Regulatory announcement (RNS) · Miscellaneous

Pillar 3 disclosures

Close Brothers Group plc · published 2 October 2026 14:18 UTC · Close Brothers credit rating and record

Close Brothers Group plc

Pillar 3 disclosures for the year ended 31 July 2026

Contents

1 Executive Summary

## Annex I: Key metrics and overview of risk-weighted exposure amounts

3 UK KM1 – Key metrics

6 IFRS 9 / Article 468 – IFRS 9 transitional arrangements disclosure

6 UK KM2 – Key metrics – MREL

6 UK OV1 – Overview of risk-weighted exposure amounts

7 UK INS1 – Insurance participation

7 UK INS2 – Financial conglomerates information on own funds and capital adequacy ratio

7 UK OVC – ICAAP information

9 Annex III: Risk management policies and objectives

9 UK OVA – Risk management approach

16 UK OVB – Governance arrangements

18 Annex V: Scope of application

18 UK LIA – Explanations of differences between accounting and regulatory exposure amounts

18 UK LIB – Other qualitative information on the scope of application

19 UK LI1 – Differences between accounting and regulatory scopes of consolidation and mapping of financial

statement categories with regulatory risk categories

20 UK LI2 – Main sources of differences between regulatory exposure amounts and carrying values in

financial statements

20 UK LI3 – Outline of the differences in the scopes of consolidation – entity by entity

21 UK PV1 – Prudent valuation adjustments

22 Annex VII: Own funds

22 Regulatory Capital

22 Movement in CET1 capital

23 UK CC1 – Composition of regulatory own funds

24 UK CC2 – Reconciliation of regulatory own funds to balance sheet in the audited financial statements

26 UK CCA – Main features of regulatory own funds instruments and eligible liabilities instruments

28 Annex IX: Countercyclical capital buffers

28 UK CCyB1 – Geographical distribution of credit exposures relevant for the calculation of the

countercyclical buffer

28 UK CCyB2 – Amount of institution-specific countercyclical capital buffer

29 Annex XI: Leverage ratio

29 UK LR1 – LRSum: Summary reconciliation of accounting assets and leverage ratio exposures

29 UK LRA – Disclosure of LR qualitative information

30 UK LR2 – LRCom: Leverage ratio common disclosure

31 UK LR3 – LRSpl: Split-up of on balance sheet exposures

32 Annex XIII: Liquidity requirements

32 UK LIQA – Liquidity risk management

34 UK LIQ1 – Quantitative information of LCR

34 UK LIQB – Quantitative information on LCR, which compliments template UK LIQ1

36 UK LIQ2 – Net Stable Funding Ratio (NSFR)

37 Annex XV: Credit risk quality

37 UK CRA – General qualitative information about credit risk

38 UK CRB – Additional information related to the credit quality of assets

39 UK CR1 – Performing and non-performing exposures and related provisions

40 UK CR1-A – Maturity of exposures

40 UK CR2 – Changes in the stock of non-performing loans and advances

40 UK CR2-A – Changes in the stock of non-performing loans and advances and related net accumulated

recoveries

40 UK CQ1 – Credit quality of forborne exposures

41 UK CQ2 – Quality of forbearance

41 UK CQ3 – Credit quality of performing and non-performing exposures by past due days

43 UK CQ4 – Quality of non-performing exposures by geography

43 UK CQ5 – Credit quality of loans and advances to non-financial corporations by industry

44 UK CQ6 – Collateral valuation - loans and advances

44 UK CQ7 – Collateral obtained by taking possession and execution processes

44 UK CQ8 – Collateral obtained by taking possession and execution processes – vintage breakdown

45 Annex XVII: Credit risk mitigation (CRM) techniques

45 UK CRC – Information related to CRM techniques

45 UK CR3 – CRM techniques overview: Use of credit risk mitigation techniques

46 Annex XIX: Standardised approach

46 UK CRD – Information related to standardised model

47 UK CR4 – standardised approach – Credit risk exposure and CRM effects

48 UK CR5 – standardised approach

49 Annex XXI: IRB approach to credit risk

49 Annex XXIII: Specialised lending

49 Annex XXV: Counterparty credit risk

49 UK CCRA – Information related to CCR

49 UK CCR1 – Analysis of CCR exposure by approach

50 UK CCR2 – Transactions subject to own funds requirements for CVA risk

50 UK CCR3 – Standardised approach – CCR exposures by regulatory exposure class and risk weights

50 UK CCR4 – IRB approach – CCR exposures by exposure class and PD scale

50 UK CCR5 – Composition of collateral for CCR exposures

50 UK CCR6 – Credit derivative exposures

51 UK CCR7 – RWEA flow statements of CCR exposures under the IMM

51 UK CCR8 – Exposures to CCPs

52 Annex XXVII: Securitisation positions

52 UK SECA - Information on securitisations

54 UK SEC1 - Securitisation exposures in the non-trading book

54 UK SEC2 - Securitisation exposures in the trading book

55 UK SEC3 - Securitisation exposures in the non-trading book and associated regulatory capital

requirements - institution acting as originator or as sponsor

55 UK SEC4 - Securitisation exposures in the non-trading book and associated regulatory capital

requirements - institution acting as investor

56 UK SEC5 - Exposures securitised by the institution - exposures in default and specific credit risk

adjustments

57 Annex XXIX: Standardised approach and internal model for market risk

57 UK MRA – Information related to market risk

58 UK MR1 – Market risk under the standardised approach

58 UK MRB – Information on the internal Market Risk Models

58 UK MR2-A – Market Risk under the Internal Model Approach (IMA)

58 UK MR2-B – RWA flow statements of market risk exposures under the IMA

58 UK MR3 – IMA values for trading portfolios

58 UK MR4 – Composition of VaR estimates with gains/losses

59 Annex XXXI: Operational risk

59 UK ORA – Information on operational risk

60 UK OR1 – Operational risk own funds requirements and risk-weighted exposure amounts

61 Annex XXXIII: Remuneration policy

61 UK REMA – Remuneration policy

66 UK REM1 - Remuneration awarded for the financial year

67 Annex XXXV: Encumbered and unencumbered assets

67 UK AE1 – Encumbered and unencumbered assets

67 UK AE4 – Accompanying narrative information

68 UK AE2 – Collateral received and own debt securities issued

68 UK AE3 – Sources of encumbrance

69 Annex XXXVII: Interest rate risk in the banking book (IRRBB)

69 UK IRRBBA – IRRBB risk management objectives and policies

73 UK IRRBB1 – Quantitative information on IRRBB

Should you have any queries please e-mail: pillar3@closebrothers.com

Executive Summary

Background

The aim of the capital adequacy regime is to promote safety and soundness in the financial system. It is structured around three "pillars":

Pillar 1 on minimum capital requirements; Pillar 2 on the supervisory review process; and Pillar 3 on market discipline. Pillar 3 requires

firms to publish a set of disclosures which allow market participants to assess key pieces of information on that firm's capital, risk

exposures and risk assessment process. The disclosures contained in this document cover the qualitative and quantitative disclosure

requirements of Pillar 3, set out in the Capital Requirements Regulation as implemented in the PRA Rulebook CRR Instrument and the

PRA Rulebook CRR Firms: Leverage Instrument (collectively known as “CRR”), and are based on data at 31 July 2026 with comparative

figures for 31 July 2025 and 31 January 2026 where relevant. Within this document are references to the Close Brothers Group plc’s

Annual Report which can be found at: www.closebrothers.com/investor-relations/investor-information/results-reports-and-presentations

Scope

The Prudential Regulation Authority (“PRA”) supervises Close Brothers Group plc (“CBG” or “the group”) on a consolidated basis and

receives information on the capital adequacy of, and sets capital requirements for, the group as a whole. In addition, a number of

subsidiaries are regulated for prudential purposes by either the PRA or the Financial Conduct Authority (“FCA”). Close Brothers Limited

(“CBL” or "the Banking division") is regulated under CRR. Winterflood Securities Limited ("Winterflood") was part of the group until 1

December 2025, and is therefore included in the 31 July 2025 comparatives.

Summary of Key Metrics

The group holds three classes of own funds, comprising common equity tier 1 ("CET1"), additional tier 1 ("AT1") capital, and tier 2 debt. The

main features of these instruments are provided in template UK CCA on page 26. The composition of, and regulatory adjustments to, CET1

are provided in table UK CC1 on page 23.

Over the 2026 financial year, the CET1 capital ratio increased from 13.8% to 14.1%, mainly driven by the recognition of other profits

attributable to shareholders (c.80bps), and total credit risk RWA reduction (c.70bps) predominately related to loan book RWAs (c.50bps).

The sale of Winterflood contributed c.50bps. These benefits were partially offset by the additional provision in relation to motor finance

commissions (-c.150bps) and AT1 coupon payments in the year (-c.20bps).

CET1 capital decreased 6% to £1,266.1 million (31 July 2025: £1,348.1 million), primarily driven by the £147.0 million net of tax provision

in relation to motor finance commissions, AT1 coupon payments of £22.3 million, partially offset by the recognition of the group’s other

profits attributable to shareholders in the year of £82.5 million.

In November 2025, CBL's ENABLE Build Guarantee with the British Business Bank ("BBB") became effective. The ENABLE Build

Guarantee scheme is an initiative managed by the BBB and is executed through a synthetic securitisation structure, supported by a

guarantee mechanism designed to facilitate increased lending to small and medium-sized enterprises (“SMEs”). Under the ENABLE

Guarantee scheme, £350.0 million of CBL’s Property loan book portfolio has benefitted from the 75% guarantee offered by the BBB. The

guarantee is treated under the securitisation framework whereby CBL covers the first loss element of £15.8 million which is treated as a

regulatory deduction from CET1 capital whilst the government guarantee (attracting a 0% risk weighting) generates a loan book RWA

saving of £269.9 million through the application of credit risk mitigation (“CRM”).

Tier 1 capital decreased by 5% and total capital decreased by 2% to £1,466.1 million and £1,716.1 million respectively (31 July 2025:

£1,548.1 million and £1,748.1 million respectively), reflecting the same movements in relation to CET1 capital. Total capital also reflects a

£50 million increase in Tier 2 capital as the Group issued £250 million Fixed Rate Subordinated Tier 2 Notes and conducted a tender offer

for £200 million Fixed Rate Subordinated Notes.

