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Challenger bank catalogue

Foreword and disclaimerThis document is intended as a reference tool for participants and also for depositors and others interested parties to gain a better understanding of the UK’s challenger banks. In essence, the document draws together key information from annual reports, Pillar 3 and directly from the participating banks themselves. It should therefore fulfil its purpose by also providing an explanation of these key data points in the new regulatory environment.

This report has been prepared by Ernst & Young LLP, a limited liability partnership registered in England and Wales with registered number OC300001, in accordance with an engagement agreement for professional services with the British Bankers’ Association (BBA). Ernst & Young LLP’s obligations to the BBA are governed by that engagement agreement. This disclaimer applies to all other parties (including the general public, visitors to BBA’s website and to BBA’s affiliates and advisors).

This report has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Refer to your advisors for specific advice.

This report may be updated from time to time and may not reflect the most recent publicly available data from the contributing banks. The data was collected and verified over a period spanning 2015 and 2016.

The information contained in this report is not intended to be relied on by third parties or to form part of any contractual arrangement. Should any reader of the report wish to deposit funds, or otherwise do business with any of the contributing banks referred to in this report, such reader should contact them directly and engage with them on the basis of their normal terms and conditions of business.

Ernst & Young LLP accepts no responsibility to update this report in light of subsequent events or for any other reason.

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To the fullest extent permitted by law, Ernst & Young LLP and its members, employees and agents do not accept or assume any responsibility or liability in respect of this report, or decisions on the basis of it, to any reader of the report. Should such readers choose to rely on this report, then they do so at their own risk.

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ContentGlossary 1

Strengthening of capital 3

Aldermore Bank 4

Charity Bank 5

Charter Court 6

Close Brothers 7

Crown Agents Bank 8

Investec 9

Jordan International Bank 10

Kingdom Bank 11

Metro Bank 12

OneSavings Bank 13

Secure Trust Bank 14

Shawbrook Bank 15

Triodos Bank 17

Consolidated table 18

1 Challenger bank database

Glossary

Item Definition and requirement (where applicable)

Core Equity Tier 1 (CET1) Ratio

Definition: This is a key regulatory measure of a bank’s capital adequacy and consists of its common stock and retained earnings expressed as a percentage of its total risk exposure amount. The purpose of this is to ensure that the bank has sufficient common stock to absorb losses in the event of the bank making significant losses.

CET1: Article 26 of the Capital Requirement’s Regulation (CRR) stipulates that CET1 items consist of the following:

► Capital instruments

► Share premium accounts

► Retained earnings

► Accumulated other comprehensive income

► Other reserves

► Funds for general banking risk

Total risk exposure amount: CRR Article 92(3) stipulates that total risk exposure amount shall be calculated as the sum of:

► Risk weighted exposure amounts for credit risk

► Own funds requirements for position risk and large exposures

► Own funds requirements for FX risk, settlement risk and commodities risk

► Own funds requirements for credit valuation adjustment risk of OTC derivatives

► Own funds requirements for operational risk

► Risk weighted exposure amounts for counterparty risk

Requirement: Article 92(1)(a) stipulates that banks must meet a minimum CET1 ratio of 4.5%.

Total capital ratio (see ‘Strengthening of Capital’ chart)

Definition: This is another important measure of a bank’s capital adequacy and consists of its own funds (total Tier 1 capital, plus Tier 2 capital) expressed as a percentage of its total risk exposure amount.

In addition to CET1, Tier 1 capital consists of Additional Tier 1 (AT1) instruments, which can absorb losses through conversion to equity or by being written-down when a bank’s capital ratio falls below a certain level. This allows AT1 instruments to increase going-concern resilience, subject to the trigger for conversion or write-down being set appropriately. In summary, the purpose of Tier 1 capital is to enable a bank to continue its activities and prevent its insolvency. A more detailed definition of AT1 capital is contained in CRR Article 52.

Tier 2 capital is likely to consist of revaluation reserves, undisclosed reserves and subordinated term debt, which are considered less reliable than Tier 1 capital. The purpose of Tier 2 capital is to help ensure that depositors and senior creditors can be repaid in the event that the institution fails and so should be seen as gone-concern capital. A more detailed definition of Tier 2 capital is contained in CRR Article 63.

Requirement: Article 92(1)(c) stipulates that banks must meet a minimum total capital ratio of 8%.

