CAB Payments Full Year 2025 Results

 

 

The Group has repositioned its asset strategy through the year with the aim to reduce risk and P&L volatility, and to broadly match the currency of assets and liabilities.

 

Treasury assets composition has changed through the year, however we have reformed the Bank's low‑risk approach to balance sheet management. With most deposits received in USD, the Bank has reduced its cross-currency exposure by reducing both cash held at the Bank of England and Money Market Funds and reallocated funds to debt securities (up 175%).

 

Debt securities increased to £678m (2024: £246m), with holdings largely in government and other high-grade investment securities. This reflects our strategy to allocate liquidity to high quality (all AA rated or better), HQLA (short duration) eligible, short tenure assets in the currency matching the underlying deposits.

 

The Bank significantly reduced the Group's exposure to interest rate movements by deploying an interest rate risk management policy. This resulted in some assets, previously held to hedge rate movements, being sold resulting in a one off gain on sale of c.£0.7m. At the year‑end, the Group assessed its interest rate sensitivity at just under £2m for a 1% parallel shock to interest rates, down from under £5m in the prior year.

 

Trade Finance lending is up 50% year-on-year to £270m as we grew lending to around our appetite levels. An enhanced 'originate to distribute' model was launched in the year and c.£92m of trade assets were successfully sold or risk participated for a small net gain. The next stage of this business will be to increase the distribution volumes through continued bi-lateral sales and syndicating transactions.

 

 

Balance Sheet

 

	2025 (£m)	2024 (£m)	YoY growth %
Cash at Central Banks	257.9	584.7	(56)  %
Money Market Fund	218.2	488.2	(55)  %
Loans and advances to banks	129.9	185.6	(30)  %
Debt Securities	677.5	246.0	175  %
Non-HQLA Assets	5.1	0.2	2450         %
Treasury Assets	1,288.6	1,504.7	(14)  %
Trade Finance	269.8	179.7	50       %
Working Capital	21.5	32.6	(34)  %
Right of use assets	15.7	17.8	(12)  %
Intangible Assets	31.2	30.6	2           %
Fixed and Other Assets	32.9	39.4	(16)  %
Total Assets	1,659.7	1,804.8	(8)      %
Customer Deposits - Current	915.6	775.8	18       %
Customer Deposits - Term	520.9	809.2	(36)  %
Customer Deposits	1,436.5	1,585.0	(9)      %
Other Liabilities	62.5	73.2	(15)  %
Shareholders Funds	160.7	146.6	10       %
Total Liabilities + Equity	1,659.7	1,804.8	(8)      %

Capital Expenditure

Capex for the year stood at £8.7m, broadly in line with guidance, with over 70% of investment allocated towards revenue-generating capabilities. Key projects include the continued investment in our new payment channels such as mobile wallet build and ACH build-out. We are also investing into our product capability as well as international expansion as we enhance our presence in key regions.

 

Capital, Liquidity and Investment

 

The Group continues to be well capitalised, highly liquid, short dated and focused on transactional activity with >65% of revenues driven by transactional FX and Payments activities with the remainder driven by Banking products.

 

As at 31 December 2025, only 22% of deposits were allocated towards short term trade and working capital lending with the remainder placed in High Quality Liquid Assets with Central Banks (HQLA). To put that into context, a typical bank in the UK would lend out at least three times this proportion of deposits¹.

 

Proforma CET1 ratio² increased to 22.1% (2024: 19.2%) reflecting the accumulated profits offset by a controlled increase in the trade finance portfolio Total proforma CET1 Capital stood at £129.3m (2024: £116.0m) an increase of 12% retaining a £41.1m surplus above the Overall Capital Requirement.

 

Liquidity metrics remain strong with both LCR and NSFR well above regulatory minimums at 123% and 148% respectively.

 

1   Defined as a basket of comparable transaction banks: Barclays, Lloyds, NatWest, Standard Chartered, Standard Bank, Commerzbank and HSBC as at 31 December 2024.

2   Proforma CET1 ratio includes 2025 audited profits and pillar 1 operational risk uplift. Regulatory CET1 ratio as at 31 December 2025 is 19.9% (2024: £19.7%)

 

Dividend

No dividends have been declared in 2025 (2024: nil). The Group does not currently have a dividend policy.

 

Outlook

 

Following a strong performance in 2025, the Group has started trading positively in 2026 and expects its strategy to continue delivering more diversified and sustainable revenue growth. CAB operates in markets that typically grow faster than global averages and are becoming increasingly central to world-wide flows. Expanding client coverage, market penetration and product depth was key to 2025 performance and will continue to be our focus over the medium-term.

 

The Group therefore believes it is well placed to deliver Total Income excluding Net Interest Income growing at a high-teens to low-20s percentage CAGR in Total Income over the next three years. In the near term, lower US interest rates are expected to create headwinds for Net Interest Income.

 

The business is expected to deliver continued positive operating leverage supporting a structural improvement in cost-income ratio over time. We expect additional investment in client-facing teams and network to be partially offset by efficiency gains from automation and process improvements.

 

The Group expects Capital Expenditure to increase in 2026 while it builds a future-ready operating platform as it enters the next phase of growth.

 

Our business model is structurally highly cash generative. With the Group now operating near the upper end of its on‑balance‑sheet lending appetite, we believe that the Group will generate significant surplus capital over the next 3 years leading to capacity for investment in growth as well as a potential shareholder return programme, a framework for which will be laid out at the time of the 2026 results.

 

James Hopkinson

Chief Financial Officer

 

 

Principal Risks and Uncertainties

 

Effective risk management is critical to realising our strategy. We have an established risk management framework to manage and mitigate the various risks that we face.

As at 31 December 2025 our principal risks consisted of:

 

		Current Context	Mitigants and other considerations
1. Business risk
Risk Description The risks to the Group arising from: •   the broader risk of the Group's business model or strategy proving inadequate due to macroeconomics, geopolitical, industry, regulatory, competitive environment or other factors; or ​ •   adverse events and media coverage that could negatively impact the Group's name and reputation thereby impacting its ability to achieve its strategic objectives.		•   The Group's business model and operations rely on the continued relationships with a diversified network of counterparties, liquidity providers and partner banks for clearing USD, GBP and EUR. •   The Group provides access to emerging markets, with a level of concentration to Sub-Saharan Africa. Significant changes to our partner network or key markets (e.g. the risk of market dislocations, general access, regulatory, economic, or geopolitical conditions) would have a corresponding impact on the Group's business, operations, financial performance and reputation. •   The Group's business model and operations rely on the continued relationships with a diversified network of counterparties and partners including liquidity providers. Potential events may include: •   Adjustments in the nature of our partner networks impacting access to local liquidity or clearing services. Structural changes to markets that result in the removal or narrowing of margins and/or access to preferential local market currency rates. •   Changes to local economies including market structure (e.g. regulatory/central bank monetary actions): -      Economic or political events (e.g. changes in government). -      Translation risk associated with significant strengthening in GBP relative to USD.		•   The Board and Management periodically: -  Review and update the strategic plan, budgets, targets, emerging opportunities, and threats. -  Track and manage, through governance, a range of metrics and early warning indicators to highlight emerging risks to performance; these continue to be developed and enhanced. •   The Group has a dedicated Network and Partnerships Function, who develop and manage our key local relationships; actions continue to be taken to ensure these are adequately diversified including key currencies such as USD and GBP. This function also tracks and reports regulatory changes and geo-political issues in these markets. •   The Group has a strategic risk register which tracks the top risks and the corresponding actions planned and underway to mitigate these. This is reported periodically to the Risk Committee and Executive Risk Committee. •   The Group has a medium-term strategy in place to continue diversifying revenues across geographies, clients and products whilst investing in its sales team.

