Chairman's Statement
Building a leading bank for customers who need us most
Over the past two and a half years as Chair, I have worked closely with the Board and Executive Team to guide the business through a period of significant change and transformation, ensuring the Group remained focused on its strategic priorities and stayed true to our purpose: to deliver caring banking so our customers can make the most of life’s opportunities.
I am pleased to report that in 2025 the Group returned to statutory profitability, strengthened its balance sheet and delivered accelerated, disciplined growth. Vanquis now serves more than 1.7 million customers and is building a purpose-led, technology-enabled bank with increasing resilience and scale. With approximately half of UK adults with an active credit profile underserved, the need for fair and accessible financial services has never been greater. This structural market dynamic presents a compelling long-term opportunity for Vanquis, guided by responsible lending, prudent capital deployment and a clear focus on improving financial resilience across the UK.
Strategic transformation
Having built strong foundations in 2024, 2025 marked a decisive shift from stabilisation to delivery as we embedded our customer-focused, needs-driven strategy across the Group. We committed to reducing costs, strengthening risk management and driving resilient, risk-adjusted returns; and we delivered.
The Group simplified products, enhanced affordability assessments and expanded support for customers seeking to regain control of their finances, helping them borrow responsibly and manage their money with greater confidence. At the same time, we progressed the Gateway technology programme, which is already delivering benefits and will underpin future scale, efficiency and stronger operational control. Collectively, these developments were instrumental in supporting the Group’s return to statutory profitability.
In UK retail banking, Vanquis stands apart by focusing on customers often excluded by high street lenders. Unlike many mainstream banks that compete primarily for the strongest credit profiles, Vanquis serves customers on a journey, helping them access credit responsibly and build financial resilience over time. This perspective underpins our refreshed brand, new technology platform and mobile app, and remains central to our ambition to be a purpose-led specialist bank for underserved customers. With a more efficient, resilient and customer-focused operating model, the Group enters 2026 with growing momentum and a clear path to long-term value creation for shareholders.
Strategic priorities
Our strategy is to build a resilient, efficient and scalable business that delivers strong risk-adjusted returns while widening access to credit for the UK’s large and structurally underserved population. In 2025, we embedded the strategic articulation “Serve More. Serve Responsibly. Scale Profitably,’ providing a clear framework for disciplined execution and capital allocation.
We will continue to optimise our product mix, maintain credit quality and harness advanced data, open banking and our Gateway platform to enhance decisioning, control and affordability outcomes. Supported by a growing digital ecosystem and a disciplined approach to capital deployment, the Group is well positioned to grow in attractive markets where our current share remains modest.
This strategy is designed to deliver revenue growth, minimal cost inflation, rising capital generation and returns on tangible equity consistently above our cost of capital. As the portfolio matures and operating leverage builds, returns will strengthen, giving the Group flexibility to accelerate growth or increase shareholder distributions over time.
Under Ian McLaughlin’s leadership, Vanquis moves into the next phase of its evolution from a position of strength, underpinned by robust risk management, improving returns and a clear purpose focused on serving the UK’s underserved population. While approximately half of UK adults with an active credit profile face barriers to mainstream credit, Vanquis currently serves only a small proportion of this sizeable and persistent market, presenting a significant long-term opportunity.
Our priorities centre on broadening access to credit across channels, optimising capital deployment and gradually shifting towards lower-risk segments such as Second Charge Mortgages. While this will naturally moderate net interest margin over time, the Board believes it will deliver stronger risk-adjusted returns, improved credit quality and a more resilient business model.
Gateway and Snoop are transforming how we manage risk, deepen customer relationships and deliver better outcomes. As Gateway completes in 2026, these capabilities will increase efficiency, strengthen controls and support higher capital generation, reinforcing the Group’s ability to generate durable, long-term value.
Commitment to customers
Our customers rely on us because they are often not well served by high street lenders, and we take that responsibility seriously. Their needs are evolving and meeting them with fairness and clarity remains central to our purpose.
That commitment is reflected in our customer satisfaction score of 83.7, ahead of the industry average of 81.1. This level of advocacy strengthens the foundations on which we are building a more scalable and resilient bank, and we will continue to invest in enhancing customer experience as we grow.
Industry developments
The Supreme Court’s ruling on motor finance commission disclosures provided welcome clarity for the industry. The FCA’s subsequent consultation on motor finance redress (CP25/27) prompted the Group to recognise a £3.0m provision based on probability-weighted scenarios.
Vanquis did not operate discretionary or tied commission arrangements, and our approach has always been grounded in transparent customer disclosures and responsible lending. We engaged constructively with the FCA throughout the consultation, emphasising the need for a fair and proportionate approach that differentiates between business models.
Financial inclusion
The Government’s Financial Inclusion Strategy, published in November, reinforced what we have long believed: that access to fair, transparent and well-designed financial products is fundamental to opportunity. As a bank with purpose at its core, Vanquis is well placed to contribute positively to this agenda, helping people build financial confidence, access fair credit and participate fully in the economy.
Capital management and shareholder distributions
In 2025, we allocated capital to support profitable growth in customer interest-earning balances. The successful £60m issuance of Additional Tier 1 (AT1) Notes in October further optimised our capital structure to support growth.
With this priority, the Board has decided not to declare a dividend for FY25 (FY24: no dividend).
The Board expects to continue deploying capital for growth in the near term and intends to provide more detail on the Group’s capital allocation framework and distribution policy with the FY26 results.
Building a strong culture
Our cultural transformation has been as important as our technological and financial transformation. In 2025, we introduced our ACT Culture (Ambitious, Caring and Together) to reinforce the Values needed for a modern, customer-led bank. Our ACT Culture and Values are now becoming firmly embedded across the organisation, strengthening accountability, collaboration and customer focus. Culture is increasingly a clear enabler of our strategy and a critical foundation for the next phase of growth.
We continued to invest in our communities, signing the Armed Forces Covenant, supporting Bradford’s City of Culture programme and advancing social mobility through the Vanquis Foundation. We remain committed to a workplace where colleagues can grow, celebrate success and contribute to delivering caring banking.
Our remuneration framework continues to reinforce alignment between performance, risk and sustainable shareholder returns.
Governance and directors
Following the Board refresh in 2024, Paul Hewitt and Angela Knight retired from the Board in January 2025. The composition of the Board has remained unchanged since their departure. The current Board brings extensive expertise across banking, financial services, governance and risk management, ensuring strong oversight and constructive challenge as the Group delivers on its strategic objectives. I would like to thank my fellow Board members for their engagement, challenge and insight throughout the year.
Independent Board evaluation
An independent external evaluation conducted in 2025 by Independent Audit concluded that financial oversight, risk management and stakeholder consideration were notable Board strengths, facilitated by a strong committee structure and approach to continuous development.
There was an overarching theme of a much-improved position, combined with an acknowledgment that key development areas remained, in particular for the Board to step back from operational detail and increase its strategic focus, within the context of the Group’s return to profitability after a challenging period. The Board has agreed an action plan and will monitor progress during 2026.
Summary
We are encouraged by the Group’s progress in 2025. Returning to profitability, strengthening the balance sheet and delivering strong but controlled growth reflect significant effort across the organisation. As we move into 2026, the Board’s confidence is grounded in clear evidence of progress and delivery, supported by a modern, scalable technology platform and effective credit risk management.
On behalf of the Board, I thank our colleagues for their dedication and our shareholders for their continued confidence. Vanquis has a clear and disciplined strategy and is well positioned to deliver enduring growth and long-term value, while continuing to support customers who need us most.