RWAs decreased 8% to £9.0 billion (31 July 2025: £9.8 billion), driven by a reduction in credit risk RWAs (£568.5 million), operational risk

RWAs (£158.1 million) and market risk RWAs (£114.0 million).

The decline in credit risk RWAs was driven by a £350.3 million decrease in loan book RWAs across Property and Premium businesses

mainly due to lower loan book balances and also reflecting the beneficial impact of the ENABLE Build Guarantee Scheme within the

Property business. In addition, other credit risk RWAs decreased by £204.3 million, largely due to reductions in Novitas receivables (£52.0

million), operating lease exposures (£35.4 million), prepayments (£30.6 million) together with the disposals of Winterflood (£45.9 million)

and Brewery Rentals (£40.8 million).

The reduction in operational risk RWAs was also primarily driven by the Winterflood disposal (£162.7 million), following the approval from

the Prudential Regulation Authority (“PRA”) for a full release of its associated operational risk RWAs.

The decrease in market risk RWAs was primarily driven by the Winterflood disposal (£114.0 million).

As a result, CET1, tier 1 and total capital ratios were 14.1% (31 July 2025: 13.8%), 16.3% (31 July 2025: 15.8%) and 19.1% (31 July 2025:

17.8%), respectively.

The applicable CET1, tier 1 and total capital ratio requirements, including capital requirements directive ("CRD") buffers but excluding any

applicable PRA buffer, were 10.3%, 12.3% and 14.9%, respectively, at 31 July 2026. Accordingly, our CET1 capital headroom of c.380bps

remains significantly above the applicable requirements, despite the impact from the £147.0 million provision charge in relation to motor

finance commissions.

The leverage ratio, which is a transparent measure of capital strength not affected by risk weightings, increased to 13.5% (31 July 2025:

12.9%).

We continue to make positive progress in our preparations for a transition to the IRB approach. Following the submission of our initial

application to the PRA in December 2020, the firm received positive feedback from the PRA on Phase II of its application in December

2025, which is currently being progressed by management.

Close Brothers Group plc

Pillar 3 Disclosures 2026

The group adopts a conservative stance on liquidity, ensuring it is comfortably ahead of both internal risk appetite and regulatory

requirements. We regularly assess and stress test the group’s liquidity requirements and continue to meet the liquidity coverage ratio

(“LCR”) regulatory requirements, with a 12-month average LCR to 31 July 2026 of 1,113% (2025: 1,012%). In addition to internal

measures, we monitor funding risk based on the CRR rules for the net stable funding ratio (“NSFR”). The four-quarter average NSFR to

31 July 2026 was 144.0% (31 July 2025: 145.9%). Both LCR and NSFR are substantially above the minimum regulatory requirements of

100%, as we continue to adopt a conservative liquidity position and prudently manage our financial resources and funding requirements.

Close Brothers Limited

For liquidity and funding, the PRA supervises CBL on an individual basis, excluding all subsidiary undertakings. For capital and leverage,

the PRA supervises CBL on an individual consolidation basis as permitted under CRR Article 9. The individual consolidation group does not

include all subsidiary undertakings and therefore differs to the CBL accounting consolidation group under IFRS. Details of the subsidiaries

included within the individual consolidation are included in UK LIB on page 18. Differences between the CBL group and individual

consolidations relate primarily to reserves held by entities that sit outside of the scope of individual consolidation but are included in the

CBL group consolidation, and the impact from the RWAs of these entities.

The only quantitative disclosures presented on an individual consolidation basis are UK KM1. The applicability of the remaining disclosures

referenced by Article 13 have been assessed in accordance with Article 432 of the UK CRR. Management concluded that separate

disclosure of these items would not provide information materially different from the group disclosures and would not influence a user's

assessment of the group's prudential position.

At 31 July 2026, CBL's CET1 capital ratio was 12.8% (31 July 2025: 12.9%). CET1 capital was £1,156.7 million (31 July 2025: £1,229.2

million) primarily driven by the £147.0 million provision (net of tax) in relation to motor finance commissions, and AT1 coupon payments of

£22.3 million. These impacts were partially offset by the recognition of the group’s underlying operating profit after tax in the year of £105.2

million and a net decrease in other CET1 resources of £8.4 million.

RWAs decreased to £9.0 billion (31 July 2025: £9.5 billion) mainly driven by a reduction in credit risk RWAs (£478 million).

Regulatory Developments

We currently estimate that the implementation of Basel 3.1 on 1 January 2027 will result in a reduction in the group's CET1 capital ratio of

approximately 80bps with the minimum CET1 capital requirement reducing by c.40bps, reflecting the PRA’s Pillar 2a SME Lending

Adjustment, which was introduced to mitigate the impact of the removal of the Pillar 1 SME support factor under the Basel 3.1 framework.

On a pro forma basis, this would reduce the group's CET1 capital ratio as at 31 July 2026 to 13.3%, against the minimum CET1 capital

requirement of 9.9%, resulting in overall CET1 capital headroom of c.340bps. In monetary terms, the impact on the group’s overall CET1

capital headroom is minimal.

There are no planned increases in the UK countercyclical buffer ("CCyB") at this time, and the rate remains at 2.0% with the group’s overall

CCyB remaining at 1.9%.

Pillar 3 Policy

These disclosures have been prepared, verified and approved under the group's Pillar 3 Policy and Framework and regulatory reporting

standards, which set out the internal processes and controls to verify that the disclosures are appropriate and in compliance with the

requirements set out in CRR.

Pillar approval and sign off

Full disclosures are issued as a minimum on an annual basis, with key metrics disclosed on a semi-annual basis, as the group meets the

requirements of Article 433c. The disclosures are published on the group’s website. These disclosures are not subject to audit except

where they are equivalent to those prepared under accounting requirements for inclusion in the group’s Annual Report. The group's Pillar 3

disclosures have been subject to senior first line and second line review (see page 13 for further details of our "three lines of defence"

model), prior to review and endorsement by the Capital Adequacy Committee (“CAC”), the Asset and Liability Committee ("ALCO") and the

Remuneration Committee (“RemCo”) as appropriate. The disclosures have been reviewed at senior and executive level, with oversight at

the Board Audit Committee and approval by the CBG board (“the board”).

"I attest that, to the best of my knowledge, these disclosures have been prepared in accordance with the group's formal policies and

internal processes, systems and controls".

Fiona McCarthy, Group Chief Financial Officer

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex I: Key metrics and overview of risk-weighted exposure amounts

UK KM1 – Key metrics

The table below provides a summary of the main prudential regulation ratios and measures for the group and for CBL on an individual consolidation basis.

Available own funds (amounts)

Common equity tier 1 ("CET1") capital

1,266.1

1,266.3

1,348.1

1,156.7

1,151.7

1,229.2

Tier 1 capital

1,466.1

1,466.3

1,548.1

1,356.7

1,351.7

1,429.2

Total capital

1,716.1

1,666.3

1,748.1

1,606.7

1,551.7

1,629.2

Risk-weighted exposure amounts

Total risk-weighted exposure amount

8,971.8

8,882.5

9,798.5

9,049.8

8,949.4

9,534.2

Capital ratios (as a percentage of risk-weighted exposure amount)

Common equity tier 1 ratio (%)

14.1

14.3

13.8

12.8

12.9

Tier 1 ratio (%)

16.3

16.5

15.8

15.0

15.1

15.0

Total capital ratio (%)

19.1

18.8

17.8

17.3

17.1

Additional own funds requirements based on SREP (as a percentage of risk-weighted exposure amount)

UK 7a

Additional CET1 SREP requirements (%)

1.4

0.7

1.4

1.0

UK 7b

Additional AT1 SREP requirements (%)

0.5

0.2

0.4

0.3

UK 7c

Additional T2 SREP requirements (%)

0.6

0.3

0.6

0.4

UK 7d

Total SREP own funds requirements (%)

10.5

9.3

10.4

9.8

Combined buffer requirement (as a percentage of risk-weighted exposure amount)

Capital conservation buffer (%)

2.5

Institution specific countercyclical capital buffer (%)

1.9

Combined buffer requirement (%)

4.4

UK 11a

Overall capital requirements (%)

14.9

13.7

14.8

14.2

CET1 available after meeting total SREP own funds requirements (%)

8.2

9.0

8.5

6.9

7.4

7.3

Leverage ratio1

Total exposure measure excluding claims on central banks6

10,828.8

10,833.0

12,040.3

10,780.5

10,786.5

11,104.0

Leverage ratio excluding claims on central banks (%)6

13.5

12.9

12.6

12.5

12.9

Group

Individual5

£m

31 Jul 2026

31 Jan 2026

31 Jul 2025

31 Jul 2026

31 Jan 2026

31 Jul 2025

Close Brothers Group plc

Pillar 3 Disclosures 2026

Liquidity coverage ratio2

Total high-quality liquid assets ("HQLA") (Weighted value - average)

2,248.2

2,643.8

2,457.4

2,254.1

2,657.4

2,477.8

UK 16a

Cash outflows - Total weighted value

807.6

927.0

971.7

1,051.3

1,142.8

1,050.8

UK 16b

Cash inflows - Total weighted value

1,056.7

1,139.8

1,203.7

2,155.0

2,251.5

2,145.8

Total net cash outflows (adjusted value)

201.9

231.8

242.9

262.8

285.7

262.7

Liquidity coverage ratio (%)

1,113.5

1,140.8

1,011.6

857.6

930.2

943.2

Net stable funding ratio3

Total available stable funding

10,313.1

10,822.0

11,073.3

9,815.0

10,304.2

10,563.6

Total required stable funding

7,160.7

7,284.9

7,587.8

6,215.6

6,280.8

6,479.7

Net stable funding ratio (%)

144.0

148.6

145.9

157.9

164.1

163.0

Group

Individual5

£m

31 Jul 2026

31 Jan 2026

31 Jul 2025

31 Jul 2026

31 Jan 2026

31 Jul 2025

Rows 14a-14e have been removed as only LREQ firms are required to disclose this information.