 

2. Financial crime risk
Risk Descriptions The risk associated with criminal activity in the form of money laundering, terrorist financing, bribery and corruption, sanctions, tax evasion and fraud.			•   Foreign Exchange (FX) remains the dominant product, utilised by over 90% of clients. However, correspondent banking and payment services are core offerings. AML and sanctions risks remain most pronounced, within this area, and Trade Finance, accounting for the majority of Suspicious Activity Reports submitted to the NCA. •   The Group delivers services to clients across global jurisdictions, including Africa, the Americas and Caribbean, the Middle East, the USA, Canada, and Europe. Historically, client concentration was weighted toward higher-risk countries; however, continued trends show increased payment flows from low-risk to higher-risk jurisdictions. Despite this, new clients in higher risk regions continued to be onboarded in 2025, while strategic expansion into the Americas and the UAE is underway to reduce reliance on African markets. •   In 2025 there was no significant change in the distribution of Client types within CAB's portfolio and Financial Institutions remain the largest segment of CAB's Client portfolio. •   CAB specialises in segments including Fintechs, Money Service Businesses (MSB), and charities, but also includes segments such as financial institutions, Central Banks and supranational organisations. •   The Group's organisational structure and control environment continue to be assessed as low due to no legacy financial crime issues, and no major control failures. The introduction of the UAE subsidiary may impact this operating risk, although the Group's licensed subsidiaries operate in a simple, non-complex structure and are physically located in jurisdictions with well established regulatory standards. •   Regulatory oversight and scrutiny are generally lower for many Fintechs and MSBs. Continued observed regulatory penalties in 2025, related to control deficiencies within MSBs, highlight persistent challenges in mitigating financial crime risk in this sector, supporting their classification as higher risk. Similarly, financial institutions operating in high-risk jurisdictions are assessed as higher risk due to the inherent country-level exposure, which may present additional challenge to the Group.		•   To effectively mitigate risks, the Group enforces rigorous onboarding standards and comprehensive due diligence for correspondent banking, supported by strong governance structures and dedicated client risk approval committees. •   A robust country risk framework mitigates the Group's exposure to high-risk countries. This framework includes complete prohibitions of some countries and detailed restrictions on others. •   Screening and monitoring controls enforce the framework, and the Group's employees have a strong awareness and understanding of the legal and regulatory environment in which they operate, including the relevant financial crime prevention provisions. •   The Group continues its investment programme in anti-financial crime technology, focusing on advanced analytics and rule-set optimisation. Following the successful implementation of a new transaction monitoring system and screening upgrades in 2024, Phase 2 enhancements were delivered in 2025, introducing machine learning capabilities and improved alert handling. Additional upgrades to sanctions screening and real-time monitoring are underway to further strengthen detection and response. •   Regular training is delivered to ensure standards are continuously maintained. •   A dedicated Risk and Compliance Function provides oversight and undertakes thematic assurance activity to identify potential gaps and issues.

 

3. Operational risk
Risk Description The risk of loss or other non-financial impact, resulting from inadequate or failed internal processes, people and systems, or from external events.		•   The Group relies extensively on the use of technology, including the inter-relationship between multiple third-party services, which is central to the processing and its operating environment. System resiliency coupled with the growing sophistication of cyber-attacks is consistently under review. •   Resource capacity and capability impact all risk types, these are monitored frequently to ensure staffing levels reflect the size and complexity of the Group. •   The Group relies on a combination of manual and automated processes. Specific clients have bespoke processes that are more prone to human errors. The Group is acutely aware that a technology incident could result in manual intervention as part of its recovery efforts.		•   The Group is Cyber Essentials and ISO 27001 accredited. Additionally, the Group continues to enhance its operational resilience efforts with a key focus on critical third-party resilience testing. •   The Group deploys several attraction and retention strategies throughout the employee lifecycle, including hybrid-working and competitive employee benefits. •   Process and control automation is proactively considered across the Group, acknowledging that not all processes can be automated but regular process review cycles support in ensuring processes and procedures are consistently updated and maintained.

 

4. Credit risk
Risk Description The risk of financial loss arising from a borrower's or counterparty's failure or inability to meet their financial obligations in accordance with contractual terms.		•   Credit risk arises inherently from the Group's core banking, financing, and treasury activities. It represents the potential for financial loss should counterparties fail to meet their contractual obligations in full and on time. •   The Group's exposure to credit risk primarily stems from its lending and trade finance operations, including working capital overdrafts, letters of credit, guarantees, and other customer financing products. These exposures are managed through robust credit approval processes, ongoing monitoring, and clearly defined risk appetite parameters. •   Counterparty credit risk also emerges from the Group's foreign exchange, payment, and derivative transactions, where counterparties may be unable or unwilling to fulfil their financial or collateral obligations as they fall due. Such exposures are mitigated through the use of collateral management frameworks, netting agreements, and credit support annexes (CSAs) where appropriate. •   In addition, treasury and liquidity management activities contribute to credit risk through the placement of surplus funds with financial institutions and investments in high-quality liquid assets (HQLA) and money market instruments. These exposures are controlled by adhering to internal counterparty limits, minimum credit rating thresholds, and concentration risk metrics. •   Overall, the Group maintains a balanced credit risk profile, supported by sound governance, regular stress testing, and alignment with the Group's overarching risk appetite and capital management framework.		•   Credit risk remains a key area of focus for the Group, given its central role in the Group's banking, financing, and treasury activities. •   The Group's risk appetite thresholds are designed in alignment with regulatory requirements and are informed by the outcomes of the Internal Capital Adequacy Assessment Process (ICAAP) and internal risk assessments. •   A well-established Credit Risk Policy defines portfolio-level exposure limits and a maximum individual counterparty exposure framework, ensuring appropriate diversification and concentration control. •   The Credit & Lifecycle Risk Committee provides oversight at both the individual counterparty and portfolio levels, ensuring that exposures remain within approved risk appetite and policy parameters. •   Comprehensive credit assessment, approval, and ongoing monitoring frameworks are in place to manage and mitigate exposures in line with the Group's credit management objectives and enterprise risk framework. •   Counterparty credit risk arising from foreign exchange and derivative transactions is mitigated through the use of ISDA Master Agreements and CSAs, where appropriate, to ensure effective collateralisation and reduce potential counterparty exposure.

 

 

5. Market risk
Risk Description The risk of losses occurring from adverse value movements of the Group's assets and liabilities; principally relating to FX and interest rate fluctuations. ​		•   The Group's market risk exposure occurs primarily through FX volatility and IRRBB. •   The economic and financial market uncertainties remain elevated. Disruptive adjustment to interest rate levels, deteriorating trade or geopolitical tensions could have implications for FX rates and the value of the Group's Nostro balances. Alternatively, a decline in interest rates may compress net interest margin across the business. •   Adverse changes in FX rates can impact capital ratios given elements of the risk-weighted assets exposures are denominated in foreign currencies. •   Failure to account for foreign currency movements could result in an adverse impact on the Group's regulatory capital and leverage ratios.		•   An assessment of market risk drivers is conducted as part of the ICAAP, and to assess BAU and stressed market risk. •   Market Risk exposure limits are staggered, to constrain typical market risk exposure. The Group primarily trades in the FX spot market and risk appetite limits are set and monitored at both an aggregate and currency level. •   Defensive positions are typically taken to the extent that markets exhibit increased market risk events, such as during national elections. •   Interest rate risk in the banking book (IRRBB) is primarily driven by mismatches between the profile of client deposits, capital, investments for cash management purposes, and lending. The Group manages IRRBB through strategies employed to mitigate risks to net interest income and economic value.

 

6. Regulatory and compliance risk
Risk Description The risk arising from non-compliance with laws and regulations governing financial services institutions in the markets in which we operate.		•   As the Group continues to grow in terms of increasing size and complexity it brings with it an increasingly diverse legislative and regulatory landscape and potentially increasing the risks of legal or regulatory sanctions, material financial loss and/or reputational damage in the markets in which we operate.		•   Regulatory Horizon Scanning: Ongoing monitoring of upcoming UK and international regulatory developments to anticipate and prepare for changes. •   Regulatory Impact Assessments: Conducting impact analysis for new regulations to identify operational, financial, and compliance implications. •   Timely Regulatory Engagement: Prompt and comprehensive responses to all regulatory requests and inquiries. •   Market Entry Compliance: Verification that the Group holds all necessary licenses and permissions before operating in any jurisdiction. •   Partnership Due Diligence: Collaboration with local providers that are regulated entities or hold appropriate local licenses to ensure compliance and reduce risk. •   Legal Assurance for Expansion: Engagement of third-party legal counsel for new territorial expansions to confirm adherence to local laws and regulatory requirements. •   Regulatory Updates Communication: Issuing regular compliance bulletins to staff on new or changing regulations. •   Regular Compliance Audits: Performing periodic thematic reviews to ensure adherence to regulatory requirements. •   Executive Reporting: Including regulatory risk metrics and compliance status in ExCo-level reporting.

