Financial review

Segmental review

 

The Group operates through two segments: Wealth Management and Asset Management.

Following the migration of all IW&I FUMA into Rathbones Investment Management, we will present FUMA from 1 January 2026 on the simpler segmental basis as set out in table 1, which shows the FUMA of each segment, analysed by mandate or fund type. Table 2 shows the breakdown of FUMA and flows by service level on a consistent basis with presentation through 2025. A reconciliation of closing FUMA using the service level presentation to the segmental presentation is set out in table 3.

Table 1. Segmental FUMA by mandate or fund type
31 December 2025	Opening FUMA £bn	Gross inflow £bn	Gross outflow £bn	Net flow £bn	Transfers & migrated assets1 £bn	Market and investment performance £bn	Closing FUMA £bn	Annualised Net Growth %
Discretionary & Managed	88.3	8.1	(8.6)	(0.5)	(0.2)	7.1	94.7	(0.6)%
MPS & Select services	3.4	0.4	(0.3)	0.1	0.1	0.4	4.0	2.9%
Execution only	7.6	0.9	(1.3)	(0.4)	(0.2)	0.5	7.5	(5.3)%
Wealth Management	99.3	9.4	(10.2)	(0.8)	(0.3)	8.0	106.2	(0.8)%
Multi Asset funds	8.5	1.9	(1.8)	0.1	-	0.8	9.4	1.2%
Single Strategy funds	7.3	1.6	(2.4)	(0.8)	0.2	0.5	7.2	(11.0)%
Asset Management - gross segmental FUMA	15.8	3.5	(4.2)	(0.7)	0.2	1.3	16.6	(4.4)%
Intra-group FUMA2	(5.9)	(1.7)	1.1	(0.6)	(0.2)	(0.5)	(7.2)	10.2%
Asset Management excluding intra-group	9.9	1.8	(3.1)	(1.3)	-	0.8	9.4	(13.1)%
Total Group	109.2	11.2	(13.3)	(2.1)	(0.3)	8.8	115.6	(1.9)%
1.  The migrated assets column does not net to zero due to a change in the classification of certain IW&I FUMA which does not meet the criteria for inclusion within reported FUMA for the Rathbones group. There is no impact on revenue resulting from this change 2.  Intragroup FUMA comprises assets managed by the Asset Management segment which relates to propositions of the Wealth Management segment.

 

Table 2. Breakdown of FUMA and flows by service level
Year ended 31 December 2025	Opening FUMA £bn	Gross inflows £bn	Gross outflows £bn	Net flows £bn	Transfers & migrated assets1 £bn	Market & investment performance £bn	Closing FUMA £bn	Net growth (flows) %
Rathbones Investment Management	52.9	7.4	(7.3)	0.1	34.7	9.4	97.1	0.2%
Bespoke portfolios	47.8	6.7	(6.8)	(0.1)	33.7	8.7	90.1	(0.2)%
Managed via in-house funds	5.1	0.7	(0.5)	0.2	1.0	0.7	7.0	3.9%
Multi-asset funds	3.1	0.6	(0.8)	(0.2)	-	0.3	3.2	(6.5)%
Rathbones discretionary and managed	56.0	8.0	(8.1)	(0.1)	34.7	9.7	100.3	(0.2)%
Non-discretionary service	0.7	0.1	(0.1)	-	0.9	0.1	1.7	0.0%
IW&I	43.0	1.2	(1.8)	(0.6)	(40.2)	(2.2)	-	(1.4)%
Single-strategy funds	6.8	1.3	(2.3)	(1.0)	-	0.4	6.2	(14.7)%
Execution only and banking	2.7	0.6	(1.0)	(0.4)	4.3	0.8	7.4	(14.8)%
Total Group	109.2	11.2	(13.3)	(2.1)	(0.3)	8.8	115.6	(1.9)%
1.  The migrated assets column does not net to zero due to a change in the classification of certain IW&I FUMA which does not meet the criteria for inclusion within reported FUMA for the Rathbones group. There is no impact on revenue resulting from this change

 

Year ended 31 December 2024	Opening FUMA £bn	Gross inflows £bn	Gross outflows £bn	Net flows £bn	Transfers & migrated assets £bn	Market & investment performance £bn	Closing FUMA £bn	Net growth (flows) %
Rathbones Investment Management	48.8	5.3	(4.5)	0.8	1.2	2.1	52.9	1.7%
Bespoke portfolios	45.0	4.7	(4.1)	0.6	0.4	1.8	47.8	1.4%
Managed via in-house funds	3.8	0.6	(0.4)	0.2	0.8	0.3	5.1	5.1%
Multi-asset funds	2.5	1.0	(0.8)	0.2	0.1	0.3	3.1	7.7%
Rathbones discretionary and managed	51.3	6.3	(5.3)	1.0	1.3	2.4	56.0	2.0%
Non-discretionary service	0.7	-	-	-	-	-	0.7	(2.9)%
IW&I1	42.3	4.0	(5.0)	(1.0)	(0.3)	2.0	43.0	(2.5)%
Saunderson House	1.6	0.1	(0.5)	(0.4)	(1.2)	-	-	(26.8)%
Single-strategy funds	6.7	1.3	(1.9)	(0.6)	-	0.7	6.8	(8.1)%
Execution only and banking	2.7	0.4	(0.8)	(0.4)	0.2	0.2	2.7	(14.5)%
Total Group	105.3	12.1	(13.5)	(1.4)	-	5.3	109.2	(1.3)%