Countercyclical capital buffer: As per CRD IV Article 129, a countercyclical buffer within a range of 0%–2.5% of CET1 will be implemented according to national circumstances by the Bank of England’s Financial Policy Committee (FPC), which will be phased in from 2016. The purpose of this buffer is to achieve the broader macro-prudential goal of protecting the banking sector from periods of excess aggregate credit growth.

Capital conservation buffer: As per CRDIV Article 129, the capital conservation buffer of 2.5%, comprised of CET1, is established above the regulatory minimum capital requirement. Capital distribution constraints will be imposed on a bank when capital levels fall within this range. Banks will be able to conduct business as normal when their capital levels fall into the conservation range as they experience losses. The constraints imposed only relate to distributions, not the operation of the bank. The distribution constraints imposed on banks when their capital levels fall into the range increase as the bank’s capital levels approach the minimum requirements. By design, the constraints imposed on banks with capital levels at the top of the range would be minimal. The table below sets out the constraints that apply.

The countercyclical and capital conservation buffers will increase the minimum total capital ratio, as these may require a bank to meet up to a minimum CET1 ratio between 7%–9.5%.

See the link to PRA Policy Statement PS3/14 given below: http://www.bankofengland.co.uk/pra/documents/publications/ps/2014/ps314.pdf

2Challenger bank database

Leverage ratio Definition: The purpose of the leverage ratio is to act as a credible supplementary regulatory measure to risk-based capital requirements, in which Tier 1 capital is expressed as a percentage of total exposure (i.e., non-risk weighted).

The leverage ratio has the following aims:

► Restrict the build-up of leverage in the banking sector to avoid destabilising, deleveraging processes that can damage the broader financial system and the economy.

► Reinforce risk-based requirements with a non-risk based ‘backstop’ measure.

► Ensure broad and adequate capture of both on-and off-balance sheet leverage of banks.

Total exposure: The leverage ratio denominator consists of:

► On-balance sheet exposures

► Derivative exposures

► Securities financing exposures

► Other off-balance sheet exposures

Requirement: CRR Article 429 places the leverage ratio requirement on banks. The Bank of England’s Financial Policy Committee set the minimum leverage ratio requirement at 3% of exposures in its July 2015 Policy Statement (to take effect in January 2018). It also places a number of additional leverage ratio buffer requirements on banks, which are further detailed in the Policy Statement.

See the link to July 2015 Bank of England FPC Policy Statement’ given below: http://www.bankofengland.co.uk/financialstability/Documents/fpc/policystatement010715ltr.pdf

Total assets Definition: This is the total assets figure contained in the balance sheet from the most recent Annual Report.

Total lending Definition: This is the total lending figure from the most recent Annual Report. A split of the different types of lending has been provided for further information (where available).

Non-performing assets

Definition: This is the percentage amount of non-performing assets from the Pillar 3 disclosure (where available). If unavailable, this figure has been provided by the bank, including the basis for calculation.

Deposits Definition: For simplicity purposes, this is a percentage split of retail deposits against all other types of deposits. Where this split has not been included in the Annual Report, this split has been provided by the bank.

Net interest margin

Definition: This is the net Interest margin figure contained in the most recent Annual Report (where available). If unavailable, this figure has been provided by the bank, including the basis for calculation.

Bank model overview

Definition: The purpose of this is to provide a brief summary and introduction to the bank’s business. Text has been taken from the most recent Annual Report or provided by the bank.

Equity raised and type

Definition: This sets out the bank’s capital structure and includes the amount of CET1, Tier 1, Tier 2 and Total Regulatory Capital. This has been taken from the bank’s Pillar 3 disclosure (where available).

Notes 1. The purpose of this glossary is to provide a brief overview of the requisite items and should be treated as such. For further details, the

reader should review the relevant underlying articles contained within the CRR.