Figures presented are for the 12 month average to the period end.

Figures presented are for the four-quarter average to the period end.

Columns b and d have been removed as only required to disclose information on a semi-annual basis.

For capital and leverage, the PRA supervises CBL on an individual consolidation basis as permitted under CRR article 9. For liquidity and funding, the PRA supervises CBL on an individual basis, excluding all subsidiary undertakings.1

The comparative leverage ratio and leverage exposure disclosed for Close Brothers Limited ("CBL") as at 31 July 2025 have been restated. The leverage ratio previously reported as 12.6% has been revised to 12.9% and leverage exposure previously

reported as £11.3 billion has been revised to £11.1 billion.

Regulatory capital and RWAs

Over the 2026 financial year, the CET1 capital ratio increased from 13.8% to 14.1%, mainly driven by the recognition of other profits attributable to shareholders (c.80bps), total credit risk RWA reduction

(c.70bps) of which loan book RWA reduction (c.50bps) and the sale of Winterflood (c.50bps). These benefits were partially offset by the additional provision in relation to motor finance commissions (-

c.150bps) and AT1 coupon payments in the year (-c.20bps).

CET1 capital decreased 6% to £1,266.1 million (31 July 2025: £1,348.1 million) primarily driven by the £147.0 million net of tax provision in relation to motor finance commissions, AT1 coupon payments of

£22.3 million, partially offset by the recognition of the group’s other profits attributable to shareholders in the year of £82.5 million.

Tier 1 capital decreased 5% to £1,466.1 million (31 July 2025: £1,548.1 million) and total capital decreased 2% to £1,716.1 million (31 July 2025: £1,748.1 million). Total capital also reflects a £50 million

increase in Tier 2 capital as the Group issued £250 million Fixed Rate Subordinated Tier 2 Notes and conducted a tender offer for £200 million Fixed Rate Subordinated Notes.

RWAs decreased 8% to £9.0 billion (31 July 2025: £9.8 billion), driven by a reduction in credit risk RWAs (£568.5 million), operational risk RWAs (£158.1 million) and market risk RWAs (£114.0 million).

The decline in credit risk RWAs was driven by a £350.3 million decrease in loan book RWAs across Property and Premium businesses mainly due to lower loan book balances and also reflecting the

beneficial impact of the ENABLE Build Guarantee Scheme within the Property business. In addition, other credit risk RWAs decreased by £204.3 million, largely due to reductions in Novitas receivables

(£52.0 million), operating lease exposures (£35.4 million), prepayments (£30.6 million) together with the disposals of Winterflood (£45.9 million) and Brewery Rentals (£40.8 million). The reduction in

operational risk RWAs was primarily driven by the Winterflood disposal (£162.7 million), following the approval from the Prudential Regulation Authority (“PRA”) for a full release of its associated operational

risk RWAs. The decrease in market risk RWAs was primarily driven by the Winterflood disposal (£114.0 million).

During the 2026 financial year, the group's Pillar 2a requirement increased from 1.3% to 2.46% of RWAs following the 2026 CSREP. The group’s overall countercyclical buffer remained at 1.9%. As a result,

the applicable minimum total capital ratio requirement, including CRD buffers but excluding any applicable PRA buffer, was 14.9% at 31 July 2026.

For more information on capital, RWAs and capital ratios, see template UK OV1 and Annex VII.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Leverage

At 31 July 2026, the group's leverage ratio (excluding central bank claims) stood at 13.5%, a slight increase from 12.9% on 31 July 2025. The 60bps year-on-year increase reflects a £1.2 billion reduction in

total assets, primarily driven by lower market-making positions and settlement accounts, partially offset by an £82.0 million decrease in Tier 1 capital. For more information on leverage see Annex XI.

Liquidity and funding

The 12-month average LCR has increased to 1,113% (31 July 2025: 1,012%) driven by a (17)% decrease in net cash outflows to £201.9 million (31 July 2025: £242.9 million) due to a reduction in corporate

deposits. Our liquidity coverage ratio is substantially above the minimum regulatory requirements of 100%, as we continue to adopt a conservative liquidity position and prudently manage our financial

resources. For more information on the LCR see Annex XIII.

The four-quarter average NSFR decreased to 144.0% (31 July 2025: 145.9%) well above regulatory requirements and internal risk appetite. For more information on the NSFR see Annex XIII.

Close Brothers Group plc

Pillar 3 Disclosures 2026

IFRS 9 transitional arrangements disclosure

The group previously applied the IFRS 9 regulatory transitional arrangements under Article 473a CRR, which allowed a proportion of

eligible IFRS 9 impairment provisions to be added back to regulatory capital. These transitional arrangements ceased to apply during the

2025 financial year and therefore had no impact on regulatory capital at 31 July 2026.

UK KM2 – Key metrics – MREL

The group does not have any additional MREL requirements under section 3A(4B) of the Banking Act 2009 so this template has not been

presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK OV1 – Overview of risk weighted exposure amounts

The table below shows risk weighted assets, here referred to as risk weighted exposure amounts ("RWEAs") and own funds requirements,

calculated as 8% of RWAs, by risk type and approach.

Credit risk (excluding CCR)

8,248.8

8,818.0

659.9

Of which the standardised approach

8,248.8

8,818.0

659.9

Of which the foundation IRB (FIRB) approach

—

Of which slotting approach

—

UK 4a

Of which equities under the simple risk weighted approach

—

Of which the advanced IRB (AIRB) approach

—

Counterparty credit risk - CCR

49.3

21.8

3.9

Of which the standardised approach

24.6

10.0

1.9

Of which internal model method (IMM)

—

UK 8a

Of which exposures to a CCP

0.1

—

UK 8b

Of which credit valuation adjustment - CVA

24.6

9.9

2.0

Of which other CCR

—

1.8

—

Settlement risk

—

0.9

—

Securitisation exposures in the non-trading book (after the cap)1

11.7

23.7

0.9

Of which SEC-IRBA approach

—

Of which SEC-ERBA (including IAA)

—

Of which SEC-SA approach

11.7

—

0.9

UK 19a

Of which 1250%/ deduction1

—

Position, foreign exchange and commodities risks (Market risk)

—

114.0

—

Of which the standardised approach

—

114.0

—

Of which IMA

—

UK 22a

Large exposures

—

Operational risk

662.0

820.1

53.0

UK 23a

Of which basic indicator approach

—

UK 23b

Of which standardised approach

662.0

820.1

53.0

UK 23c

Of which advanced measurement approach

—

Amounts below the thresholds for deduction (subject

to 250% risk weight)

70.9

79.4

5.7

Total2

8,971.8

9,798.5

717.7

£m

Risk weighted exposure amounts

(RWEAs)

Total own funds

requirements

31 Jul 2026

31 Jul 2025

31 Jul 2026

Securitisation exposures are associated with the retained junior tranche securitisation positions the group holds.

For more information on movements in RWAs and the CET1 capital ratio, see template 'Regulatory capital' in Annex VII.

RWAs decreased to £8,971.8 million (31 July 2025: £9,798.5 million), driven by a reduction in credit risk RWAs (£568.5 million), operational

risk RWAs (£158.1 million) and market risk RWAs (£114.0 million).

The decline in credit risk RWAs was driven by a £350.3 million decrease in loan book RWAs across each of the Banking businesses,

mainly due to lower loan book balances and also reflecting the beneficial impact of the ENABLE Build Guarantee Scheme within the

Property business. In addition, other credit risk RWAs decreased by £204.3 million, largely due to reductions in Novitas receivables (£52.0

million), operating lease exposures (£35.4 million), prepayments (£30.6 million) together with the disposals of Winterflood (£45.9 million)

and Brewery Rentals (£40.8 million).

The reduction in operational risk RWAs was primarily driven by the Winterflood disposal (£162.7 million), following the approval from the

Prudential Regulation Authority (“PRA”) for a full release of its associated operational risk RWAs.

The decrease in market risk RWAs of c.£114 million was primarily driven by the disposal of Winterflood (£92.0 million), with the remaining

reduction attributable to lower market risk capital requirements. This also reflects the group's application of the Article 351 de minimis

exemption, under which certain foreign exchange positions are excluded from market risk own funds requirements where the prescribed

threshold is not exceeded.

UK INS1 – Insurance participation

The group has no own funds held in insurance or reinsurance firms, so this template has not been presented.

UK INS2 – Financial conglomerates information on own funds and capital adequacy ratio

The group does not qualify as a financial conglomerate, so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK OVC – Internal capital adequacy assessment process ("ICAAP") information

(a) Approach to assessing the adequacy of the internal capital (Article 438(a) CRR)

The group undertakes a group-wide internal capital adequacy assessment annually which is an integral part of the group’s risk

management processes. The main outputs from the process are an assessment of all material capital risks faced by the group,

determination of the level of capital required to be held against each major source of risk and an analysis of a number of severe stress tests

over a three-year time horizon, which is the group’s standard business planning timescale. Management at all levels within the group are

involved in carrying out risk assessments for their business units, having input into stress testing and scenario analysis and where

necessary approving inputs into the process. The ICAAP is subject to detailed review and challenge by the CAC, the Group Risk and

Compliance Committee ("GRCC") and the Risk Committee, before approval by the board.

The group conducts capital planning and stress testing on a regular basis. This process takes into account the perspectives of all key

stakeholders, including the board, our shareholders and the regulators.

The ICAAP is a key component of the group’s approach to the setting of capital risk appetite and capital risk management, and it is also

widely used across the organisation, supporting analysis and conclusions about the robustness of the group’s business model, especially in

discussions with external stakeholders, such as rating agencies. The ICAAP’s Pillar 2b stress testing scenarios are considered as part of

the development of the group’s three-year strategic plan and going concern and viability assessments for the financial year end.