 

 

7. Capital adequacy risk
Risk Description The risk of the Group having insufficient quality or quantity of capital, to meet its regulatory capital requirements and internal thresholds to cover risk exposures and withstand a severe stress as identified as part of the ICAAP.		•   The Group's capital ratios can be affected by various business activities and the failure to meet prudential capital requirements, internal targets and/or to support the Group's strategic plans. •   The key risk drivers with capital implications are credit risk, market risk and operational risk, each of which is addressed within its relevant section.		•   The Group has robustly defined capital adequacy thresholds, constructed in reference to regulatory requirements and maintains capital ratios in excess of these. •   The Group produces an ICAAP at least once each calendar year. Challenge and oversight of the ICAAP occurs at the Asset & Liability Risk Committee and the Risk Committee before approval by the Board. •   Day-to-day capital risk exposure is managed by the Treasury function with oversight from the Asset & Liability Risk Committee and the Group Treasury Committee, who monitor and manage capital risk in line with the Group's capital management objectives, capital plan and risk frameworks. •   If the Group were to encounter a significant stress on capital resources, a Recovery Plan is maintained which includes options to ensure it can remain sufficiently capitalised to remain viable. Recovery Plan metrics are regularly monitored and reported against. The Group's Pillar 3 disclosures contain a comprehensive assessment of its capital requirements and resources and are published separately on the Group's website.

 

8. Liquidity and funding risk
Risk Description The risk the Group cannot meet its contractual or contingent obligations in a timely manner as they fall due. Funding risk is the risk that the Group cannot maintain access to a sufficient stable funding base to maintain its liquidity.		•   The Group's liquidity ratios (i.e. LCR and Net Stable Funding Ratio (NSFR)) can be affected by various business activities, either idiosyncratic or market-wide, that could impact prudential liquidity requirements and corresponding business activities, and investor or depositor confidence. •   The key liquidity risk drivers are depositor outflows, and intraday liquidity requirements.		•   Funding and liquidity risks are managed within a comprehensive risk framework in reference to regulatory requirements and internal thresholds to ensure there is no significant risk that liabilities cannot be met as they fall due. •   The Group produces an ILAAP at least once per calendar year. Challenge and oversight of the ILAAP occurs at the Asset & Liability Risk Committee and the Risk Committee before approval by the Board. •   The primary metrics used to monitor and assess the adequacy of liquidity are the Overall Liquidity Adequacy Rule (OLAR), the LCR and NSFR. •   Day-to-day liquidity risk exposure is managed by the Treasury function with oversight from the Asset & Liability Risk Committee. •   Treasury conducts regular and comprehensive liquidity stress testing, including reverse stress testing, to ensure that the liquidity position remains within the Board's appetite.

 

 

9. Conduct risk
Risk Description The risk that the conduct of the Group and its staff, towards clients (or in the markets in which it operates), leads to unfair or inappropriate client outcomes and results in reputational damage and/or financial loss.		•   As the Group continues to operate in complex markets and deliver services to a diverse client base, there is an ongoing risk that actions, processes, or products originating within the Group could lead to client detriment. Conduct risk may arise through several channels, including: •   Product design that fails to meet client needs or expectations; •   Inappropriate sales practices that do not align with regulatory or market standards; •   Poor complaint handling, particularly where the Group has acted improperly towards clients; •   Behaviour or practices that fall short of market integrity or regulatory requirements; and •   Such failures could result in unfair or inappropriate client outcomes, leading to reputational damage, regulatory scrutiny, and potential financial loss.		•   Integration of Conduct Risk in Product Governance: All new products undergo a formal approval process that includes an assessment of conduct risk to ensure suitability and fair client outcomes. •   Robust Complaints Management Framework: Complaints are systematically logged, thoroughly investigated, and resolved with documented responses to maintain transparency and accountability. •   Gifts and Hospitality Controls: A formal Gifts and Hospitality Policy is in place, requiring prior approval and mandatory logging of all instances to prevent conflicts of interest. •   Mandatory Conduct and Ethics Training: All employees complete annual training focused on conduct, ethics, and cultural standards to reinforce expected behaviours and regulatory compliance. •   Executive-level reporting: Including conduct risk metrics and thematic reviews in regular ExCo-level updates. •   Conduct Risk MI (Management Information): Tracking indicators such as complaints trends, client detriment cases, and breaches. •   Whistleblowing Framework: Strengthening anonymous reporting channels and ensure staff confidence in escalation processes. •   Communication monitoring: surveillance of electronic communications (emails, chats, voice recordings) to ensure compliance with conduct standards.

 

Financial Statements

 

Consolidated Statement of Profit or Loss

		2025	2024
	Note	£'000	£'000
Interest income	3	55,788	58,857
Interest expense	3	(29,779)	(38,403)
Net interest income		26,009	20,454
Gain on money market funds		14,688	16,070
Net loss on financial assets and financial liabilities mandatorily held at fair value through profit or loss	4	(1,616)	(247)
Fees and commission income	5	16,488	15,745
Net foreign exchange gain	6	62,685	53,803
Other operating income		735	616
Total income		118,989	106,441
Operating expenses before non-underlying items	7	(94,523)	(84,659)
Non-underlying items	7a	(4,674)	(3,741)
Operating expenses after non-underlying items		(99,197)	(88,400)
Other finance costs	3	(1,384)	(897)
Impairment reversal on financial assets at amortised cost		113	450
Profit before tax		18,521	17,594
Tax expense	8	(4,965)	(3,382)
Profit for the year		13,556	14,212

 

Profit for the financial year arises from continuing operations and is attributable to the owners of the parent.

 

Earnings per share		2025	2024
		pence	pence
Basic earnings per share	28	5.4	5.6
Diluted earnings per share		5.2	5.3

 

Earnings per share relate entirely to continuing operations.

Consolidated Statement of Other Comprehensive Income

 

		2025	2024
		£'000	£'000
Profit for the year		13,556	14,212
Other comprehensive income for the year:
Items that may be reclassified subsequently to profit or loss:
Foreign exchange (losses)/gains on translation of foreign operations		(53)	4
Cash flow hedge reserve	12	(244)	-
Movement in investment in debt securities at fair value through other comprehensive income	14	73	-
Items that will not be reclassified subsequently to profit or loss:
Movement in investment revaluation reserve for equity instruments at fair value through other comprehensive income		98	20
Income tax relating to these items	19	(24)	(5)
Other comprehensive (loss)/income net of tax		(150)	19
Total comprehensive income		13,406	14,231

 

 

Consolidated Statement of Financial Position

		As at	As at
		31 December 2025	31 December 2024
	Note	£'000	£'000
Assets
Cash and balances at central banks	9	257,867	584,679
Money market funds	10	218,157	488,197
Loans and advances on demand to banks	11	129,946	185,559
Investment in debt securities at amortised cost	13	234,790	246,021
Investment in debt securities at fair value through OCI	14	442,751	-
Other loans and advances to banks	11	274,956	180,084
Other loans and advances to non-banks	11	21,521	32,596
Unsettled transactions		8,900	10,866
Derivative financial assets	12	489	4,884
Investment in equity securities		679	553
Other assets¹	15	9,614	9,944
Current tax asset¹		8,839	9,397
Accrued income		2,033	925
Property, plant and equipment	16	2,299	2,781
Right of use assets	17	15,713	17,754
Intangible assets	18	31,170	30,605
Total assets		1,659,724	1,804,845
Liabilities
Customer accounts	20	1,436,533	1,585,000
Derivative financial liabilities	12	1,384	539
Unsettled transactions		20,772	35,173
Other liabilities		4,843	5,967
Accruals		13,451	10,380
Lease liabilities	17	19,037	18,069
Deferred tax liability	19	928	1,217
Provisions	21	2,054	1,949
Total liabilities		1,499,002	1,658,294
Equity
Called up share capital	22	85	85
Treasury shares reserve		(264)	(244)
Retained earnings		161,065	146,724
Investment revaluation reserve		200	126
Cash flow hedge reserve	12	(244)	-
Debt securities revaluation reserve	14	73	-
Foreign currency translation reserve		(193)	(140)
Shareholders' funds		160,722	146,551
Total liabilities and equity		1,659,724	1,804,845

^¹  Additional disclosure has been made in respect of current income tax to present it separately to Other assets. Refer to Note 15  for further information.