2. A link to the CRR text can be found here: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32013R0575&from=EN.

3. The "Strengthening of capital" page sets out the transitional capital requirement provisions from 2013–19.

4. As set out in ‘Total Capital Ratio’ above, the capital conservation buffer prohibits banks from paying dividends or bonuses above a specified proportion of the profits after tax generated. The details are set out below:

First quartile 75% to 100% of buffer 60% of profits can be distributed

Second quartile 50% to 75% of buffer 40% of profits can be distributed

Third quartile 25% to 50% of buffer 20% of profits can be distributed

Fourth quartile 0% to 25% of buffer 0% of profits can be distributed


Total capital

Tier 1capital

CET 1

0%–2.5%

8%8% 8% 8%8% 8% 8%8%

6%

4.5%

6%

4.5%

6% 6%

4.5%

4%4.5%

5.5%6%

4.5%

2%3.5%

4%

0.625 % 1.25 % 1.875% 2.5 %

4.5%

Countercyclical capital buffer Capital conservation buffer

Gradual increase of the:

► Common Equity Tier 1 ratio to 4.5 % (after deductions)

► Tier 1 capital ratio to 6%

► Additional capital conservation buffer of 2.5%, consisting of Common Equity Tier 1.

► Overall Common Equity Tier 1 ratio of 7% to9.5%

until 2012 2013 2014 2015 2016 2017 2018 2019

0%–2.5% 0%–2.5% 0%–2.5%

Strengthening of capital

Common Equity Tier 1 capital becomes key in the run up to 2019.

Though regulators, banks and investors are looking ahead to the fully-loaded position which will prevail in 2019, the counter-cyclical and capital conservation buffers are yet to apply and further transitional measures are yet to fully work through. The remainder of the decade will see further increases in the capital demands on banks.

In December 2015, the Bank of England Financial Policy Committee (FPC) signalled its intention to set the UK countercyclical capital buffer rate in the region of 1% in a standard risk environment. Consistent with the FPC’s assessment of the current risk environment, and its intention to move gradually, it has decided to increase the UK countercyclical capital buffer rate from 0% to 0.5% of risk-weighted assets. This new setting will become binding with effect from 29 March 2017, at which time the FPC says that overlapping aspects of Pillar 2 supervisory capital buffers will be lifted.


Aldermore Bank

Item As at 31/12/2014 (£m) Source

CET1 ratio 10.4% 31/12/2014 Annual Report

Total capital ratio 14.8% 31/12/2014 Annual Report

Leverage ratio 6.3% 31/12/2014 Annual Report

Total assets 5,565.243 31/12/2014 Annual Report

Total lending Business Finance: 1,225 Figures provided by Aldermore Bank

Commercial Mortgages: 552

Residential Mortgages: 980

Buy-to-let Mortgages: 2,044

Total: 4,801

Non-performing assets 0.4% Figure provided by Aldermore Bank

Individually impaired loans/average gross loans

Deposits Retail: 77%

Commercial: 23%

Split provided by Aldermore Bank

Net interest margin 3.4% 31/12/2014 Annual Report

Bank model overview Aldermore is a specialist lender, supporting UK SMEs, homeowners and landlords. Enjoying the advantages of modern, legacy-free and scaleable systems, our expert underwriters are able to make considered credit decisions rather than adopting a “computer says yes or no” approach. We are able to focus on customers who are often under — or poorly served by the wider market.

Diversification is a central theme of our strategy. In our lending portfolio, we focus on prime creditworthy customers across lending lines chosen for their large market sizes, high levels of tangible asset security and attractive risk adjusted returns. Across our funding base, which is anchored by our dynamic online savings proposition, diversification, along with falling interest rates, has been a key driver of our reducing cost of funds in recent years. Through the extension of our distribution capability, we are reaching more customers through multiple channels and aim to differentiate our service by being easy to do business with and making quick, consistent and transparent credit decisions.

Our DNA is to be Reliable, Expert, Dynamic and Straightforward and this informs everything we do, creating the basis of our culture and brand. We have a proven ability to leverage our specialist underwriting capability into adjacent market segments and are confident of achieving our strategic growth and financial objectives while maintaining a prudent risk appetite and strong capital base.

Text provided by Aldermore Bank

CET1 Capital: 281.2

Additional Tier 1 Capital: 73.7

Equity raised and type Total Tier 1 Capital: 354.9 31/12/2014 Annual Report

Total Tier 2 Capital: 45.3

Total Regulatory Capital: 400.2


Charity Bank


CET1 ratio 28.0% 31/12/2014 Pillar 3 Disclosure

Total capital ratio 33.1% 31/12/2014 Pillar 3 Disclosure

Leverage ratio 11.7% 31/12/2014 Pillar 3 Disclosure

Total assets 114.209 31/12/2014 Annual Report

Total lending Residential: 0 31/12/2014 Annual Report Split provided by Charity Bank

Commercial: 54.286 (some of the bank’s lending is secured against residential premises)