(b) Result of the group's internal capital adequacy assessment process (Article 438 (b) and (c) CRR)

The group ordinarily is subject to the PRA's supervisory review and evaluation process ("SREP") on a regular basis. Following the recent

SREP earlier this year, the group was set a Total Capital Requirement of 10.5% of which 5.9% must be met with CET1 capital. From 1

January 2027, the group's Total Capital Requirement will reduce to 9.7%, of which 5.4% must be met with CET1 capital, reflecting the

PRA's Pillar 2a SME lending adjustment, which was introduced to mitigate the impact of the removal of the Pillar 1 SME support factor

under the Basel 3.1 framework.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex III: Risk management policies and objectives

UK OVA – Risk management approach

(a) Risk statement approved by the management body (Point (f) of Article 435(1) CRR)

Effective management of the risks we face is central to everything we do.

The group faces a number of risks in the normal course of its business, primarily arising from its lending and deposit-taking activities. To

manage these effectively, a consistent approach is adopted based on a set of overarching principles, namely:

adhering to our established and proven business model, as outlined on pages 8 to 9 of the group’s Annual Report;

ii.

implementing an integrated risk management approach based on the concept of three lines of defence; and

iii.

setting and operating within clearly defined risk appetites, monitored with defined metrics and limits.

The group employs an Enterprise Risk Management Framework ("ERMF") designed to provide the Board and senior management with

oversight of the group’s financial position as well as the risks that might adversely affect it.

The framework is founded on a three lines of defence model and details the core risk management components and structures used across

the firm, and defines a consistent and measurable approach to identifying, assessing, controlling and mitigating, reviewing and monitoring,

and reporting risk – the risk process life cycle. The framework is purposely designed to allow the capture of business opportunities whilst

maintaining an appropriate balance of risk and reward within the group’s agreed risk appetite.

Risk appetite forms a key component of the group’s risk management framework and refers to the sources and levels of risk that the group

is willing to assume in order to achieve its strategic objectives and business plan. It is managed via an established framework that

facilitates ongoing communication between the Board and management with respect to the group’s evolving risk profile. This enables key

decisions concerning the allocation of group resources to be made on an informed basis.

Risk appetite is set on a top-down basis by the Board with consideration to business requests and executive recommendation. Appetite

measures, both qualitative and quantitative, are applied to inform both decision-making and monitoring and reporting processes. Early-

warning triggers are also employed to drive required corrective action before overall tolerance levels are reached.

The group conducts a formal review of its risk appetites annually to align risk-taking with the achievement of strategic objectives.

Adherence is monitored through the group’s risk committees on an ongoing basis, with interim updates to individual risk appetites

considered as appropriate through the year.

Principal risks relating to Pillar 1 minimum capital requirements

The following table sets out the principal risks in relation to the group’s Pillar 1 minimum capital requirements that may impact the group’s

ability to deliver its strategy, the frameworks in place to mitigate them, and relevant key developments, both over the last year and

anticipated for the next financial year. A full list of the principal risks that the group faces can be found on pages 67 to 69 of the group’s

Annual Report covering business and strategic risk; capital risk; change execution risk; conduct risk; credit risk; cyber risk; funding and

liquidity risk; legal and regulatory risk; market risk; operational risk and reputational risk. Please refer to Annex XIII, liquidity requirements,

for further detail on the risk management of the group's liquidity.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Capital risk

Capital risk is the risk that the group has insufficient regulatory capital (including equity and other loss-absorbing debt

instruments) to operate effectively, including meeting minimum regulatory requirements, operating within Board-approved

risk appetite and supporting its strategic goals.

The group’s exposure to capital risk principally arises from its requirement to meet minimum regulatory requirements set out

in the Capital Requirements Regulation (“CRR”) and PRA requirements and guidelines, and is usually specified in terms of

minimum capital ratios which assess the level of regulatory capital and RWAs. The group operates a prudent business

model which results in comparatively low levels of leverage and so risk-based capital requirements are, and are likely to

remain, the group’s binding constraint.

The group’s policy is to be well capitalised and its approach to capital management is driven by strategic and organisational

requirements, while also taking into account the regulatory and commercial environments in which it operates. Accordingly,

a prudent capital position is a core part of the group’s business model, allowing it to grow and invest in the business,

support paying dividends to shareholders and meet regulatory requirements.

Capital risk is measured using CET1, tier 1 and total capital ratios, determined in line with regulatory capital adequacy

requirements. These ratios, and associated metrics, are actively monitored, and reported quarterly to the regulator. These

are also disclosed in the group’s Annual Report as well as in these Pillar 3 disclosures – see Annex I.

Both actual and forecast capital adequacy, including the potential impact of capital headwinds, are reported monthly through

the group’s governance framework, with oversight from the Capital Adequacy Committee (“CAC”), GRCC and the Risk

Committee. Annually, as part of the ICAAP, the group also undertakes its own assessment of its capital requirements

against its principal risks (Pillar 2a) together with an assessment of how capital adequacy could be impacted in a range of

stress scenarios (Pillar 2b). Under both assessments, the group ensures that it maintains sufficient levels of capital

adequacy.

In response to the continuing uncertainty relating to the FCA motor finance commission redress scheme, we have continued

to strengthen our capital position substantially above regulatory requirements. The group's CET1 capital ratio was 14.1% at

31 July 2026.

We currently estimate that the implementation of Basel 3.1 on 1 January 2027 will result in a reduction in the group's CET1

capital ratio of approximately 80bps with the minimum CET1 capital requirement reducing by c.40bps, reflecting the PRA’s

Pillar 2a SME Lending Adjustment, which was introduced to mitigate the impact of the removal of the Pillar 1 SME support

factor under the Basel 3.1 framework. On a pro forma basis, this would reduce the group's CET1 capital ratio as at 31 July

2026 to 13.3%, against the minimum CET1 capital requirement of 9.9%, resulting in overall CET1 capital headroom of

c.340bps. In monetary terms, the impact on the group’s overall CET1 capital headroom is minimal.

Credit risk

Credit risk is the risk of a reduction in earnings and/or value, as a result of the failure of a counterparty or associated party,

with whom the group has contracted, to meet its obligations as they fall due.

As a lender to businesses and individuals, the group is exposed to credit losses if customers are unable to repay loans and

outstanding interest and fees.

The group’s general approach to credit assessment is based on the provision of affordable lending on a secured or

structurally protected basis, against assets that are known and understood. These assets are typically easily realisable with

strong secondary markets and predictable values, and spread across a broad range of classes within established sectors.

Whilst diverse, the businesses adhere to a set of common lending principles resulting in stable portfolio credit quality and

consistently low loss rates through the cycle.

The common lending principles are as follows:

•

Predominantly secured lender: 97.1% of loan book secured or structurally protected.

•

Short average tenor: portfolio residual maturity of 16 months.

•

Small average loan size with low single-name concentration risk: balance for top 10 facility limits represents 5.7%

of book.

•

Further diversification by sector, asset class and UK geography.

•

Local underwriting expertise with central oversight and focus on assets that are known and understood.

All lending criteria and assessment procedures are thoroughly documented in robust credit policies and standards, at both a

bank and business level.

The bank applies consistent and prudent lending criteria to mitigate credit risk. To support this approach, the group

maintains a credit risk appetite framework to define and align credit risk strategy to its overall appetite for risk and business

strategies, as defined by the Board.

Risk

Mitigation

Close Brothers Group plc

Pillar 3 Disclosures 2026

Market risk

Market risk is the current or prospective risk to the group’s capital or earnings arising from changes in interest rates, credit

spreads and foreign exchange rates applied to the group’s banking book.

Following the disposal of Winterflood, the group no longer has any exposure to traded market risk. Therefore, the group's

market risk exposure consists of interest rate risk in the banking book ("IRRBB"), credit spread risk in the banking book

("CRRBB") and foreign exchange risk. These exposures are expected to remain broadly stable and continue to be

managed within approved risk appetite and established risk management frameworks.

The group has a restricted appetite for interest rate risk which is limited to that required to operate efficiently. The group’s

policy is to match repricing characteristics of assets and liabilities naturally. The bank's (Close Brothers Limited and its

subsidiaries) treasury is responsible for hedging the interest rate risk in the banking book. Any residual risk which cannot be

naturally matched is hedged utilising vanilla derivative transactions to remain within prescribed risk limits. GALCO and

ALCO are respectively responsible for approving any changes to hedging strategies before implementation for the group

and bank.

The group has a limited appetite for credit spread risk which occurs due to the high-quality liquid assets (“HQLA”) portfolio,

which primarily comprises of highly rated UK and European sovereign debt, sovereign-guaranteed debt, supranational debt

and UK covered bonds.

The group has a restricted appetite for foreign exchange risk. It avoids large open positions and sets individual currency

limits to mitigate the risk.

The group recognises three main sources of IRRBB which could adversely impact future income or the value of the balance

sheet:

•

repricing risk: the risk presented by assets and liabilities that reprice at different times;

•

embedded optionality risk: the risk presented by contract terms embedded into certain assets and liabilities; and

•

basis risk: the risk presented by a mismatch in the reference interest rate for assets and liabilities.

Two measures are used for measuring IRRBB: Earnings at Risk (“EaR”) and Economic Value (“EV”).

The group recognises three categories of FX risk:

transaction risk: the risk relating to foreign currency loan commitments;

translation risk: the risk relating to converting foreign currency balances and profits into sterling;

structural FX risk: the risk relating to the potential impact on capital ratios relating to non-GBP exposures.

Transaction risk is measured daily within treasury based on net cash flows and contracted future exposures. Treasury’s

strategy is to hedge the FX risk as soon as it arrives, and to have zero FX transaction exposure each day at close of

business. Translation risk is monitored within each business monthly, translating non-UK profits regularly to mitigate

fluctuations in foreign exchange rates.Structural FX risk is assessed at least annually and is deemed to be immaterial.

Risk

Mitigation

Close Brothers Group plc

Pillar 3 Disclosures 2026

Risk

Mitigation

Operational

risk

Operational risk is the risk of loss or customer harm resulting from inadequate or failed processes, people and systems or

external events. This includes the risk of being unable to recover systems quickly and maintain critical services.

The group is exposed to various operational risks through its day-to-day business activities, many of which have the

potential to result in direct or indirect financial loss or adverse impact to the group’s financial performance, levels of

customer care or reputation.