Company registration number - 09659405. The Board of Directors approved and authorised for issue the consolidated financial statements on 4 March 2026. Signed on behalf of the Board by: 

 

 

N Kapur	J Hopkinson
Group Chief Executive Officer	Group Chief Finance Officer

 

Consolidated Statement of Changes in Equity

 

	Share capital	Treasury shares reserve	Retained earnings	Investment revaluation reserve	Debt securities revaluation reserve	Cash flow hedge reserve	Foreign currency translation reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2025	85	(244)	146,724	126	-	-	(140)	146,551
Profit for the year	-	-	13,556	-	-	-	-	13,556
Other comprehensive income:
Foreign exchange gain on translation of foreign operations	-	-	-	-	-	-	(53)	(53)
Movement in investment revaluation reserve for equity instruments at fair value through other comprehensive income	-	-	-	98	-	-	-	98
Cash flow hedge reserve (Note 12)	-	-	-	-	-	(244)	-	(244)
Movement in investment in debt securities at fair value through other comprehensive income (Note 14)	-	-	-	-	73	-	-	73
Income tax relating to these items (Note 19)	-	-	-	(24)	-	-	-	(24)
Other comprehensive income net of tax	-	-	-	74	73	(244)	(53)	(150)
Total comprehensive income	-	-	13,556	74	73	(244)	(53)	13,406
Transactions with owners in their capacity as owners:
Share-based payment expense	-	-	615	-	-	-	-	615
Deferred tax on share based payment expense	-	-	170	-	-	-	-	170
Acquisition of treasury shares by EBT	-	(20)	-	-	-	-	-	(20)
Total	-	(20)	785	-	-	-	-	765
Balance at 31 December 2025	85	(264)	161,065	200	73	(244)	(193)	160,722
Balance at 1 January 2024	85	-	131,478	111	-	-	(144)	131,530
Profit for the year	-	-	14,212	-	-	-	-	14,212
Other comprehensive income:
Foreign exchange losses on translation of foreign operations	-	-	-	-	-	-	4	4
Movement in investment revaluation reserve for equity instruments at fair value through other comprehensive income	-	-	-	20	-	-	-	20
Income tax relating to these items (Note 19)	-	-	-	(5)	-	-	-	(5)
Other comprehensive (loss)/income net of tax	-	-	-	15	-	-	4	19
Total comprehensive income	-	-	14,212	15	-	-	4	14,231
Transactions with owners in their capacity as owners:
Share-based payment expense	-	-	996	-	-	-	-	996
Change in ownership interest in subsidiary	-	-	38	-	-	-	-	38
Share capital reduction	-	(244)	-	-	-	-	-	(244)
Total	-	(244)	1,034	-	-	-	-	790
Balance at 31 December 2024	85	(244)	146,724	126	-	-	(140)	146,551

 

 

 

Consolidated Statement of Cash Flows

 

		2025	2024
	Note	£'000	£'000
Cash (outflow)/inflow from operating activities	23	(613,426)	96,774
Tax paid		(4,687)	(11,766)
Payments for interest on lease liabilities		(45)	(33)
Net cash (used in)/generated from operating activities		(618,158)	84,975
Cash flow used in investing activities
Purchase of property, plant and equipment	16	(134)	(2,428)
Purchase of intangible assets	18	(7,639)	(12,524)
Refund of investments in subsidiary undertakings		-	39
Purchase of equity investments		-	(53)
Net cash used in investing activities		(7,773)	(14,966)
Cash flow used in financing activities
Repayment of principal portion of the lease liability		(193)	(295)
Purchase of treasury shares		(20)	(244)
Net cash used in financing activities		(213)	(539)
Net (decrease)/ increase in cash and cash equivalents		(626,144)	69,470
Cash and cash equivalents at the beginning of the year		1,258,435	1,183,777
Effect of exchange rate changes on cash and cash equivalents		(26,321)	5,188
Cash and cash equivalents at the end of the year		605,970	1,258,435
Analysed as follows:
Cash and balances at central banks	9	257,867	584,679
Money market funds	10	218,157	488,197
Loans and advances on demand to banks	11	129,946	185,559

 

 

Notes to the Financial Statements

 

1.   Statement of Accounting Policies

 

The following accounting policies relate to the financial statements of CAB Payments Holdings plc (the 'Company') and its subsidiaries (collectively referred to as the 'Group').

 

a) General information

The Company is incorporated and domiciled in England. On 4 July 2023 the Company was re-registered as a public limited company, CAB Payments Holdings plc, in order to align with its strategic objectives. The address of its registered office as at  31 December 2025 is 3 London Bridge St, London, SE1 9SG, England.

The Company's shares trade under the ticker code of CABP.L.

The Group is a market leader in business-to-business cross-border payments and foreign exchange, specialising in hard-to-reach markets.

 

b) Basis of preparation

 

The financial information included in this preliminary announcement have been prepared in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority, and the principles of UK-adopted international accounting standards, but do not comply with the full disclosure requirements of these standards.

 

The financial information contained in this announcement does not constitute the statutory financial statements of the Group as at and for the year ended 31 December 2025, but is derived from those financial statements, which have been prepared in accordance with the UK adopted International Accounting Standards (UK-adopted International Financial Reporting Standards (IFRSs)) in conformity with the applicable legal requirements of the Companies Act 2006.

 

The statutory financial statements themselves have been approved by the Board of Directors and reported on by the auditor and will be delivered to the Registrar of Companies following the Group's Annual General Meeting. The auditor reported on those financial statements: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under s498(2) or (3) of the Companies Act 2006.

 

The preliminary is presented in British Pound Sterling (£). All values are rounded to the nearest thousand (£'000), except when otherwise indicated.

 

 

c) Basis of consolidation

 

The consolidated financial statements include the financial statements of the Company and all of the entities controlled by the Company made up to 31 December each year. Control is achieved when the Company:

 

•     has the power over the investee;

•     is exposed, or has rights, to variable return from its involvement with the investee; and

•     has the ability to use its power to affect its returns.

 

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

 

A subsidiary is an entity controlled directly or indirectly by the Company. The Company controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the investee.

 

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in the consolidated profit or loss account from the date the Company gains control until the date when the Company ceases to control the subsidiary.

 

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.

 

All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions between the members of the Group are eliminated on consolidation, with the exception of foreign currency gains and losses on intragroup monetary items denominated in a foreign currency of at least one of the parties.

 

Changes in the Group's interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amount of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to the owners of the Company.

 

The Group has established employee benefit trusts (EBTs) to hold shares to meet the Group's obligation to provide shares awarded to employees under the share incentive plan. Shares held by the EBTs are deducted from equity and presented as Treasury Shares until such time that the shares settle. The EBT is controlled and recognised by the Company using the look-through approach, i.e. as if the EBT is included within the accounts of the Company.

 

d) Going concern

 

The Directors have assessed the ability of the Company and of the Group to continue as a going concern based on the net current asset position, regulatory capital requirements and estimated future cash flows. The Directors have formed the view that the Company and the Group have adequate resources to continue in existence for a period of at least 12 months from when these financial statements are authorised for issuance. Accordingly, the financial statements of the Company and the Group have been prepared on a going concern basis.

 

Critical to reaching this view were:

•              The output of internal stress assessments which were conducted at a Company and a Group level and modelled the impact of severe yet plausible stresses which underpinned the Going concern assessment.

•              The output of the reverse stress testing assessment which modelled the scenarios that would have to occur in order for the Group to fall below its Total Capital Requirement (being the aggregate of Pillar 1 and Pillar 2A capital requirements).

 

In reaching their conclusions, the Directors also considered the results of the  2025 Going concern assessment and the three year Budget and Corporate Plan.

 

i. Internal stress assessments

 

In total, three stresses were considered:

•     That income from all new products and new markets, which are either in their infancy and/or are unproven, do not succeed. For prudence, all costs were assumed to be retained as per the base case plan;

•     Market Stress which modelled the impacts of a severe global recession which leads to increased credit defaults and a low interest rate environment detrimentally impacting Net Interest Income and GBP sharply depreciating against USD;

•     Idiosyncratic Stress which modelled the impact of a material reduction in revenue driven by idiosyncratic events.

The Group's most recent ICAAP was approved by the Board in June 2024. As part of this Going Concern assessment, severe, but plausible Idiosyncratic, and Combined stresses similar to those applied in that ICAAP are applied to the three year Budget and Group Corporate Plan which was Board approved during December 2025.

 

In all the stresses noted above the Group maintained sizeable surpluses to the Total Capital Requirement and liquidity requirements.

 

ii. Reverse stress tests

 

The reverse stress tests are used to assess vulnerabilities of the Group and determine what extreme adverse events would cause the business to fail. Where any of these events are deemed to be plausible, the Group will adopt measures to mitigate the impact of such events where plausible.

 

The Group did not identify reasonably possible scenarios which could result in failure to continue in operational existence for a period of at least 12 months from when these financial statements are authorised for issuance.