Total: 54.286

Non-performing assets 0.4% Figure provided by Charity Bank. Calculated as specifically provisioned loans and loans over 90 days in arrears/total assets

Deposits Retail: 100% Split provided by Charity Bank

Net interest margin 2.6% Net interest income/total assets less the non-interest-earning assets (average of 1/1 and 31/12). Net interest income from 31/12/2014 Annual Report. Average interest earning assets’ figure provided by Charity Bank

Bank model overview Charity Bank is a savings and loans bank with a mission to use money for good. Since it was established in 2002, Charity Bank has lent over £150 million to more than 800 charities and social enterprises, with the support of investors and depositors who want to encourage more responsible and transparent use of their money.

Charity Bank recruits deposits from private individuals, SMEs and charities through its website and its network of relationship managers in order to meet its mission.

Charity Bank is entirely owned by charitable foundations, trusts and social purpose organisations. It is the only bank in the UK with the Social Enterprise Mark and the first bank in Europe to achieve certification as a B Corporation.

Text provided by Charity Bank

Equity raised and type Ordinary share capital: 11.622 31/12/2014 Pillar 3 Disclosure

Retained earnings and other reserves: 2.05

CET1 capital: 13.672

Total Tier 1 capital: 13.672

Subordinated loan notes: 1.932

General provisions: 0.536


Total regulatory capital: 16.14


Charter Court


CET1 ratio N/A Charter Court was not a bank as at 31/12/2014 and so this item is not applicable

Total capital ratio N/A Charter Court was not a bank as at 31/12/2014 and so this item is not applicable

Leverage ratio N/A Charter Court was not a bank as at 31/12/2014 and so this item is not applicable


Total lending Residential buy to let: 304.348 31/12/2014 Annual Report Gross of impairments

Residential homeowner: 422.502

Total: 726.85

Non-performing assets Nil Nil — not relevant for CCFS until end of 2016 — Pillar 3

Deposits N/A Charter Court was not a bank as at 31/12/2014 and had not started to take retail deposits at that date. This item is therefore not applicable

Net interest margin 1.9% 31/12/2014 Annual Report Net interest income/total assets

Bank model overview As one of the fastest growing banks in the UK, Charter Court Financial Services (Charter Court) is a specialist bank which serves retail savings customers through Charter Savings Bank, mortgage customers and intermediaries through Precise Mortgages and institutional clients through Exact Mortgage Experts.

In today’s challenging financial services markets, our focus is firmly on the significant niche markets that are underserved by High Street banks and since our launch we have achieved £2.5 billion of cumulative mortgage originations through our relationships with over 16,000 intermediaries.

In March 2015 we reached a new milestone in our corporate development with the launch of Charter Savings Bank. By the end of 2015 the bank has already won multiple industry awards, welcomed nearly 40,000 customers and attracted over £1.5 billion in deposits as we continue to diversify and strengthen our business model.

Text provided by Charter Court

Equity raised and type Ordinary share capital: 2.870001 31/12/2014 Annual Report

CET1 capital: N/A*

Total Tier 1 capital: N/A*

Total Tier 2 capital: N/A*

Total regulatory capital: N/A*

* Charter Court was not a bank as at 31/12/2014 and so this item is not applicable.


Close Brothers






Total lending Retail: 2,266 31/07/2015 Annual Report

Commercial: 2,172.8 31/07/2015 Annual Report

Property: 1,299 31/07/2015 Annual Report

Total: 5,737.8 31/07/2015 Annual Report

Non-performing assets 2.8% 31/07/2015 Annual Report Gross impaired loans/Gross loans

Deposits Retail: 36% Split provided by Close Brothers

Other: 64%

Net interest margin 8.8% 31/07/2015 Annual Report Net interest and fees/average net loans and advances to customers

Bank model overview Close Brothers provide a range of specialist lending products to UK SMEs, as well as specialist instalment payment solutions to UK retail borrowers. Close Brothers also offer deposit-taking services to businesses and individuals. Close Brothers has a strong and established market position in each of its specialist areas in asset, invoice, property development, motor and insurance premium finance. The loan book is predominantly secured, short term (average maturity 14 months) with small ticket sizes. Close Brothers maintain a prudent and diverse funding position and borrows longer than it lends.

