 4.7% | 3.7% | 6.1% | 7.5% |
2026 | 4.7% | 4.2% | 6.2% | 8.0% |
2027 | 4.7% | 4.3% | 5.5% | 6.6% |
2028 | 4.7% | 4.4% | 5.2% | 5.8% |
Five-year peak | 4.8% | 4.5% | 6.4% | 8.4% |
Statement of accounting policies continued
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Critical accounting judgements and key
sources of estimation uncertainty continued
Amounts receivable from customers (note 12)
Group: £2,153.7m (2023: £2,155.8m) continued
Macroeconomic assumptions continued
| Scenario for year | ||||
ended 2024 | Base | Upside | Downside | Severe |
Weighting | 60% | 15% | 20% | 5% |
2025 | 1.14% | 1.08% | 1.19% | 1.20% |
2026 | 1.15% | 0.96% | 1.32% | 1.37% |
2027 | 1.15% | 0.90% | 1.41% | 1.48% |
2028 | 1.13% | 0.88% | 1.44% | 1.50% |
2029 | 1.12% | 0.88% | 1.42% | 1.48% |
Five-year peak | 1.16% | 1.13% | 1.45% | 1.51% |
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Financial and capital risk management
Financial risk management
The Group’s activities expose it to a variety of financial risks,
which can be categorised as credit risk, liquidity risk and
market risk. The objective of the Group’s Risk Management
and internal control framework is to identify and assess
the risks facing the Group and to minimise the potential
adverse effects of these risks on the Group’s financial
performance. Financial risk management is overseen by the
Group Risk Committee.
Further details of the Risk Management and Internal Control
framework are described on pages 48 to 50.
Statement of accounting policies continued
Critical accounting judgements and key
sources of estimation uncertainty continued
Provisions: Customer remediation complaints (note 25)
continued
| Change | |||
Complaint volumes | 2024 | 2023 | % |
CMC | 55,791 | 38,972 | 43% |
Direct | 31,770 | 30,637 | 4% |
Total | 87,561 | 69,609 | 26% |
| Change | |||
Complaint uphold rates | 2024 | 2023 | % |
CMC | 6% | 11% | (5%) |
Direct | 30% | 35% | (5%) |
Total | 15% | 22% | (7%) |
| Change | |||
FOS referral volumes | 2024 | 2023 | % |
CMC | 30,970 | 7,346 | 322% |
Direct | 3,423 | 2,628 | 30% |
Total | 34,393 | 9,974 | 245% |
| Change | |||
FOS uphold rates | 2024 | 2023 | % |
CMC | 11% | 6% | 5% |
Direct | 31% | 31% | 0% |
Total | 13% | 14% | (1%) |
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Financial risk management continued
(a) Credit risk continued
| Repayable | Over 5 | |||||
| on demand | <1 year | 1–2 years | 2–5 years | years | Total | |
| 2024 – Group | £m | £m | £m | £m | £m | £m |
Retail deposits | 780.9 | 1,165.2 | 414.6 | 144.2 | — | 2,504.9 |
| Bank and other borrowings: | ||||||
– bank facilities | 1.1 | — | — | — | — | 1.1 |
– securitisation | — | 11.2 | 78.6 | 127.2 | — | 217.0 |
– Tier 2 capital | — | 17.8 | 17.8 | 53.3 | 244.4 | 333.3 |
– ILTR | — | 5.1 | — | — | — | 5.1 |
Total borrowings | 782.0 | 1,199.3 | 511.0 | 324.7 | 244.4 | 3,061.4 |
Trade and other payables | — | 46.1 | — | — | — | 46.1 |
Lease liabilities | — | 12.5 | 4.5 | 9.2 | 9.0 | 35.2 |
Derivative financial instruments | — | 5.8 | (0.7) | 0.1 | — | 5.2 |
Total | 782.0 | 1,263.7 | 514.8 | 334.0 | 253.4 | 3,147.9 |
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Financial risk management continued
(b) Liquidity risk continued
Financial liabilities continued
| Repayable | Over 5 | |||||
| on demand | <1 year | 1–2 years | 2–5 years | years | Total | |
| 2023 – Group | £m | £m | £m | £m | £m | £m |
Retail deposits | — | 1,137.6 | 467.0 | 408.7 | — | 2,013.3 |
| Bank and other borrowings: | ||||||
– bank facilities | 1.5 | — | — | — | — | 1.5 |
– senior public bonds | — | — | — | — | — | — |
– securitisation | — | 13.6 | 207.4 | — | — | 221.0 |
– retail bonds | — | — | — | — | — | — |
– Tier 2 capital | — | 17.8 | 17.8 | 53.3 | 271.0 | 359.9 |
– TFSME | — | 1.3 | 175.3 | — | — | 176.6 |
Total borrowings | 1.5 | 1,170.3 | 867.5 | 462.0 | 271.0 | 2,772.3 |
Trade and other payables | — | 44.1 | — | — | — | 44.1 |
Lease liabilities | — | 10.7 | 10.7 | 11.3 | 11.9 | 44.6 |
Derivative financial instruments | — | 6.2 | (0.7) | (3.7) | — | 1.8 |
Total | 1.5 | 1,231.3 | 877.5 | 469.6 | 282.9 | 2,862.8 |
| Repayable | Over 5 | |||||
| on demand | <1 year | 1–2 years | 2–5 years | years | Total | |
| 2024 – Company | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings: | ||||||
– Tier 2 capital | — | 17.8 | 17.8 | 53.3 | 244.4 | 333.3 |
Total borrowings | — | 17.8 | 17.8 | 53.3 | 244.4 | 333.3 |
Trade and other payables | — | 20.9 | — | — | — | 20.9 |
Lease liabilities | — | 4.7 | 0.8 | 2.4 | 4.8 | 12.7 |
Derivative financial instruments | — | 5.8 | (0.5) | 0.1 | — | 5.4 |
Total | — | 49.2 | 18.1 | 55.8 | 249.2 | 372.3 |
| Repayable | Over 5 | |||||
| on demand | <1 year | 1–2 years | 2–5 years | years | Total | |
| 2023 – Company | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings: | ||||||
– Tier 2 capital | — | 17.8 | 17.8 | 53.3 | 271.0 | 359.9 |
Total borrowings | — | 17.8 | 17.8 | 53.3 | 271.0 | 359.9 |
Trade and other payables | — | 235.4 | — | — | — | 235.4 |
Lease liabilities | — | 3.7 | 3.7 | 2.4 | 5.6 | 15.4 |
Derivative financial instruments | — | 6.2 | (0.2) | (3.0) | — | 3.0 |
Total | — | 263.1 | 21.3 | 52.7 | 276.6 | 613.7 |
Financial and capital risk management continued
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146
Financial risk management continued
(c) Market risk continued
Interest rate risk continued
| 2024 | 2023 | |
| £m | £m | |
| Economic value sensitivity | ||
+200bps parallel shift in yield curve | 0.7 | 6.0 |
-200bps parallel shift in yield curve | 8.2 | 6.0 |
| Net interest income sensitivity | ||
| (over 12-month period) | ||
+100bps parallel shift in yield curve | 1.1 | 0.1 |
-100bps parallel shift in yield curve | 1.6 | 0.1 |
2024 | 2023 | |||
| Receivables | Notes in | Receivables | Notes in | |
| secured | issue | secured | issue | |
| Vehicle | £m | £m | £m | £m |
| Oban Cards | ||||
| 2021-1 Holdings | ||||
Limited | 518.2 | 453.1 | 510.9 | 453.1 |
| Moneybarn | ||||
Financing Limited | 320.9 | 320.9 | 321.0 | 321.0 |
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| 2023 | ||
| 2024 | (restated) 1 | |
| Regulatory capital (unaudited) | £m | £m |
Total equity ! | 441.2 | 569.1 |
Retirement benefit asset | (27.8) | (38.2) |
Deferred tax on retirement benefit asset | 7.0 | 9.5 |
Goodwill | (1.2) | (72.4) |
Intangible assets | (61.5) | (74.4) |
Deferred tax on intangible asset | 4.9 | 3.9 |
Foreseeable dividend | — | (2.5) |
Deferred tax assets not arising from temporary differences | (18.3) | (1.6) |
Common Equity Tier 1 capital | 344.3 | 393.4 |
Tier 2 capital | 200.0 | 200.0 |
Total regulatory capital | 544.3 | 593.4 |
Risk-weighted exposures | 1,834.8 | 1,975.6 |
CET1 ratio | 18.8% | 19.9% |
Total capital ratio | 29.7% | 30.0% |
Financial and capital risk management continued
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148
1 Segment reporting
IFRS 8 requires segment reporting to be based on the internal financial information reported to the chief operating decision
maker. The Group’s chief operating decision maker is deemed to be the Group ExCo, whose primary responsibility is to support
the CEO in managing the Group’s day-to-day operations and analyse trading performance. The Group’s segments are set
out below, which are the segments reported in the Group’s management accounts used by the Group ExCo as the primary
means for analysing trading performance. The Group ExCo assesses profit performance using profit before tax measured
on a basis consistent with the disclosure in the Group financial statements.
| Second | ||||||
| Credit | Vehicle | Charge | Corporate | |||
| Cards | Finance | Mortgages | Loans | Centre | Total | |
| 2024 | 2024 | 2024 | 2024 | 2024 | 2024 | |
| £m | £m | £m | £m | £m | £m | |
Interest income | 406.3 | 133.1 | 4.8 | 15.4 | 5.8 | 565.4 |
Interest expense | (79.6) | (38.5) | (2.9) | (3.4) | (21.0) | (145.4) |
Net interest income | 326.7 | 94.6 | 1.9 | 12.0 | (15.2) | 420.0 |
Fee and commission income | 36.8 | — | — | — | 1.5 | 38.3 |
Fee and commission expense | (1.7) | — | — | — | (0.2) | (1.9) |
Net fee and commission income | 35.1 | — | — | — | 1.3 | 36.4 |
Other income | 0.2 | — | — | — | 1.9 | 2.1 |
Total income | 362.0 | 94.6 | 1.9 | 12.0 | (12.0) | 458.5 |
Impairment charges | (123.9) | (60.4) | (0.2) | (5.7) | (0.8) | (191.0) |
Risk-adjusted income | 238.1 | 34.2 | 1.7 | 6.3 | (12.8) | 267.5 |
Adjusted operating costs | (185.3) | (42.2) | (0.2) | (10.5) | (64.1) | (302.3) |
Adjusted PBT/(LBT) | 52.8 | (8.0) | 1.5 | (4.2) | (76.9) | (34.8) |
Exceptional items including goodwill write-off | (95.3) | (95.3) | ||||
Amortisation of acquisition intangibles | (6.2) | (6.2) | ||||
Statutory loss before taxation | (178.4) | (136.3) | ||||
Tax credit | 17.0 | |||||
| Statutory loss for the year attributable to equity shareholders | (119.3) |
| Vehicle | Second | |||||
| Credit | Finance | Charge | Corporate | Total | ||
| Cards | 2023 | Mortgages | Loans | Centre | 2023 | |
| 2023 | (restated) 1 | 2023 | 2023 | 2023 | (restated) 1 | |
| £m | £m | £m | £m | £m | £m | |
Interest income | 371.0 | 150.3 | 0.4 | 25.9 | 8.4 | 556.0 |
Interest expense | (51.6) | (28.7) | (0.2) | (4.0) | (28.9) | (113.4) |
Net interest income | 319.4 | 121.6 | 0.2 | 21.9 | (20.5) | 442.6 |
Fee and commission income | 44.2 | — | — | — | — | 44.2 |
Fee and commission expense | (1.7) | — | — | — | — | (1.7) |
Net fee and commission income | 42.5 | — | — | — | — | 42.5 |
Other income | 1.3 | 2.0 | — | — | 0.4 | 3.7 |
Total income | 363.2 | 123.6 | 0.2 | 21.9 | (20.1) | 488.8 |
Impairment charges | (125.5) | (20.4) | — | (19.6) | — | (165.5) |
Risk-adjusted income | 237.7 | 103.2 | 0.2 | 2.3 | (20.1) | 323.3 |
Adjusted operating costs | (172.3) | (51.9) | (0.7) | (17.3) | (63.8) | (306.0) |
Adjusted PBT/(LBT) | 65.4 | 51.3 | (0.5) | (15.0) | (83.9) | 17.3 |
Exceptional items | (21.4) | (21.4) | ||||
Amortisation of acquisition intangibles | (7.9) | (7.9) | ||||
Statutory loss before taxation | (113.2) | (12.0) | ||||
Tax credit | 0.3 | |||||
Statutory loss for the year attributable to equity shareholders | (11.7) |
1 Refer to accounting policies for detail of restatement.
Notes to the financial statements
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Notes to the financial statements continued
1 Segment reporting continued
Acquisition intangibles represent the fair value of the broker relationships of £75.0m, which arose on the acquisition of
Moneybarn in 2014; the fair value of intangible assets of £10.1m; and the brand name of £1.0m, arising on the acquisition of
Snoop in 2023. The Moneybarn broker relationship intangible was fully amortised during the year. The amortisation charge
in 2024 amounted to £6.2m (2023: £7.9m).
Revenue between business segments is not material.
Exceptional items represent a net exceptional charge of £24.1m in 2024 (2023: £21.4m) and comprise:
| 2024 | 2023 | |
| £m | £m | |
Strategy consultancy costs | 7.9 | 3.5 |
Redundancy – outsourcing and other staff exits (note 10) | 6.2 | 7.2 |
Other outsourcing costs | 3.5 | 2.2 |
Property exit costs (note 16) | 3.5 | 4.1 |
Total transformation costs | 21.1 | 17.0 |
| Other exceptional costs: | ||
Snoop acquisition costs (note 17) | 1.7 | 3.0 |
Legal and other advice | 0.8 | 1.0 |
Repayment Option Plan (ROP) provision release (note 25) | — | (2.0) |
CCD liquidation/scheme costs | (0.9) | 2.4 |
Third-party settlement (note 25) | 1.4 | — |
Total exceptional items | 24.1 | 21.4 |
| Segment assets/ | ||||||
(liabilities) Segment liabilities | Net assets/(liabilities) | |||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| Group | £m | £m | £m | £m | £m | £m |
Credit Cards, Personal Loans and Second Charge Mortgages | 2,514.8 | 2,195.7 | (2,161.8) | (1,802.0) | 353.0 | 393.7 |
Vehicle Finance (restated) 1 | 775.5 | 882.1 | (646.4) | (683.2) | 129.1 | 198.9 |
Corporate Centre | (2.6) | 41.2 | (38.3) | (64.7) | (40.9) | (23.5) |
Total before intra-group elimination | 3,287.7 | 3,119.0 | (2,846.5) | (2,549.9) | 441.2 | 569.1 |
Intra-group elimination | 87.6 | 75.7 | (87.6) | (75.7) | — | — |
Total Group (restated) 1 | 3,375.3 | 3,194.7 | (2,934.1) | (2,625.6) | 441.2 | 569.1 |
1 Refer to accounting policies for detail of restatement.
The presentation of segment net assets reflects the statutory assets, liabilities and net assets of each of the Group’s
divisions. This results in an intra-group elimination reflecting the difference between the central intercompany funding
provided to the divisions and the external funding raised centrally. Credit Cards, Personal Loans and Second Charge
Mortgages are recognised within Vanquis Bank Limited and are therefore combined for balance sheet reporting purposes.
The Group’s businesses operate principally in the UK.
Capital expenditure | Depreciation | Amortisation | ||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |
| Group | £m | £m | £m | £m | £m | £m |
Credit Cards, Personal Loans and Second Charge Mortgages | 12.7 | 12.9 | 1.4 | 1.3 | 8.2 | 8.6 |
Vehicle Finance | 0.8 | 0.7 | 0.9 | 0.5 | 0.1 | 0.1 |
Corporate Centre | 1.2 | 19.8 | 0.6 | 0.4 | 8.6 | 9.8 |
Total Group | 14.7 | 33.4 | 2.9 | 2.2 | 16.9 | 18.5 |
Capital expenditure comprises expenditure on intangible assets of £12.5m (2023: £30.1m) and property, plant and
equipment of £2.2m (2023: £3.3m). In 2023 it also included the acquisition intangible relating to Snoop of £11.1m.
The acquired intangible asset in respect of the acquisition of Vehicle Finance and Snoop is held on consolidation and,
therefore, the amortisation charge has been allocated to Central in the above analysis, consistent with the segment net
asset analysis.
Financial statements
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| Group | ||
| 2023 | ||
| 2024 | (restated) 1 | |
| Interest receivable from: | £m | £m |
Customer receivables (note 12) | 518.2 | 525.7 |
Cash balances held on deposit and other (note 11) | 44.9 | 25.6 |
Net fair value gains on derivative financial instruments (note 22) | 2.3 | 4.7 |
Total income | 565.4 | 556.0 |
| Group | ||
| 2024 | 2023 | |
| Interest payable on: | £m | £m |
Retail deposits | 99.8 | 57.7 |
Senior public and retail bonds | 27.9 | 35.9 |
Securitisation | 14.7 | 18.8 |
Lease liabilities finance costs | 3.0 | 1.0 |
Total interest expense | 145.4 | 113.4 |
4 Net fee and commission income
Fee income is recognised at the time the charges are made to the customer on the basis the performance obligation
is complete.
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
Fee and commission income | 38.3 | 44.2 |
Fee and commission expense | (1.9) | (1.7) |
Net fee and commission income | 36.4 | 42.5 |
Fee income predominantly relates to Credit Cards and reflects default and overlimit fees as well as other ancillary income
streams and interchange income.