 

iii. Conclusion

 

The Directors are of the view that:

•     There are no material uncertainties relating to events or conditions that cast significant doubt on the Company's and the Group's ability to continue as a going concern; andThe significant judgements and estimates made by management in determining whether or not the adoption of the going concern is appropriate are disclosed in Note 18. The forecasts and assumptions used for impairment assessments were the same used for the going concern assessment.

 

Accordingly, the financial statements have been prepared on a going concern basis.

 

 

e) Interest income and interest expense

 

i) Net interest income

 

Interest income and interest expense for all interest-bearing financial instruments, including interest accruals on related FX contracts, are recognised within Net interest income in the consolidated statement of profit or loss and other comprehensive income. The interest expense on financial liabilities and interest income on assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, is recognised using the effective interest method.

 

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability.

 

ii) Net loss on financial instruments measured at fair value through profit or loss

 

This balance comprises the interest income or interest expense on FX derivatives. It is measured at the contractual interest rate. The balance also comprise:

•     Fair value gains or losses on the hedged instruments;

•     Fair value gains and losses on the hedged items measured at amortised cost;

•     The effective portion adjustments of the fair value hedges; and

•     Effective gains/losses reclassified to income statement from cash flow hedge reserve when a hedged item affected net profit.

 

f) Fees and commission income

 

Fees and commission receivable which are not an integral part of the effective interest rate are recognised as income as the Group fulfils its performance obligations. Fees and commission income includes the following key revenue streams:

 

•     Account management and payment services: the Group's performance obligation in relation to account management services is to provide management or maintenance services to its current account holders. The revenue for these services is recognised over the life of the contract on a monthly basis as fees are received. Crown Agents Bank Ltd (CAB) provides the service. Payment services fees relate to services offered by the Group to its clients by executing payment transactions. Revenue from providing services is recognised at a point in time when the services are rendered i.e. when the payments are executed.

•     Pension payment fees: pension payment fees are charged to pension companies for making payment to pension beneficiaries on their behalf. The Group acts as a principal in rendering these services to its clients. Revenue from providing services is recognised at a point in time when the services are rendered i.e., when the payments are executed.

 

•     Trade finance - Financial guarantee income: includes fixed fees earned for issuing financial guarantee contracts. The performance obligation of the Group is to provide financial assurance to the recipient of the guarantee in case of payment default. Revenue is recognised over the period of the contract term. The fees for providing financial guarantee services are charged and collected upfront.

 

 

•     Trade Finance - Income from letters of credit: the Group also receives fees in respect of the issue of letters of credit where the performance obligations are typically fulfilled towards the end of the client contract. Where it is unlikely that the letter of credit will be drawn down, it is recognised in fee and commission income over the life of the facility, rather than as an adjustment to the effective interest rate for loans expected to be drawn as they are short-term facilities. The fees for acceptance of letters of credits include fees and are charged and collected upfront. Other charges include advising fees, confirming bank fees, and bank charges, all of which are collected on the completion of the term of the letter of credit.

 

•     Electronic platform fees: fees for the services provided by the Group using its electronic platform to facilitate bulk payments to its clients. Revenue is recognised at a point in time when the services are rendered i.e., when the payments are executed.

 

g) Net foreign exchange gain

 

Net FX gain comprises wholesale FX and FX gain on payment transactions as follows:

 

•     Wholesale FX - Profit on settlement of FX contracts: these profits arise on FX Settlements involving the instruction of client payments to specific recipients. Under the Group's FX and payment services, clients agree to terms and conditions for all transactions at the time of signing a contract with the Group. On trade date the Group measures these cash flows at fair value, with further changes in fair value being recognised in profit or loss until the settlement of the contract. This balance includes both realised and unrealised FX income at year-end.

•   Wholesale FX - Remeasurement of non-sterling balances: Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated to the functional currency using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. FX gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss except for FX gains and losses in relation to instruments measured at fair value through other comprehensive income (FVTOCI) which are recognised in other comprehensive income (OCI).

 

•              Wholesale FX - Fair value gains or losses on derivatives:this comprises the profits and losses on remeasurement of forward FX derivatives carried at fair value through profit and loss (FVTPL).

 

•              FX gain on payment transaction revenue: a FX gain or loss on payment transactions is the difference between the spot exchange rate between the functional currency and the foreign currency at the date of the payment transaction.

 

h) Foreign currency transactions and balances policy

 

(i) Functional and presentational currency

The Company's and the Group's functional and presentational currency is British Pound Sterling (£).

 

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

 

 

At each period end foreign currency monetary items are translated to the functional currency using the closing rate. Non‑monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

 

 

FX gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated statement of profit or loss except for FX gains and losses in relation to instruments measured at fair value through other comprehensive income (FVTOCI) which are recognised in other comprehensive income (OCI).

 

(iii) Group companies

 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated to the Group's presentational currency at exchange rates prevailing at the close of business on the balance sheet date. Income and expense items are translated at the exchange rates on the day of the transaction.

 

FX differences arising on the translation of a foreign operation are recognised in other comprehensive income and accumulated in the Foreign Currency Translation Reserve (FCTR).

 

(iv) Lack of exchangeability on currencies

 

If a currency becomes unexchangeable either for purposes of translating foreign currency transactions during the year or foreign operations and FX balance sheet balances to GBP at reporting date, management estimates the spot exchange rates for such currencies in line with IAS 21 requirements by using either:

 

•           an observable exchange rate without adjustment (e.g. exchange rates from the market sources or independent providers like Reuters); or

•           an estimation technique e.g. first subsequent available exchange rate from official independent sources.

The impact of this amendment, effective 1 January 2025, has been assessed as not material to the Group.

 

i) Taxation

 

The tax expense for the period comprises current and deferred tax recognised in the reporting period. Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. If current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

Current or deferred tax assets or liabilities are not discounted.

 

Current tax

 

Current tax is the tax expected to be payable on the taxable profit for the year and on any adjustment to tax payable in respect of previous years. Taxable profit differs from net profit as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

 

A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable.

 

If a company within the Group incurs losses within the period, that company may surrender trading losses and other amounts eligible for relief from corporation tax to another Group company (the 'claimant company') for the claimant company to set off against its own profits for corporation tax purposes as permitted by HMRC.

 

Deferred tax

 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, a deferred tax liability is not recognised if the temporary difference arises from the initial recognition of goodwill.

 

j) Intangible assets (excluding Goodwill)

 

Intangible assets (except for Goodwill) are stated at cost less accumulated amortisation and accumulated impairment losses. The residual value of such intangible assets is amortised, using the straight-line method, over their estimated useful lives, as follows:

 

•     Core accounting software - 12.5 years;

•     Other software - 5 years (subject to regular management assessment of the economic benefit of the asset); and

•     Brand/name - 50 years (acquired).

 

Costs associated with maintaining computer software are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met:

 

•     it is technically feasible to complete the software so that it will be available for use;

•     management intends to complete the software and use or sell it;

•     there is an ability to use or sell the software;

•     it can be demonstrated how the software will generate probable future economic benefits;

•     adequate technical, financial and other resources to complete the development and to use or sell the software are available; and

•     the expenditure attributable to the software during its development can be reliably measured.

 

Other development expenditure that does not meet these criteria is recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Long-term software-as-a-service (SaaS) type contracts that do not meet the definition of an asset (rental of software) are expensed to profit and loss over the period of the contract in line with the benefits received.

 

 

 

k) Property, plant and equipment, and depreciation

 

Property, plant and equipment are stated in the statement of financial position at historic cost less accumulated depreciation. Cost includes the original purchase price of the asset and the costs attributable to bring the asset to its working condition for its intended use. Depreciation commences when an asset becomes available for use and is calculated to write down assets to their residual value in equal instalments, on a straight-line basis over their estimated useful lives, as follows:

 

 

Leasehold improvements	Life of lease
Computer equipment	5 years
Fixtures and fittings	5 years
Artwork	20 years

 

l) Impairment of non-financial assets

 

At each statement of financial position date, non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired, such as a decline in operational performance, geopolitical uncertainty, economic uncertainty i.e. rising interest rates and inflation, or changes in the outlook of future profitability among other potential indicators. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset.

 

Individual assets are grouped for impairment assessment purposes at the lowest level at which there are identifiable cash inflows that are largely independent of the cash flows of other groups of assets. This should be at a level not higher than an operating segment. The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset's continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset. In determining fair value less costs to sell, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit or loss unless the asset has been revalued then the amount is recognised in other comprehensive income to the extent of any previously recognised revaluation. An impairment loss recognised on goodwill is not reversed in a subsequent period.

 

If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the statement of profit or loss and other comprehensive income.