Text provided by Close Brothers

Equity raised and type Called up share capital: 37.7 31/07/2015 Annual Report

Share premium account: 284

Retained earnings: 694.4

Other reserves: 18.3

Deductions: (221.2)

CET1: 813.2



Total regulatory capital: 848

* All references to annual report relate to the Close Brothers Group plc 2015 Annual Report and Accounts and therefore include data from the Securities and Asset Management divisions as well as from the Banking division.


Crown Agents Bank


CET1 ratio 18.9% December 2014 Pillar 3 Disclosure

Total capital ratio 21.5% December 2014 Pillar 3 Disclosure

Leverage ratio 2.9% December 2014 Pillar 3 Disclosure


Total lending Cash with central banks: 509.06 31/12/2014 Annual Report

Deposits with other banks: 214.141

Debt securities: 90.304

Total: 813.505

Non-performing assets 0% Figure provided by Crown Agents

Deposits Other: 100% Split provided by Crown Agents

Net interest margin 31.4% 31/12/2014 Annual Report. Net interest income/other interest receivable and similar income

Bank model overview Crown Agents is a wholesale bank based on deep relationships with central banks, commercial banks, exporters and non-government organisations. Its business activities are focused on a low risk, deposit-driven rather than asset led business model. It has plans to grow significantly to become a leading transactional bank, with new investment from a strong private equity backer, Helios LLP. It will grow its international correspondent relationships in particular and focus on payments, cash management, trade finance and treasury services, including exotic FEX, plus Investment Management through its sister company Crown Agents Investment Management. Crown Agents expects to see continued growth in the core market sectors it serves in the short to medium term and is in a unique position to expand its business, diversifying revenues and more fully serving its clients’ needs

Text provided by Crown Agents and taken from 31/12/2014 Annual Report

Equity raised and type Share capital: 7.3 December 2014 Pillar 3 Disclosure


CET1: 21.841



Total regulatory capital: 28.553


Investec






Total lending Lending collateralised by property: 2,183.602 31/03/2015 Annual Report

High net worth and other private clients: 1,192.449

Corporate and other: 3,659.639

Total: 7,035.690

Non-performing Assets 5.5% 31/03/2015 Annual Report Gross defaults/gross core loans and advances to customers

Deposits Retail: 64.8% 31/03/2015 Annual Report

Other: 35.2%

Net interest margin 1.9% 31/03/2015 Annual ReportNet interest income/average interest earning assets

Bank model overview Investec is an international specialist bank and asset manager that provides a diverse range of financial products and services to a niche client base. The group is dual listed in London and Johannesburg. Investec plc (housing the non-Southern African operations) is a FTSE 250 company and Investec Bank plc (IBP) is its main banking subsidiary.

Investec focuses on delivering distinctive profitable solutions for its clients in three core areas of activity: specialist banking, wealth & investment and asset management.

The specialist bank provides a full service bank offering to high net worth and high income private clients, SMEs and mid to large sized corporates. These services include:

► Day to day banking and lending to private clients; including private bank and savings accounts, FX, offshore banking, mortgages, structured property and specialised lending

► Lending and treasury activities for corporate clients; investment banking services including corporate finance advice, institutional research, sales and trading. Corporate lending specialities include acquisition finance, asset based lending, fund finance, asset finance, project finance, resource finance and other corporate and institutional loans.

Loans are originated with the intent of holding the assets to maturity, thereby developing a ‘hands-on’ and longstanding relationship with clients. The book is predominantly secured UK exposures with a preference for granular hold sizes.

Investec Bank plc has a solid UK customer deposit franchise, is not reliant on wholesale market funding and maintains a conservative and diversified funding position.

Text provided by Investec

Equity raised and type CET1 Capital: 1,325 31/03/2015 Annual Report

Total Tier 1 Capital: 1,325

Total Tier 2 Capital: 590

Total regulatory capital: 1,915

* All references to annual report are to Investec Bank plc Annual Report 2015


Jordan International Bank (JIB)




Leverage ratio 15.3% Figure provided by JIB. Calculated as arithmetic mean of leverage ratio over a quarter in line with CRR Article 429. This figure represents the mean leverage ratio for Oct 15, Nov 15 and Dec 15


Total lending Loans and advances to shareholder banks: 32.338 31/12/2014 Annual Report

Loans and advances to other banks: 53.931

Loans and advances to customers: 135.623

Total: 221.892

Non-performing assets 0% 31/12/2014 Annual Report Impairments of 0.1m

Deposits Retail: 40.5% 31/12/2014 Annual Report

Other: 59.5%

Net interest margin 2.8% 31/12/2014 Annual Report Total net interest income/Average (December 13 to December 14 Total Assets)

Bank model overview JIB Plc operates a number of different business lines. In terms of its structured property finance offering, it offers bespoke funding to experienced property developers and investors. Its team of three lenders has approximately 60 years’ experience in this field between them.