Operational risk is a core component of the Enterprise Risk Management Framework (“ERMF”) and is embedded in day-to-

day business activities. Requirements and responsibilities are set out in the Operational Risk Policy and supporting

standards and procedures as part of the framework to identify, assess, mitigate, monitor and report the operational risks,

events and issues that could impact the achievement of the business objectives or impact core business processes.

Operational risk is measured through key risk indicators (“KRIs”), observed impact of risk events, periodic risk and control

self-assessments and scenario analysis. Material operational risk events are identified, reviewed and escalated in line with

set criteria set out in the ERMF and a supporting suite of standards and policies and use of common systems.

The group seeks to deliver its strategic objectives and maintain operational resilience and accepts a level of loss may arise

from operational failure. Key to this is continued management of operational risks and key controls, monitoring and

governance, with appropriate escalation and oversight to manage operational risks and losses within acceptable limits. We

operate controls over the group’s most significant operational risks ensuring there are near-term mitigation strategies where

risks are greatest and ensure these are sufficient to prevent material disruption of our service to customers and/or our

businesses.

The board delegates authority to the GRCC to manage the group’s operational risk framework on a day-to-day basis and

provide oversight of its exposure. The committee is supported by the Operations and Technology Risk Committee which is

responsible for oversight of technology, information security, third-party and certain other resilience-related risks. Regular

management information is presented to and discussed by these committees and additionally local business RCCs.

The Risk function has a dedicated operational risk team which is responsible for maintaining the framework, tool sets and

reporting necessary for effective operational risk management. The group has identified, assessed and monitored all key

operational and resilience risks, including undertaking a bi-annual assessment of control effectiveness, monitoring key risk

indicator trends and escalating events, in accordance with policy and standard requirements. In the second line, operational

risk managers are aligned to businesses, with an additional technical second line of defence team providing specialist

oversight of technology, information security, data, resilience and third-party risks. Monitoring of all operational risk domains

is conducted via divisional RCCs with escalation to the GRCC and Risk Committee as appropriate.

The delivery of a standardised framework and management information across all operating risks is complemented by

periodic thematic reviews conducted on key focus areas and reviewed by the GRCC and Risk Committee. In the last year

these have covered topics including change execution and third party risk. Further independent assurance is obtained

through reviews conducted by the compliance monitoring team and specialist external partners (e.g. cyber risk

management) and group internal audit.

Additionally, the group has an embedded Whistleblowing Policy which sets out the high-level framework for meeting

regulatory requirements in relation to the handling of reportable concerns by whistleblowers. The policy and supporting

standard sets of the process to raising aspects of concerns by all employees, past and current, across the group.

Furthermore, the Risk function performs a level of oversight of the group’s business planning process, including analysis of

industry trends or forward-looking threats that could lead to material impact on our ability to deliver on the strategic

objectives or result in a significant impact on assessment of operational risk capital.

(b) Information on the risk governance structure for each type of risk (Point (b) of Article 435(1) CRR)

The Board retains overall responsibility for overseeing the maintenance of a system of internal control, facilitating an effective risk

management framework and oversight process operate across the group. The risk management framework and associated governance

arrangements are designed to ensure a clear organisational structure with distinct, transparent and consistent lines of responsibility and

effective processes to identify, manage, monitor and report the risks to which the group is, or may become, exposed. On an annual basis,

the Board reviews the effectiveness of the group's risk management and internal control systems.

Risk management across the group is overseen by the Risk Committee. The committee is responsible for reviewing risk appetite,

monitoring the group’s risk profile against this and reviewing the day-to-day effectiveness of the risk management framework. In addition,

the committee is responsible for overseeing the maintenance and development of an appropriate and supportive risk culture and for

providing risk input into the alignment of remuneration with performance against risk appetite.

The committee’s key areas of focus over the last financial year are set out on pages 134 and 136 of the group’s Annual Report.

The group closely monitors its risk profile to ensure that it continues to align with its strategic objectives as documented on page 10 of the

group’s Annual Report. The Board considers that the group’s current risk profile remains consistent with its strategic objectives.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Risk Governance

The group’s risk management approach is underpinned by a strong governance framework founded on a three lines of defence model. The

governance framework is considered appropriate to both the size and strategic intentions of the group. The key principles underlying this

approach are that:

•

business management owns all the risks assumed throughout the group and is responsible for their day-to-day management to

ensure that risk and return are balanced;

•

the board and business management together promote a culture in which risks are identified, assessed and reported in an open,

transparent and objective manner;

•

the overriding priority is to protect the group’s long-term viability and produce sustainable medium to long-term revenue streams;

•

risk functions are independent of the businesses and provide oversight of and advice on the management of risk across the

group;

•

risk management activities across the group are proportionate to the scale and complexity of the group’s individual businesses;

•

risk mitigation and control activities are commensurate with the degree of risk; and

•

risk management and control supports decision-making.

First line of defence

Second line of defence

Third line of defence

The Businesses

Risk and Compliance

Internal Audit

Group Risk and Compliance Committee

(reports to the Risk Committee)

Risk Committee (reports to the Board)

Audit Committee (reports to the Board)

The Chief Executive delegates to divisional

and operating business chief executives the

day-to-day responsibility for risk

management, regulatory compliance,

internal control and conduct in running their

divisions or businesses.

Business management has day-to-day

ownership, responsibility and accountability

for:

•

identifying and assessing risks;

•

managing and controlling risks;

•

measuring risk (key risk indicators/

early warning indicators);

•

mitigating risks, including controls

framework and effectiveness;

•

reporting risks; and

•

committee structure and reporting; and

•

management of self-assessment of

operational resilience capabilities.

Key Features

•

Promotes a strong risk culture and

focus on sustainable risk-adjusted

returns.

•

Implements the risk framework.

•

Promotes a culture of adhering to limits

and managing risk exposures and

ongoing self-assessment.

•

Promotes a culture of focus on good

customer outcomes.

•

Promotes responsibility for ongoing

monitoring of positions and

management and control of risks and

controls effectiveness, including

testing, alongside portfolio

optimisation.

The Risk Committee delegates day-to-day

responsibility for oversight and challenge on

risk-related issues to the group chief risk

officer.

Risk functions (including compliance)

provide support, assurance and independent

challenge on:

•

the design and operation of the risk

framework and methodologies;

•

risk assessment;

•

risk appetite and strategy;

•

risk reporting;

•

adequacy of mitigation plans and

effectiveness of risk decisions taken by

business management;

•

group risk profile; and

•

committee governance and challenge.

Key Features

•

Oversees embedding of the risk

framework and supporting

methodologies, taking an integrated

view of risk and compliance (qualitative

and quantitative).

•

Promotes a strong and effective risk

and control culture across the group.

•

Undertakes compliance monitoring and

assurance activities.

•

Supports through developing and

advising on risk and compliance

strategies.

•

Facilitates constructive check and

challenge.

•

Oversight of business conduct and

customer outcomes.

The Audit Committee mandates the head of

group internal audit with day-to-day

responsibility for independent assurance.

Internal audit provides independent

assurance on:

•

first and second lines of defence;

•

appropriateness/effectiveness of

internal controls; and

•

effectiveness of policy implementation.

Key Features

•

Draws on deep knowledge of the

group and its businesses.

•

Provides independent assurance on

the activities of the group, including the

risk management framework.

•

Assesses the appropriateness and

effectiveness of internal controls.

•

Incorporates review of culture and

conduct, and customer outcomes.

Aligned to these core principles, the governance framework operates through various delegations of authority from the board downwards.

These cover both individual authorities as well as authorities exercised via the group’s risk committee structure.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Risk Committee Structure

Group Risk and Compliance Committee

Provides oversight of the group’s risk profile, alignment to risk appetite and effectiveness of

the risk management and compliance framework.

Model Governance Committee

Provides oversight of the group’s exposure to model risk through the review, approval and

monitoring of all high materiality models.

Capital Adequacy Committee

Monitors group and bank capital adequacy, incorporating capital planning, stress testing,

governance, processes and controls.

Bank Asset and Liability Committee

Provides oversight of the bank's risk management and internal controls and its subsidiaries

across liquidity, funding and market risk.

Group Asset and Liability Committee

Provides oversight of the company and wider group's risk management and internal

controls across liquidity, funding and market risk.

Credit Risk Management Committee

Monitors the group’s credit risk profile, examining current performance and key portfolio

trends, ensuring compliance with risk appetite.

Group Credit Committee

Reviews material credit transactions and exposures from a credit, reputational, funding

structure and business risk perspective.

Impairment Adequacy Committee

Governs the group's impairment process, reviewing the financial position relating to

impairment and ensuring adequate coverage is held across the portfolio.

Operations and Technology Risk

Committee

Monitors and oversees group-wide operational resilience, including technology, security,

supplier and operational risk appetite, examining industry, regulatory and technical risks.

Divisional risk and compliance

committees

Provide oversight of risk profile, alignment to risk appetite and effectiveness of the risk

management and compliance framework at a divisional or business level.

Together, these committees facilitate an effective flow of key risk information, as well as functioning to support appropriate risk

management at each stage of the risk lifecycle. They also provide an escalation channel for any risks or concerns, supporting the

maintenance of an effective risk culture. The group’s risk governance framework is designed to enable the group to respond to changes in

the risk and the broader regulatory environment in a considered and effective manner, with oversight from the Board, and during the year

the committees have operated where needed in an agile manner, convening on an ad-hoc basis where required in addition to regular

scheduled sessions. During the year the effectiveness of these committees and their terms of reference were reviewed to confirm they

remain fit for purpose and all committees continue to work efficiently and effectively.

Risk Committee Roles and Responsibilities

The Risk Committee’s key responsibilities are to:

•

oversee the maintenance and development of a supportive culture and "tone from the top" in relation to the management of risk;

•

review and recommend to the Board for approval the group's risk appetite, which is the level of risk the group is willing to take in

pursuit of its strategic objectives;

•

monitor the group’s risk profile against the prescribed appetite;

•

review the effectiveness of the risk management framework to ensure that key risks are identified and appropriately managed;

•

provide input from a risk perspective into the alignment of remuneration with performance against risk appetite (through the

Remuneration Committee); and

•

undertake a robust assessment of both the principal and emerging risks facing the group over the course of the year, and review

reports from the risk and compliance functions on the effectiveness of the processes that support the management and mitigation

of those risks.