 

Table 3. Reconciliation of closing FUM
	Wealth Management FUMA	Asset Management FUMA (Gross)	Intra-group FUMA1	Asset Management FUMA (Net)1	Total Group FUMA
Year ended 31 December 2025	£bn	£bn	£bn	£bn	£bn
Rathbones Investment Management	97.1	-	-	-	97.1
Bespoke portfolios	90.1	-	-	-	90.1
Managed via in-house funds	7.0	-	-	-	7.0
Multi-Asset funds	-	9.4	(6.2)	3.2	3.2
Rathbones Discretionary & Managed	97.1	9.4	(6.2)	3.2	100.3
Non-discretionary service	1.7	-	-	-	1.7
Single-Strategy funds	-	7.2	(1.0)	6.2	6.2
Execution Only	7.4	-	-	-	7.4
Total	106.2	16.6	(7.2)	9.4	115.6
1.  FUMA of the Asset Management segment excludes £7.2bn of assets at 31 December 2025 which are managed by the segment but relate to propositions of the Wealth Management segment. This FUMA is reported within the Wealth Management segment.

Wealth Management

Wealth Management income is primarily driven by income margins earned from FUMA. Income margins are expressed as a basis point return, which depends on a mix of tiered annual fee rates and commissions charged for transactions undertaken on behalf of clients. Fee and commission income margins are calculated as annual income divided by the gross average FUMA of the segment.

Funds under management and administration

Year-on-year changes in the key performance indicators and other metrics for Wealth Management are shown in table 4. Total Wealth Management FUMA increased by 6.9% to £106.2 billion as at 31 December 2025. This has been driven by market movements which were positive for the year overall and more than offset the 0.8% negative net flows position reported for the segment for 2025.

While the overall net flows position was negative, this represented an improvement relative to the prior year net outflow position of 1.1%. Table 5 reconciles the movement in Wealth Management FUMA during the year.

Gross inflows remained strong in 2025 at 9.5% of opening FUMA. The Wealth Management segment continued to broadly maintain levels of new business despite the focus of IW&I investment teams on the final stages of the IW&I integration process and the migration of IW&I clients onto the Rathbones operating platform. This particularly affected the first half of the year, with gross inflows increasing during the second half of the year by £0.7 billion relative to the first half. Gross outflows improved by £0.5 billion (4.7%) relative to the prior year but remained elevated at 10.3% of opening FUMA, being higher during the second half of the year, particularly prior to the UK Autumn Budget. Despite the increase in gross outflows ahead of the UK Budget, net outflows for the final quarter of the year were the lowest quarter of the year at £64 million, representing 7.7% of the total net outflows for the year of £830 million.

We continue to see positive net inflows in respect of those clients who receive financial planning services in addition to investment management services. Net inflows linked to internal financial planning advisors were £0.3 billion during 2025. We continue to pursue our objective of increasing the proportion of our client base who utilise our financial planning service.

We continue to respond to changes in the external financial advisor market, which include continuing consolidation of IFA firms and increased appetite for different investment solutions. The launch of the Core MPS service during 2025 is an important step to ensuring the breadth of our investment solutions remain competitive in this channel.

Table 4. Wealth Management - Key performance indicators and other metrics
	2025	2024
FUMA at 31 December1	£106.2bn	£99.3bn
Rate of total net growth (net flows) in Wealth Management funds under management and administration2	(0.8%)	(1.1%)
Revenue margin3 (bps)	68.1	67.5
Number of Investment Management clients4	119,100	114,700
Number of investment managers5	631	630
1.  FUMA disclosed on a gross basis (inclusive of intra-group FUMA). 2.  See table 5 (percentages calculated on unrounded figures) 3.  Revenue margin based on fee and commission income, expressed in 'basis points' (bps). See table 8 4.  The increase in the period is driven by an alignment of the methodology for calculating this number following the migration of IW&I onto Rathbones core systems. 5.  The method of calculating the number of investment managers was revised in 2025 following changes in the organisation which resulted in an alignment of methodologies. The number of investment managers  in 2024 have been restated.