 

Goodwill is allocated on acquisition to the cash-generating unit expected to benefit from the synergies of the combination. Goodwill is included in the carrying value of cash-generating units for impairment testing.

 

Disposal groups held for sale are measured at the lower of their carrying amount and fair value less costs to sell. At initial classification of the disposal group as held for sale, the carrying amounts of all the individual assets and liabilities in the disposal group are measured in accordance with the Group's accounting policies. If fair value less costs to sell for the disposal group is below the aggregate carrying amount of all of the assets and liabilities included in the disposal group, the disposal group is written down. The impairment loss is recognised in profit or loss for the period.

m) Cash and cash equivalents

 

Cash and cash equivalents include cash in hand and deposits held at call with commercial or central banks and exposures to money market funds (transacted via open-ended investment companies). Cash equivalents are short-term highly liquid investments that are readily convertible to a known amount of cash and which are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

 

n) Goodwill

 

Goodwill arises on the acquisition of subsidiaries and represents the excess of the consideration transferred over the Group's interest in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of any non-controlling interest in the acquiree.

 

Goodwill is tested for impairment at the end of each accounting period.

 

On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Goodwill is accounted for at cost less accumulated impairment losses.

 

o) Financial instruments

 

Financial assets and financial liabilities are recognised in the Company and Group statements of financial position when the Company or Group becomes a party to the contractual provisions of the instrument.

 

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 

(i) Financial assets

 

All regular way purchases or sales of financial assets are recognised and derecognised using trade date accounting. The trade date is the date of the commitment to buy or sell the financial asset.

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.

 

Classification of financial assets

 

Financial assets that meet the following conditions are measured subsequently at amortised cost:

•     the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

•     the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

•    

•     Financial assets that meet the following conditions are measured subsequently at FVTOCI:

•     the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

•     the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

Despite the foregoing, the Group and the Company may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if equity instruments are held as a strategic investment and not held with the intention to realise a profit.

 

By default, all other financial assets are measured subsequently at fair value through profit or loss.

The Group's financial assets measured at amortised cost consist of:

•     Cash and balances at central banks;

•     Loans and advances on demand to banks;

•     Other loans and advances to banks;

•     Other loans and advances to non-banks;

•     Investment in debt securities at amortised cost;

•     Other assets;

•     Accrued income; and

•     Unsettled transactions.

 

The nature of all financial items included in a given balance sheet line item is as shown in the respective note breakdown.

The Group's financial assets measured at FVTPL consist of money market funds and derivative financial instruments.

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in profit or loss.

 

The Group's financial assets designated at FVTOCI comprise primarily its investments in debt securities at FVTOCI, also not held for trading (Note 14) and investment in equity securities, which are not held for trading.

 

The equity instruments are held as a strategic investment and not held with the intention to realise a profit.

 

Investments in equity instruments at FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the Investment revaluation reserve. The cumulative gain or loss is not reclassified to profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.

 

Dividends on these investments in equity instruments are recognised in profit or loss in accordance with IFRS 9 unless the dividends clearly represent a recovery of part of the cost of the investment. Dividends are included in the 'Other operating income' line item in the statement of profit or loss and other comprehensive income.

 

Investments in debt securities at FVTOCI's business model is to hold to collect and sell. They are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the debt securities revaluation reserve. The cumulative gain or loss is reclassified to profit or loss on disposal of the investments.

 

Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost (Note 1 (e)) above. Interest income is recognised in the statement of profit or loss and other comprehensive income in the 'Net interest income' line item (Note 3).

 

 

Derecognition of financial assets

 

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

On derecognition of a financial asset the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognised in profit or loss.

 

(ii) Financial liabilities

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the contractual substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

 

Classification of financial liabilities

 

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at fair value through profit and loss.

 

Financial liabilities at fair value through profit and loss

The Group's financial liabilities at fair value through profit and loss consist of derivative liabilities (see below for policy on derivative financial instruments).

 

Financial liabilities at fair value through profit and loss are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss.

 

Financial liabilities at amortised cost

 

The Group's financial liabilities at amortised cost consist of customer accounts, unsettled transactions and other liabilities such as trade creditors, funds received in advance, transactions credited by third-party nostro providers and other creditors.

 

Financial liabilities at amortised cost are measured subsequently at amortised cost using the effective interest method .

 

Derecognition of financial liabilities

 

Financial liabilities are derecognised when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

 

(iii) Derivative financial instruments

 

The Group's derivatives policy only permits dealing in forward FX contracts and interest rate swaps to hedge, to provide services to clients or to facilitate cash management.

Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value at the reporting date.

Derivatives are financial instruments that derive their value from the price of underlying items such as equities, interest rates or other indices. Derivatives are recognised initially and are subsequently measured at fair value through profit or loss. Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative.

 

 

Hedge accounting

 

Under certain conditions, the Group may designate a recognised asset or liability, a firm commitment or highly probable forecast transaction into a formal hedge accounting relationship with a derivative that has been entered to manage interest rate and risks present in the hedged item. The Group has a policy to apply hedge accounting in accordance with IAS 39.

 

 

There are two categories of hedge relationships:

 

•     Macro Fair value hedge: to manage the fair value of interest rate risks of recognised assets or liabilities or firm commitments.

•     Macro Cash flow hedge: to manage interest rate risks of highly probable future cash flows attributable to a recognised asset or liability, or a forecasted transaction.

 

In the case of the hedge of a forecast transaction, the transaction must have a high probability of occurring and must present an exposure to variations in cash flows that are expected to affect reported profit or loss.

 

Hedges are considered to be highly effective if all the following criteria are met:

 

•     At inception of the hedge and throughout its life, the hedge is prospectively expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk.

•     The Group establishes the hedging ratio by matching the notional amount of the derivatives with the principal of that portion of the portfolio being hedged and manages this on a monthly basis by entering into interest rate swaps. This is tested using regression analysis.

•     Prospective and retrospective effectiveness of the hedge should be within a range of 80-125%. 

•     This is tested using regression analysis where the slope of the regression line must be between -0.80 and -1.25 and the data pairs between the hedged item and the hedging instrument are regressed to a 95% confidence interval. The regression co-efficient (R squared), which measures the correlation between the variables in the regression, is at least 96%.

 

In the case of the hedge of a forecast transaction, the transaction must have a high probability of occurring and must present an exposure to variations in cash flows that are expected to affect reported profit or loss.

 

Macro Fair value hedge

 

Changes in the fair value of derivatives that are designated and qualify as fair value hedging instruments are recorded in 'Net loss on financial assets and financial liabilities mandatorily held at fair value through profit or loss', together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to the income statement over the remaining term to maturity of the hedged item. If the hedged item is sold or repaid, the unamortised fair value adjustment is recognised immediately in the income statement. .

 

Macro Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedging instruments are initially recognised in other comprehensive income, accumulating in the cash flow hedge reserve within equity. These amounts are subsequently recycled to the income statement in the periods when the hedged item affects profit or loss. Both the derivative fair value movement and any recycled amount are recorded in the 'Cashflow hedge reserve' line item in other comprehensive income.

The Group assesses hedge effectiveness using the hypothetical derivative method, which creates a derivative instrument to serve as a proxy for the hedged transaction. The terms of the hypothetical derivative match the critical terms of the hedged item and it has a fair value of zero at inception. The hypothetical derivative and the actual derivative are regressed to establish the statistical significance of the hedge relationship.

 

Any ineffective portion of the gain or loss on the hedging instrument is recognised in the profit or loss immediately.

 

If a cash flow hedge is discontinued, the amount accumulated in the cash flow hedge reserve is released to the income statement as and when the hedged item affects the income statement.

Should the Group consider the hedged future cash flows are no longer expected to occur due to reasons, the cumulative gain or loss will be immediately reclassified to profit or loss.

 

(iv) Offsetting

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements only when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

 

(v) Equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Repurchase of the Company's own equity instruments is recognised and deducted directly from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.

 

(vi) Financial guarantee contracts and letter of credit confirmations/bill acceptances - provisions

 

 

Financial guarantee contracts

 

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due, in accordance with the terms of a debt instrument.

 

Letters of credit confirmations/bill acceptances

 

A letter of credit confirmation/acceptance is a letter from an issuing bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. The Group confirms/accepts the letters of credit issued by an issuing bank and charges fixed fees which are received either in advance or at a later date.