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Notes to the financial statements continued
| Group | ||
| 2024 | 2023 | |
| Profit before taxation is stated after charging/(crediting): | £m | £m |
| Amortisation of other intangible assets: | ||
– computer software (note 19) | 10.7 | 10.6 |
– acquisition intangibles (note 19) | 6.2 | 7.9 |
Depreciation of property, plant and equipment (note 15) | 2.9 | 2.2 |
Loss on disposal of property, plant and equipment (note 15) | 0.3 | 1.3 |
Loss on disposal of intangibles (note 19) | — | 0.5 |
Depreciation of right of use assets (note 16) | 4.6 | 6.9 |
Impairment of right of use assets (note 16) | 3.5 | 4.1 |
Lease liability finance costs (note 3) | 3.0 | 1.0 |
Impairment of amounts receivable from customers (note 12) | 189.8 | 166.1 |
Employment costs (prior to exceptional redundancy costs (note 10 (b)) | 116.6 | 130.6 |
| Exceptional items: | ||
- strategy consultancy costs | 7.9 | 3.5 |
- redundancy – outsourcing and other staff exits (note 10) | 6.2 | 7.2 |
- other outsourcing costs | 3.5 | 2.2 |
- property exit costs (note 16) | 3.5 | 4.1 |
- Snoop acquisition costs (note 17) | 1.7 | 3.0 |
- legal and other advice | 0.8 | 1.0 |
- Repayment Option Plan (ROP) provision release (note 25) | — | (2.0) |
- third-party settlement (note 25) | 1.4 | — |
- CCD liquidation/scheme costs (note 25) | (0.9) | 2.4 |
| Group | ||
| 2024 | 2023 | |
| Auditor’s remuneration | £m | £m |
Fees payable to the Company’s auditor for the audit of Company and consolidated financial statements | 0.5 | 0.4 |
| Fees payable to the Company’s auditor and its associates for other services: | ||
– audit of Company’s subsidiaries pursuant to legislation | 1.8 | 1.6 |
– other non-audit services | 0.4 | 0.3 |
Total auditor’s remuneration | 2.7 | 2.3 |
6 Tax credit
| 2023 | ||
| 2024 | (restated) 1 | |
| Tax (charge)/credit in the income statement | £m | £m |
Current tax – UK | 3.3 | 2.0 |
Deferred tax (note 23) – UK | 13.7 | (0.4) |
Impact of change in UK tax rate (note 23) | — | (1.3) |
Total tax credit | 17.0 | 0.3 |
1 Refer to accounting policies for detail of restatement.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
152
6 Tax credit continued
| 2024 | |||||
| Adjusted | Exceptional | Goodwill | |||
| PBT | items | Amortisation | write-off | Total | |
| £m | £m | £m | £m | £m | |
Loss on ordinary activities before tax | (34.8) | (24.1) | (6.2) | (71.2) | (136.3) |
| Loss before tax multiplied by standard rate of corporation tax | |||||
in the UK of 25.0% | 8.7 | 6.0 | 1.6 | 17.8 | 34.1 |
| Effect of: | |||||
– impact of change of UK tax rate (note (a)) | — | — | — | — | — |
– write-off of deferred tax assets (note (b)) | (0.3) | — | — | — | (0.3) |
– adjustments in respect of prior years (note (c)) | 1.3 | — | — | — | 1.3 |
– non-deductible asset write-off (note (d)) | (0.6) | (0.2) | — | — | (0.8) |
– non-deductible general expenses (note (e)) | (0.2) | (0.4) | — | (17.8) | (18.4) |
– benefit of capital losses (note (f)) | 1.1 | — | — | — | 1.1 |
Total tax credit | 10.0 | 5.4 | 1.6 | — | 17.0 |
2023 (restated) 1 | ||||
| Adjusted | Exceptional | |||
| PBT | items | Amortisation | Total | |
| £m | £m | £m | £m | |
Profit/(loss) on ordinary activities before tax | 17.3 | (21.4) | (7.9) | (12.0) |
Profit/(loss) before tax multiplied by standard rate of corporation tax in the UK of 23.5% | (4.0) | 5.0 | 1.9 | 2.9 |
| Effect of: | ||||
– impact of change of UK tax rate (note (a)) | (1.3) | — | — | (1.3) |
– write-off of deferred tax assets (note (b)) | (0.3) | — | — | (0.3) |
– adjustments in respect of prior years (note (c)) | (1.5) | — | — | (1.5) |
– non-deductible general expenses (note (e)) | (0.2) | (0.7) | — | (0.9) |
– benefit of capital losses (note (f)) | 1.4 | — | — | 1.4 |
Total tax (charge)/credit | (5.9) | 4.3 | 1.9 | 0.3 |
1 Refer to accounting policies for detail of restatement.
(a) Impact of change of UK tax rate
In 2021, changes were enacted to increase the mainstream corporation tax rate from 19% to 25% with effect from
1 April 2023. In 2022, further changes were enacted which, with effect from 1 April 2023, reduced the bank corporation tax
surcharge rate from 8% to 3% and increased the bank corporation tax surcharge allowance, being the threshold below
which banking profits are not subject to the surcharge, from £25m to £100m.
To the extent the temporary differences on which deferred tax has been calculated were expected to reverse after
1 April 2023, deferred tax balances at 31 December 2022 were remeasured at 25% and, in the case of Credit Cards and
Loans, at the combined mainstream corporation tax rate (25%) and bank corporation tax surcharge rate (3%) of 28%,
except to the extent the temporary differences reverse when profits from Credit Cards and Loans were expected to be
below the bank surcharge threshold, in which case deferred tax balances were measured at the combined rate of 25%.
At 31 December 2023, deferred tax balances in respect of Cards and Loans and movements in deferred tax balances
during the year were further remeasured at 25% to the extent that the related temporary differences reverse when profits
from Cards and Loans are expected to be below the surcharge threshold.
A tax charge of £nil (2023: charge of £1.3m) represents the income statement adjustment to deferred tax as a result of
these changes.
(b) Write-off of deferred tax assets
The tax charge in respect of deferred tax assets written off of £0.3m (2023: £0.3m) relates to share schemes awards where
future deductions are expected to be lower (2023: lower) than previously anticipated and other deferred tax assets which
have not been recognised.
(c) Adjustment in respect of prior years
In 2024, the tax credit of £1.3m (2023: tax charge of £1.5m) in respect of prior years comprises: (a) a £0.9m reinstatement
of deferred tax assets in respect of tax losses of discontinued operations previously written off which have now been used
to shelter prior year tax liabilities; (b) a £0.8m tax credit from claiming capital allowances super deductions in prior years;
(c) a tax charge of £0.8m due to lower tax deductions in respect of share scheme awards as a result of a lower than
anticipated share price on vesting; and (d) a tax credit of £0.4m related to the finalisation of tax liabilities for prior periods.
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Vanquis Banking Group plc Annual Report and Accounts 2024
153
Notes to the financial statements continued
6 Tax credit continued
(c) Adjustment in respect of prior years continued
In 2023, the tax charge of £1.5m in respect of prior years was due to lower tax deductions in respect of share scheme
awards as a result of a lower than anticipated share price on vesting and adjustments to prior year deferred tax assets
which were no longer supportable.
(d) Non-deductible asset write-offs
A tax charge of £0.8m (2023: £nil) arises in respect of some of the write-offs of various assets and balance sheet items
which are non-deductible for tax purposes.
(e) Non-deductible general expenses
In 2024, these primarily relate to the write-off of goodwill on consolidation and the exceptional adjustment to the
consideration in respect of the acquisition of Snoop, neither of which are deductible for tax purposes.
In 2023, these primarily comprised exceptional costs in respect of the acquisition of Snoop.
(f) Benefit of capital losses
The conversion and subsequent sales in 2024 and 2023 of further tranches of the preferred stock in VISA Inc gave rise to
capital gains which have been significantly offset by brought forward capital losses in respect of which a deferred tax asset
| was not previously recognised. This gives rise to a beneficial impact on the tax charge in 2024 of £1.1m (2023: £1.4m). |
| (g) Impact of bank corporation tax surcharge |
| The adverse impact of the bank corporation tax surcharge amounts to £nil (2023: £nil) as the taxable profits of Credit Cards |
| and Personal Loans are below the annual threshold (£25m to 31 March 2023; £100m thereafter) below which banking profits |
are not subject to the surcharge.
The tax credit/(charge) on items taken directly to other comprehensive income is as follows:
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
Deferred tax credit/(charge) on actuarial movements on retirement benefit asset | 2.9 | (1.5) |
Impact of change in UK tax rate | — | (0.1) |
Total tax credit/(charge) on items taken directly to other comprehensive income | 2.9 | (1.6) |
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
154
7 (Loss)/earnings per share
Basic (Loss)/Earnings Per Share ((L)/EPS)) is calculated by dividing the (loss)/profit for the year attributable to equity
shareholders by the weighted average number of ordinary shares outstanding during the year less the number of shares
held by the Employee Benefit Trust which are used to satisfy the share awards such as DBP, PSP, LTIS, RSP and CSOP.
Diluted (L)/EPS calculates the effect on (L)/EPS assuming conversion of all dilutive potential ordinary shares. Dilutive
potential ordinary shares are calculated as follows:
(i) For share awards outstanding under performance-related share incentive schemes such as the Deferred Bonus Plan
(DBP) (previously the Performance Share Plan (PSP)), the Long Term Incentive Scheme (LTIS), the Restricted Share Plan
(RSP) and the Company Share Option Plan (CSOP), the number of dilutive potential ordinary shares is calculated based
on the number of shares which would be issuable if: (i) the end of the reporting period is assumed to be the end of the
schemes’ performance period; and (ii) the performance targets have been met as at that date.
(ii) For share options outstanding under non-performance-related schemes such as the Save As You Earn scheme (SAYE),
a calculation is performed to determine the number of shares that could have been acquired at fair value (determined
as the average annual market share price of the Company’s shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares calculated is compared with the number of
share options outstanding, with the difference being the dilutive potential ordinary shares. The Group also presents an
adjusted EPS, prior to the amortisation of acquisition intangibles and exceptional items.
Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares would decrease
earnings per share or increase loss per share.
Reconciliations of basic and diluted (L)/EPS for the Group are set out below:
2024 | 2023 (restated) 1 | |||||
| Weighted | Weighted | |||||
| average | average | |||||
| number of | Per share | number of | Per share | |||
| Loss | shares | amount | Loss | shares | amount | |
| £m | m | pence | £m | m | pence | |
Basic loss per share | (119.3) | 255.5 | (46.7) | (11.7) | 253.0 | (4.6) |
Diluted loss per share | (119.3) | 255.5 | (46.7) | (11.7) | 253.0 | (4.6) |
1 Refer to accounting policies for detail of restatement.
The directors have elected to show an adjusted (loss)/earnings per share prior to the amortisation of acquisition
intangibles which arose on the acquisition of Vehicle Finance in August 2014 (see note 19) and prior to exceptional items
and goodwill write-off (see note 1). This is presented to show the adjusted earnings per share generated by the Group.
A reconciliation of basic/diluted (loss)/earnings per share to adjusted basic and diluted (loss)/earnings per share is
as follows:
2024 | 2023 (restated) 1 | |||||
| Weighted | Weighted | |||||
| average | average | |||||
| (Loss)/ | number of | Per share | (Loss)/ | number of | Per share | |
| earnings | shares | amount | earnings | shares | amount | |
| £m | m | pence | £m | m | pence | |
Basic (loss)/earnings per share | (119.3) | 255.5 | (46.7) | (11.7) | 253.0 | (4.6) |
Amortisation of acquisition intangibles, net of tax | 4.6 | — | 1.8 | 6.1 | — | 2.3 |
Exceptional items, net of tax | 18.7 | — | 7.3 | 17.1 | — | 6.8 |
Goodwill write-off, net of tax | 71.2 | — | 27.9 | — | — | — |
Adjusted basic (loss)/earnings per share | (24.8) | 255.5 | (9.7) | 11.5 | 253.0 | 4.5 |
Diluted (loss)/earnings per share | (119.3) | 255.5 | (46.7) | (11.7) | 253.0 | (4.6) |
Amortisation of acquisition intangibles, net of tax | 4.6 | — | 1.8 | 6.1 | — | 2.3 |
Exceptional items, net of tax | 18.7 | — | 7.3 | 17.1 | — | 6.7 |
Goodwill write-off, net of tax | 71.2 | — | 27.9 | — | — | — |
Adjusted diluted (loss)/earnings per share | (24.8) | 255.5 | (9.7) | 11.5 | 262.8 | 4.4 |
1 Refer to accounting policies for detail of restatement.
2023 weighted average number of shares of 253.0m has been adjusted by the dilutive effect of share options of 9.8m when
calculating the adjusted dilutive earnings per share.
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Vanquis Banking Group plc Annual Report and Accounts 2024
155
Notes to the financial statements continued
8 Dividends
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
2022 final – 10.3p per share | — | 25.7 |
2023 interim – 5.0p per share | — | 12.7 |
2023 – final 1.0p per share | 2.5 | — |
Dividends paid | 2.5 | 38.4 |
The directors are not recommending a final dividend in respect of the financial year ended 31 December 2024.
9 Directors’ remuneration
The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for
each of the categories specified in IAS 24 Related Party Disclosures.
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Salary and other benefits | 2.4 | 2.5 |
Share-based payment charge | 1.0 | 0.9 |
Total directors’ remuneration | 3.4 | 3.4 |
Salary and other benefits comprise salary/fees, bonus, benefits earned in the year and pension salary supplements for
executive directors.
The share-based payment charge reflects the expected vesting of the Group’s share-based incentives.
10 Employee information
(a) Average monthly number of employees in the Group
| Credit | 2024 | 2023 | ||||||
| Cards, | ||||||||
| Personal | Credit | |||||||
| Loans and | Cards and | |||||||
| Second Charge | Vehicle | Corporate | Personal | Vehicle | Corporate | |||
| Mortgages | Finance | Centre | Group | Loans | Finance | Centre | Group | |
Full time | 668 | 241 | 339 | 1,248 | 1,007 | 338 | 359 | 1,704 |
Part time | 90 | 12 | 25 | 127 | 139 | 34 | 31 | 204 |
Total | 758 | 253 | 364 | 1,146 | 372 | 390 | 1,908 |
The 28% reduction in workforce is predominantly in relation to the redundancy programme to simplify the Group’s
operating model and natural staff attrition.
During the year the Company had 162 (2023: 161) average full-time employees and 11 (2023: 14) average part-time
employees.
(b) Employment costs
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Aggregate gross wages and salaries paid to the Group’s employees | 97.3 | 107.1 | 16.1 | 18.8 |
Employer’s National Insurance contributions | 10.1 | 12.1 | 2.1 | 3.1 |
Pension charge | 6.5 | 6.8 | 1.6 | 1.9 |
Share-based payment charge (note 30) | 2.7 | 4.6 | 1.5 | 2.4 |
Total employment cost prior to exceptional costs | 116.6 | 130.6 | 21.3 | 26.2 |
Exceptional redundancy cost | 6.2 | 7.2 | 3.0 | 1.9 |
Total employment costs | 122.8 | 137.8 | 24.3 | 28.1 |
The pension charge comprises the retirement benefit charge for defined benefit schemes and contributions to the
stakeholder pension plan.
The decrease in the share-based payment charge from £4.6m in 2023 to £2.7m in 2024 primarily reflects the lower scheme
costs in the year due to leavers. The share-based payment charge relates entirely to the equity-settled scheme.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
156
11 Cash and cash equivalents
Cash and cash equivalents includes cash at bank and held in short-term deposits and Vanquis Bank Limited’s liquid asset
buffer, including other liquid resources.
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Central bank reserves | 948.7 | 683.1 | — | — |
Cash at bank | 55.2 | 60.2 | 10.5 | 14.7 |
Total cash and cash equivalents | 1,003.9 | 743.3 | 10.5 | 14.7 |
In addition to cash and cash equivalents, the Group had £1.0m of bank overdrafts at 31 December 2024 (2023: £1.5m)
and the Company had £nil bank overdrafts (2023: £nil), both of which are disclosed within bank and other borrowings
(see note 27).
All cash and cash equivalents are held with investment grade rated banks and are held in sterling.
Vanquis Bank Limited’s total liquid asset buffer is held in the Bank of England central reserve account and amounted to
£948.7m at 31 December 2024 (2023: £681.5m).
Cash and cash equivalents of £45.1m at 31 December 2024, held as part of securitisations, is not immediately available due
to the terms of the arrangements.
The currency profile of cash and cash equivalents is held in pound sterling.
Cash and cash equivalents are non-interest bearing other than in respect of the cash held on deposit and the amounts
held by Vanquis Bank Limited as a liquid asset buffer and other liquid resources which bear interest at rates linked to the
Bank of England base rate.
12 Amounts receivable from customers
2024 | 2023 (restated) 1 | |||||
| Due | Due in | Due | Due in | |||
| within | more than | within | more than | |||
| one year | one year | Total | one year | one year | Total | |
| £m | £m | £m | £m | £m | £m | |
Credit Cards | 1,149.9 | — | 1,149.9 | 1,277.7 | — | 1,277.7 |
Vehicle Finance | 227.5 | 507.9 | 735.4 | 226.7 | 549.4 | 776.1 |
Second Charge Mortgages | — | 225.3 | 225.3 | — | 2.8 | 2.8 |
Personal Loans | 9.7 | 34.3 | 44.0 | 15.0 | 87.4 | 102.4 |
Total | 1,387.1 | 767.5 | 2,154.6 | 1,519.4 | 639.6 | 2,159.0 |
Fair value adjustment for portfolio hedged risk | (0.8) | (0.1) | (0.9) | (2.3) | (0.9) | (3.2) |
Total reported amounts receivable from customers | 1,386.3 | 767.4 | 2,153.7 | 1,517.1 | 638.7 | 2,155.8 |
1 Refer to accounting policies for detail of restatement and representation of fraud costs.
The fair value adjustment for the portfolio hedge risk relates to the unamortised hedged accounting adjustment in relation
to the balance guaranteed swap, where hedge accounting has been discontinued (see note 22).