 

Table 5. Wealth Management - Funds under management and administration
Year ended 31 December	2025 £bn	2024 £bn
As at 1 January	99.3	96.1
Inflows	9.4	9.7
Outflows	(10.2)	(10.7)
IW&I Migrated assets	(0.3)	-
Market movement, investment performance and transfers	8.0	4.2
As at 31 December	106.2	99.3
Rate of total net growth	(0.8)%	(1.1)%

Turnover of Investment Managers has remained low during 2025. Outflows linked to Investment Managers who left IW&I prior to the announcement of the combination have continued to decline over the year and reached negligible levels by the end of the year.

The net amount shown of £0.3 billion relating to IW&I migrated assets shown in table 5 comprise FUMA of the IW&I business that does not qualify for disclosure within the Rathbones Group.

Financial performance

Underlying profit before tax for the Wealth Management segment increased by 2.3% in the year to £206.9 million. This represents an underlying operating margin of 24.7% (2024: 24.8%).

Net investment management fee income increased by £9.5 million (1.7%) in 2025. This reflects higher levels of FUMA during the year which has been driven by market growth and has offset the impact of net outflows of FUMA noted above.

Whilst headline FUMA has increased by 6.9% during the year overall, the average FUMA at the key quarterly billing dates is only 2.4% higher than the prior year. This reflects the fall in asset values at the end of the first quarter following the announcement of widespread tariffs by the US government. The resulting low point in the value of portfolios coincided with the first quarterly billing of investment management fees of the year on 31 March and 4 April 2025 which had a significant adverse impact on fee income prior to the market recovery which followed.

Transaction based commission increased by 3.9% to £95.4 million (2024: £91.8 million). Transaction activity remained buoyant during the year, elevated by investment opportunities following the fall in asset values at the end of the first quarter and subsequent recovery, along with heightened activity ahead of the UK Autumn Budget.

Net interest income increased by £22.5 million. Net interest income needs to be considered in conjunction with Other income, as prior to the IW&I migration, the income generated from IW&I client money deposits was reported within Other income. The net increase across these two income streams is £6.9 million. This overall increase is primarily driven by £6.0 million of synergy benefit resulting from the higher net interest margin that is generated under the Group's banking model relative to the client money model which IW&I operated under prior to the migration of IW&I clients onto the Rathbones platform. The reductions in the UK base rate that arose during the year had a relatively modest impact on the net interest margin, as we were able to maintain the margin on deposits, which is the largest element of the segment's liquidity. In addition, the full effect of base rate reductions does not fully arise immediately as a result of our treasury investments.

Fees from advisory services increased by 6.8% to £58.2 million as we continue to use our financial planning capability to increase the number of new and existing clients who receive financial planning services.

Table 6. Wealth Management - Financial performance
	2025	2024
	£m	£m
Net investment management fee income1	584.6	575.1
Net commission income	95.4	91.8
Net interest income	84.8	62.3
Fees from advisory services2	58.2	54.5
Other income	14.9	30.5
Operating income	837.9	814.2
Underlying operating expenses3	(631.0)	(612.0)
Underlying profit before tax	206.9	202.2
Underlying operating margin	24.7%	24.8%
1.  Net investment management fee income is stated after deducting fees and commission expenses paid to introducers 2.  Fees from advisory services includes income from trust, tax and financial planning services 3.  See table 9

 

Table 7. Wealth Management - Average funds under management and administration
	2025	2024
	£bn	£bn
-  Q1	94.5	95.9
-  Q2	99.4	98.7
-  Q3	103.1	99.2
-  Q4	106.2	99.6
Quarterly average2	100.8	98.4
1.  Current and prior year FUMA disclosed on a gross basis (Inclusive of intra-group FUMA). Previously this table was presented on the basis of net FUMA in the Annual Report & Accounts 2.  Quarterly average FUMA

 

Underlying operating expenses increased by 3.1% to £631.0 million despite the increased benefit of synergy delivery during the year. The increase in synergies reduced operating costs by £23.9 million relative to the prior year but this was offset by other factors with the key elements being:

-  Salary and general cost inflation

-  The rise in employer's NIC and FSCS levies

-  Higher variable staff costs linked to higher income levels

-  Non-recurring costs incurred in the year, which include those relating to executive changes. 

The integration of IW&I during 2025 has resulted in a movement in the individual operating expense line items shown in table 9. During 2024, prior to integration, IW&I was not making significant use of group shared services and was maintaining the cost of IW&I-specific enablement functions. Post integration in 2025 these functions all now form part of the shared service functions which explains the reduction in total staff costs and increase in other operating expenses (which includes the cost of shared services).