 

Fees relating to financial guarantee contracts and letter of credit confirmations/bill acceptances issued by the Group can be received upfront and these fees are amortised on a straight-line basis to income over the year. The receivable increases over the life of the contract as service is performed with the corresponding recognition of income in the statement of profit or loss. All financial guarantee contracts issued by the Group are subsequently measured at the higher of:

 

•     the amount of the loss allowance determined in accordance with IFRS 9; and

•     the amount initially recognised less, where appropriate, the cumulative amount of income recognised in accordance with the Group's revenue recognition policies.

 

Such amounts are presented as provisions on the statement of financial position and the remeasurement is included within the reversal of impairment/(impairment loss) on financial assets at amortised cost.

 

(vii) Impairment of financial assets

 

The Group recognises loss allowances for Expected Credit Loss (ECL) in accordance with IFRS 9 on financial assets.

Equity investments are not subject to impairment, consistent with IFRS 9.

ECLs are required to be measured through a loss allowance at an amount equal to:

•              12-month ECL (referred to as Stage 1); or

•              full lifetime ECL (referred to as Stage 2 and Stage 3).

 

For Stages 1 and 2, interest revenue is calculated on the gross carrying amount. Under Stage 3, interest revenue is calculated based on the net carrying amount (gross amount less ECL).

 

 

The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. For these financial assets, the Group recognises lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

 

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

 

Significant increase in credit risk

 

The Group monitors all financial assets, financial guarantee contracts and letter of credit confirmations/bill acceptances that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk the Group will measure the loss allowance based on lifetime rather than 12-month ECL.

 

Definition of default

 

The Group considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet the earlier of either of the following criteria are generally not recoverable:

 

•              when there is a breach of financial covenants by the debtor; or

•              information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full.

 

Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.

 

Write-off policy

 

The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

 

Measurement and recognition of ECLs

 

ECLs are a probability-weighted estimate of the present value of credit losses. These are measured as the present value of the difference between the cash flows due to the Group under the contract and the cash flows that the Group expects to receive arising from the weighting of multiple future economic scenarios, discounted at the asset's Effective Interest Rate (EIR).

 

The measurement of expected credit losses is a function of the

•     probability of default

•     loss given default (i.e. the magnitude of the loss if there is a default); and

•     exposure at default.

 

The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information.

 

As for the exposure at default, for financial assets, this is represented by the assets' gross carrying amount at the reporting date.

 

For financial guarantee contracts and letter of credit confirmations/bill acceptances, the exposure includes the amount of guaranteed debt that has been drawn down as at the reporting date, together with any additional guaranteed amounts expected to be drawn down by the borrower in the future by default date determined based on historical trend, the Group's understanding of the specific future financing needs of the debtors, and other relevant forward-looking information.

 

For a financial guarantee contract and letter of credit confirmations/bill acceptances, as the Group is required to make payments only in the event of a default by the debtor in accordance with the terms of the instrument that is guaranteed, the expected loss allowance is the expected payments to reimburse the holder for a credit loss that it incurs less any amounts that the Group expects to receive from the holder, the debtor, or any other party.

 

If the Group has measured the loss allowance for a financial instrument at an amount equal to lifetime ECL in the previous reporting period but determines at the current reporting date that the conditions for lifetime ECL are no longer met, the Group measures the loss allowance at an amount equal to 12-month ECL at the current reporting date.

 

The Group measures ECL on an individual basis, or on a collective basis for portfolios of loans that share similar economic risk characteristics. The measurement of the loss allowance is based on the present value of the asset's expected cash flows using the asset's original EIR, regardless of whether it is measured on an individual basis or a collective basis.

 

Presentation of ECL

 

Loss allowances for ECL are presented in the statement of financial position as follows:

•     for financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets; and

•     financial guarantee contracts: as a provision.

The Group recognises an increase or decrease in impairment in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

 

 

p) Employee benefits

 

The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements, medical insurance and defined contribution pension plans. The Group has implemented a one-off Free Share Scheme following the 2023 listing and a Matching/Partnership Share Scheme, both schemes for all employees. The Group also provides share incentive schemes to Executive Directors and certain other key employees or senior management as follows:

 

•     Long-Term Incentive Plans (LTIP);

•     a Matching/Partnership Share Incentive Plan (all employees)

•     a Free Shares Plan* (all employees);

 

*Applicable to 2024 only.

 

Short-term benefits

 

Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

 

Pension contributions

 

All pension contributions are accounted for as defined contributions and paid over on a monthly basis. No liability for pension entitlement accrues to the Group.

 

Share-based payment arrangements

 

The Group provides share-based payment arrangements to certain employees (as noted above).The awards are equity-settled arrangements and are measured at fair value of the equity instruments at the grant date. The fair value is expensed on a straight-line basis over the vesting period. The fair value of the employee services received in exchange for the grant of the awards is recognised in employee benefit expenses together with a corresponding increase in equity (retained earnings), over the period in which the service and the performance conditions are fulfilled (the vesting period). The grant date fair value is not adjusted for subsequent changes in the fair value of the equity instruments.

 

Long-term incentive plan awards are subject to performance conditions. LTIP awards granted in 2023 and 2024 are subject to both market performance conditions (relating to Total Shareholder Returns) and non-market performance conditions (relating to Earnings Per Share) The 2025 LTIP awards are subject non-market performance conditions only (relating to Earnings Per Share, Cost-Income Ratio and Adjusted EBITDA per average full-time equivalent employee for 2025 LTIP and Adjusted Profit After Tax for 2025 LTIP Acceleration Award).

 

Service conditions are not taken into account when determining the grant date and for fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Any other conditions attached to an award, but without an associated service requirement, are non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award. Share awards vest when service conditions are met.

 

Where the equity-settled arrangements are modified before the vesting date, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to the date of vesting. If modified after vesting, it is recognised immediately. Where a modification is not beneficial to the employee there is no change to the charge for the share-based payment. Settlement and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the statements of profit or loss and other comprehensive income.

 

The Group has no cash-settled arrangements.

 

q) Investments in subsidiaries

 

Investments in subsidiaries are non-monetary assets measured at cost less impairment.

 

r) Provisions and contingent liabilities

 

Provisions are recognised in respect of present obligations arising from past events where it is probable that outflows of resources will be required to settle the obligations and they can be reliably estimated. Provisions comprises dilapidation provision on the leased office space.

 

Contingent liabilities are possible obligations whose existence depends on the outcome of uncertain future events or those present obligations where the outflows of resources are uncertain or cannot be measured reliably. Contingent liabilities are not recognised in the consolidated and Company financial statements but are disclosed unless they are remote.

 

s) Share capital

 

On issue of ordinary shares, any consideration received is included in equity net of any directly attributable transaction costs.

 

t) Earnings per share

 

i. Basic earnings per share

 

Basic earnings per share is calculated on the Group's profit or loss after taxation attributable to the owners of the parent and based on the weighted average of ordinary shares at the end of the year.

 

ii. Diluted earnings per share

 

Diluted earnings per share is calculated on the Group's profit or loss after taxation attributable to owners of the parent and based on the weighted average of ordinary shares at the end of the year and the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Performance-based employee share options are treated as contingently issuable shares because their issue is contingent upon satisfying specified conditions in addition to the passage of time.

 

u) Dividends

 

Dividends are recognised in the financial statements in the period they are paid.

 

v) Leases (Group as lessee)

 

The Group assesses whether a contract is, or contains, a lease, at inception of the contract. The Group recognises a right-of-use asset and corresponding lease liabilities with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets (such as small items of fixtures and equipment and value of less than £10,000). For these leases, the Group recognises the lease payments as an Operating Expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

 

The lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

 

Lease payments included in the measurement of the Group's lease liabilities are fixed lease payments less any lease incentives receivable.

 

The lease liabilities are presented as a separate line in the consolidated statement of financial position.

 

The lease liabilities are subsequently measured by increasing the carrying amount to reflect interest on the lease liabilities (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

 

The right-of-use assets comprise the initial measurement of the corresponding lease liabilities, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs and estimations of any dilapidation obligations. They are subsequently measured at cost less accumulated depreciation and impairment losses.

 

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

 

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the 'impairment of non-financial assets' policy.

 

In line with IFRS 9, a liability is derecognised when the obligation in the contract is extinguished or cancelled, which in the context of the lease liabilities, they are derecognised when the Group and its subsidiaries have been legally released from the obligations by the creditors.

 

The dilapidation provision is recognised in accordance with IAS 37 when a present obligation exists due to a lease agreement requiring restoration of premises. It is initially measured at the best estimate of the expected costs to settle the obligation, discounted to present value if the time value of money is material. Subsequently, the provision is reviewed at each reporting date and adjusted for changes in estimates, such as cost revisions or discount rate changes. If initially discounted, the unwinding of the discount is recognised as an interest expense in profit or loss.