The gross amounts receivable from customers and allowance account which form the net amounts receivable from
customers are as follows:
2024 | 2023 (restated) 1 | |||||||||
| Second | Second | |||||||||
| Credit | Vehicle | Charge | Personal | Credit | Vehicle | Charge | Personal | |||
| Cards | Finance | Mortgages | Loans | Group | Cards | Finance | Mortgages | Loans | Group | |
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| Gross amounts receivable | ||||||||||
from customers | 1,309.9 | 831.9 | 225.5 | 49.1 | 2,416.4 | 1,474.8 | 1,144.2 | 2.8 | 117.5 | 2,739.3 |
Allowance account | (160.0) | (96.5) | (0.2) | (5.1) | (261.8) | (197.1) | (368.1) | — | (15.1) | (580.3) |
| Reported amounts receivable | ||||||||||
from customers | 1,149.9 | 735.4 | 225.3 | 44.0 | 2,154.6 | 1,277.7 | 776.1 | 2.8 | 102.4 | 2,159.0 |
1 Refer to accounting policies for detail of restatement and representation of fraud costs.
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Vanquis Banking Group plc Annual Report and Accounts 2024
157
Notes to the financial statements continued
12 Amounts receivable from customers continued
Credit cards
Amounts receivable from customers for Credit Cards can be reconciled as follows:
2024 | 2023 (represented) | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Credit Cards | £m | £m | £m | £m | £m | £m | £m | £m |
| Gross carrying amount | ||||||||
At 1 January | 1,199.5 | 161.2 | 114.1 | 1,474.8 | 1,116.1 | 148.6 | 186.6 | 1,451.3 |
Originations 1 | 21.9 | — | — | 21.9 | 66.9 | — | — | 66.9 |
Drawdowns | 2,007.5 | 76.5 | 8.5 | 2,092.5 | 2,245.2 | 74.1 | 13.2 | 2,332.5 |
| Net transfers and changes in credit risk: | ||||||||
– from Stage 1 to Stage 2 | (376.7) | 376.7 | — | — | (459.1) | 459.1 | — | — |
– from Stage 1 to Stage 3 | (44.9) | — | 44.9 | — | (52.3) | — | 52.3 | — |
– from Stage 2 to Stage 1 | 290.1 | (290.1) | — | — | 247.3 | (247.3) | — | — |
– from Stage 2 to Stage 3 | — | (158.6) | 158.6 | — | — | (151.8) | 151.8 | — |
– from Stage 3 to Stage 1 | 16.7 | — | (16.7) | — | 9.3 | — | (9.3) | — |
– from Stage 3 to Stage 2 | — | 5.9 | (5.9) | — | — | 2.0 | (2.0) | — |
Write-offs | (11.7) | (9.6) | (36.4) | (57.7) | (13.3) | (9.6) | (31.5) | (54.4) |
Write-offs (debt sale) | — | — | (157.7) | (157.7) | — | — | (217.3) | (217.3) |
Repayments | (2,320.5) | (107.1) | (31.1) | (2,458.7) | (2,312.7) | (147.7) | (40.0) | (2,500.4) |
Interest and fee income | 345.6 | 46.6 | 2.9 | 395.1 | 340.5 | 45.4 | 7.8 | 393.7 |
Other movements | 9.1 | (1.7) | (7.7) | (0.3) | 11.6 | (11.6) | 2.5 | 2.5 |
At 31 December | 1,136.6 | 99.8 | 73.5 | 1,309.9 | 1,199.5 | 161.2 | 114.1 | 1,474.8 |
| Allowance account | ||||||||
At 1 January | (84.7) | (57.5) | (54.9) | (197.1) | (92.7) | (58.1) | (118.9) | (269.7) |
| Movements through income statement: | ||||||||
Originations 1 | (4.8) | — | — | (4.8) | (17.6) | — | — | (17.6) |
Drawdowns and net transfers and changes in credit risk: | ||||||||
– from Stage 1 to Stage 2 | 66.2 | (152.0) | (85.8) | 73.4 | (191.8) | — | (118.4) | |
– from Stage 1 to Stage 3 | 7.0 | — | (26.6) | (19.6) | 8.0 | — | (28.4) | (20.4) |
– from Stage 2 to Stage 1 | (41.2) | 94.3 | — | 53.1 | (27.4) | 94.1 | — | 66.7 |
– from Stage 2 to Stage 3 | — | 108.5 | (125.9) | (17.4) | — | 109.2 | (126.0) | (16.8) |
– from Stage 3 to Stage 1 | (3.9) | — | 5.1 | 1.2 | (0.9) | — | 3.0 | 2.1 |
– from Stage 3 to Stage 2 | — | (2.8) | 2.5 | (0.3) | — | (0.9) | 0.9 | — |
– remeasuring with existing stage | (32.6) | (21.4) | 1.2 | (52.8) | (42.1) | (25.1) | 7.8 | (59.4) |
– post-model overlays | 19.0 | (20.1) | (2.5) | (3.6) | 8.8 | 7.1 | 11.1 | 27.0 |
– write-offs | (9.9) | (3.3) | (6.6) | (19.8) | (9.2) | (3.5) | (6.0) | (18.7) |
– debt sales | — | — | 16.1 | 16.1 | — | — | 15.4 | 15.4 |
– derecognition of Stage 3 interest | — | — | 3.3 | 3.3 | — | — | 5.1 | 5.1 |
– recoveries | — | — | 3.1 | 3.1 | — | — | 7.2 | 7.2 |
– revaluations | — | — | 3.3 | 3.3 | — | — | (0.8) | (0.8) |
– other movements | — | — | 0.1 | 0.1 | 1.7 | 1.9 | (0.5) | 3.1 |
Total movements through income statement | (0.2) | 3.2 | (126.9) | (123.9) | (5.3) | (9.0) | (111.2) | (125.5) |
| Movements through allowance account: | ||||||||
– write-offs (regular) | 12.0 | 9.7 | 36.4 | 58.1 | 13.3 | 9.6 | 31.5 | 54.4 |
– write-offs (debt sale) | — | — | 173.2 | 173.2 | — | — | 217.3 | 217.3 |
– debt sale proceeds | — | — | (60.6) | (60.6) | — | — | (71.3) | (71.3) |
– derecognition of Stage 3 interest | — | — | (3.3) | (3.3) | — | — | (5.1) | (5.1) |
– other | (0.4) | (0.1) | (5.9) | (6.4) | — | — | 2.8 | 2.8 |
Allowance account at 31 December | (73.3) | (44.7) | (42.0) | (160.0) | (84.7) | (57.5) | (54.9) | (197.1) |
| Reported amounts receivable | ||||||||
from customers at 31 December | 1,063.3 | 55.1 | 31.5 | 1,149.9 | 1,114.8 | 103.7 | 59.2 | 1,277.7 |
| Reported amounts receivable | ||||||||
from customers at 1 January | 1,114.8 | 103.7 | 59.2 | 1,277.7 | 1,023.4 | 90.5 | 67.7 | 1,181.6 |
1 2023 originations have been represented to reflect the gross receivable and impairment provision for customer spend in their first month following acquisition.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
158
12 Amounts receivable from customers continued
Credit cards continued
Total Credit Cards interest and fee income from customers of £395.1m (2023: £393.7m) comprises £365.3m (2023: £349.5m)
interest income and £29.8m (2023: £44.2m) of fee and commission income.
As at 31 December 2024 unutilised Credit Card commitments were £1,476.3m (2023: £1,332.4m).
An increase of 1% of the gross exposure into Stage 2 from Stage 1 would result in an increase in the allowance account
of £4.3m (2023: £3.4m) based on applying the difference between the coverage ratios from Stage 1 to Stage 2 to the
movement in gross exposure.
A breakdown of the in-model and post-model overlays for Credit Cards is shown below:
| 2023 | ||
| 2024 | (represented) | |
| Credit Cards | £m | £m |
Core model | 155.6 | 209.4 |
New model underlays (note (a)) | — | (12.7) |
Post-model overlays | 4.4 | 0.4 |
Total allowance account | 160.0 | 197.1 |
| 2023 | ||
| 2024 | (represented) | |
| £m | £m | |
| Post-model overlays | ||
Macroeconomic model redevelopment (note (b)) | 4.0 | — |
Other | 0.4 | 0.4 |
Total post-model overlays | 4.4 | 0.4 |
Total over/(underlays) | 4.4 | (12.3) |
2023 numbers have been represented for fraud, refer to accounting policies for detail.
(a) New model underlay
Throughout 2023 the Group, in line with its ongoing commitment to continue to enhance the quality and accuracy of
expected credit loss modelling, took steps to refine and re-calibrate the IFRS 9 model suite across Credit Cards, Vehicle
Finance and Personal Loans resulting in a release of £57.7m across all portfolios. Enhanced segmentation, refreshed data
calibration, and a refinement to model input parameters indicated the need for a model rebuild underlay at 31 December
2023 and a PMA reflected to address this. The PMA was released in 2024 when the refinements to the models were fully
embedded, removing the requirement for the underlay.
(b) Macroeconomic model redevelopment
The macroeconomic model was considered in 2023 as part of the wider model development, however due to volatility
in the output, the model was not implemented. The model has been redeveloped in 2024 using an external third party
macroeconomic data provider. As it was not fully embedded at the year end, a PMA has been recognised reflecting the
difference between the incumbent macroeconomic model and the new output. Further work is expected in 2025 to develop
a more suitable, internally built model and remove the requirement for the PMA.
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Notes to the financial statements continued
12 Amounts receivable from customers continued
A breakdown of the gross receivable by internal credit risk rating is shown below:
2024 | 2023 (restated) | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Credit Cards | £m | £m | £m | £m | £m | £m | £m | £m |
Good | 995.9 | 70.0 | — | 1,065.9 | 990.6 | 114.2 | — | 1,104.8 |
Satisfactory | 140.7 | 29.8 | — | 170.5 | 208.9 | 47.0 | — | 255.9 |
Lower quality | — | — | 73.5 | 73.5 | — | — | 114.1 | 114.1 |
Total | 1,136.6 | 99.8 | 73.5 | 1,309.9 | 1,199.5 | 161.2 | 114.1 | 1,474.8 |
Low-quality receivables relate to defaulted accounts and are therefore assigned as Stage 3. Satisfactory receivables
consist of accounts that are above a prescribed PD cut-off, dependent on the customer’s credit score. High-quality
receivables consist of accounts that are below a prescribed PD cut-off, dependent on the customer’s credit score.
Vehicle Finance
Amounts receivable from customers for Vehicle Finance can be reconciled as follows:
2024 | 2023 (restated) 1 | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Vehicle Finance | £m | £m | £m | £m | £m | £m | £m | £m |
| Gross carrying amount | ||||||||
At 1 January | 391.7 | 224.8 | 527.7 | 1,144.2 | 351.0 | 169.3 | 452.0 | 972.3 |
Originations | 311.1 | — | — | 311.1 | 381.6 | — | — | 381.6 |
| Transfers due to changes in credit risk: | ||||||||
– from Stage 1 to Stage 2 | (63.6) | 63.6 | — | — | (159.0) | 159.0 | — | — |
– from Stage 1 to Stage 3 | (22.0) | — | 22.0 | (129.5) | — | 129.5 | — | |
– from Stage 2 to Stage 1 | 125.8 | (125.8) | — | — | 18.6 | (18.6) | — | — |
– from Stage 2 to Stage 3 | — | (15.9) | 15.9 | — | — | (59.4) | 59.4 | — |
– from Stage 3 to Stage 1 | 38.3 | — | (38.3) | — | 11.9 | — | (11.9) | — |
– from Stage 3 to Stage 2 | — | 41.7 | (41.7) | — | — | 18.8 | (18.8) | — |
Write-offs | — | — | (374.9) | (374.9) | — | — | (9.7) | (9.7) |
Repayments | (279.8) | (97.8) | (74.7) | (452.3) | (160.7) | (78.7) | (131.6) | (371.0) |
Interest and fee income | 72.2 | 30.3 | 30.6 | 133.1 | 66.5 | 34.1 | 51.7 | 152.3 |
Other movements | 32.6 | (0.8) | 38.9 | 70.7 | 11.3 | 0.3 | 7.1 | 18.7 |
At 31 December | 606.3 | 120.1 | 105.5 | 831.9 | 391.7 | 224.8 | 527.7 | 1,144.2 |
| Allowance account | ||||||||
At 1 January | (18.2) | (27.0) | (322.9) | (368.1) | (15.9) | (25.8) | (275.2) | (316.9) |
| Movements through income statement: | ||||||||
– originations | (40.0) | — | — | (40.0) | (64.4) | — | — | (64.4) |
Drawdowns and net transfers and changes in credit risk: | ||||||||
– from Stage 1 to Stage 2 | 15.9 | (44.9) | — | (29.0) | 21.2 | (23.1) | — | (1.9) |
– from Stage 1 to Stage 3 | 1.9 | — | (11.1) | (9.2) | 34.4 | — | (46.4) | (12.0) |
– from Stage 2 to Stage 1 | (13.0) | 38.8 | — | 25.8 | (0.9) | 3.2 | — | 2.3 |
– from Stage 2 to Stage 3 | — | 27.3 | (42.4) | (15.1) | — | 11.6 | (20.6) | (9.0) |
– from Stage 3 to Stage 1 | (2.3) | — | 11.1 | 8.8 | (0.3) | — | 2.1 | 1.8 |
– from Stage 3 to Stage 2 | — | (14.8) | 20.1 | 5.3 | — | (1.8) | 3.8 | 2.0 |
– remeasurements within existing stage | 38.1 | 0.1 | (49.2) | (11.0) | 5.6 | 5.3 | (18.2) | (7.3) |
– post-model overlays | (0.6) | (1.0) | (3.9) | (5.5) | 2.1 | 3.6 | 43.2 | 48.9 |
– write-offs | — | — | (30.4) | (30.4) | — | — | (8.6) | (8.6) |
– debt sales | — | — | 0.1 | 0.1 | — | — | — | — |
– derecognition of Stage 3 interest | — | — | 18.5 | 18.5 | — | — | 33.9 | 33.9 |
– recoveries | — | — | (0.2) | (0.2) | — | — | (1.7) | (1.7) |
– revaluations | — | — | 21.7 | 21.7 | — | — | (3.2) | (3.2) |
– other movements | — | — | 0.2 | 0.2 | — | — | (1.2) | (1.2.) |
Total amount recorded in impairment charges | — | 5.5 | (65.5) | (60.0) | (2.3) | (1.2) | (16.9) | (20.4) |
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160
2024 | 2023 (restated) 1 | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Vehicle Finance | £m | £m | £m | £m | £m | £m | £m | £m |
| Movements through allowance account: | ||||||||
– write-offs | — | — | 374.9 | 374.9 | — | — | 9.7 | 9.7 |
– debt sale proceeds | — | — | (6.7) | (6.7) | — | — | — | — |
– derecognition of Stage 3 interest | — | — | (18.5) | (18.5) | — | — | (33.9) | (33.9) |
– other changes | — | — | (18.1) | (18.1) | — | — | 1.9 | 1.9 |
Allowance account at 31 December | (18.2) | (21.5) | (56.8) | (96.5) | (18.2) | (27.0) | (322.9) | (368.1) |
Reported amounts receivable from customers at 31 December | 588.1 | 98.6 | 48.7 | 735.4 | 373.5 | 197.8 | 204.8 | 776.1 |
Reported amounts receivable from customers at 1 January | 373.5 | 197.8 | 204.8 | 776.1 | 335.1 | 143.5 | 168.2 | 646.8 |
1 Refer to accounting policies for detail of restatement.
Total Vehicle Finance interest and fee income from customers of £133.1m (2023: £152.3m) comprises £133.1m (2023: £150.3m)
interest income and £nil (2023: £2.0m) of other income.
Other changes within gross receivables include the capitalisation of broker costs.
Included within Vehicle Finance receivables is £nil (2023: £2.1m) in relation to receivables classified as purchased or
originated as credit impaired under IFRS 9.
An increase of 1% of the gross exposure into Stage 2 from Stage 1 would result in an increase in the allowance account
of £0.9m (2023: £0.3m) based on applying the difference between the coverage ratios from Stage 1 to Stage 2 to the
movement in gross exposure.
A breakdown of the in-model and post-model overlays for Vehicle Finance is shown below:
| 2023 | ||
| 2024 | (restated) 1 | |
| Vehicle Finance | £m | £m |
Core model | 93.3 | 414.3 |
New model underlays (note (a)) | — | (47.0) |
Post-model overlays | 3.2 | 0.8 |
Total allowance account | 96.5 | 368.1 |
| 2023 | ||
| 2024 | (restated) 1 | |
| £m | £m | |
| Post-model (under)/overlays: | ||
12-month PD recalibration (note (b)) | 2.8 | — |
Macroeconomic LGD implementation (note (c)) | (0.9) | — |
Macroeconomic model redevelopment (note (d)) | 1.4 | — |
LGD recalibration (note (e)) | (0.6) | — |
Borrowers in financial difficulty (note (f)) | — | 0.8 |
Other | 0.5 | — |
Total post-model overlays | 3.2 | 0.8 |
Total over/(underlays) | 3.2 | (46.2) |
1 Refer to accounting policies for detail of restatement.
12 Amounts receivable from customers continued
Vehicle Finance continued
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161
Notes to the financial statements continued
12 Amounts receivable from customers continued
(a) Model overlay
| Relates to new model development executed in 2023. Refer to Cards section for further details. |
| (b) 12-month PD recalibration |
| Monitoring of the 12-month PD model indicated a recalibration was required for the ‘up to date’ segment. A PMA has been |
recognised until the model can be updated in 2025.