The Bank’s trade finance and personal banking teams offer services to customers who, in the main, are based in, or who have links with, the Middle East. The trade finance business issues and confirms letters of credit and letters of guarantee, while also providing discounted financing for receivables. In controlling the risk exposure in this area, the Bank typically takes exposure to other financial institutions with investment grade credit ratings for periods of up to 365 days.

The personal banking team provides currency deposit accounts and foreign exchange to customers who, in the main, have ties with Jordan or the wider Middle East region. In conjunction with the Treasury team, the Bank offers the facility for clients to buy and sell fixed income securities as well as arranging custody services to hold these investments. The Bank also offers a range of fixed term deposit products.

31/12/2014 Annual Report





Kingdom Bank


CET1 ratio 14.5% Provided by Kingdom Bank

Total capital ratio 18.2% Provided by Kingdom Bank



Total lending Commercial/SME mortgages: 29 31/12/2014 Pillar 3 Disclosure

Personal residential: 0.6

Unsecured: 0.1

Total: 29.70

Non-performing Assets 1.0% 31/12/2014 Annual Report. Calculated as past due items/total assets

Deposits Retail: 99.8% Provided by Kingdom Bank

Other: 0.2% Provided by Kingdom Bank

Net interest margin 2.3% 31/12/2014 Annual Report. Calculated as net interest income/interest earning assets

Bank model overview The principal business of the Bank is secured lending to churches and charities, which helps them to deliver their mission to their local communities. The Bank is particularly interested in financing projects which provide practical help and support to people in need both physically and spiritually. This is funded from customer deposits in a range of savings and investment accounts. These savings products are designed to be the natural choice for churchgoers, being easy to understand while offering competitive interest rates and easy access. In conjunction with this, the Bank operates an insurance booking service specialising in churches and charities.

Text provided by Kingdom Bank

Equity raised and type CET1 Capital: 4.7 31/12/2014 Pillar 3 Disclosure





Metro Bank


CET1 ratio 27.4% Adjusted CET1 Capital number as per ‘Equity Raised and Type’ below as a percentage of RWAs as per 31/12/2014 Pillar 3 Disclosure

Total capital ratio 27.4% Total Regulatory Capital as a percentage of RWAs as per 31/12/2014 Pillar 3 Disclosure

Leverage ratio 13% 31/12/2014 Annual Report


Total lending Retail: 881.144 31/12/2014 Annual Report

Commercial: 714.641 31/12/2014 Annual Report

Total: 1,595.785 31/12/2014 Annual Report

Non-performing assets 0.1% Past due items/loans and advances to customers 31/12/2014 Pillar 3 Disclosure and Annual Report

Deposits Retail: 51.0% Split provided by Metro Bank

Other: 49.0%

Net interest margin 2.1% 31/12/2014 Annual Report

Bank model overview Metro Bank is a retail and commercial bank, which offers banking focused on the customer and creates fans through unparalleled levels of service and convenience.

Metro Bank’s principal activities during 2014 were the provision of banking and related services through stores, telephony, internet and mobile. Metro Bank is a deposit-taking and lending institution with a focus on retail and small and medium commercial customers, offering consistent, transparent fair pricing and excellent customer service. Metro Bank is authorised to accept deposits under the Financial Services and Markets Act, 2000, has a Consumer Credit Act license and is a member of the Financial Services Compensation Scheme.

Text provided by Metro Bank 31/12/2014 Annual Report

Equity raised and type Ordinary share capital: 629.304 31/12/2014 Annual Report. Amendment made to reflect AFS reserve as deduction from CET1 capitalRetained earnings: (118.686)

Current year loss: (38.863)

Intangible assets: (34.669)

Deferred tax asset: (45.511)

Available for sale reserve (4.314)

CET1 Capital: 387.261





OneSavings Bank (OSB)






Total lending BTL/SME Mortgages: 2,064.905 31/12/2014 Annual Report

Residential Mortgages: 1,763.391

Personal Loans: 117.138

Total: 3,945.434

Non-performing assets 2.5% 31/12/2014 Pillar 3 Disclosure Past due items/total exposure

Deposits Retail: 99.0% Split provided by OSB

Other: 1.0%

Net interest margin 2.9% 31/12/2014 Annual Report Net interest income (less coupons on PSBs) over average interest bearing assets

Bank model overview One Savings Bank plc is a specialist lending and retail savings group authorised by the Prudential Regulation Authority, part of the Bank of England, and regulated by the Financial Conduct Authority and Prudential Regulation Authority.