Close Brothers Group plc

Pillar 3 Disclosures 2026

(c) Declaration approved by the management body on the adequacy of the risk management arrangements (Point (e) of Article

435(1) CRR)

As described in more detail on page 125 of the group’s Annual Report, an evaluation of the effectiveness of the board and its committees

was undertaken during the year in line with the requirements of the UK Corporate Governance Code. The Board has reviewed the group's

risk management and internal control systems and considers that the group has in place adequate systems and controls with regard to its

risk profile and strategy. The board’s assessment is supported by the work of the Risk Committee and Audit Committee which together

keep under review the effectiveness of the systems of risk management and internal control via a range of mechanisms. This includes

regular risk management metrics, review and challenge of internal audit activities, and review and challenge of various risk-related

processes and plans.

(d) Disclosure on the scope and nature of risk disclosure and/or measurement systems (Point (c) of Article 435(1) CRR)

The statement set out above in UK OVA (c) is reviewed and approved by the Risk Committee, in accordance with the committee’s terms of

reference. Alongside this, an annual assessment of the effectiveness of the ERMF is performed with recommendations presented to both

the group Risk and Compliance Committee and the Risk Committee.

(e) Disclose information on the main features of risk disclosure and measurement systems (Point (c) of Article 435(1) CRR)

The Board, assisted by the Risk Committee and the Audit Committee, monitors the group’s risk management and internal control systems

and reviews their effectiveness throughout the year. The assessment is informed through various sources of information, both internal and

external and may include but is not limited to:

•

Outputs from the previous year assessment and progress in completing any recommendations / actions identified;

•

Benchmarking against peers;

•

Insights into the appropriateness and effectiveness of internal controls through reviews performed by internal audit;

•

Management information and reports from the risk and compliance functions.

(f) Strategies and processes to manage risks for each separate category of risk (Point (a) of Article 435(1) CRR)

The ERMF details the core risk management components and structures used across the group, and defines a consistent and measurable

approach to identifying, assessing, controlling and mitigating, reviewing and monitoring, and reporting risk – the risk process life cycle.

This sets out the activities, tools, techniques and organisational arrangements designed to identify the principal and emerging risks facing

the group; and that appropriate responses are in place to mitigate these risks and prevent detriment to its customers and colleagues.

This is an enabler for the group to meet its goals and enhance its ability to respond to new opportunities. For more information on the

ERMF see the Risk Report on pages 60 to 100 in the group's Annual Report.

Risk Culture and Awareness

Maintenance of an effective risk management culture is integral to the group meeting its regulatory conduct requirements and assisting the

accomplishment of key strategic goals.

The risk culture:

•

supports the group and its directors to meet their legal and regulatory obligations, particularly with respect to the identification and

management of risks and the need for a robust control environment;

•

underpins the group’s purpose, strategy, cultural attributes and divisional values;

•

provides enhanced awareness of risk in business operations by highlighting strengths and weaknesses and their materiality to the

business and, in turn, facilitating informed decision-making;

•

optimises business performance by facilitating challenge of ineffective controls and improving the allocation of resources;

•

improves the group’s control environment; and

•

assists in the planning and prioritisation of key projects and initiatives.

While risk management is led centrally, it is embedded locally within our businesses. Managers actively promote a culture in which risks are

identified, assessed, managed and reported in an open, transparent and objective manner, and staff conduct is viewed as critical.

All members of staff are responsible for risk identification and reporting within their area of responsibility and are encouraged to escalate

risks and concerns where necessary, either through line or business management or by following the provisions of the group

Whistleblowing Policy.

The group risk management function operates independently of the business, providing oversight and advice on the operation of the risk

framework, and assurance that agreed processes operate effectively and that a risk and conduct culture is embedded within the business.

The relationship between risk and reward is also a key priority with all staff evaluated against both agreed objectives (the what) and desired

behaviours (the how). This encourages long-term, stewardship behaviours together with a strong and appropriate risk and conduct culture.

For further information on our approach to remuneration for the group’s Directors see pages 137 to 151 of the group’s Annual Report.

Stress Testing

Stress testing represents another core component of the risk management framework and is employed, alongside scenario analysis, to

support assessment and understanding of the risks to which the group might be exposed in the future. As such, it provides valuable insight

to the Board and senior management, playing an important role in the formulation and pursuit of the group’s strategic objectives.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Internal Control System

Aligned to the risk governance framework, oversight across the group is supported by the maintenance of a range of internal controls.

These cover risk and financial management and reporting and control processes. The controls are designed to ensure the accuracy and

reliability of the group’s financial information and reporting.

The main features of these controls include consistently applied accounting policies, clearly defined lines of responsibility and processes for

the review and oversight of disclosures within the Annual Report. These controls are overseen by the Audit Committee.

The policy framework, overseen by the Board, is a key component of the group's ERMF, supporting the foundation of a strong risk

management structure. Group policies are supported by group standards, and by divisional/business-level policies and procedures which,

together, outline the way in which policy is implemented and detail the process controls in place to ensure compliance. The accounting

policies form part of this broader policy framework, alongside policies and standards relating to the group’s principal risks.

This structure establishes a link between group strategy and day-to-day operations in a manner consistent with agreed risk appetite.

Simultaneously, they facilitate Board and executive-level oversight and assurance as to the application of the strategy via conformance with

underlying policy and standard requirements.

(g) Information on the strategies and processes to manage, hedge and mitigate risks (Point (a) and (d) of Article 435(1) CRR)

The group employs an ERMF designed to provide the board and senior management with oversight of the group’s financial position as well

as the risks that might adversely affect it.

The framework details the core risk management components and structures used across the group, and defines a consistent and

measurable approach to identifying, assessing, controlling and mitigating, reviewing and monitoring, and reporting risk – the risk process

lifecycle. This sets out the activities, tools, techniques and organisational arrangements designed to identify the principal and emerging

risks facing the group; and that appropriate responses are in place to mitigate these risks and prevent detriment to its customers and

colleagues. This is an enabler for the group to meet its goals and enhance its ability to respond to new opportunities.

The group’s suite of principal risks is accompanied by a portfolio of emerging risks reflecting broader market uncertainties. The group

defines an emerging risk as a risk that may potentially become material in the delivery of the group’s strategic objectives but the risk and its

applicability to the group may not yet be fully understood or assessed. This incorporates input and insight from both a top-down and

bottom-up perspective.

A full list of emerging risks and uncertainties that the group faces can be found on page 70 of the group’s Annual Report covering economic

uncertainty; geopolitical uncertainty; transitional climate risks and strategic disruption.

Following review and challenge, it has been determined that the existing suite of principal risks detailed in our prior year’s report remains

broadly reflective of those faced currently. However, as part of our continual review of the prevailing risk landscape, it is recognised that

underlying risk drivers may have changed and our approach to managing them has in turn evolved in step with them. Following the sale of

Winterflood - the group no longer has a trading book and market risk only arises from our non-trading (banking) book. As a result traded

market risk has been removed from the suite of principal risks and non-traded market risk has been renamed to market risk.

For more information on principal risks, and the frameworks in place to mitigate them, see UK OVA (a) above.

UK OVB – Governance arrangements

(a) The number of directorships held by members of the management body (Point (a) of Article 435(2) CRR)

In addition to their roles within the group, the number of external directorships1 held by members of the management body are detailed in

the table below. Further details on the board of directors can be found on page 108 of the group's Annual Report.

Name

Position

Directorships

Mike Biggs

Chairman

Mike Morgan

Chief Executive

Fiona McCarthy

Chief Finance Officer

Mark Pain

Senior Independent Director

Tesula Mohindra

Independent Non-executive Director

Patricia Halliday

Independent Non-executive Director

Sally Williams

Independent Non-executive Director

Tracey Graham

Independent Non-executive Director

Kari Hale

Independent Non-executive Director

The number of directorships shown excludes external non-commercial directorships. External directorships held within the same group of companies count as a single

directorship.

(b) Information regarding the recruitment policy for the selection of members of the management body (Point (b) of Article 435(2)

CRR) and (c) Information on the diversity policy with regard of the members of the management body (Point (c) of Article 435(2)

CRR)

The board acknowledges the benefits that diversity and inclusion can bring to the board and to all levels of the group’s operations. As such,

the board is committed to the promotion of diversity and inclusion across the group and to ensuring that all employees are treated fairly.

The board maintains a board diversity and inclusion policy, which is reviewed annually by the Nomination and Governance Committee. The

policy recognises the importance of ensuring its members collectively possess the appropriate range and balance of skills, knowledge and

Close Brothers Group plc

Pillar 3 Disclosures 2026

expertise, and embrace the advantages to be derived from having a diversity of gender, social and ethnic backgrounds represented by the

Board, bringing different perspectives and the challenge needed to ensure effective decision-making.

More information on the recruitment and diversity policies and practices for the selection of members of the management body can be

found in the Nomination and Governance Committee Report on pages 122 to 125 of the group's Annual Report.

(d) Information whether or not the group has set up a separate risk committee and the frequency of the meetings (Point (d) of

Article 435(2) CRR)

The Risk Committee comprises all CBG independent non-executive directors and Patricia Halliday as chair.

Seven scheduled meetings were held during the year. Full details of attendance by the non-executive directors at scheduled meetings are

set out on page 113 of the group’s Annual Report.

Members of the Risk Committee are regularly joined by the chair of the board, the executive directors, the group chief risk officer, the group

head of non-financial risk and the group head of internal audit, all of whom receive standing invitations to attend.

Other executives, subject matter experts, risk team members and external advisers are invited to attend the Committee from time to time as

required, to present and advise on reports commissioned.

The Risk Committee’s chair continues to meet frequently with the group chief risk officer and his risk team in a combination of formal and

informal sessions, and with senior management across all divisions of the group, to discuss the business environment and to gather their

views on emerging risks, business performance and the competitive environment.

(e) Description on the information flow on risk to the management body (Point (e) of Article 435(2) CRR)

The governance framework operates through various delegations of authority from the board downwards, including authorities exercised

via the aforementioned risk committee structure.