(c) Macroeconomic LGD implementation
Refinements have been made to the macroeconomic LGD model implementation to; (i) reflect an upside scenario;
(ii) refine the shape of the scenarios; and (iii) enhance how the scenarios were being applied. A PMA has been recognised
until the model can be updated in 2025.
(d) Macroeconomic model redevelopment
Refer to Cards section for details.
(e) LGD recalibration
Following the introduction of the charge-off process and the revised definition of default during 2024 calibrations were
required to components of the LGD model. A PMA has been recognised until the model can be updated in 2025.
(f) Borrowers in financial difficulty
An overlay was recognised for a selection of customer accounts that were deemed to be borrowers in financial difficulty.
This was released in 2024.
The fraud overlay has been represented within the core model, refer to accounting policies for further detail.
A breakdown of the gross receivable by internal credit risk rating is shown below:
2024 | 2023 | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Vehicle Finance | £m | £m | £m | £m | £m | £m | £m | £m |
Good quality | 516.9 | 11.1 | — | 528.0 | 127.9 | 46.3 | — | 174.2 |
Satisfactory quality | 78.9 | 35.8 | — | 114.7 | 229.9 | 87.3 | — | 317.2 |
Lower quality | 10.4 | 39.7 | — | 50.1 | 32.5 | 29.5 | — | 62.0 |
Below standard | 0.1 | 33.5 | 105.5 | 139.1 | 1.4 | 61.7 | 527.7 | 590.8 |
Gross carrying amount | 606.3 | 120.1 | 105.5 | 831.9 | 391.7 | 224.8 | 527.7 | 1,144.2 |
Internal credit risk rating is based on the internal credit score of a customer at the balance sheet date.
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12 Amounts receivable from customers continued
Second charge mortgages
Amounts receivable from customers for second charge mortgages can be reconciled as follows:
| 2024 | ||||
| Stage 1 | Stage 2 | Stage 3 | Total | |
| £m | £m | £m | £m | |
| Gross carrying amount | ||||
At 1 January | 2.8 | — | — | 2.8 |
Originations | 217.7 | — | — | 217.7 |
Net transfers and changes in credit risk: | — | — | — | — |
- from Stage 1 to 2 | (1.2) | 1.2 | — | — |
- from Stage 1 to 3 | (0.1) | — | 0.1 | — |
Repayments | (8.9) | — | — | (8.9) |
Interest income | 4.8 | — | — | 4.8 |
Other movements | 9.1 | — | — | 9.1 |
At 31 December | 224.2 | 1.2 | 0.1 | 225.5 |
| Allowance account | ||||
At 1 January | — | — | — | — |
| Movements through income statement: | ||||
Originations | (0.1) | — | — | (0.1) |
Net transfers and changes in credit risk: | — | — | — | — |
- from Stage 1 to 2 | — | (0.1) | — | (0.1) |
Total amount recorded in impairment charges | (0.1) | (0.1) | — | (0.2) |
Allowance account at 31 December | (0.1) | (0.1) | — | (0.2) |
Reported amounts receivable from customers at 31 December | 224.1 | 1.1 | 0.1 | 225.3 |
Reported amounts receivable from customers at 1 January | 2.8 | — | — | 2.8 |
| 2023 | ||||
| Stage 1 | Stage 2 | Stage 3 | Total | |
| £m | £m | £m | £m | |
| Gross carrying amount | ||||
At 1 January | — | — | — | — |
Originations | 2.8 | — | — | 2.8 |
At 31 December | 2.8 | — | — | 2.8 |
| Allowance account | ||||
At 1 January and 31 December | — | — | — | — |
Allowance account at 31 December | — | — | — | — |
Reported amounts receivable from customers at 31 December | 2.8 | — | — | 2.8 |
Reported amounts receivable from customers at 1 January | — | — | — | — |
Other movements in gross receivables predominantly relate to the capitalisation of deferred acquisition costs.
Total second charge mortgages interest and fee income from customers of £4.8m (2023: £0.4m) comprises solely of
interest income.
An increase of 1% of the gross exposure into Stage 2 from Stage 1 would result in an increase in the allowance account of
£nil (2023: £nil) based on applying the difference between the coverage ratios from Stage 1 to Stage 2 to the movement in
gross exposure.
There are no post-model overlays for second charge mortgages in the current or prior year.
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163
Notes to the financial statements continued
12 Amounts receivable from customers continued
Second charge mortgages continued
A breakdown of the gross second charge mortgages receivable by internal credit risk rating is shown below:
| 2024 | ||||
| Stage 1 | Stage 2 | Stage 3 | Total | |
| £m | £m | £m | £m | |
Good | 224.2 | — | — | 224.2 |
Satisfactory | — | 1.2 | — | 1.2 |
Lower quality | — | — | 0.1 | 0.1 |
Total | 224.2 | 1.2 | 0.1 | 225.5 |
| 2023 | ||||
| Stage 1 | Stage 2 | Stage 3 | Total | |
| £m | £m | £m | £m | |
Good | 2.8 | — | — | 2.8 |
Satisfactory | — | — | — | — |
Lower quality | — | — | — | — |
Total | 2.8 | — | — | 2.8 |
Low-quality receivables relate to defaulted accounts and are therefore assigned as Stage 3. Satisfactory receivables
consist of accounts that are above a prescribed PD cut-off, dependent on the customer’s credit score. High-quality
receivables consist of accounts that are below a prescribed PD cut-off, dependent on the customer’s credit score.
Personal Loans
Amounts receivable from customers for Personal Loans can be reconciled as follows:
2024 | 2023 (represented) | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Personal Loans | £m | £m | £m | £m | £m | £m | £m | £m |
| Gross carrying amount | ||||||||
At 1 January | 104.1 | 5.5 | 7.9 | 117.5 | 78.1 | 2.1 | 5.3 | 85.5 |
Originations | 6.4 | — | — | 6.4 | 109.4 | — | — | 109.4 |
Net transfers and changes in credit risk: | — | — | — | — | ||||
– from Stage 1 to Stage 2 | (24.7) | 24.7 | — | — | (22.1) | 22.1 | — | — |
– from Stage 1 to Stage 3 | (4.0) | — | 4.0 | — | (10.0) | — | 10.0 | — |
– from Stage 2 to Stage 1 | 13.8 | (13.8) | — | — | 5.8 | (5.8) | — | — |
– from Stage 2 to Stage 3 | — | (12.9) | 12.9 | — | — | (12.5) | 12.5 | — |
– from Stage 3 to Stage 1 | 0.7 | — | (0.7) | — | 0.2 | — | (0.2) | — |
– from Stage 3 to Stage 2 | — | 0.9 | (0.9) | — | — | 0.1 | (0.1) | — |
Write-offs | — | — | (20.6) | (20.6) | — | — | (18.2) | (18.2) |
Repayments | (66.3) | (2.7) | (2.2) | (71.2) | (81.3) | (1.2) | (1.9) | (84.4) |
Interest and fee income | 14.3 | 0.9 | 0.2 | 15.4 | 24.0 | 0.7 | 1.2 | 25.9 |
Other movements | (0.1) | (0.2) | 1.9 | 1.6 | — | — | (0.7) | (0.7) |
At 31 December | 44.2 | 2.4 | 2.5 | 49.1 | 104.1 | 5.5 | 7.9 | 117.5 |
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164
2024 | 2023 (represented) | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Personal Loans | £m | £m | £m | £m | £m | £m | £m | £m |
| Allowance account | ||||||||
At 1 January | (6.3) | (2.4) | (6.4) | (15.1) | (5.0) | (0.7) | (3.5) | (9.2) |
Originations | (0.8) | — | — | (0.8) | (8.4) | — | — | (8.4) |
| Movements through income statement: | ||||||||
Drawdowns and net transfers and changes in credit risk: | ||||||||
– from Stage 1 to Stage 2 | 3.0 | (7.5) | — | (4.5) | 5.2 | (8.7) | — | (3.5) |
– from Stage 1 to Stage 3 | 0.5 | — | (2.2) | (1.7) | 2.2 | — | (5.9) | (3.7) |
– from Stage 2 to Stage 1 | (1.4) | 3.5 | — | 2.1 | (0.9) | 1.9 | — | 1.0 |
– from Stage 2 to Stage 3 | — | 6.1 | (8.5) | (2.4) | — | 5.3 | (7.0) | (1.7) |
– from Stage 3 to Stage 1 | (0.1) | — | 0.3 | 0.2 | — | — | — | — |
– from Stage 3 to Stage 2 | — | (0.4) | 0.6 | 0.2 | — | — | — | — |
– remeasurement with existing stage | 2.8 | (0.4) | 0.7 | 3.1 | (0.4) | 0.6 | 0.2 | |
– post-model overlays | (0.5) | 0.2 | 0.1 | (0.2) | (0.3) | (0.3) | (0.8) | (1.4) |
– write-offs | — | — | (6.9) | (6.9) | — | — | (7.9) | (7.9) |
– debt sales | — | — | 1.3 | 1.3 | — | — | 2.0 | 2.0 |
– derecognition of Stage 3 interest | — | — | 0.7 | 0.7 | — | — | 1.1 | 1.1 |
– recoveries | — | — | 3.2 | 3.2 | — | — | 1.9 | 1.9 |
– revaluations | — | — | — | — | — | — | — | — |
– other movements | — | — | — | — | 1.3 | 0.1 | (0.6) | 0.8 |
Total movements through income statement | 3.5 | 1.5 | (10.7) | (5.7) | (1.3) | (1.7) | (16.6) | (19.6) |
| Movements through allowance | ||||||||
| account: | ||||||||
– write-offs | — | — | 20.6 | 20.6 | — | — | 18.2 | 18.2 |
– debt sale proceeds | — | — | (1.3) | (1.3) | — | — | (2.0) | (2.0) |
– derecognition of Stage 3 interest | — | — | (0.7) | (0.7) | — | — | (1.1) | (1.1) |
– other | — | — | (2.9) | (2.9) | — | — | (0.1) | (1.4) |
Allowance account at 31 December | (2.8) | (0.9) | (1.4) | (5.1) | (6.3) | (2.4) | (6.4) | (15.1) |
Reported amounts receivable from customers at 31 December | 41.4 | 1.5 | 1.1 | 44.0 | 97.8 | 3.1 | 1.5 | 102.4 |
Reported amounts receivable from customers at 1 January | 97.8 | 3.1 | 1.5 | 102.4 | 73.1 | 1.4 | 1.8 | 76.3 |
Total Personal Loans interest and fee income from customers of £15.4m (2023: £25.9m) comprises solely of interest income.
An increase of 1% of the gross exposure into Stage 2 from Stage 1 would result in an increase in the allowance account
of £0.2m (2023: £0.4m) based on applying the difference between the coverage ratios from Stage 1 to Stage 2 to the
movement in gross exposure.
A breakdown of the in-model and post-model overlays for Personal Loans is shown below:
| 2024 | 2023 | |
| Personal Loans | £m | £m |
Core model | 5.1 | 13.1 |
New model overlays (note (a)) | — | 2.0 |
Post-model overlays | — | — |
Total allowance account | 5.1 | 15.1 |
12 Amounts receivable from customers continued
Personal Loans continued
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165
Notes to the financial statements continued
12 Amounts receivable from customers continued
(a) Model overlay
Relates to new model development executed in 2023. Refer to Credit Cards section for further details.
A breakdown of the gross receivable by internal credit risk rating is shown below:
2024 | 2023 | |||||||
| Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
| Personal Loans | £m | £m | £m | £m | £m | £m | £m | £m |
Good | 33.0 | 1.4 | — | 34.4 | 73.1 | 0.6 | — | 73.7 |
Satisfactory | 11.2 | 1.0 | — | 12.2 | 31.0 | 4.9 | — | 35.9 |
Lower quality | — | — | 2.5 | 2.5 | — | — | 7.9 | 7.9 |
Total | 44.2 | 2.4 | 2.5 | 49.1 | 104.1 | 5.5 | 7.9 | 117.5 |
Low-quality receivables relate to defaulted accounts and are therefore assigned as Stage 3. Satisfactory receivables
consist of accounts that are above a prescribed PD cut-off, dependent on the customer’s credit score. High-quality
receivables consist of accounts that are below a prescribed PD cut-off, dependent on the customer’s credit score.
The movement in directly attributable acquisition costs included within amounts receivable from customers can be
analysed as follows:
2024 | 2023 | |||||||||
| Second | Second | |||||||||
| Credit | Vehicle | Charge | Personal | Credit | Vehicle | Charge | Personal | |||
| Cards | Finance | Mortgages | Loans | Group | Cards | Finance | Mortgages | Loans | Group | |
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m |
Brought forward | 32.3 | 56.0 | 0.1 | 1.2 | 89.6 | 30.3 | 44.3 | — | 1.3 | 75.9 |
Capitalised | 5.8 | 31.6 | 9.2 | — | 46.6 | 15.1 | 37.6 | 0.1 | 1.5 | 54.3 |
Amortised | (12.6) | (31.4) | (0.9) | (0.8) | (45.7) | (13.1) | (25.9) | — | (1.6) | (40.6) |
Written off | — | (6.5) | — | — | (6.5) | — | — | — | — | — |
Carried forward | 25.5 | 49.7 | 8.4 | 0.4 | 84.0 | 32.3 | 56.0 | 0.1 | 1.2 | 89.6 |
The impairment charge in respect of amounts receivable from customers can be analysed as follows:
| Group | ||
| 2024 | 2023 | |
| Impairment charge on amounts receivable from customers | £m | £m |
Credit Cards | 123.9 | 125.5 |
Vehicle Finance | 60.0 | 20.4 |
Second Charge Mortgages | 0.2 | — |
Personal Loans | 5.7 | 19.6 |
Total impairment charge | 189.8 | 165.5 |
The impairment in the income statement of £191.0m includes £1.2m in relation to loans held within trade and other
receivables (note 13).
The average effective interest rate for the year ended 31 December 2024 was 28.3% for Credit Cards (2023: 23.9%), 24%
for Vehicle Finance (2023: 27%), 8.9% for Second Charge Mortgages (2023: 9.1%) and 24.3% for Personal Loans (2023: 25.8%).
The average period to maturity of the amounts receivable from customers within Vehicle Finance is 34 months
(2023: 35 months). The average period to maturity of the amounts receivable from customers within Second Charge
Mortgages is 18.4 years (2023: 16.1 years) and 2.0 years for Personal Loans (2023: 1.7 years). Within Credit Cards, for the
majority of customers, there is no fixed term for repayment other than a general requirement for customers to make
a monthly minimum repayment towards their outstanding balance. This is currently the greater of 3% of the amount
owed plus any fees and interest charges in the month and £10.
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166
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Other receivables | 34.2 | 19.5 | 9.4 | 9.5 |
Stock | 2.0 | 1.8 | — | — |
Finance lease receivable (note (a)) | 6.2 | 6.3 | — | — |
Amounts placed on deposit by Group undertaking | — | — | 23.0 | 15.0 |
Amounts owed by Group undertakings | — | — | 731.2 | 887.0 |
Prepayments | 28.9 | 27.9 | 4.8 | 3.4 |
Accrued income | 1.2 | 0.4 | — | — |
Total trade and other receivables | 72.5 | 55.9 | 768.4 | 914.9 |
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
Due within one year | 1.0 | — |
Due between one and five years | 3.9 | 3.9 |
Due in more than five years | 1.6 | 2.9 |
Total | 6.5 | 6.8 |
Unearned finance cost | (0.3) | (0.5) |
Total lease receivable | 6.2 | 6.3 |
| 2024 | 2023 | |
| £m | £m | |
Recoverable after 12 months | 5.5 | 6.8 |
Recoverable within 12 months | 1.0 | — |
Total | 6.5 | 6.8 |
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Notes to the financial statements continued
13 Trade and other receivables continued
(a) Finance lease receivable continued
Net investment in the lease analysed as:
| 2024 | 2023 | |
| £m | £m | |
Recoverable after 12 months | 5.3 | 6.4 |
Recoverable within 12 months | 0.9 | (0.1) |
Total | 6.2 | 6.3 |
The finance lease arrangement does not include variable payments. The average effective interest rate contracted
approximates to 1.6% per annum.
No impairment provision has been recognised against the lease receivable.
14 Investments
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
Visa shares | 2.3 | 5.4 |
Total investments | 2.3 | 5.4 |
Visa shares
The Visa Inc shares represent preferred stock in Visa Inc held by Vanquis Bank Limited. The valuation of the preferred stock
has been determined using the common stock’s value as an approximation as both classes of stock have similar dividend
rights. However, adjustments have been made for: (i) illiquidity, as the preferred stock is not tradeable on an open market
and can only be transferred to other Visa members; and (ii) future litigation costs which could affect the valuation of the
stock prior to conversion.
As at 31 December 2024, the total fair value of £2.3m of Visa shares comprised preferred stock only. During the year,
common stock (19,300 Class A Common shares) was fully sold on 23 October 2024 for $284.36 (£223.37) per share.
15 Property, plant and equipment
| Leasehold | Equipment | ||
| land and | and | ||
| buildings | vehicles | Total | |
| Group | £m | £m | £m |
| Cost | |||
At 1 January 2024 | 8.3 | 21.9 | 30.2 |
Additions | — | 2.2 | 2.2 |
Disposals | (0.2) | (2.3) | (2.5) |
At 31 December 2024 | 8.1 | 21.8 | 29.9 |
| Accumulated depreciation and impairment | |||
At 1 January 2024 | 2.0 | 20.1 | 22.1 |
Charged to the income statement – depreciation | 0.8 | 2.1 | 2.9 |
Disposals | (0.2) | (2.0) | (2.2) |
At 31 December 2024 | 2.6 | 20.2 | 22.8 |
Net book value at 31 December 2024 | 5.5 | 1.6 | 7.1 |
Net book value at 1 January 2024 | 6.3 | 1.8 | 8.1 |
The loss on disposal of property, plant and equipment in 2024 amounted to £0.3m (2023: £1.3m). The loss comprised
proceeds received of £nil (2023: £nil) less the net book value of disposals of £0.3m (2023: £1.3m).