OSB focuses on selected sub-sectors of the lending market in which it has established expertise, platforms and capabilities, and where opportunities have been identified for both high returns on a risk-adjusted basis and strong growth. These include Buy-to-Let/SME, Residential Mortgages (comprising first charge, second charge and shared ownership), and Personal Loans. OSB originates organically through specialist brokers and independent financial advisors.

OSB is predominantly funded by retail savings originated through the established and award-winning Kent Reliance franchise, which includes a network of branches in the South East of England, as well as online and postal channels. Diversification of funding is currently provided by a securitisation, and OSB joined the Funding for Lending Scheme in early 2014.

Text provided by OSB

Equity raised and type CET1 Capital: 207.785 31/12/2014 Pillar 3 Disclosure





Secure Trust Bank






Total lending Personal Lending: 181.4 31/12/2014 Annual ReportMotor Finance: 137.9

Retail Finance: 156.3

Current Account and OneBill: 0.4

Business Finance: 143.3

Debt Collection and Other: 3.2

Total: 622.5

Non-performing Assets 5.2% 31/12/2014 Annual Report Impairments/gross loans and advances

Deposits Retail: 100% Split provided by Secure Trust Bank

Net interest margin 20.4% Provided by Secure Trust Bank

Bank model overview During 2014, the Group further improved its balance sheet strength giving it the ability to provide a wider range of products and services to consumer and business customers.

Consumer Finance:

Personal Lending: the Group offers fixed rate, fixed term loans through its Moneyway brand as well as having a high street presence through the everyday brand. Retail Finance: includes lending products for in-store and online retailers to enable consumer purchases. Motor Finance: finance is arranges through motor dealerships and brokers and involves fixed rate, fixed term higher purchase arrangements on used cars.

Current Accounts

Business Finance:

Asset Finance: this provides finance for plant, machinery and commercial purchases by SMEs. Real Estate Finance: this provides finance to enable commercial and residential real estate development and investment.Commercial Finance: this provides SMEs with invoice finance solutions and asset backed lending, providing companies with the funding needed to secure growth. It provides customers with local decision-makers and experts.

Savings:

Secure Trust offers notice deposits and deposit bonds with competitive interest rates.

Debt Collection:

Debt Managers Limited is the debt collection arm, collecting debts on behalf of a range of clients.

31/12/2014 Annual Report





* The Group’s loan book (classified as loans and advances to customers and operating leases within property, plant and equipment) at 31 December 2014 was £2,331.0m. This table only includes Loans and advances to customers of £2,284.8m i.e., £46.2m is held within Operating Leases

Shawbrook Bank





Total assets 2,754 31/12/2014 Annual Report

Total lending Commercial mortgages: 968.9 31/12/2014 Annual Report

Asset finance: 517.9

Business credit: 169.8

Secured lending: 401.3

Consumer lending: 226.9

Total: 2,284.8*

Non-performing Assets 0.8% 31/12/2014 Annual Report Past due over 90 days loans and advances to customers plus impaired loans and advances to customers/total gross loan and advances to customers

Deposits Retail: 97.1% 31/12/2014 Annual Report Retail deposit figure is calculated as customer deposits as a percentage of the total customer deposits, amounts due to banks and subordinated debt

Other: 2.9%

Net interest margin 6.1% 31/12/2014 Annual Report Calculated as underlying net operating income divided by average principal employed. Average principal employed is calculated as the average monthly closing loans and advances to customers, net of impairment provision, from the Group’s financial reporting and management information systems, including operating leases, which are classified as property, plant and equipment in the Group’s statutory accounts


Bank model overview Shawbrook’s approach to lending is fresh and pragmatic, and based on the core values of respect, care, good sense and thoughtful judgement. It differentiates its service in many ways, focusing, for example, on carefully selected markets where its specialist knowledge and underwriting expertise can deliver competitive advantage. The Group serves both SMEs and consumers in the UK with a range of lending and savings products. It focuses its activities on specific markets — including commercial mortgages, consumer loans, secured lending, asset-based lending and invoice finance services — where its strong relationships, specialist knowledge and commitment to service can be clearly evidenced, and where opportunities for significant growth have been identified. The Group is funded predominantly through retail and SME deposits and as at 31 December 2014, it had a loan-to-deposit ratio of 94%. To date, the Group has focused on raising longer-dated contractual deposits across both the notice account and fixed-term retail bond markets to closely match its lending assets.