 

w) Non-underlying items

The Group separately identifies results before non-underlying items. These measures are not measures of performance under IFRS and should be considered in addition to, and not as a substitute for, IFRS measures of financial performance and liquidity. The Group uses its judgement to classify items as non-underlying. Income or expenses are recognised and classified as non-underlying when the following criteria are met:

•           The item does not arise in the normal course of business; and

•      The items are material by amount or nature.

Non-underlying items include other income or expenses not considered to drive the operating results of the Group including transaction, transformational, as well as restructuring costs. When items meet the criteria, they are recognised and classified as non-underlying and this is applied consistently from year to year,

w) New and revised IFRS accounting standards in issue but not yet effective

 

At the date of authorisation of these consolidated financial statements, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective.

 

Accounting standard*		Details of amendment
Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures effective 1 January 2026		The amendments provide guidance related to: •       Financial assets with ESG-linked features; •       Settlement of financial liabilities by electronic payments.
New sustainability standards issued by the International Sustainability Standards Board (ISSB) effective 1 January 2026 in the UK		The ISSB issued its first two sustainability reporting standards on 26 June 2023. This included: •       General Requirements for Disclosure of Sustainability-related Financial Information (IFRS S1), the core framework for the disclosure of material information about sustainability-related risks and opportunities across an entity's value chain. •       Climate-related Disclosures (IFRS S2), the first thematic standard issued that sets out requirements for entities to disclose information about climate-related risks and opportunities.
IFRS 18 Presentation and Disclosure in Financial Statements effective 1 January 2027		IFRS 18 affects all companies, bringing significant changes to how companies present their income and what information companies need to disclose, and making certain 'non-GAAP' measures part of audited financial statements for the first time. There will be three new categories of income and expenses, two defined income statement subtotals and one single note on management-defined performance measures.
IFRS 19 Reduced Disclosures for Subsidiaries		To simplify and reduce the cost of financial reporting by subsidiaries while maintaining the usefulness of their financial statements. This standard is not applicable to the Group consolidated financial statements.

 

            Anything not mentioned in the above table is not relevant.

 

The Group does not expect that the adoption of the Standards listed above will have a material impact on the consolidated and Company Financial Statements of the Group and the Company in future periods, with the exception of IFRS 18 where the impact has yet to be determined.

 

2.   Segment Reporting

 

Operating segments are determined by the Group's internal reporting to the Chief Operating Decision Maker (CODM). The CODM has been determined to be the Group's Executive Committee. The information regularly reported to the Executive Committee for the purposes of resource allocation and the assessment of performance, is based wholly on the overall activities of the Group. Based on the Group's business model, the Group has determined that it has only one reportable segment of continuing operations.

 

The CODM assesses the profitability of the segment based on a measure of EBITDA and Adjusted EBITDA and is defined as follows:

 

•     EBITDA - Calculated as Profit before Tax and IFRS 16 lease liability interest, depreciation and amortisation. Although it is typical to calculate EBITDA before interest, our net interest income is generated from operational client deposits and subsequent re-investment to generate returns for the shareholder and therefore remains included within EBITDA.

•     Adjusted EBITDA - EBITDA before Non-underlying items (Non-underlying items were referred to as Adjusting items in the prior year).

 

All revenue from external clients is generated through its operations located in the UK and on that basis is wholly attributable to the UK and all non-current assets, other than financial instruments and deferred tax assets, are located in the UK.

 

a) Income

 

The Group derives its income as follows:

 

	2025	2024
Income by business line from continuing operations	£'000	£'000
FX ¹	48,679	38,997
Payments ¹	29,517	29,510
Banking services and other income ²	40,793	37,934
Total income - net of interest expense	118,989	106,441

 

Prior period reclassifications

 

¹ At the beginning of the financial year ended 31 December 2025, the Group reassessed its client transaction classifications within the FX and Payments segments and concluded that certain transaction more appropriately meet the definition of Payment transactions. To improve the clarity and comparability of the reported financial information in line with IFRS 8, income related to these clients amounting to £2.2m  has been reclassified from the FX line to the Payments line for the 2024 comparative period.

 

This reclassification is presentational in nature and does not impact previously reported profit before tax, profit for the year, earnings per share, equity, or the statement of financial position.

 

² Refer to Note 3a for details on the reclassification of interest expense on lease liabilities disclosed within related to Banking Services and Other Income.

 

FX: Revenue categorised as FX is from clients with a need to exchange a bulk amount from one currency for another without onward payment to another party. The Group's FX revenue is derived from profit on settlement of FX contracts, remeasurement of sterling balances, fair value losses on derivatives and FX gain on payment transaction revenue. The accounting policy for the Group's Net FX gain revenue and its components is disclosed in Note 1 (g).

 

Payments: The Group's payments revenue include payments FX, same currency payments (corresponding activity income, and account management fees), pension payments and platform revenue. Payments FX comprises of the margin derived from bid-ask spreads on foreign currency conversion and fees paid by clients to transfer money from or to a third party, cross borders.

 

Same currency relates to payment services provided for payments transacted without an exchange of foreign currency largely relating to major market currency clearing and includes fees for account management activities and payments execution. Pension payments fees relate to amounts earned on processing of pension scheme foreign currency payments. Platform revenue relates to recurring fixed fees rather than fees earned on transaction volumes.

 

Banking services and other income: The Group also generates income from trade finance (including trade finance and letters of credit), working capital services, interest earned from other placements with banks, interest earned from advances to non-banks outside the Working Capital facility, interest from staff loans, and net gains from financial assets/liabilities measured at fair value. The Group takes client funds earmarked for other needs as client deposits and makes short-term investment in the money market to generate gain on money market funds.

 

b) Profitability

 

The Group measures profitability for the reporting segment on an EBITDA and Adjusted EBITDA basis. EBITDA is useful as a measure of comparative operating performance between both previous periods and other companies as it removes the effect of taxation, depreciation and amortisation as well as items relating to capital structure, while adjusted EBITDA also removes the effect of non-underlying items.

 

Reconciliation of profit before tax from continuing operations to EBITDA and Adjusted EBITDA	2025	2024
	£'000	£'000
Profit before taxation	18,521	17,594
Adjusted for:
Interest expenses on lease liabilities (Note 17)	1,384	897
Amortisation (Note 18)	7,930	6,213
Depreciation (Note 16)¹	2,690	2,320
EBITDA	30,525	27,024
Non-underlying items	4,674	3,741
Adjusted EBITDA	35,199	30,765

 

1 Balance includes depreciation on property, plant and equipment, and depreciation on right of use of asset.

 

 

3.   Net Interest Income

 

	Consolidated
	2025	2024
Interest income:	£'000	£'000
Interest on cash and balances at central banks	22,039	29,894
Interest on loans and advances	15,170	12,993
Interest on letters of credit	1,525	1,347
Interest on interest rate swaps	130	-
Interest on investment in debt securities	16,625	14,428
Other interest income and similar income¹	299	194
Interest income	55,788	58,857
Interest expense:
Interest on financial liabilities at amortised cost	(29,179)	(38,232)
Other interest expense¹	(156)	(171)
Interest on interest rate swaps	(444)	-
Interest expense (Note 3a)	(29,779)	(38,403)
Total net interest income (Note 3a)	26,009	20,454

 

1  Other interest income and similar income and other interest expense are interest received, interest accrued, or interest paid on the collateral balances paid to or received from our FX Swap Counterparties.

 

 

a) Other finance costs

 

	Consolidated
	2025	2024
	£'000	£'000
Interest expense on lease liabilities (Note 17)	(1,384)	(897)

 

Prior period reclassification

During the year, the Group revised its presentation of interest expense on lease liabilities. This interest expense, previously included within the overall 'Interest Expense' line, is now presented separately on the face of the Statement of Profit or Loss under the heading 'Other Finance Costs' to enhance understandability of transactions of a similar nature.

 

As a result, the comparative figures for the year ended 31 December 2024 have been reclassified to conform to the current year's presentation. The reclassification is presentational only and has no impact on previously reported profit before tax, profit for the year, earnings per share, equity or the condensed consolidated statement of financial position. The impact of the reclassification on the comparative statement of profit or loss is as follows:

 

	As previously reported	Adjustment	Reclassified
For the year ended 31 December 2024	£'000	£'000	£'000
Interest expense	(39,300)	897	(38,403)
Net interest income	19,557	897	20,454
Total Income, net of interest expense	104,928	897	105,825
Total income	105,544	897	106,441
Other finance costs	-	897	(897)