Table 8. Wealth Management - Revenue margin
	2025	2024
	bps	bps
Basis point return1 from:
-  fee income	58.6	58.5
-  commission	9.5	9.0
Basis point return on FUMA	68.1	67.5
1.  Fee or commission income, divided by the average gross funds under management and administration on the quarterly billing dates (see table 7)

 

Table 9. Wealth Management - Underlying operating expenses
	2025	2024
	£m	£m
Staff costs
-  fixed	219.1	233.9
-  variable	117.7	129.5
Total staff costs	336.8	363.4
Other operating expenses	294.2	248.6
Underlying operating expenses	631.0	612.0
Underlying cost/income ratio1	75.3%	75.2%
1.  Underlying operating expenses as a percentage of operating income (see table 6)

 

Asset Management

The financial performance of the Asset Management segment is principally driven by the value of funds under management (FUM). Year-on-year changes in the key performance indicators and other metrics for Asset Management are shown in table 10. The FUM stated represents the value of assets managed by the segment gross of intragroup assets, being those relating to services of the Wealth Management segment which utilise the funds managed by the Asset Management segment.

Table  10. Asset Management - Key performance indicators and other metrics
	2025	2024
FUM at 31 December1	£16.6bn	£15.8bn
Rate of net growth in Asset Management FUM1	(4.4%)	4.3%
Underlying profit before tax2	£31.2m	£25.4m
1.  See table 12 2.  See table 14

 

Table 11. Asset Management - Funds under management by product
	2025	2024
	£bn	£bn
Rathbone Multi-Asset Portfolios	7.6	6.9
Rathbone Global Opportunities Fund	3.8	4.1
Rathbone Ethical Bond Fund	1.9	2.0
Other funds	3.3	2.8
	16.6	15.8

Funds under management

Overall FUM in the Asset Management segment grew by 5.1% to a record level of £16.6 billion at the end of 2025. This was driven by rising investment markets but was partially offset by the continuing challenging environment for net flows.

The Asset Management segment reported net outflows of £0.7 billion (2024: net inflows £0.6 billion) for the year which equates to a negative rate of growth of 4.4% (2024: growth of 4.3%). Conditions remained tough across the broader asset management industry and the position on single strategy fund flows has been particularly challenging with a net outflow of £0.8 billion in 2025 (2024: net outflow of £0.6 billion). Growth in the multi-asset funds was significantly lower than 2024 but still reported a net inflow of £0.2 billion (2024: £1.2 billion). Total net flows for the segment include inflows relating to services of the Wealth Management segment which amounted to £0.6 billion (2024: £1.0 billion). After excluding these intragroup inflows, net outflows were £1.3 billion (2024: net outflows of £0.4 billion).

Gross inflows reduced by 20% to £3.5 billion, which illustrates the more difficult backdrop for growth that continued across the industry. The reduction in inflows was particularly pronounced in the multi-asset funds where flows were down £0.9 billion (31%) relative to 2024. Single strategy gross inflows were materially in line with 2024.

Gross outflows increased by 10.5% to £4.2 billion which was predominately driven by outflows from single strategy funds of £2.3 billion (2024: £1.9 billion). Multi-asset outflows were broadly in line with 2024.

During the year we continued to see the benefits of having a diverse range of fund offerings and the use of these funds as investment solutions to support the Wealth Management segment. The flows generated from the Wealth Management segment includes the Core MPS range which launched in 2025 and which we expect to be an area of growth for the Group. The business also launched the Asia excluding Japan fund and the Charity Growth & Income Fund (CAIF) during the year. Whilst these new funds report modest inflows in their early stages, they represent important enhancements to the breadth of our overall asset management offering.

Performance has been more challenging during 2025 and table 13 shows quartile performance for the main single strategy funds. The Ethical Bond fund continues to perform well and is in the top quartile over both one and three years. Both the Ethical Bond and Global Opportunities fund remain top quartile since launch. The aggregate performance across all funds in 2025 was 0.8% above benchmark and an annualised 1.3% above benchmark over the last three years.

Table 12. Asset Management - Funds under management
Year ended 31 December	2025 £bn	2024 £bn
As at 1 January	15.8	13.8
Net inflows	(0.7)	0.6
-  inflows1	3.5	4.4
-  outflows1	(4.2)	(3.8)
Market movement,  investment performance and transfers2	1.5	1.4
As at 31 December	16.6	15.8
Rate of net growth	(4.4)%	4.3%
1.  Valued at the date of transfer in or out 2.  Impact of market movements and relative performance

 

Table 13. Asset Management - Performance1, 2, 4
2025/(2024) Quartile ranking³ over	1 year	3 years	5 years
Rathbone Ethical Bond Fund	1 (1)	1 (2)	2 (2)
Rathbone Global Opportunities Fund	3 (2)	2 (3)	3 (1)
Rathbone Income Fund	2 (4)	3 (3)	2 (3)
Rathbone Strategic Bond Fund	3 (2)	2 (3)	3 (3)
Rathbone UK Opportunities Fund	4 (3)	3 (4)	4 (4)
1.  Quartile ranking data is sourced from FE Trustnet 2.  Excludes multi-asset funds (for which quartile rankings are prohibited by the Investment Association (IA)), High Quality Bond Fund, which has no relevant peer group against which to measure quartile performance, non-publicly marketed funds and segregated mandates 3.  Ranking of institutional share classes at 31 December 2025 and 2024 against other funds in the same IA sector, based on total return performance, net of fees (consistent with investment performance information reported in the funds' monthly factsheets) 4.  Funds included in the above table account for 39% of the total FUM of total FUM of the Asset Management segment.