Financial statements
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15 Property, plant and equipment continued
Additions in 2024 and 2023 principally comprise expenditure in respect of the routine replacement of IT equipment.
| Leasehold | Equipment | ||
| land and | and | ||
| buildings | vehicles | Total | |
| Group | £m | £m | £m |
| Cost | |||
At 1 January 2023 | 8.6 | 23.2 | 31.8 |
Additions | 1.6 | 3.3 | 4.9 |
Disposals | (1.9) | (4.6) | (6.5) |
At 31 December 2023 | 8.3 | 21.9 | 30.2 |
| Accumulated depreciation and impairment | |||
At 1 January 2023 | 2.8 | 20.7 | 23.5 |
Charged to the income statement – depreciation | 0.1 | 2.1 | 2.2 |
Disposals | (0.9) | (2.7) | (3.6) |
At 31 December 2023 | 2.0 | 20.1 | 22.1 |
Net book value at 31 December 2023 | 6.3 | 1.8 | 8.1 |
Net book value at 1 January 2023 | 5.8 | 2.5 | 8.3 |
| Leasehold | Equipment | ||
| land and | and | ||
| buildings | vehicles | Total | |
| Company | £m | £m | £m |
| Cost | |||
At 1 January 2024 | 0.2 | 12.2 | 12.4 |
Additions | — | — | — |
Disposals | — | — | — |
At 31 December 2024 | 0.2 | 12.2 | 12.4 |
| Accumulated depreciation | |||
At 1 January 2024 | 0.1 | 11.6 | 11.7 |
Charged to the income statement – depreciation | — | 0.1 | 0.1 |
Disposals | — | — | — |
At 31 December 2024 | 0.1 | 11.7 | 11.8 |
Net book value at 31 December 2024 | 0.1 | 0.5 | 0.6 |
Net book value at 1 January 2024 | 0.1 | 0.6 | 0.7 |
The profit on disposal of property, plant and equipment in 2024 amounted to £nil (2023: £nil) and represented proceeds
received of £nil (2023: £nil) less the net book value of disposals of £nil (2023: £nil).
| Leasehold | Equipment | ||
| land and | and | ||
| buildings | vehicles | Total | |
| Company | £m | £m | £m |
| Cost | |||
At 1 January 2023 | 0.2 | 12.2 | 12.4 |
Additions | — | — | — |
Disposals | — | — | — |
At 31 December 2023 | 0.2 | 12.2 | 12.4 |
| Accumulated depreciation | |||
At 1 January 2023 | 0.1 | 11.4 | 11.5 |
Charged to the income statement | — | 0.2 | 0.2 |
Disposals | — | — | — |
At 31 December 2023 | 0.1 | 11.6 | 11.7 |
Net book value at 31 December 2023 | 0.1 | 0.6 | 0.7 |
Net book value at 1 January 2023 | 0.1 | 0.8 | 0.9 |
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Notes to the financial statements continued
16 Right of use assets
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Group | £m | £m | £m | £m |
| Cost | ||||
At 1 January | 72.8 | 71.0 | 23.8 | 22.9 |
Additions and revaluations | 1.3 | 1.8 | 0.7 | 0.9 |
Disposals | — | — | — | — |
At 31 December | 74.1 | 72.8 | 24.5 | 23.8 |
| Accumulated depreciation and impairment | ||||
At 1 January | 49.6 | 38.6 | 12.9 | 10.2 |
Charged to the income statement – depreciation | 4.6 | 6.9 | 1.3 | 2.7 |
Charged to the income statement – impairment | 3.5 | 4.1 | 2.9 | — |
At 31 December | 57.7 | 49.6 | 17.1 | 12.9 |
Net book value at 31 December | 16.4 | 23.2 | 7.4 | 10.9 |
Net book value at 1 January | 23.2 | 32.4 | 10.9 | 12.7 |
Lease liabilities are disclosed in note 26.
The additions and revaluations relate to a revaluation of a property leases and, in 2023, computer equipment which is
leased by the Group.
17 Acquisition of Snoop
The Group completed the acquisition of the entire share capital of Usnoop Limited, which trades as Snoop, on 7 August
2023 for consideration of £8.7m. Snoop is a money-saving financial technology company with customers across the UK.
Goodwill of £1.2m was recognised in relation to the acquisition.
Costs of £3.0m associated with the acquisition including due diligence, legal, advisory and tax fees were charged as an
exceptional cost in the prior year.
An assessment of the fair values of the identifiable assets and liabilities of Snoop as at the acquisition date was performed
and there has been no change in the fair values in 2024.
Snoop generated revenues of £0.4m and losses of £2.5m in the period from acquisition to 31 December 2023, which were
included in the consolidated statement of comprehensive income in 2023. If Snoop had been part of the Group for the 12
months to 31 December 2023, Group total income would be £489.6m and the statutory loss before tax would be £16.8m.
In 2024, the terms of certain post-consideration benefits were updated and a resulting cost of £1.7m recognised as an
exceptional item.
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Vanquis Banking Group plc Annual Report and Accounts 2024
170
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
| Cost | ||
At 1 January | 74.5 | 73.3 |
Additions | — | 1.2 |
Write-off | (71.2) | — |
At 31 December | 3.3 | 74.5 |
| Accumulated impairment | ||
At 1 January and 31 December | 2.1 | 2.1 |
Net book value at 31 December | 1.2 | 72.4 |
Net book value at 1 January | 72.4 | 71.2 |
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Notes to the financial statements continued
2024 | 2023 | |||||
| Acquisition | Computer | Acquisition | Computer | |||
| intangibles | software | Total | intangibles | software | Total | |
| Group | £m | £m | £m | £m | £m | £m |
| Cost | ||||||
At 1 January | 86.1 | 85.1 | 171.2 | 75.0 | 68.5 | 143.5 |
Additions | — | 12.5 | 12.5 | 11.1 | 19.0 | 30.1 |
Disposals | — | (15.5) | (15.5) | — | (2.4) | (2.4) |
At 31 December | 86.1 | 82.1 | 168.2 | 86.1 | 85.1 | 171.2 |
| Accumulated amortisation and impairment | ||||||
At 1 January | 70.4 | 26.4 | 96.8 | 62.5 | 17.7 | 80.2 |
Charged to the income statement – amortisation | 6.2 | 10.7 | 16.9 | 7.9 | 10.6 | 18.5 |
Charged to the income statement – impairment | — | 8.5 | 8.5 | — | — | — |
Disposals | — | (15.5) | (15.5) | — | (1.9) | (1.9) |
At 31 December | 76.6 | 30.1 | 106.7 | 70.4 | 26.4 | 96.8 |
Net book value at 31 December | 9.5 | 52.0 | 61.5 | 15.7 | 58.7 | 74.4 |
Net book value at 1 January | 15.7 | 58.7 | 74.4 | 12.5 | 50.8 | 63.3 |
20 Investment in subsidiaries
| Company | ||
| 2024 | 2023 | |
| £m | £m | |
| Cost | ||
At 1 January | 265.3 | 230.7 |
Additions | 85.9 | 34.8 |
Disposals | (1.5) | (0.2) |
At 31 December | 349.7 | 265.3 |
| Accumulated impairment losses | ||
At 1 January | 23.7 | 23.3 |
Charge to the income statement | 78.5 | 0.4 |
Disposals | (0.4) | — |
At 31 December | 101.8 | 23.7 |
Net book value at 31 December | 247.9 | 241.6 |
Net book value at 1 January | 241.6 | 207.4 |
The movements in 2024 reflect steps taken to make two non-trading companies solvent in advance of them entering
members’ voluntary liquidation. This included the subscription of £3.2m of shares in Yes Car Credit Limited and £75.2m of
shares in Provident Yes Car Credit Limited, both of which were subsequently impaired based on the value of the underlying
assets of the companies.
Additions also included steps taken to increase the investment value of Provident Financial Holdings Limited by £7.5m as
part of the transfer of trade and assets of its subsidiary PFG Corporate Services Limited, to Vanquis Bank Limited.
Financial statements
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172
20 Investment in subsidiaries continued
Due to indicators of impairment, an investment valuation review was performed at the balance sheet date for the
investment held in Provident Financial Holdings Limited utilising the higher of the discounted future cash flow forecasts of
the underlying business or fair value. Whilst no impairment is required, sensitivity analysis has been performed based on
the assumptions used in the cash flow valuations. A 1% movement in the discount rate would move the valuations by £92m,
sufficient headroom would remain to not require impairment.
Disposals including £1.1m (2023: £0.2m) in relation to the movement are in relation to the share options/awards provided
to the subsidiary employees. Under IFRS 2, the fair value of the share options/awards issued is required to be treated as
capital contribution and an investment in the relevant subsidiary, net of any share options/awards that have vested.
The movements in 2023 also reflect steps taken to make a number of dormant and non-trading companies solvent in
advance of them entering members’ voluntary liquidation. Included within the £34.8m of additions was the subscription
of a further £34.4m of shares in Provident Financial Holdings Limited and the transfer of the full 100% ordinary share
capital of Greenwood Personal Credit to the Company from another Group company equal to the company’s net asset
value of £0.4m.
The cost, accumulated impairment losses and carrying value of investments at 31 December 2024 are shown below:
| Accumulated | |||
| impairment | Carrying | ||
| Cost | losses | value | |
| Company | £m | £m | £m |
Provident Financial Holdings Limited | 238.6 | — | 238.6 |
Provident Financial Group Limited | 29.9 | (22.6) | 7.3 |
Provident Yes Car Credit Limited | 75.2 | (75.2) | — |
Yes Car Credit Limited | 3.2 | (3.2) | — |
Other | 2.8 | (0.8) | 2.0 |
Net book value at 31 December | 349.7 | (101.8) | 247.9 |
The following are the subsidiary undertakings which, in the opinion of the directors, principally affect the profit or assets
of the Group or are a guaranteeing subsidiary of the Group’s certain borrowings. A full list of subsidiary undertakings in
included in note 36. All subsidiaries are consolidated and held directly by the Company except for those noted below,
which are held by wholly owned intermediate companies.
| Country of | Class | % | |||
Company | Activity | incorporation | of capital | holding | |
Vanquis Bank | Vanquis Bank Limited | Financial services | England | Ordinary | 100 1 |
Moneybarn | Duncton Group Limited | Financial services | England | Ordinary | 100 1 |
Moneybarn Group Limited | Financial services | England | Ordinary | 100 1 | |
Moneybarn No. 1 Limited | Financial services | England | Ordinary | 100 1 | |
Central | Provident Financial Holdings Limited | Intermediate holding company | England | Ordinary | 100 |
1 Shares held by wholly owned intermediate companies.
The above companies operate principally in their country of incorporation.
21 Retirement benefit asset
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173
Notes to the financial statements continued
21 Retirement benefit asset continued
(a) Pension schemes – defined benefit continued
| Group and Company | ||||
2024 | 2023 | |||
£m | % | £m | % | |
Equities | 63.7 | 14 | 55.5 | 11 |
Corporate bonds | 46.6 | 10 | 191.0 | 37 |
Government bonds | 316.8 | 70 | 145.1 | 28 |
Index linked government bonds | — | — | 110.9 | 22 |
Other quoted securities | — | — | 9.5 | 2 |
Cash and money market funds | 26.6 | 6 | 0.9 | — |
Total fair value of scheme assets | 453.7 | 100 | 512.9 | 100 |
Present value of funded defined benefit obligation | (425.9) | (474.7) | ||
Net retirement benefit asset recognised in the balance sheet | 27.8 | 38.2 |
| 2024 | 2023 | |
| Group and Company | £m | £m |
Pension asset as at 1 January | 38.2 | 30.7 |
Cash contributions made by the Group | 0.8 | 0.8 |
Return on assets being held to meet pension obligations in excess of discount rate | (54.6) | (7.8) |
Change in demographic assumptions | (0.9) | 19.3 |
Increase/(decrease) in discount rate used to discount future liabilities | 48.2 | (7.4) |
Change in inflation rate used to forecast pensions | (4.5) | 1.1 |
Actuarial/membership experience | 0.2 | 1.2 |
Other | 0.4 | 0.3 |
Pension asset as at 31 December | 27.8 | 38.2 |
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Administration costs and taxes | (1.3) | (1.1) |
Interest on scheme liabilities | (21.7) | (23.0) |
Interest on scheme assets | 23.4 | 24.4 |
Credit recognised in the income statement | 0.4 | 0.3 |
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174
21 Retirement benefit asset continued
(a) Pension schemes – defined benefit continued
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Fair value of scheme assets at 1 January | 512.9 | 520.7 |
Interest on scheme assets | 23.4 | 24.4 |
Actuarial movement on scheme assets | (54.6) | (7.8) |
Contributions by the Group/Company | 0.8 | 0.8 |
Net benefits paid out | (28.8) | (25.2) |
Fair value of scheme assets at 31 December | 453.7 | 512.9 |
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Present value of the defined benefit obligation at 1 January | (474.7) | (490.0) |
Administration costs and taxes | (1.3) | (1.1) |
Interest on scheme liabilities | (21.7) | (23.0) |
Actuarial movement – experience | 0.2 | 1.2 |
Actuarial movement – demographic assumptions | (0.9) | 19.3 |
Actuarial movement – financial assumptions | 43.7 | (6.3) |
Net benefits paid out | 28.8 | 25.2 |
Present value of the defined benefit obligation at 31 December | (425.9) | (474.7) |
| Group and Company | ||
| 2024 | 2023 | |
| % | % | |
Price inflation – RPI | 3.20 | 3.10 |
Price inflation – CPI | 2.75 | 2.60 |
Rate of increase to pensions in payment | 3.00 | 2.95 |
Inflationary increases to pensions in deferment | 2.75 | 2.60 |
Discount rate | 5.55 | 4.65 |
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Notes to the financial statements continued
21 Retirement benefit asset continued
(a) Pension schemes – defined benefit continued
Male | Female | |||
| 2024 | 2023 | 2024 | 2023 | |
| Group and Company | years | years | years | years |
Current pensioner aged 65 | 21.2 | 21.2 | 23.0 | 22.9 |
Current member aged 45 from age 65 | 21.2 | 21.1 | 24.0 | 23.8 |
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Discount rate decreased by 0.5% | 24.4 | 30.5 |
Inflation increased by 0.1% | 2.2 | 2.7 |
Life expectancy increased by one year | 16.4 | 19.5 |
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Interest on scheme assets | 23.4 | 24.4 |
Actuarial movement on scheme assets | (54.6) | (7.8) |
Actual return on scheme assets | (31.2) | 16.6 |
| Group and Company | ||
| 2024 | 2023 | |
| £m | £m | |
Actuarial movement on scheme assets | (54.6) | (7.8) |
Actuarial movement on scheme liabilities | 43.0 | 14.2 |
Total movement recognised in other comprehensive income in the year | (11.6) | 6.4 |
Cumulative movement recognised in other comprehensive income | (159.9) | (148.3) |
| 2024 | 2023 | |
| Group and Company | £m | £m |
Fair value of scheme assets | 453.7 | 512.9 |
Present value of funded defined benefit obligation | (425.9) | (474.7) |
Retirement benefit asset recognised in the balance sheet | 27.8 | 38.2 |
| Experience (losses)/gains on scheme assets: | ||
– amount (£m) | (54.6) | (7.8) |
– percentage of scheme assets (%) | (12.0) | (1.5) |
| Experience (gains)/losses on scheme liabilities: | ||
– amount (£m) | (0.2) | (1.2) |
– percentage of scheme liabilities (%) | — | 0.3 |
Financial statements
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176
21 Retirement benefit asset continued
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Fair value of derivatives | £m | £m | £m | £m |
Securitisation balance guarantee swap | (0.3) | 1.3 | — | — |
Group balance guarantee swap | (0.2) | (1.8) | (0.2) | (1.8) |
Tier 2 swap | (1.3) | — | (1.3) | — |
Internal retail deposit swaps | — | — | 0.4 | (0.2) |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Notional value of derivatives | £m | £m | £m | £m |
Securitisation balance guarantee swap | 296.4 | 304.7 | — | — |
Group balance guarantee swap | 296.4 | 304.7 | 296.4 | 304.7 |
Tier 2 swap | 200.0 | 200.0 | 200.0 | 200.0 |
Internal retail deposit swaps | — | — | 130.0 | 380.0 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Fair value adjustment for hedged risk | £m | £m | £m | £m |
Securitisation balance guarantee swap (hedge accounting terminated in 2022) | (0.9) | (3.2) | — | — |
Tier 2 swap | 2.5 | 1.0 | 2.5 | 1.0 |
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Notes to the financial statements continued
22 Derivative financial instruments continued
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Hedge ineffectiveness | £m | £m | £m | £m |
Securitisation balance guarantee swap (hedge accounting terminated in 2022) | — | — | — | — |
Tier 2 swap | — | 0.1 | — | 0.1 |
Total | — | 0.1 | — | 0.1 |
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178
23 Deferred tax continued
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| Asset/(liability) | £m | £m | £m | £m |
At 1 January | 8.4 | 14.5 | (7.8) | (5.3) |
Credit/(charge) to the income statement | 13.7 | (0.4) | (0.7) | (0.9) |
Acquisition of Snoop | — | (2.8) | — | — |
| Credit/(charge) on other comprehensive income prior to impact of change in UK tax | ||||
rate | 2.9 | (1.5) | 2.9 | (1.5) |
| Impact of change in UK tax rate: | ||||
– (charge)/credit to the income statement | — | (1.3) | — | — |
– (charge)/credit to other comprehensive income | — | (0.1) | — | (0.1) |
At 31 December | 25.0 | 8.4 | (5.6) | (7.8) |
| 2024 | |||||||
| Accelerated | Retirement | Other | |||||
| capital | Visa | Tax | benefit | temporary | |||
| allowances | shares | losses | IFRS 9 | obligations | differences | Total | |
| Group – asset/(liability) | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 1.4 | (1.4) | 1.9 | 19.6 | (9.6) | (3.5) | 8.4 |
Credit/(charge) to the income statement | 1.3 | 0.9 | 17.6 | (5.0) | (0.3) | (0.8) | 13.7 |
Acquisition of Snoop | — | — | — | — | — | — | — |
Credit/(charge) on other comprehensive income prior to change in UK tax rate | — | — | — | — | 2.9 | — | 2.9 |
| Impact of change in UK tax rate: | |||||||