Text provided by Shawbrook Bank

Equity Raised and Type Share capital: 185.3 31/12/2014 Pillar 3 Disclosure

Share premium account: 1.3


Intangible assets: (49.5)


Subordinated debt: 30.8

Collective impairment allowance: 3.0



Shawbrook Bank


Triodos Bank

Item As at 31/12/2014 (€m) Source


Total Capital Ratio 19.0% 31/12/2014 Annual Report



Total lending Retail: 369.163 Total from 31/12/2014 Annual Report. Breakdown provided by Triodos Bank

Municipality loans: 291.956

Businesses/charities: 3,605.205

Total: 4,266.324

Non-performing assets - Not provided

Deposits - Not provided

Net interest margin 1.8% Figure provided by Triodos Bank. Calculated as net interest income over cash, government paper, banks, loans and interest bearing securities

Bank model overview Triodos Bank’s mission is to make money work for positive change, by financing businesses, charities and projects which add cultural value and benefit people and the environment. Our primary business is raising retail and business deposits, primarily through online channels, and lending these to businesses and organisations, the majority of which are SMEs. In doing so, we connect savers and investors who want to change the world for the better with entrepreneurs and sustainable companies which are meeting present day needs without compromising those of future generations. We are the only specialist bank to offer integrated lending and investment opportunities for sustainable sectors in a number of European countries, and we are transparent in how we do that, publishing details of every organisation we lend to (www.knowwhereyourmoneygoes.co.uk).

Triodos Bank was founded in the Netherlands in 1980 and now operates through branches in the Netherlands, Belgium, the UK, Spain and Germany. The business model is to operate as a single legal entity with branches in various EU countries operating under EEA passporting arrangements, but the aim is for each branch to be self-financing so that deposits raised in a country are used to finance business in that country. The vast majority of deposits are from either retail or SME customers, and the bank does not use wholesale or interbank funding as a rule, except in relation to some interest-subsidised lending in the renewable sector. The bank has a history of steady organic growth and positive RoE.

Triodos Bank is authorised by the Dutch Central Bank (DNB), and subject to relevant regulation by the Financial Conduct Authority and Prudential Regulation Authority. It is a founder member of the Global Alliance for Banking on Values.

Text provided by Triodos Bank

Equity raised and type Tier 1 Capital: 659.627 31/12/2014 Annual Report

Tier 2 Capital: 1.604



Consolidated

Challenger Bank CET1 Ratio

Total Capital Ratio

Leverage Ratio

Total Regulatory Capital (£m)

Total Assets (£m)

Total Lending (£m)

Aldermore Bank 10.4% 14.8% 6.3% 400.200 5,565.243 4,801.000

Charity Bank 28.0% 33.1% 11.7% 16.140 114.209 54.286

Charter Court N/A N/A N/A N/A 773.656 726.850

Close Brothers 13.7% 14.3% 10.2% 848.000 7,957.300 5,737.800

Crown Agents 18.9% 21.5% 2.9% 28.553 833.360 813.505

Investec 12.1% 17.5% 7.5% 1,915.000 17,943.469 7,035.690

Jordan International Bank 15.7% 15.7% 15.3% 60.981 342.275 221.892

Kingdom Bank 14.5% 18.2% 9.1% 5.900 49.843 29.700

Metro Bank 27.4% 27.4% 13.0% 387.261 3,664.305 1,595.785

OneSavings Bank 11.4% 14.8% 4.2% 269.880 4,936.527 3,945.434

Secure Trust 18.7% 19.0% 14.7% 123.400 782.300 622.500

Shawbrook Bank 11.6% 13.9% 6.2% 203.000 2,754.000 2,284.800

Triodos Bank 19.0% 19.0% 8.8% 661.231* 7,152.404* 4,266.324*

* Denotes figures in €m


Notes

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