Financial performance

Asset Management income is primarily derived from annual management charges, which are calculated on a daily basis on the value of FUM in each fund, net of rebates payable to intermediaries.

Net annual management charges increased by 3.9% to £82.5 million during 2025. This reflects the rise in average FUM over the year. However, there was a further 1.4bps reduction in the overall fee income yield to 51.8bps as the multi-asset funds, which are lower yielding than single strategy funds, continued to grow as a proportion of overall funds under management. The multi-asset funds now make up 56.6% of total FUM (2024: 53.8%).

Underlying operating expenses decreased by 3.7% to £54.2 million (2024: £56.3 million) during 2025. Total staff costs decreased by £3.7 million as the impact of higher fixed staff costs linked to salary inflation and headcount growth to support new fund launches was offset by a normalisation in the level of variable staff costs following the elevated charge in 2024 which related to the accounting for deferred share awards. Other operating expenses increased by 5.7% reflecting both inflation and costs associated with new fund launches.

Table 14. Asset Management - Financial performance
	2025	2024
	£m	£m
Net annual management charges	82.5	79.4
Interest and other income	2.9	2.3
Operating income	85.4	81.7
Underlying operating expenses1	(54.2)	(56.3)
Underlying profit before tax	31.2	25.4
Operating % margin2	36.5%	31.1%
1.  See table 15 2.  Underlying profit before tax divided by operating income

 

Table 15. Asset Management - Underlying operating expenses
	2025	2024
	£m	£m
Staff costs
-  Fixed	9.9	7.9
-  Variable	14.8	20.5
Total staff costs	24.7	28.4
Other operating expenses	29.5	27.9
Underlying operating expenses	54.2	56.3
Underlying cost/income ratio1	63.5%	68.9%
1.  Underlying operating expenses as a percentage of operating income (see table 14)

 

 

Financial position

Summary of financial positions

As a banking group, Rathbones is required to operate in accordance with the requirements relating to capital resources and banking exposures prescribed by the Capital Requirements Regulation, as applied in the UK by the Prudential Regulation Authority (PRA). The Group is required to ensure it maintains adequate capital resources to meet its combined Pillar 1 and Pillar 2 requirements.

Table 16. Group's financial position
	2025	2024
	£m (unless stated)	£m (unless stated)
Own funds1
-  Common Equity Tier 1 ratio2	18.0%	19.0%
-  Total own funds ratio3	19.4%	20.6%
-  Total retained earnings	578.5	279.8
-  Tier 2 subordinated loan notes4	39.9	39.9
-  Total risk exposure amount	2,778.3	2,521.9
-  Leverage ratio5	17.3%	21.1%
Other resources:
-  Total assets	5,217.2	4,290.1
-  Treasury assets6	3,633.0	2,737.4
-  Investment Management loan book	145.1	76.0
-  Intangible assets from acquired growth7	436.9	468.5
-  Tangible assets and software8	54.7	62.5
Liabilities:
-  Due to customers9	3,284.4	2,352.1
-  Net defined benefit pension asset	0.6	0.5
1.  Stated inclusive of the retained profit for the year ended 31 December 2025 which became verified profit on 25 February 2026, but prior to taking into account the proposed final dividend relating to 2025. 2.  Common Equity Tier 1 capital as a proportion of total risk exposure amount 3.  Total own funds (see table 17) as a proportion of total risk exposure amount 4.  Represents the carrying value of the Tier 2 loan notes 5.  Tier 1 capital as a percentage of total assets, excluding intangible assets, plus certain off-balance-sheet exposures 6.  Balances with central banks, loans and advances to banks and investment securities 7.  Net book value of acquired client relationships and goodwill (note 7) 8.  Net book value of property, plant and equipment and computer software 9.  Total amounts of cash in client portfolios held by Rathbones Investment Management as a bank

The Group's Pillar 3 disclosures are published annually on our website (rathbones.com/investor-relations/results-and-presentations) and provide further details about regulatory capital resources and requirements. The Group's key financial positions are set out in table 16.

The Group's CET1 and total capital ratios decreased year on year, reflecting both an increase in the Pillar 1 capital requirement (see table 18) and the return of surplus capital to shareholders up to 31 December 2025 relating to the share buyback. The increase in the requirement was driven by the migration of IW&I clients to Rathbones Investment Management Limited (RIM) from April 2025. Client deposits, which were previously held off balance sheet by IW&I under CASS requirements, became on‑balance sheet banking deposits and were subsequently invested in accordance with the RIM treasury mandate. This change resulted in a higher Pillar 1 credit risk charge.