– (charge)/credit to the income statement | — | — | — | — | — | — | — |
– (charge)/credit to other comprehensive income | — | — | — | — | — | — | — |
At 31 December | 2.7 | (0.5) | 19.5 | 14.6 | (7.0) | (4.3) | 25.0 |
| 2023 | |||||||
| Accelerated | Retirement | Other | |||||
| capital | Visa | Tax | benefit | temporary | |||
| allowances | shares | losses | IFRS 9 | obligations | differences | Total | |
| Group – asset/(liability) | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 1.6 | (3.0) | 0.6 | 26.3 | (7.7) | (3.3) | 14.5 |
(Charge)/credit to the income statement | (0.1) | 1.2 | 1.3 | (4.6) | (0.3) | 2.1 | (0.4) |
Acquisition of Scoop | — | — | — | — | — | (2.8) | (2.8) |
Credit/(charge) on other comprehensive income prior to change in UK tax rate | — | — | — | — | (1.5) | — | (1.5) |
| Impact of change in UK tax rate: | |||||||
– (charge)/credit to the income statement | (0.1) | 0.4 | — | (2.1) | — | 0.5 | (1.3) |
– credit/(charge) to other comprehensive income | — | — | — | — | (0.1) | — | (0.1) |
At 31 December | 1.4 | (1.4) | 1.9 | 19.6 | (9.6) | (3.5) | 8.4 |
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Notes to the financial statements continued
23 Deferred tax continued
Deferred tax assets on losses and other temporary differences continued
2024 | 2023 | ||||||||
| Accelerated | Other | Retirement | Accelerated | Other | Retirement | ||||
| capital | temporary | benefit | capital | Tax | temporary | benefit | |||
| allowances | differences | obligations | Total | allowances | losses | differences | obligations | Total | |
| Company – asset/(liability) | £m | £m | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 0.3 | 1.5 | (9.6) | (7.8) | 0.3 | 0.6 | 1.5 | (7.7) | (5.3) |
| Credit/(charge) to the income | |||||||||
statement | 0.1 | (0.5) | (0.3) | (0.7) | — | (0.6) | — | (0.3) | (0.9) |
Credit/(charge) on other comprehensive income | — | — | 2.9 | 2.9 | — | — | — | (1.5) | (1.5) |
| Impact of change in UK tax rate: | |||||||||
– (charge)/credit to other comprehensive income | — | — | — | — | — | — | — | (0.1) | (0.1) |
At 31 December | 0.4 | 1.0 | (7.0) | (5.6) | 0.3 | — | 1.5 | (9.6) | (7.8) |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Trade payables | 6.1 | 7.5 | 0.5 | — |
Amounts owed to Group undertakings | — | — | 14.5 | 228.7 |
Other payables including taxation and social security | 5.1 | 5.0 | 2.9 | 1.2 |
Accruals | 34.9 | 31.6 | 3.0 | 5.5 |
Total trade and other payables | 46.1 | 44.1 | 20.9 | 235.4 |
2024 | 2023 | |||||||||||
| Customer | Legal | Customer | ||||||||||
| compliance | Dilapidations | Scheme | Redundancy | settlement | Others | Total | Scheme | ROP | compliance | Others | Total | |
| Provisions | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m |
At 1 January | 3.5 | 0.2 | 1.0 | — | — | 1.1 | 5.8 | 1.2 | 2.0 | 1.4 | 0.6 | 5.2 |
Created in the year | 16.0 | 6.2 | — | 6.2 | 1.5 | 0.1 | 30.0 | — | — | 10.7 | 0.3 | 11.0 |
| Reclassified | ||||||||||||
in the year | — | — | — | — | (1.4) | — | (1.4) | — | — | — | 0.6 | 0.6 |
Utilised in the year | (12.1) | — | — | (4.9) | — | (0.6) | (17.6) | (0.2) | — | (8.4) | (0.2) | (8.8) |
Released in the year | — | — | (1.0) | — | (0.1) | (0.2) | (1.3) | — | (2.0) | (0.2) | — | (2.2) |
| At 31 | ||||||||||||
December | 7.4 | 6.4 | — | 1.3 | — | 0.4 | 15.5 | 1.0 | — | 3.5 | 1.3 | 5.8 |
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25 Provisions continued
| Company | |||||
2024 | 2023 | ||||
| Redundancy | Dilapidations | Total | Scheme | Total | |
| Provisions | £m | £m | £m | £m | £m |
At 1 January | — | — | — | 0.1 | 0.1 |
Created in the year | 2.5 | 5.3 | 7.8 | — | — |
Utilised in the year | (2.2) | — | (2.2) | (0.1) | (0.1) |
Released in the year | — | — | — | — | — |
At 31 December | 0.3 | 5.3 | 5.6 | — | — |
26 Lease liabilities
A maturity analysis of the lease liabilities is shown below:
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Due within one year | 12.5 | 10.7 | 4.7 | 3.7 |
Due between one and five years | 13.7 | 21.2 | 3.2 | 5.3 |
Due in more than five years | 9.0 | 12.7 | 4.8 | 6.4 |
Total | 35.2 | 44.6 | 12.7 | 15.4 |
Unearned finance cost | (2.7) | (3.7) | (1.4) | (1.8) |
Total lease liabilities | 32.5 | 40.9 | 11.3 | 13.6 |
Right of use assets are disclosed in note 16.
Lease payments for the Group of £12.7m (2023: £11.2m) include: (i) capital repayments of £9.7m (2023: £10.2m); (ii) interest
of £3.0m (2023: £1.0m); and (iii) short-term lease cash outflows of £nil (2023: £nil). At 31 December 2024, the Group is also
committed to £nil (2023: £nil) for short-term leases. Total cash outflows for the Company amounted to £5.2m (2023: £4.4m)
and include: (i) capital repayments of £3.0m (2023: £4.0m); and (ii) interest of £2.2m (2023: £0.4m).
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Notes to the financial statements continued
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Retail deposits | 2,428.2 | 1,950.5 | — | — |
Bank and other borrowings | 412.5 | 583.5 | 207.2 | 206.7 |
Total | 2,840.7 | 2,534.0 | 207.2 | 206.7 |
Fair value adjustment for hedged risk | (2.5) | (1.0) | (2.5) | (1.0) |
Total reported retail deposits and borrowings | 2,838.2 | 2,533.0 | 204.7 | 205.7 |
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
Retail deposits: | 2,398.9 | 1,924.9 |
– accrued interest | 29.3 | 25.6 |
Total retail deposits (note (b)) | 2,428.2 | 1,950.5 |
| Bank and other borrowings: | ||
– Vehicle Finance securitisation (note (e)) | 200.0 | 200.0 |
– Tier 2 (note (f)) | 200.0 | 200.0 |
– Central Bank facilities (note (g)) | 5.0 | 174.0 |
– bank overdrafts | 1.1 | 1.5 |
– accrued interest | 8.5 | 10.8 |
– arrangement fees | (2.1) | (2.8) |
Total bank and other borrowings | 412.5 | 583.5 |
Total retail deposits and borrowings | 2,840.7 | 2,534.0 |
| 2024 | 2023 | |
| Group | £m | £m |
At 1 January | 1,950.5 | 1,100.6 |
New funds received | 1,107.5 | 1,100.0 |
Maturities | (1,082.9) | (529.6) |
Retentions | 537.1 | 313.4 |
Cancellations | (135.9) | (68.6) |
Interest | 51.9 | 34.7 |
At 31 December | 2,428.2 | 1,950.5 |
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27 Borrowings continued
2024 | 2023 | |||
| Borrowing | Borrowing | |||
| facilities | facilities | |||
| available | Borrowings | available | Borrowings | |
| Group | £m | £m | £m | £m |
| Repayable: | ||||
On demand (uncommitted) | 377.1 | 377.1 | 1.5 | 1.5 |
In less than one year | 1,462.9 | 1,462.9 | 1,115.4 | 1,115.4 |
Between one and two years | 621.4 | 621.4 | 803.8 | 803.8 |
Between two and five years | 143.6 | 143.6 | 379.7 | 379.7 |
In more than five years | 200.0 | 200.0 | 200.0 | 200.0 |
Accrued interest | — | 37.8 | — | 36.4 |
Arrangement fees | — | (2.1) | — | (2.8) |
Total Group | 2,805.0 | 2,840.7 | 2,500.4 | 2,534.0 |
2024 | 2023 | |||
| Borrowing | Borrowing | |||
| facilities | facilities | |||
| available | Borrowings | available | Borrowings | |
| Company | £m | £m | £m | £m |
| Repayable: | ||||
On demand (uncommitted) | — | — | — | — |
In less than one year | — | — | — | — |
Between one and two years | — | — | — | — |
Between two and five years | — | — | — | — |
In more than five years | 200.0 | 200.0 | 200.0 | 200.0 |
Accrued interest | — | 8.2 | — | 8.2 |
Arrangement fees | — | (1.0) | — | (1.5) |
Total Company | 200.0 | 207.2 | 200.0 | 206.7 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
Fixed | 1,644.7 | 2,157.2 | 207.2 | 206.7 |
Floating | 1,196.0 | 376.8 | — | — |
Total | 2,840.7 | 2,534.0 | 207.2 | 206.7 |
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Notes to the financial statements continued
27 Borrowings continued
Group | Company | |||||||
2024 | 2023 | 2024 | 2023 | |||||
| Weighted | Weighted | Weighted | Weighted | Weighted | Weighted | Weighted | Weighted | |
| average | average | average | average | average | average | average | average | |
| interest | period to | interest | period to | interest | period to | interest | period to | |
| rate | maturity | rate | maturity | rate | maturity | rate | maturity | |
| % | years | % | years | % | years | % | years | |
Sterling | 5.0 | 1.2 | 5.0 | 1.8 | 8.9 | 7.0 | 8.9 | 8.0 |
Group 2024 | Company 2024 | |||
| Book value | Fair value | Book value | Fair value | |
| £m | £m | £m | £m | |
Retail deposits | 2,428.2 | 2,400.4 | — | — |
Bank loans and overdrafts | 1.1 | 1.1 | — | — |
Securitisation | 200.0 | 199.1 | — | — |
Tier 2 | 204.7 | 168.8 | 204.7 | 168.8 |
Central Bank facilities | 4.2 | 4.2 | — | — |
Total | 2,838.2 | 2,773.6 | 204.7 | 168.8 |
Group 2023 | Company 2023 | |||
| Book value | Fair value | Book value | Fair value | |
| £m | £m | £m | £m | |
Retail deposits | 1,950.5 | 1,916.2 | — | — |
Bank loans and overdrafts | 1.5 | 1.5 | — | — |
Securitisation | 200.2 | 200.8 | — | — |
Tier 2 | 205.7 | 184.1 | 205.7 | 184.1 |
Central Bank facilities | 175.1 | 175.1 | — | — |
Total | 2,533.0 | 2,477.7 | 205.7 | 184.1 |
Financial statements
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28 Financial instruments
| 2024 | ||||
| Items | Amortised | Non-financial | ||
| held at FVTPL | cost | assets/liabilities | Total | |
| Group | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | — | 1,003.9 | — | 1,003.9 |
Amounts receivable from customers | — | 2,153.7 | — | 2,153.7 |
Trade and other receivables | — | 42.4 | 30.1 | 72.5 |
Investments held at fair value through profit and loss | 2.3 | — | — | 2.3 |
Current tax asset | — | — | 3.9 | 3.9 |
Property, plant and equipment | — | — | 7.1 | 7.1 |
Right of use assets | — | — | 16.4 | 16.4 |
Goodwill | — | — | 1.2 | 1.2 |
Other intangible assets | — | — | 61.5 | 61.5 |
Retirement benefit asset | — | — | 27.8 | 27.8 |
Deferred tax assets | — | — | 25.0 | 25.0 |
Total assets | 2.3 | 3,200.0 | 173.0 | 3,375.3 |
| Liabilities | ||||
Trade and other payables | — | 46.1 | — | 46.1 |
Provisions | — | — | 15.5 | 15.5 |
Lease liabilities | — | 32.5 | — | 32.5 |
Retail deposits | — | 2,428.2 | — | 2,428.2 |
Bank and other borrowings | — | 410.0 | — | 410.0 |
Derivative financial instruments | 1.8 | — | — | 1.8 |
Total liabilities | 1.8 | 2,916.8 | 15.5 | 2,934.1 |
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Notes to the financial statements continued
28 Financial instruments continued
(a) Classification and measurement continued
2023 (restated) 1 | ||||
| Items | Amortised | Non-financial | ||
| held at FVTPL | cost | assets/liabilities | Total | |
| Group | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | — | 743.3 | — | 743.3 |
Amounts receivable from customers | — | 2,155.8 | — | 2,155.8 |
Trade and other receivables | — | 27.6 | 28.3 | 55.9 |
Investments held at fair value through profit and loss | 5.4 | — | — | 5.4 |
Current tax asset | — | — | 8.3 | 8.3 |
Property, plant and equipment | — | — | 8.1 | 8.1 |
Right of use assets | — | — | 23.2 | 23.2 |
Goodwill | — | — | 72.4 | 72.4 |
Other intangible assets | — | — | 74.4 | 74.4 |
Retirement benefit asset | — | — | 38.2 | 38.2 |
Derivative financial instruments | 1.3 | — | — | 1.3 |
Deferred tax assets | — | — | 8.4 | 8.4 |
Total assets | 6.7 | 2,926.7 | 261.3 | 3,194.7 |
| Liabilities | ||||
Trade and other payables | — | 44.1 | — | 44.1 |
Provisions | — | — | 5.8 | 5.8 |
Lease liabilities | — | 40.9 | — | 40.9 |
Retail deposits | — | 1,950.5 | — | 1,950.5 |
Bank and other borrowings | — | 582.5 | — | 582.5 |
Derivative financial instruments | 1.8 | — | — | 1.8 |
Total liabilities | 1.8 | 2,618.0 | 5.8 | 2,625.6 |
| 2024 | ||||
| Non- | ||||
| Items | financial | |||
| held at | Amortised | assets/ | ||
| FVTPL | cost | liabilities | Total | |
| Company | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | — | 10.5 | — | 10.5 |
Trade and other receivables | — | 768.4 | — | 768.4 |
Property, plant and equipment | — | — | 0.5 | 0.5 |
Right of use assets | — | — | 7.4 | 7.4 |
Other intangible assets | — | — | 1.4 | 1.4 |
Investment in subsidiaries | — | — | 247.9 | 247.9 |
Retirement benefit asset | — | — | 27.8 | 27.8 |
Derivative financial instruments | 0.6 | — | — | 0.6 |
Total assets | 0.6 | 778.9 | 285.0 | 1,064.5 |
| Liabilities | ||||
Trade and other payables | — | 20.9 | — | 20.9 |
Provisions | — | — | 5.6 | 5.6 |
Lease liabilities | — | 11.3 | — | 11.3 |
Bank and other borrowings | — | 204.7 | — | 204.7 |
Derivative financial instruments | 1.7 | — | — | 1.7 |
Current tax liabilities | — | — | 8.2 | 8.2 |
Deferred tax liabilities | — | — | 5.6 | 5.6 |
Total liabilities | 1.7 | 236.9 | 19.4 | 258.0 |
Financial statements
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28 Financial instruments continued
(a) Classification and measurement continued
| 2023 | ||||
| Non- | ||||
| Items | financial | |||
| held at | Amortised | assets/ | ||
| FVTPL | cost | liabilities | Total | |
| Company | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | — | 14.7 | — | 14.7 |
Trade and other receivables | — | 913.0 | 1.9 | 914.9 |
Property, plant and equipment | — | — | 0.7 | 0.7 |
Right of use assets | — | — | 10.9 | 10.9 |
Other intangible assets | — | — | 1.7 | 1.7 |
Investment in subsidiaries | — | — | 241.6 | 241.6 |
Retirement benefit asset | — | — | 38.2 | 38.2 |
Derivative financial instruments | 1.0 | — | — | 1.0 |
Total assets | 1.0 | 927.7 | 295.0 | 1,223.7 |
| Liabilities | ||||
Trade and other payables | — | 235.4 | — | 235.4 |
Current tax liability | — | — | 3.1 | 3.1 |
Provisions | — | — | — | — |
Lease liabilities | — | 13.6 | — | 13.6 |
Bank and other borrowings | — | 205.7 | — | 205.7 |
Derivative financial instruments | 3.0 | — | — | 3.0 |
Deferred tax liabilities | — | — | 7.8 | 7.8 |
Total liabilities | 3.0 | 454.7 | 7.8 | 468.6 |
Group | Company | |||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |
| £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
Investments held at fair value through P&L: | ||||||||||||
– Visa Inc shares | — | — | 2.3 | — | — | 5.4 | — | — | — | — | — | — |
Derivatives held at fair value through P&L: | ||||||||||||
| – securitisation balance | ||||||||||||
guarantee swap | — | — | (0.3) | — | — | 1.3 | — | — | — | — | — | — |
– Group balance guarantee swap | — | — | (0.2) | — | — | (1.8) | — | — | (0.2) | — | — | (1.8) |
– Tier 2 swap | — | (1.3) | — | — | — | — | — | (1.3) | — | — | — | — |
– internal retail deposit swaps | — | — | — | — | — | — | — | 0.4 | — | — | (0.2) | — |
Total | — | (1.3) | 1.8 | — | — | 4.9 | — | 0.9 | (0.2) | — | (0.2) | (1.8) |
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Notes to the financial statements continued
28 Financial instruments continued
(b) Fair values of financial assets and liabilities held at fair value continued
| Group | ||
| 2024 | 2023 | |
| £m | £m | |
At 1 January | 5.4 | 10.7 |
Gain recognised in income statement | 1.2 | 0.9 |
Disposal of investment | (4.3) | (6.2) |
At 31 December | 2.3 | 5.4 |
Group | Company | |||
| 2024 | 2023 | 2024 | 2023 | |
| £m | £m | £m | £m | |
At 1 January | (0.5) | (4.0) | (2.0) | (15.3) |
Fair value (loss)/gain recognised in income statement | (1.3) | 3.5 | 0.9 | 13.3 |
At 31 December | (1.8) | (0.5) | (1.1) | (2.0) |
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28 Financial instruments continued
2024 | 2023 | |||
| Fair value | Book value | Fair value | Book value | |
| Group | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | 1,003.9 | 1,003.9 | 743.3 | 743.3 |
Amounts receivable from customers | 2,488.5 | 2,153.7 | 2,780.5 | 2,155.8 |
Trade and other receivables | 72.5 | 72.5 | 55.9 | 55.9 |
Total assets | 3,564.9 | 3,230.1 | 3,579.7 | 2,955.0 |
| Liabilities | ||||
Retail deposits | 2,400.4 | 2,428.2 | 1,916.2. | 1,950.5 |
Bank and other borrowings | 373.2 | 410.0 | .561.5 | 582.5 |
Trade and other payables | 46.1 | 46.1 | 44.1 | 44.1 |
Lease liabilities | 32.5 | 32.5 | 40.9 | 40.9 |
Total liabilities | 2,852.2 | 2,916.8 | 2,562.7 | 2,618.0 |
2024 | 2023 | |||
| Fair value | Book value | Fair value | Book value | |
| Company | £m | £m | £m | £m |
| Assets | ||||
Cash and cash equivalents | 10.5 | 10.5 | 14.7 | 14.7 |
Trade and other receivables | 768.4 | 768.4 | 914.9 | 914.9 |
Total assets | 778.9 | 778.9 | 929.6 | 929.6 |
| Liabilities | ||||
Bank and other borrowings | 168.8 | 204.7 | 184.1 | 205.7 |
Trade and other payables | 20.9 | 20.9 | 235.4 | 235.4 |
Lease liabilities | 11.3 | 11.3 | 13.6 | 13.6 |
Total liabilities | 201.0 | 236.9 | 433.1 | 454.7 |
| 2024 | 2023 | ||
| Issued and | Issued and | ||
| Group and Company | fully paid | fully paid | |
Ordinary shares of 20 8⁄11p each | – £m | 53.2 | 53.2 |
– number (m) | 256.5 | 256.5 |
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Notes to the financial statements continued
29 Share capital continued
| 2024 | 2023 | |
| Group and Company | m | m |
At 1 January | 256.5 | 253.8 |
Shares issued pursuant to the exercise/vesting of options and awards | — | 0.1 |
Shares issued on acquisition of Snoop | — | 2.6 |
At 31 December | 256.5 | 256.5 |
30 Share-based payments
The Group issues share options and awards to employees as part of its employee remuneration packages. The Group
operates five equity-settled share schemes: the Long Term Incentive Scheme (LTIS), the Restricted Share Plan (RSP), the
Company Share Option Plan (CSOP), employees’ savings-related share option schemes typically referred to as Save As You
Earn schemes (SAYE), and the Deferred Bonus Plan (DBP).