Together, these committees facilitate an effective flow of key risk information, as well as functioning to support appropriate risk

management at each stage of the risk process lifecycle. They also provide an escalation channel for any risks or concerns, supporting the

maintenance of an effective risk culture.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex V: Scope of application

UK LIA – Explanations of differences between accounting and regulatory exposure amounts

(a) Differences between columns (a) and (b) in template UK LI1 (Article 436(b) CRR)

There are no differences in the carrying values for columns (a) and (b) and there are no entities derecognised from the accounting balance

sheet for regulatory purposes.

(b) Information on the main sources of differences between the accounting and regulatory scope of consolidation shown in

template UK LI2 (Article 436(d) CRR)

Exposure amounts considered for regulatory purposes as a starting point for risk-weighted asset calculations shown in template UK LI2

differ to the carrying values under the regulatory scope of consolidation for the following reasons:

•

As shown in row 9 of UK LI2, off-balance sheet amounts are reduced by applicable credit conversion factors; and

•

As shown in row 11, other differences are primarily driven by add-ons in relation to potential future credit exposure for derivative

financial instruments (CCR framework)

UK LIB – Other qualitative information on the scope of application

(a) Impediment to the prompt transfer of own funds or to the repayment of liabilities within the group (Article 436(f) CRR)

There are no impediments that impact on the ability of subsidiary undertakings to transfer funds or repay liabilities promptly or the ability to

transfer capital by way of a dividend payment, noting that CBL is a regulated entity and as such is required to maintain minimum regulatory

capital at all times.

(b) Subsidiaries not included in the consolidation with own funds less than required (Article 436(g) CRR)

There are no subsidiaries excluded from the consolidation.

(c) Use of derogation referred to in Article 7 CRR or individual consolidation method laid down in Article 9 CRR (Article 436(h)

CRR)

CBL makes use of the provisions laid down in CRR article 9 and reports to the PRA on an individual consolidated basis. Entities included in

the individual consolidation at 31 July 2026 are:

•

Close Finance (CI) Ltd;

•

Close Brothers Technology Services Ltd;

•

Commercial Acceptances Ltd;

•

Close Leasing Ltd;

•

Close Invoice Financial Ltd;

•

Close Brothers Vehicle Hire Ltd;

•

Close Brothers Premium DAC;

•

Close Brothers DAC.

(d) Aggregate amount by which the actual own funds are less than required in all subsidiaries that are not included in the

consolidation (Article 436(g) CRR)

There are no subsidiaries excluded from the consolidation.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LI1 – Differences between accounting and regulatory scopes of consolidation and mapping of financial statement categories with regulatory risk categories1

Breakdown by asset class according to the balance sheet in

the published financial statements

Cash and balances at central banks

1,190.7

—

Settlement balances

—

Loans and advances to banks

224.6

—

Loans and advances to customers

9,463.2

9,437.4

—

25.8

Debt securities

571.2

568.1

—

3.1

—

Equity shares

—

Loans to money brokers against stock advanced

—

Derivative financial instruments

93.3

—

93.3

—

Intangible assets

155.0

—

155.0

Property, plant and equipment

165.4

—

Current tax assets

55.6

—

Deferred tax assets2

27.9

28.4

—

(0.5)

Prepayments, accrued income and other assets

111.5

—

Assets classified as held for sale

—

Total assets

12,058.4

11,781.7

93.3

3.1

—

180.3

Breakdown by liability classes according to the balance

sheet in the published financial statements

Settlement balances and short positions

—

Deposits by banks

20.3

—

20.3

Deposits by customers

7,876.2

—

7,876.2

Loans and overdrafts from banks

0.9

—

0.9

Debt securities in issue

1,636.0

—

1,636.0

Loans from money brokers against stock advanced

—

Derivative financial instruments

90.0

—

90.0

—

Provisions

364.4

—

364.4

Accruals, deferred income and other liabilities

169.2

—

169.2

Subordinated loan capital

249.8

—

249.8

Liabilities classified as held for sale

—

Total liabilities

10,406.8

—

90.0

—

10,316.8

Carrying values as

reported in

published financial

statements

Carrying values

under scope of

regulatory

consolidation

Carrying values of items

£m

Subject to the credit

risk framework

Subject to the CCR

framework

Subject to the

securitisation

framework

Subject to the market

risk framework

Not subject to own

funds requirements or

subject to deduction

from own funds

As explained in UK LIA, there are no differences between the accounting and regulatory scopes of consolidation.

Accounting value for deferred tax assets is net of deferred tax liabilities in row 12, column a and b. £28.4m of deferred tax assets are subject to the credit risk framework with £(0.5)m of deferred tax liabilities net against associated intangible assets

that are subject to regulatory capital deductions from own funds and therefore shown in column g.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LI2 – Main sources of differences between regulatory exposure amounts and carrying values in financial statements1

Assets carrying value amount under the scope of regulatory consolidation (as per UK LI1)

11,878.1

11,781.7

3.1

93.3

—

Liabilities carrying value amount under the regulatory scope of consolidation (as per UK LI1)

(90.0)

—

(90.0)

—

Total net amount under the regulatory scope of consolidation

11,788.1

11,781.7

3.1

3.3

—

Off-balance-sheet amounts

1,315.3

855.4

459.9

—

Differences in valuations

0.6

—

Differences due to different netting rules, other than those already included in row 2

—

Differences due to consideration of provisions

—

Differences due to the use of credit risk mitigation techniques (CRMs)

—

Differences due to credit conversion factors

(769.5)

—

Differences due to Securitisation with risk transfer

—

Other differences

51.6

(1.1)

—

52.7

Exposure amounts considered for regulatory purposes

12,386.1

11,867.1

463.0

56.0

—

Total

Items subject to

£m

Credit risk framework

Securitisation

framework

CCR framework

Market risk framework

Differences are explained in UK LIA.

UK LI3 – Outline of the differences in the scopes of consolidation – entity by entity

There are no differences in the methods of accounting and regulatory consolidation as all entities within the group are fully consolidated and so this template has not been presented. A list of the group's

subsidiaries at 31 July 2026, which are all wholly owned and incorporated, can be found in note 28 of the group's Annual Report. For more information on the differences between accounting and regulatory

exposure amounts, see UK LIA.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK PV1 – Prudent valuation adjustments

The group applies the simplified approach to calculate the prudent valuation adjustment ("PVA") and therefore template PV1 has not been

presented as it is only applicable to institutions applying the core approach. Under the simplified approach the PVA is calculated as 0.1% of

the sum of the absolute value of fair-valued assets and liabilities.

The group's PVA per simplified approach is presented below.

Fair value

Held for hedging

Fair value for PVA

Assets

Loans and advances to customers held at FVTPL

10.4

—

10.4

Debt securities:

—

Sovereign and central bank debt

340.1

—

340.1

Supranational, sub-sovereigns and agency bonds

144.0

—

144.0

Covered bonds

83.9

—

83.9

Long trading positions in debt securities

—

Equity shares

—

Derivative financial instruments

93.3

(62.5)

30.8

Contingent consideration

—

Other assets

0.6

—

0.6

Liabilities

—

Short positions:

—

Debt securities

—

Equity shares

—

Derivative financial instruments

90.0

(80.6)

9.4

Contingent consideration

—

Total fair value assets and liabilities

762.2

(143.0)

619.2

Prudent valuation adjustment (0.1% of total)

0.6

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex VII: Own funds

Regulatory capital

The table below summarises the composition of regulatory capital and shows a reconciliation between shareholders' equity and CET1

capital after adjustments.

£m

31 Jul 2026

31 Jul 2025

Capital

Shareholders' equity per balance sheet

1,651.6

1,735.5

Regulatory adjustments to CET1 capital

—

Contingent convertible securities recognised as AT1 capital1

(197.6)

Intangible assets, net of associated deferred tax liabilities

(154.5)

(176.1)

Foreseeable AT1 coupon charges2

(3.8)

Cash flow hedging reserve

(0.6)

(3.8)

Pension asset, net of associated deferred tax liabilities

—

(0.1)

Prudent valuation adjustment

(0.6)

(1.0)

Securitisation positions deducted from CET1 capital3

(25.8)

(11.3)

Deferred tax assets that rely on future profitability

(2.6)

—

IFRS 9 transitional arrangements4

—

6.3

CET1 capital4

1,266.1

1,348.1

AT1 capital

200.0

Total tier 1 capital4

1,466.1

1,548.1

Tier 2 capital – subordinated debt

250.0

200.0

Total regulatory capital4 (audited)

1,716.1

1,748.1

RWAs (notional)

Credit and counterparty credit risk

8,309.8

8,864.4

Operational risk

662.0

820.1

Market risk

—

114.0

Total RWAs

8,971.8

9,798.5

CET1 capital ratio4

14.1

13.8

Tier 1 capital ratio4

16.3

15.8

Total capital ratio4

19.1

17.8

The contingent convertible securities are classified as an equity instrument for accounting but treated as AT1 for regulatory capital purposes, note 18 of the group's Annual

Report.

2 Under Article 26, a deduction for foreseeable charges has been recognised at 31 July 2026 and 31 July 2025. The deduction at 31 July 2026 reflects charges for the

coupon on the group’s contingent convertible securities.

Under Article 36 of the UK CRR, securitisation positions that attract a 1,250% risk weight may instead be deducted from Common Equity Tier 1 (CET1) capital. The

deduction presented here relates to the securitisation arrangement with the British Business Bank. Further details on this transaction are provided in the Banking

Commercial section of the Financial Overview.

IFRS 9 transitional arrangements ceased to apply and had no impact on regulatory capital as at 31 July 2026. The capital ratios presented for 31 July 2025 after applying

IFRS 9 transitional arrangements and the CRR transitional and qualifying own funds arrangements in force at the time. Without their application, at 31 July 2025 the CET1

capital ratio would be 13.7%, tier 1 capital ratio 15.7% and total capital ratio 17.8%.

Movement in CET1 capital

The following table shows the movement in CET1 capital during the year.