The share premium reduction completed in July 2025 increased retained earnings but was neutral from a regulatory capital perspective. In addition, the Group launched a £50 million share buyback programme in September 2025, under which £36.2 million of shares had been repurchased in the market by year end. The resulting reduction in share capital was largely offset by lower CET1 regulatory deductions.  

The leverage ratio was 17.3% at 31 December 2025, reduced from 21.1% at 31 December 2024. The leverage ratio represents our Tier 1 capital (own funds) as a percentage of the Group's total assets (i.e. the 'exposure measure'), excluding central bank exposure and intangible assets. Whilst total assets and Tier 1 capital increased in the year due to the IW&I client migration, assets excluded from the exposure measure (central bank exposure and regulatory deductions) represented a lower proportion of the balance sheet. This resulted in a decrease to the leverage ratio.

At 31 December 2025, neither RIM nor the Group was subject to a minimum leverage ratio requirement.

Capital management

The Group continues to maintain a robust capital base, with a surplus of capital above the regulatory minimum of £197.5 million at 31 December 2025 (including retained profit for the year ended 31 December 2025 which became verified profit on 26 February 2026, but prior to reflecting the proposed final dividend relating to 2025 of £70.1 million).

The Group successfully completed its £50 million share buyback programme in February 2026. As we continue to apply our capital allocation framework, we have announced an extension of £20 million to the buyback programme, subject to regulatory approval. The Board will continue to review the Group's capital position to inform future capital allocation decisions, taking into account regulatory requirements and strategic priorities.

Capital resources

At 31 December 2025, the Group's regulatory own funds (including retained profit for the year ended 31 December 2025 which became verified profit on 26 February 2026) were £539.3 million (2024: £520.2 million). This figure is prior to taking into account the proposed final dividend relating to 2025. Own funds consisted of both Common Equity Tier 1 and Tier 2 capital (see table 17).

Table 17. Group's regulatory own funds1
	2025	2024
	£m	£m
Share capital and share premium2	12.3	323.3
Reserves	1,402.9	1,104.2
Less:
Own shares	(63.3)	(68.1)
Intangible assets3	(852.0)	(878.7)
Retirement benefit asset4	(0.6)	(0.5)
Common Equity Tier 1 own funds	499.3	480.2
Tier 2 own funds	40.0	40.0
Total own funds	539.3	520.2
1.  Stated inclusive of the retained profit for the year ended 31 December 2025 which became verified profit on 26 February 2026, but prior to taking into account the proposed final dividend relating to 2025. 2.  Following Court approval, on 11 June 2025, £317,824,953 of the company's share premium account was cancelled and converted to distributable retained earnings to allow for more efficient management of shareholdersʼ capital. The cancellation had no net impact on the company's total equity. 3.  Net book value of goodwill, client relationship intangible assets and software is deducted directly from own funds, less any related  deferred tax 4.  The retirement benefit asset is deducted directly from own funds

The Tier 2 eligible own funds equate to £40.0 million of ten-year subordinated loan notes, which were issued in October 2021 and have a carrying value of £39.9 million. The notes introduced a small amount of gearing into our balance sheet as a way of financing future growth in a cost-effective and capital-efficient manner. They are repayable in October 2031, with a call option for the issuer annually from 2026. Interest is payable at a fixed rate of 5.6% per annum until the first option call date, and at a rate of 4.9% over Compound Daily SONIA thereafter.

When taking the capital requirement into account, the resulting capital surplus at the end of 2025 of £197.5 million represents a decrease of £9.7 million relative to the surplus of £207.2 million as at
31 December 2024.

Capital requirement

The Group's own funds requirement (see table 18) is the combined total of both the Group's Pillar 1 and Pillar 2 requirement. The Pillar 2 requirement consists of both the Pillar 2A, set by the PRA, and the combined regulatory buffer requirement.

Table 18. Group's own funds requirements
	2025	2024
	£m	£m
Credit risk requirement	89.2	75.2
Market risk requirement	-	-
Operational risk requirement	133.1	126.6
Pillar 1 own funds requirement	222.3	201.8
Pillar 2A own funds requirement	0.6	0.6
Total Capital Requirement (TCR)	222.9	202.4
Combined buffer:
Capital Conservation Buffer (CCB)	69.5	63.0
Countercyclical Capital Buffer (CCyB)	49.5	47.6
Total Capital Requirement (TCR) and Combined buffer	341.8	313.0

Pillar 1 own funds requirement

Pillar 1 determines a total risk exposure amount (also known as 'risk-weighted assets') for the Group, taking into account expected losses in respect of the Group's exposure to credit, counterparty credit, market and operational risks. The combined exposure amount equates to the minimum requirement for the amount of capital the Group must hold.