When an equity-settled share option or award is granted, a fair value is calculated based on the share price at grant date,
the probability of the option/award vesting, the Group’s recent share price volatility, and the risk associated with the option/
award. A fair value is calculated based on the value of awards granted and adjusted at each balance sheet date for the
probability of vesting against performance conditions.
The fair value of all options/awards is charged to the income statement on a straight-line basis over the vesting period of
the underlying option/award.
During 2024, awards/options have been granted under the RSP scheme (2023: awards/options have been granted under
the RSP/CSOP, DBP, LTIS and SAYE (UK) schemes).
(a) Equity-settled schemes
The charge to the income statement in 2023 for equity-settled schemes was £2.7m for the Group (2023: £4.6m) and £1.5m
for the Company (2023: £2.4m).
The fair value per award/option granted and the assumptions used in the calculation of the equity-settled share-based
payment charges for the Group and the Company are as follows:
2024 | 2023 | ||||
Group | RSP | RSP/CSOP | DBP/PSP | LTIS | SAYE |
Grant date | 7 May 2024 | 8 Sep 2023 | 11 Apr 2023 | 8 Sep 2023 | 3 Oct 2023 |
| & 11 Apr 2023 | |||||
Share price at grant date (£) | 0.50 | 1.17 & 2.31 | 2.31 | 1.17 | 1.19 |
Exercise price (£) | — | — | — | — | 0.87 |
Vesting period (years) | 3 | 3 | 3 | 4 | 3 & 5 |
Expected volatility | — | — | — | — | 52.0%–56.7% |
Award/option life (years) | 3 | 3 | 3 | 4 | Up to 5 |
Expected life (years) | 3 | 3 | 3 | 4 | Up to 5 |
Risk-free rate | — | — | — | — | 4.7%–4.9% |
Expected dividends expressed as a dividend yield | — | — | — | — | 3.4%–6.9% |
Fair value per award/option (£) | 0.48 | 0.75 & 1.84 | 1.84 | 0.75 | 0.25–0.26 |
The expected volatility is based on historical volatility over the last three or five years depending on the length of the option/
award. The expected life is the average expected period to exercise. The risk-free rate of return is the yield on zero coupon
UK Government bonds of a similar duration to the life of the share option.
Financial statements
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30 Share-based payments continued
(a) Equity-settled schemes continued
A reconciliation of award/share option movements during the year is shown below:
RSP/CSOP | DBP | LTIS | SAYE | |||||
| Weighted | Weighted | Weighted | Weighted | |||||
| average | average | average | average | |||||
| exercise | exercise | exercise | exercise | |||||
| price | price | price | price | |||||
Group | Number | £ | Number | £ | Number | £ | Number | £ |
Outstanding at 1 January 2024 | 6,479,601 | — | 664,572 | — | 2,821,336 | — | 5,795,672 | 1.04 |
Awarded/granted | 5,093,207 | — | — | — | — | — | — | — |
Lapsed | (1,660,998) | — | — | — | — | — | (2,464,291) | 1.19 |
Vested | — | — | — | — | — | — | — | — |
Exercised | (756,405) | — | — | — | — | — | — | — |
Outstanding at 31 December 2024 | 9,155,405 | — | 664,572 | — | 2,821,336 | — | 3,331,381 | 0.93 |
Exercisable at 31 December 2024 | 166,038 | — | — | — | — | — | 86,387 | 1.01 |
RSP/CSOP | DBP | LTIS | SAYE | |||||
| Weighted | Weighted | Weighted | Weighted | |||||
| average | average | average | average | |||||
| exercise | exercise | exercise | exercise | |||||
| price | price | price | price | |||||
Group | Number | £ | Number | £ | Number | £ | Number | £ |
Outstanding at 1 January 2023 | 5,106,736 | — | 586,104 | — | 8,407 | — | 2,980,151 | 1.77 |
Awarded/granted | 4,593,575 | — | 315,661 | — | 2,821,336 | — | 4,739,225 | 0.87 |
Lapsed | (2,055,397) | — | — | — | (8,407) | — | (1,869,066) | 1.73 |
Vested | (313,610) | — | (237,193) | — | — | — | — | — |
Exercised | (851,703) | — | — | — | — | — | (54,638) | 1.82 |
Outstanding at 31 December 2023 | 6,479,601 | — | 664,572 | — | 2,821,336 | — | 5,795,672 | 1.04 |
Exercisable at 31 December 2023 | 12,870 | — | — | — | — | — | 38,292 | 1.65 |
The amounts included in the RSP/CSOP table reflect the total amount of shares awarded under both schemes.
Share awards outstanding under the LTIS at 31 December 2024 had an exercise price of £nil (2023: £nil) and a weighted
average remaining contractual life of 2.7 years (2023: 3.8 years). Share options outstanding under the SAYE schemes at
31 December 2024 had exercise prices ranging from 87p to 284p (2023: 87p to 323p) and a weighted average remaining
contractual life of 0.9 years (2023: 1.8 years). Share awards outstanding under the DBP schemes at 31 December 2024 had
an exercise price of £nil (2023: £nil) and a weighted average remaining contractual life of 0.7 years (2023: 1.4 years). Share
awards outstanding under the RSP at 31 December 2024 have an exercise price of £nil (2023: £nil) and a weighted average
remaining contractual life of 1.6 years (2023: 1.7 years). Share awards outstanding under the CSOP schemes at 31 December
2024 had exercise prices ranging from 48p to 296p (2023: 75p to 334p) and a weighted average remaining contractual life
of 1.6 years (2023: 1.7 years).
RSP/CSOP | DBP/PSP | SAYE | ||||
| Weighted | Weighted | Weighted | ||||
| average | average | average | ||||
| exercise | exercise | exercise | ||||
| price | price | price | ||||
Company | Number | £ | Number | £ | Number | £ |
Outstanding at 1 January 2024 | 4,286,055 | — | 571,865 | — | 1,019,026 | 1.10 |
Awarded/granted | 3,513,681 | — | — | — | — | — |
Lapsed | (1,190,461) | — | — | — | (285,676) | 1.15 |
Vested | — | — | — | — | — | — |
Exercised | (468,406) | — | — | — | — | — |
Outstanding at 31 December 2024 | 6,140,869 | — | 571,865 | — | 733,350 | 0.93 |
Exercisable at 31 December 2024 | 107,486 | — | — | — | 12,587 | 1.43 |
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
191
Notes to the financial statements continued
30 Share-based payments continued
(a) Equity-settled schemes continued
RSP/CSOP | DBP/PSP | SAYE | ||||
| Weighted | Weighted | Weighted | ||||
| average | average | average | ||||
| exercise | exercise | exercise | ||||
| price | price | price | ||||
Company | Number | £ | Number | £ | Number | £ |
Outstanding at 1 January 2023 | 3,110,201 | — | 429,067 | — | 510,019 | 1.74 |
Awarded/granted | 3,099,161 | — | 315,661 | — | 888,996 | 0.87 |
Lapsed | (1,360,464) | — | — | — | (362,957) | 1.67 |
Vested | (117,589) | — | (172,863) | — | — | — |
Exercised | (445,254) | — | — | — | (17,032) | 1.82 |
Outstanding at 31 December 2023 | 4,286,055 | — | 571,865 | — | 1,019,026 | 1.10 |
Exercisable at 31 December 2023 | — | — | — | — | — | — |
Share options outstanding under the SAYE schemes at 31 December 2024 had exercise prices ranging from 87p to 284p
(2023: 87p to 323p) and a weighted average remaining contractual life of 0.9 years (2023: 1.4 years). Share awards
outstanding under the DBP/PSP schemes at 31 December 2024 had an exercise price of £nil (2023: £nil) and a weighted
average remaining contractual life of 0.8 years (2023: 1.8 years). Share awards outstanding under the RSP schemes at
31 December 2024 had an exercise price of £nil (2023: £nil) and a weighted average remaining contractual life of 1.6 years
(2023: 1.7 years). Share awards outstanding under the CSOP schemes at 31 December 2024 had exercise prices ranging
from 48p to 296p (2023: 75p to 334p) and a weighted average remaining contractual life of 1.6 years (2023: 1.7 years).
| Share- | ||||
| Profit | Capital | based | Total | |
| retained by | redemption | payment | other | |
| subsidiary | reserve | reserve | reserves | |
| Group | £m | £m | £m | £m |
At 1 January 2023 | 0.8 | 3.6 | 8.0 | 12.4 |
Share-based payment charge (note 30) | — | — | 4.6 | 4.6 |
Transfer of share-based payment reserve on vesting of share awards | — | — | (4.9) | (4.9) |
At 31 December 2023 | 0.8 | 3.6 | 7.7 | 12.1 |
At 1 January 2024 | 0.8 | 3.6 | 7.7 | 12.1 |
Share-based payment charge (note 30) | — | — | 2.7 | 2.7 |
Transfer of share-based payment reserve on vesting of share awards | — | — | (4.0) | (4.0) |
At 31 December 2024 | 0.8 | 3.6 | 6.4 | 10.8 |
| Share- | |||
| Capital | based | Total | |
| redemption | payment | other | |
| reserve | reserve | reserves | |
| Company | £m | £m | £m |
At 1 January 2023 | 3.6 | 8.0 | 11.6 |
Share-based payment charge (note 30) | — | 2.5 | 2.5 |
Transfer of share-based payment reserve on vesting of share awards | — | (2.6) | (2.6) |
Share-based payment movement in investment in subsidiaries | — | (0.2) | (0.2) |
At 31 December 2023 | 3.6 | 7.7 | 11.3 |
At 1 January 2024 | 3.6 | 7.7 | 11.3 |
Share-based payment charge (note 30) | — | 1.5 | 1.5 |
Transfer of share-based payment reserve on vesting of share awards | — | (1.7) | (1.7) |
Share-based payment movement in investment in subsidiaries | — | (1.1) | (1.1) |
At 31 December 2024 | 3.6 | 6.4 | 10.0 |
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
192
31 Other reserves continued
2024 | 2023 | |||||
| Management | Interest | Outstanding | Management | Interest | Outstanding | |
| recharge | credit | balance | recharge | credit | balance | |
| Company | £m | £m | £m | £m | £m | £m |
Vanquis Bank | 37.5 | (1.9) | 23.2 | 34.1 | (2.6) | 37.4 |
Moneybarn | 18.1 | — | — | 14.4 | — | — |
Provident Financial Holdings | — | (63.7) | 729.2 | — | (55.6) | 651.7 |
Other central companies | (14.1) | 0.3 | (12.7) | (15.5) | 0.2 | 62.4 |
Total related party transactions | 41.5 | (65.3) | 739.7 | 33.0 | (58.0) | 751.5 |
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
193
Notes to the financial statements continued
33 Contingent liabilities continued
Vehicle Finance commissions continued
34 Reconciliation of (loss)/profit after taxation to cash generated from/(used in) operations
Group | Company | ||||
| 2023 | |||||
| 2024 | (restated) 1 | 2024 | 2023 | ||
| Note | £m | £m | £m | £m | |
(Loss)/profit after taxation | (119.3) | (11.7) | 62.3 | 34.5 | |
| Adjusted for: | |||||
– tax (credit)/charge | 6 | (17.0) | (0.3) | 10.0 | 3.7 |
– finance costs | 3 | 145.4 | 113.4 | 28.0 | 57.3 |
– finance income | 2 | (47.2) | (30.3) | (69.1) | (90.6) |
– dividends received | 32 | — | — | (41.7) | (0.4) |
– share-based payment charge | 30 | 2.7 | 4.6 | 1.5 | 2.5 |
– retirement benefit credit | 21 | (0.4) | (0.3) | (0.4) | (0.3) |
– internally generated intangible assets | 19 | (12.5) | — | — | — |
– amortisation of intangible assets | 19 | 16.9 | 18.5 | 0.3 | 0.4 |
– impairment of intangible assets | 19 | 8.5 | — | — | — |
– provisions created in the year | 25 | 30.0 | 11.0 | 7.8 | — |
– provisions released in the year | 25 | (0.3) | (0.2) | — | — |
– exceptional release of provisions | 25 | (1.0) | (2.0) | — | — |
– provisions utilised in the year | 25 | (17.6) | (8.8) | (2.2) | (0.1) |
– depreciation of property, plant and equipment and right of use assets | 15 16 | 7.5 | 9.1 | 1.5 | 2.9 |
– exceptional impairment of ROU asset | 16 | 3.5 | 4.1 | 2.9 | — |
– loss on disposal of property, plant and equipment | 15 | 0.3 | 1.3 | — | — |
– loss on disposal of intangible assets | 19 | — | 0.5 | — | 0.5 |
– provision for investment impairment | — | — | 78.5 | 0.4 | |
– provision for intercompany impairment | — | — | (78.3) | (26.3) | |
– hedge ineffectiveness | 22 | 1.2 | — | (4.7) | — |
– fair value movements on Visa shares | 14 | (1.2) | (1.1) | — | — |
– contributions into the retirement benefit scheme | 21 | (0.8) | (0.8) | (0.8) | (0.8) |
– goodwill write-off | 18 | 71.2 | — | — | — |
| Changes in operating assets and liabilities: | |||||
– amounts receivable from customers | 12 | 4.4 | (254.2) | — | — |
– trade and other receivables | 13 | (16.9) | (5.8) | 195.4 | 344.7 |
– trade and other payables | 24 | 0.6 | (22.0) | (214.5) | (80.4) |
– movement in retail deposits 2 | 27 | 425.8 | 815.2 | — | — |
Cash generated from/(used in) operations | 483.8 | 640.2 | (23.5) | 248.0 |
1 Refer to accounting policies for details of restatement.
2 The classification of certain cash flows has been represented in 2023, impacting £1,100.0m in proceeds and £284.8m in repayments related to bank and other
borrowings. These amounts, which are no longer considered to be financing cash flows, are now reported within cash generated from operations as an £815.2m
movement in retail deposits.