The increase in credit risk to £89.2 million in 2025 was driven by the migration of IW&I clients to RIM from April 2025, whereby IW&I's client money balances previously held off balance sheet under CASS requirements were recognised as on‑balance sheet banking deposits and invested in line with the existing RIM treasury mandate.

At 31 December 2025, the Group's total risk exposure amount was £2,778.3 million (2024: £2,521.9 million). This increase was also migration driven.

Pillar 2A own funds requirement

The Pillar 2 requirement supplements the Pillar 1 minimum requirement with firm-specific Pillar 2A requirements and a framework of regulatory capital buffers.

The Pillar 2A own funds requirement is set by the PRA as part of its supervisory review process and the calculation of it remains confidential to the PRA. The requirement reflects those risks that are specific to the firm that are not fully captured under the Pillar 1 own funds requirement. The Group-specific risks that are reflected in the Pillar 2A requirement are set out overleaf:

Interest rate risk in the banking book

The Group operates on a non-trading book basis, whereby all assets held are with the intent of holding to maturity. Assets are not actively traded in secondary markets for speculative purposes. The resulting interest rate risk represents losses that could arise for a 2% parallel shift in the Bank of England base rate. The exposure would measure the time to reprice interest bearing assets and liabilities.

Concentration risk

Greater potential exposure as a result of the concentration of borrowers located in the UK relative to other overseas jurisdictions.

Combined buffer requirement

The Group is also required to maintain two regulatory capital buffers, both of which must be met with CET1 capital.

The capital conservation buffer (CCB) is a general buffer, designed to provide for losses in the event of a stress, and is set by the PRA. The CCB is set at 2.5% of the Group's total risk exposure amount as at 31 December 2025.

The countercyclical capital buffer (CCyB) reflects the credit conditions and overall health of the financial system in a particular jurisdiction. The firm specific CCyB reflects the weighted average of rates for relevant credit exposures. For relevant UK credit risk exposures, the percentage rate that applies is set by the Financial Policy Committee (FPC) of the Bank of England. For other jurisdictions where the Group has exposures, the percentage rate applicable to each jurisdiction is applied and set by their respective prudential policy makers.

The percentage buffer rate for UK exposures is currently 2.0%. The Group has relevant credit exposures in other jurisdictions where a different rate applies, resulting in a weighted rate of 1.78% as at 31 December 2025.

Capital and liquidity monitoring

As required under PRA rules, we perform an Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process (ILAAP) annually for the consolidated Group. Both processes include performing a range of stress tests to determine the appropriate level of regulatory capital and liquidity that the Group should hold above the regulatory minimum.

In addition, we monitor a wide range of capital and liquidity ratio statistics on a daily and monthly basis. Surplus capital levels are forecast monthly, taking account of anticipated dividend and investment requirements, to ensure that appropriate buffers are maintained. Investment of proprietary funds is controlled by our Group treasury department.

We routinely horizon scan across the regulatory landscape to ensure we maintain our compliance with future changes in prudential requirements. Our preparations for the incoming Basel 3.1 regime and the accompanying Small Domestic Deposit Takers (SDDT) regime are progressing and are a key focus for the Group.

Total assets

Total assets at 31 December 2025 were £5.2 billion (2024: £4.3 billion), of which £3.3 billion (2024: £2.4 billion) represents the cash element of client portfolios that is held as a banking deposit.

RIM treasury assets

As a licensed deposit taker, Rathbones Investment Management Limited (RIM) holds the Group's surplus liquidity on its balance sheet together with clients' cash. Cash in client portfolios held on a banking basis of £3.3 billion (2024: £2.4 billion) represented 3.2% of total Investment Management funds under management and administration at 31 December 2025 which is consistent with the prior year (2024: 3.2%). Cash held in client money accounts was £6.5 million (2024: £27.6 million), this decrease is due a lower proportion of client settlements transactions outstanding in the market over the year end. These balances are held off balance sheet in accordance with the Client Money Rules of the FCA.

The value of treasury assets held with the Bank of England increased to £1.5 billion (2024: £1.2 billion), as did investment in marketable securities. The increases were driven by the migration of IW&I clients to RIM with funds invested in accordance with our treasury policy and risk appetite.

The Group's treasury department, reporting through the Group's Banking Committee to the Board, operates in accordance with procedures set out in a Board-approved treasury manual and monitors exposure to market, credit and liquidity risk. It invests in certain securities issued by a diversified range of highly-rated counterparties. These counterparties must be single 'A' rated or higher by Fitch at the time of investment and are subject to regular review by the Banking Committee.

IW&I client migration

On migration, IW&I client deposits held off-balance sheet under CASS rules transferred to RIM. These deposits have since been held by RIM, on-balance sheet on a banking basis and managed by the Group treasury department in line with existing Board-approved limits, as set out in the treasury manual.

Loans to clients

Loans are provided as a service to Wealth Management clients who have short- to medium-term cash requirements. Such loans are normally made on a fully secured basis against portfolios held in our nominee, with a requirement that the value of the loan is covered two times by the value of the secured portfolio. Loans are usually advanced under five year facilities. Alternatively, charges may be taken on property held by the client to meet security cover requirements, which applies in a small number of cases.

Our ability to provide such loans is a valuable additional service to clients who require short- to medium-term finance, typically for bridging finance when buying and selling their homes.

Loans advanced to clients increased to £146.8 million at end of 2025 (2024: £76.0 million), which was driven by the novation of £61.1 million of loans from Investec Bank to RIM for former IW&I clients.

Intangible assets

Intangible assets arise principally from business combinations and are categorised as goodwill and client relationships. Intangible assets reported on the balance sheet also include purchased and developed software.

At 31 December 2025, the total carrying value of goodwill and client relationship intangible assets was £941.8 million (2024: £973.4  million). During the year, client relationship intangible assets of £13.6 million were capitalised (2024: £11.6 million). A total of £3.8 million of client relationship intangible assets were disposed of in the year, relating to cessations of individual relationships.

Client relationship intangible assets are amortised over the estimated life of the client relationship, which is generally a period between 10 and 15 years. The total amortisation charge for client relationships in 2025, including the impact of any lost relationships, was £41.4 million (2024: £42.2 million).

Capital expenditure

Capital expenditure during 2025 amounted to £4.8 million (2024: £48.7 million).

Capital expenditure in 2025 has returned to normal levels following the elevated costs in 2024 driven by the enlarged Group's property strategy.

Defined benefit pension schemes

We operate two defined benefit pension schemes. With effect from 30 June 2017, we closed both schemes, ceasing all future benefit accrual and breaking the link to salary.

At 31 December 2025 the combined schemes' liabilities, measured on an accounting basis, had increased to £88.6 million, up 0.8% from £87.9 million at the end of 2024. This increase primarily reflects changes in financial and demographic assumptions.

On 9 April 2024 both schemes invested in a bulk annuity policy to match their liabilities as part of a 'buy-in' process. The Schemes' assets are now therefore almost entirely invested in bulk policies, with some residual funds in the Schemes' bank accounts or cash deposits. The reported position of the schemes as at 31 December 2025 was a surplus of £0.6 million (2024: surplus of £0.5 million).

Liquidity and cash flow

As a bank, the RIM and the Group are subject to the PRA's ILAAP regime, which requires a suitable liquid assets buffer to be held to ensure that short-term liquidity requirements can be met under certain stressed scenarios. Liquidity risks are actively managed on a daily basis and depend on operational and investment transaction activity.

Cash and balances at central banks amounted to £1.5 billion at 31 December 2025 (2024: £1.2 billion). We continue to hold a substantial portion of the Group's overall liquidity with central banks. The increase during the year is predominately driven by the migration of IW&I client balances .

Cash and cash equivalents, as defined by accounting standards, includes cash, money market funds and banking deposits, which had an original maturity of less than three months. Consequently, cash flows, as reported in the financial statements, include the impact of capital flows in treasury assets.

Net cash inflows from operating activities in the year largely reflect a £937.0 million increase in banking client deposits (2024: £90.2 million decrease) and a £154.6 million increase in interest received (2024: £147.6 million). Loans and advances to customers increased by  £72.3 million in the year (2024: decrease of £21.8 million) predominately due to the novation of loans from Investec Bank. These movements reflect the effect of the migration of IW&I clients and assets onto the Rathbones banking model.

Table 19. Extracts from the Consolidated Statement of Cashflows
	2025	2024
	£m	£m
Cash and cash equivalents at the end of the year	1,768.7	1,459.2
Net cash inflows from operating activities	1,066.2	293.6
Net change in cash and cash equivalents	309.5	156.3

 

Cash used in investing activities included a net outflow of £589.1 million from the purchase of certificates of deposit (2024: net inflow of £18.6 million), as we utilised the balances transferred as a result of the IW&I client migration to maintain our proportion of treasury assets held in marketable instruments. All investment decisions were made under the existing low risk appetite framework set by the RIM Banking Committee.

The other significant non-operating cash flows during the year were as follows:

-  outflows relating to the payment of dividends of £98.4 million (2024: £56.9 million)

-  outflows relating to payments to acquire intangible assets of £4.1 million (2024: £9.7 million), which includes payments in respect of awards made to recently recruited investment managers in relation to the delivery of new business growth, along with the development of client software applications

-  outflows of £4.8 million relating to capital expenditure on tangible property, plant and equipment (2024: £46.9 million).