The decrease in amounts receivable from customers of £4.4m (2023: £254.2m increase) includes the non-cash movement
in the impairment provision as set out below.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
194
34 Reconciliation of (loss)/profit after taxation to cash generated from/(used in) operations
continued
| 2023 | ||
| 2024 | (restated) 1 | |
| Group | £m | £m |
Cash movement in amounts receivable from customers | 322.9 | (229.5) |
Non-cash provision movement – allowance account | (318.5) | (24.7) |
Net movement in amounts receivable from customers | 4.4 | (254.2) |
1 Refer to accounting policies for details of restatement.
The table below details changes in the Group and Company’s liabilities arising from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or future cash
flows will be, classified in the cash flow statement as cash flows from financing activities.
Retail deposit movements are no longer considered to be financing cash flows and are therefore no longer presented in
the tables below. 2023 has also been represented for this change.
| 2024 | |||||||||
Cash changes | Non-cash changes | ||||||||
| Lease | |||||||||
| Included | additions | ||||||||
| 1 January | Financing | Lease | Amortised | Interest | within | and | 31 December | ||
| 2024 | cash flows | payments | fees | paid | overdrafts | Derivatives | disposals | 2024 | |
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings | |||||||||
(note 27) | (582.5) | 169.0 | — | (0.7) | 2.3 | 0.4 | 1.5 | — | (410.0) |
Lease liabilities (note 26) | (40.9) | — | 12.7 | — | (3.0) | — | — | (1.3) | (32.5) |
Total | (623.4) | 169.0 | 12.7 | (0.7) | (0.7) | 0.4 | 1.5 | (1.3) | (442.5) |
| 2023 | |||||||||
Cash changes | Non-cash changes | ||||||||
| Lease | |||||||||
| Included | additions | ||||||||
| 1 January | Financing | Lease | Amortised | Interest | within | and | 31 December | ||
| 2023 | cash flows | payments | fees | paid | overdrafts | Derivatives | disposals | 2023 | |
| Group | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings | |||||||||
(note 27) | (815.4) | 238.5 | — | (1.5) | — | (0.5) | (3.6) | — | (582.5) |
Lease liabilities (note 26) | (49.3) | — | 11.2 | — | (1.0) | — | — | (1.8) | (40.9) |
Total | (864.7) | 238.5 | 11.2 | (1.5) | (1.0) | (0.5) | (3.6) | (1.8) | (623.4) |
| 2024 | |||||||||
Cash changes | Non-cash changes | ||||||||
| Lease | |||||||||
| Included | additions | ||||||||
| 1 January | Financing | Lease | Amortised | Interest | within | and | 31 December | ||
| 2024 | cash flows | payments | fees | paid | Derivatives | overdrafts | disposals | 2024 | |
| Company | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings | |||||||||
(note 27) | (205.7) | — | — | (0.5) | — | 1.5 | — | — | (204.7) |
Lease liabilities (note 26) | (13.6) | — | 3.4 | — | (0.4) | — | — | (0.7) | (11.3) |
Total | (219.3) | — | 3.4 | (0.5) | (0.4) | 1.5 | — | (0.7) | (216.0) |
| 2023 | |||||||||
Cash changes | Non-cash changes | ||||||||
| Lease | |||||||||
| Included | additions | ||||||||
| 1 January | Financing | Lease | Amortised | Interest | within | and | 31 December | ||
| 2023 | cash flows | payments | fees | paid | Derivatives | overdrafts | disposals | 2023 | |
| Company | £m | £m | £m | £m | £m | £m | £m | £m | £m |
| Bank and other borrowings | |||||||||
(note 27) | (365.8) | 163.5 | — | (0.8) | 1.0 | (3.6) | — | — | (205.7) |
Lease liabilities (note 26) | (16.7) | — | 4.4 | — | (0.4) | — | — | (0.9) | (13.6) |
Total | (382.5) | 163.5 | 4.4 | (0.8) | 0.6 | (3.6) | — | (0.9) | (219.3) |
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
195
Notes to the financial statements continued
| Company | |
| Company name | number |
Registered at No. 1 Godwin Street, Bradford BD1 2SU: | |
Provident Financial Holdings Limited | 13061852 |
Provident SPV Limited 1, 2 | 12988335 |
Vanquis Bank Limited 1 | 2558509 |
N&N Simple Financial Solution Limited 1 | 3803565 |
Cheque Exchange Limited 1 | 2927947 |
Provident Investments Limited 2 | 4541509 |
PFG Corporate Services Limited 1 | 13423666 |
Provfin Limited 1 | 1879771 |
Provident Yes Car Credit Limited 2 | 4253314 |
Provident Financial Group Limited | 194214 |
Yes Car Credit Limited 2 | 3459042 |
Aquis Cards Limited | 7036307 |
| Provident Financial Trustees (Performance | |
Share Plan) Limited 2 | 4625062 |
| Company | |
| Company name | number |
Registered at Athena House, Bedford Road, Petersfield, Hampshire GU32 3LJ: | |
Moneybarn No. 1 Limited 1 | 4496573 |
Duncton Group Limited 1 | 6308608 |
Moneybarn Group Limited 1 | 4525773 |
Moneybarn Limited 1 | 2766324 |
| Registered at 10 Norwich Street, London EC4A 1BD: | |
Usnoop Limited 1 | 11797870 |
Registered at C/O DWF LLP, 2 Semple Street, Edinburgh EH3 8BL: | |
Lawson Fisher Limited | SC004758 |
| Company | |
| Company name | number |
| Registered at 8th Floor, 100 Bishopsgate, London, England EC2N 4AG: | |
Moneybarn Financing Limited | 12323134 |
| Company | |
| Company name | number |
| Registered at 10th Floor, 5 Churchill Place, London, England E14 5HU: | |
Oban Cards 2021-1 Holdings Limited | 12754762 |
Oban Cards 2021-1 PLC | 12757121 |
Oban Cards Receivables Trustee Limited | 12756504 |
| Company | |
| Company name | number |
N&N Simple Financial Solution Limited | 3803565 |
Provfin Limited | 1879771 |
Provident Financial Group Limited | 194214 |
Duncton Group Limited | 6308608 |
Moneybarn Group Limited | 4525773 |
Lawson Fisher Limited | SC004758 |
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
196
Alternative performance measures
In addition to statutory results and KPIs reported under International Financial Reporting Standards (IFRS),
the Group provides certain Alternative Performance Measures (APMs). These APMs are used internally by
management and are also deemed helpful in understanding the Group’s performance. These non-statutory
measures should not be considered as replacements for IFRS measures.
Definitions, numerical reconciliations and relevance of APMs presented within this report are set out below. The definition
of these non-statutory measures may not be comparable to similarly titled measures reported by other companies.
All the below APMs are on a continuing operations basis.
2023 KPIs have been restated where required. Refer to accounting policies for detail of restatement.
APM Method of calculation Relevance
Adjusted profit
before tax
A reconciliation of adjusted profit before tax from statutory (loss)/profit for
the year attributable to equity shareholders is provided on the income
statement; see page 130.
Adjusted profit before tax excludes
the impact of amortisation of
acquisition intangibles and
exceptional items and is used
to provide further clarity on the
ongoing, underlying financial
performance of the divisions
and Group.
Net Interest
Margin (NIM)
Interest income less interest expense for the 12 months ended 31 December
as a percentage of average gross receivables.
2024
£m
2023
£m
Interest income 565.4 556.0
Interest expense (145.4) (113.4)
Net interest income 420.0 442.6
Average gross receivables 2,286.0 2,375.7
NIM (%) 18.4% 18.6%
This measure shows the returns
generated from customers to allow
comparison to other banks and
banking groups.
Risk-adjusted
margin
Total income less impairment charges for the 12 months ended
31 December as a percentage of average gross receivables.
2024
£m
2023
£m
Total income 458.5 488.8
Impairment (191.0) (165.5)
Risk-adjusted income 267.5 323.3
Average gross receivables 2,286.0 2,375.7
Risk-adjusted margin (%) 11.7% 13.6%
This measure shows the
returns from customers after
impairment charges.
Asset yield Interest income received from customers for the 12 months ended
31 December as a percentage of average gross receivables.
2024
£m
2023
£m
Interest income 565.4 556.0
Less: non-customer interest income (47.2) (30.3)
Customer interest income 518.2 525.7
Average gross receivables 2,286.0 2,375.7
Asset yield (%) 22.7% 22.1%
This measure shows the returns
generated from customer
receivables to allow comparison to
other banks and banking groups.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
197
Alternative performance measures continued
APM Method of calculation Relevance
Cost of funds
1
Interest expense less non-funding items, as a percentage of average
funding balances. Average funding balances are defined as average
principal balances owed to lenders, excluding Tier 2 debt capital and
capitalised fees for the 13 months ended 31 December.
2024
£m
2023
£m
Interest expense 145.4 113.4
Less: interest on Tier 2 (17.8) (17.7)
Less: swap interest (3.2) (3.2)
Less: fees and IFRS 16 interest (4.3) (3.2)
Funding interest 120.1 89.3
Funding balances (average) 2,356.5 2,025.3
Cost of funds (%) 5.1% 4.4%
This measure shows the cost of
funding the business (primarily our
customer receivables) to allow
comparison to other banks and
banking groups.
Cost of risk Impairment charges for the 12 months ended 31 December as a
percentage of average gross receivables.
2024
£m
2023
£m
Impairment charges (191.0) (165.5)
Average gross receivables 2,286.0 2,375.7
Cost of risk (%) 8.4% 7.0%
This measure shows the cost of
impairment charges on customer
receivables to allow comparison to
other banks and banking groups.
Average gross
receivables
Average of gross customer interest earning balances for the 13 months
ended 31 December.
2024
£m
2023
£m
Credit Cards 1,312.5 1,415.9
Vehicle Finance 825.4 836.3
Second Charge Mortgages 69.0 0.4
Personal Loans 79.1 123.1
Total average gross receivables 2,286.0 2,375.7
This is used to align the receivables
movement to the same period
in which the income statement
measures are generated in
calculating performance KPIs.
Cost:income
ratio
Operating costs, excluding exceptional items, as a percentage of total
income for the 12 months ended 31 December.
2024
£m
2023
£m
Total income 458.5 488.8
Operating costs (302.3) (306.0)
Cost:income ratio 65.9% 62.6%
This ratio is a measure of the
efficiency of the Group’s cost base.
Adjusted basic
Earnings per
Share (EPS)
Profit after tax, excluding the amortisation of acquisition intangibles and
exceptional items, divided by the weighted average number of shares in
issue (see note 8 for more details).
This is used to assess the Group’s
operational performance per
ordinary share. It removes the effect
of amortisation of acquisition
intangibles and exceptional items.
Financial statements
Vanquis Banking Group plc Annual Report and Accounts 2024
198
APM Method of calculation Relevance
Adjusted Return
on Tangible
Equity (ROTE)
Adjusted profit after tax net of fair value gains for the 12 months ended
31 December as a percentage of average adjusted tangible equity for the
13 months ended 31 December. Adjusted tangible equity is stated as equity
after deducting the Group’s pension asset, net of deferred tax, and the fair
value of derivative financial instruments, net of deferred tax less intangible
assets and goodwill.
2024
£m
2023
£m
Adjusted (loss)/profit before tax (34.8) 17.3
Tax credit/(charge) 10.0 (5.9)
Net fair value gains (2.3) (4.7)
Tax on net fair value gains 0.6 1.2
Adjusted (loss)/profit after tax net of fair value
gains (26.5) 7.9
Average tangible equity
Average equity as per balance sheet 529.5 572.8
Average pension asset (33.7) (28.5)
Average deferred tax on pension asset 8.4 7.1
Average derivative financial instruments 6.6 8.2
Average deferred tax on derivative financial
instruments (1.7) (2.1)
Average adjusted equity 509.1 557.5
Average intangible assets (65.7) (67.7)
Average goodwill (66.9) (71.7)
Average tangible equity 376.5 418.1
ROTE (7.0)% 1.9%
This demonstrates how well the
Group’s returns are generated from
its tangible equity, removing the
impact of whether development
has occurred through organic
or inorganic growth.
Funding
headroom
Committed bank and debt facilities less borrowings on those facilities and
amounts committed to further syndicated bank facility reduction, plus
available cash and liquid resources (see note 27 for more details).
This represents the difference
between the total amount of
committed contractual debt
facilities provided by banks, bond
holders and other lenders and the
amount of funds drawn on those
facilities plus cash held on deposit.
Liquidity
coverage ratio
(LCR)
A regulatory measure that assesses net 30-day cash outflows
as a proportion of high-quality liquid assets (HQLA).
This demonstrates the Group’s ability
to meet its short-term liabilities.
Customer
satisfaction
The rate at which surveyed customers were satisfied (or more than
satisfied) with the service they have been provided.
Tier 1 ratio The ratio of the Group’s Tier 1 capital to the Group’s risk-weighted assets
measured in accordance with the Capital Requirements Regulation (CRR).
The CET1 ratio is a key measure of
whether a firm has adequate CET1
to cover the risks associated with
its assets.
Total Capital
Ratio (TCR)
The ratio of the Group’s total regulatory capital (own funds) to the Group’s
risk-weighted assets measured in accordance with the CRR.
The Tier 1 ratio is a key measure of
whether a firm has adequate
capital resources to cover the risks
associated with its assets.
Regulatory
capital
Common Equity Tier 1 (CET1) capital is the sum of the Group’s equity as
calculated in accordance with IFRS, an accrued foreseeable dividend and
regulatory adjustments. Tier 2 is the sum of capital instruments meeting the
criteria for Tier 2 as set out in the Capital Requirements Regulation (CRR).
Total available regulatory capital is the sum of these two elements for
the Group (as the Group does not hold any additional Tier 1 instruments).
The calculation is set out under capital risk management on page 147.
In the current year management took the decision to no longer present Return on required equity (RORE) as it is no longer
considered to be an appropriate measure of the Group’s performance and also replaced Liquidity with Liquidity coverage
ratio aligned to reporting of this principal metric.
Governance Financial statementsStrategic report Shareholder information
Vanquis Banking Group plc Annual Report and Accounts 2024
199
Information for shareholders
Share price
The Company’s shares are listed
on the London Stock Exchange
under share code ‘VANQ’. The share
price is quoted daily in a number
of national newspapers and is
available on the Group’s website at
www.vanquisbankinggroup.com.
Tax on dividends
Please refer to HMRC guidance
regarding the taxation of dividends
paid by the Company.
Registrar
The Company’s registrar is:
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
Shareholder helpline
For information relating to your shares
call: +44 (0)371 664 0300
Website helpline
For information on using our
website call: +44 (0)371 664 0391
Calls to 0371 are charged at the
standard geographic rate and will
vary by provider.
Calls outside the United Kingdom
are charged at the applicable
international rate.
We are open between 9.00am and
5.30pm, Monday to Friday excluding
public holidays in England and Wales.
Link Signal Shares
Link Asset Services offers a share
portal service which enables
registered shareholders to manage
their shareholdings quickly and
easily online. Once registered for this
service, you will have access to your
personal shareholding and a range
of services including: setting up or
amending dividend bank mandates;
proxy voting; and amending personal
details. For further information visit
www.signalshares.com.
Link Dividend
Reinvestment Plan
Link Asset Services offers a Dividend
Reinvestment Plan whereby
shareholders can acquire further
shares in the Company by using
their cash dividends to buy
additional shares.
For further information contact
Link Asset Services:
Telephone: 0371 664 0381
(from within the UK)
Calls are charged at the standard
geographic rate and will vary by
provider. Calls outside the UK will
be charged at the applicable
international rate. Lines are open
between 9.00am and 5.30pm, Monday
to Friday excluding public holidays in
England and Wales.
Telephone: +44 371 664 0381
(from outside the UK)
Special requirements
A PDF version of the full Annual Report
and Financial Statements is available
on our website.
Advisors
Independent auditor
Deloitte LLP
4 Brindley Place
Birmingham
B1 2HZ
Company advisors and stockbrokers
Shore Capital
Cassini House
55-59 St. James’s Street
London
SW1A 1LD
Fenchurch Advisory Partners LLP
110 Bishopsgate
London
EC2N 4AY
Solicitors
Clifford Chance LLP
10 Upper Bank Street
London
E14 5JJ
Company details
Registered office and contact details:
Vanquis Banking Group plc
No. 1 Godwin Street
Bradford
West Yorkshire
England
BD1 2SU
Telephone:
+44 (0)1274 351 351
Fax:
+44 (0)1274 730 606
Website:
www.vanquisbankinggroup.com
Company number
668987
Vanquis Banking Group plc Annual Report and Accounts 2024
200
Shareholder information
Vanquis Banking Group plc’s commitment to environmental issues is reflected in this Annual Report, which has
been printed on Magno Satin, an FSC
®
certified material. This document was printed by Park Communications
using its environmental print technology, which minimises the impact of printing on the environment, with 99%
of dry waste diverted from landfill. Both the printer and the paper mill are registered to ISO 14001.
CBP029781
View and download the online version here:
www.vanquisbankinggroup.com/shareholder-hub/annual-report-2024
Vanquis Banking Group plc Annual Report and Accounts 2024Vanquis Banking Group plc Annual Report and Accounts 2024
Vanquis Banking Group
No. 1 Godwin Street
Bradford
BD1 2SU
United Kingdom
+44 (0)1274 351 351
www.vanquisbankinggroup.com
Company number 668987
Vanquis Banking Group plc Annual Report and Accounts 2024Vanquis Banking Group plc Annual Report and Accounts 2024