£m

2026

2025

CET1 capital at 1 August

1,348.1

1,374.8

(Loss)/Profit in the period attributable to shareholders

(63.4)

(77.9)

AT1 coupon charges

(22.3)

IFRS 9 transitional arrangements

(6.3)

(5.8)

Decrease in intangible assets, net of associated deferred tax liabilities

21.6

87.8

Other movements in reserves recognised for CET1 capital

5.0

2.4

Other movements in adjustments to CET1 capital1

(16.6)

(10.9)

iti

d d

t d f

CET1

it l

(14 5)

CET1 capital at 31 July (audited)

1,266.1

1,348.1

Other movements in adjustments to CET1 capital includes ENABLE Synthetic securitisation capital deduction of £25.8 million

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CC1 – Composition of regulatory own funds8

The table below shows the composition of the group’s regulatory capital position at 31 July 2026 in the disclosure format required by the

CRR. References identify balance sheet components within UK CC2 that are used in the calculation of regulatory capital. Certain rows of

this table have not been presented as they are not applicable to the group.

Common Equity Tier 1 (CET1) capital: instruments and reserves

Capital instruments and the related share premium accounts

38.0

(d)

of which: called up share capital

38.0

(d)

Retained earnings

1,504.7

(e)1

Accumulated other comprehensive income (and other reserves)

(2.0)

(f)2

UK-5a Independently reviewed interim profits net of any foreseeable charge or dividend

—

Common Equity Tier 1 (CET1) capital before regulatory adjustments

1,540.7

Common Equity Tier 1 (CET1) capital: regulatory adjustments

Additional value adjustments (negative amount)

(0.6)

Intangible assets (net of related tax liability) (negative amount)

(154.5)

(a)3

Deferred tax assets that rely on future profitability excluding those arising from temporary

differences (net of related tax liability where the conditions in Article 38 (3) CRR are met)

(negative amount)

(2.6)

Fair value reserves related to gains or losses on cash flow hedges of financial instruments

that are not valued at fair value

(0.6)

Direct, indirect and synthetic holdings by an institution of own CET1 instruments (negative

amount)

(27.1)

(g)4

UK-20

Exposure amount of the following items which qualify for a RW of 1250%, where the

institution opts for the deduction alternative

(25.8)

(i)9

UK-20

of which: securitisation positions (negative amount)

(25.8)

UK-25

Losses for the current financial year (negative amount)

(63.4)

27a

Other regulatory adjustments to CET1 capital (including IFRS 9 transitional adjustments)

—

Total regulatory adjustments to Common Equity Tier 1 (CET1)

(274.6)

Common Equity Tier 1 (CET1) capital9

1,266.1

Additional Tier 1 (AT1) capital: instruments

Capital instruments and the related share premium accounts

200.0

(h)5

of which: classified as equity under applicable accounting standards

200.0

Additional Tier 1 (AT1) capital before regulatory adjustments

200.0

Additional Tier 1 (AT1) capital9

200.0

Tier 1 capital (T1 = CET1 + AT1)9

1,466.1

Tier 2 (T2) capital: instruments

Capital instruments and the related share premium accounts

250.0

Tier 2 (T2) capital before regulatory adjustments

250.0

Tier 2 (T2) capital9

250.0

Total capital (TC = T1 + T2)9

1,716.1

Total risk exposure amount

Total risk exposure amount9

8,971.8

Capital ratios and buffers8

Common Equity Tier 1 (as a percentage of total risk exposure amount)

14.1

Tier 1 (as a percentage of total risk exposure amount)

16.3

Total capital (as a percentage of total risk exposure amount)

19.1

Institution CET1 overall capital requirement (CET1 requirement in accordance with Article 92

(1) CRR, plus additional CET1 requirement which the institution is required to hold in

accordance with point (a) of Article 104(1) CRD, plus combined buffer requirement in

accordance with Article 128(6) CRD) expressed as a percentage of risk exposure amount)

10.3

of which: capital conservation buffer requirement

2.5

of which: countercyclical buffer requirement

1.9

CET1 available to meet buffers (as a percentage of risk exposure amount)

8.2

Amounts below the thresholds for deduction (before risk weighting)

Deferred tax assets arising from temporary differences (amount below 17.65% threshold, net

of related tax liability where the conditions in Article 38 (3) CRR are met)

28.4

£m

Amounts

Reference to UK

CC2

Close Brothers Group plc

Pillar 3 Disclosures 2026

Applicable caps on the inclusion of provisions in Tier 2

Cap on inclusion of credit risk adjustments in T2 under standardised approach

103.1

£m

Amounts

Reference to UK

CC2

Comprises brought-forward retained earnings and AT1 coupon payments in the year.

Comprises cash flow hedge reserve, share-based awards reserve, exchange movements reserve as well as other profit and loss items in other reserves.

Equal to the intangible assets on the balance sheet net of associated deferred tax liabilities.

Comprises the treasury share reserve.

Includes the nominal amount of contingent convertible securities eligible as additional tier 1 capital. Balance sheet value in UK CC2 is nominal amount net of transaction

costs. See UK CCA for further details on the issued AT1 capital.

6 Includes the nominal amount of subordinated notes eligible as tier 2 capital. Balance sheet value in UK CC2 is nominal amount net of transaction costs, fair value

adjustment for hedge accounting and includes accrued interest. See UK CCA for further details on the issued tier 2 capital.

Certain rows of this table have not been presented as they are not applicable in the UK or are not applicable to the group.

For more information on the movements in CET1, tier 1 capital, tier 2 capital, RWAs and capital ratios, see 'Regulatory capital' and 'Movement in CET1 capital' templates

in this Annex.

The first-loss position under the ENABLE Guarantees have been recognised as a capital deduction.

UK CC2 – Reconciliation of regulatory own funds to balance sheet in the audited financial statement1

Assets - Breakdown by asset class according to the balance sheet in the published financial statements

Cash and balances at central banks

1,190.7

Settlement balances

—

Loans and advances to banks

224.6

Loans and advances to customers

9,463.2

(i)

Debt securities

571.2

Equity shares

—

Loans to money brokers against stock advanced

—

Derivative financial instruments

93.3

Intangible assets

155.0

(a)

Property, plant and equipment

165.4

Current tax assets

55.6

Deferred tax assets

27.9

Prepayments, accrued income and other assets

111.5

(b)

Assets classified as held for sale

—

Total assets

12,058.4

Liabilities - Breakdown by liability class according to the balance sheet in the published financial statements

Settlement balances and short positions

—

Deposits by banks

20.3

Deposits by customers

7,876.2

Loans and overdrafts from banks

0.9

Debt securities in issue

1,636.0

Loans from money brokers against stock advanced

—

Derivative financial instruments

90.0

Provisions

364.4

Accruals, deferred income and other liabilities

169.2

Subordinated loan capital

249.8

(c)

Liabilities classified as held for sale

—

Total liabilities

10,406.8

Shareholders' Equity

Called up share capital

38.0

(d)

Retained earnings

1,445.1

(e), (f)

Other equity instrument

197.6

(h)

Other reserves

(29.1)

(f), (g)

Total shareholders' equity (audited)

1,651.6

Non-controlling interests in equity

—

Balance sheet as in

published financial

statements

Reference to

UK CC1

£m

As at period end

Close Brothers Group plc

Pillar 3 Disclosures 2026

Total equity

1,651.6

Total liabilities and equity

12,058.4

Balance sheet as in

published financial

statements

Reference to

UK CC1

£m

As at period end

The group has the same statutory and regulatory scopes of consolidation and so columns a and b have been merged.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CCA – Main features of regulatory own funds instruments and eligible liabilities instruments

The table below shows the main features of the CET1, additional tier 1 and tier 2 instruments issued by CBG.

Issuer

CBG

Unique identifier (eg CUSIP, ISIN or Bloomberg identifier for private placement)

GB0007668071

XS2541917105

XS2 3277031293

Public or private placement

Public

Governing law(s) of the instrument

English

Contractual recognition of write down and conversion powers of resolution authorities

YES

Regulatory treatment

—

Current treatment taking into account, where applicable, transitional CRR rules

CET1

AT1

Tier 2

Post-transitional CRR rules

CET1

AT1

Tier 2

Eligible at solo/(sub-)consolidated/ solo & (sub-)consolidated

Consolidated

Instrument type (types to be specified by each jurisdiction)

Ordinary Shares

Additional Tier 1

Subordinated Debt

Amount recognised in regulatory capital or eligible liabilities (Currency in million, as of most

recent reporting date)

£38 million

£200 million

£250 million

Nominal amount of instrument

£38 million

£200 million

£250 million

UK-9a

Issue price

Par

UK-9b

Redemption price

Par

Accounting classification

Equity

Liability - Amortised Cost

Original date of issuance

Various

29/11/2023

3/2/2026

Perpetual or dated

Perpetual

Dated

Original maturity date

N/A

3/8/2036

Issuer call subject to prior supervisory approval

N/A

Yes

Optional call date, contingent call dates and redemption amount

N/A

Any date from (and including)

29/11/2028, At Par

On any date following the First

Call Date (3 May 2031) to and

including the Reset Date (3

August 2031)

Subsequent call dates, if applicable

N/A

On any Reset date after

29/11/2028 (every five years)

None after the intial 3 month

call window

Coupons / dividends

—

Fixed or floating dividend/coupon

N/A

Fixed to Fixed

Coupon rate and any related index

N/A

Fixed 11.125% until 29/11/2028

then sum of 5-year Gilt Rate for

the Reset Period and margin

Fixed 6.125% until 03/08/2031

then sum of 5-year Gilt Rate for

the Reset Period and margin

Existence of a dividend stopper

N/A

UK-20a

Fully discretionary, partially discretionary or mandatory (in terms of timing)

Full Discretionary

Fully Discretionary

Mandatory

UK-20b

Fully discretionary, partially discretionary or mandatory (in terms of amount)

Full Discretionary

Fully Discretionary

Mandatory

Existence of step up or other incentive to redeem

N/A

Non-cumulative or cumulative

Non-Cumulative

Cumulative

Convertible or non-convertible

Non-Convertible

Convertible

Non-Convertible

Qualitative or quantitative information

Close Brothers Group plc

Pillar 3 Disclosures 2026

If convertible, conversion trigger(s)

N/A

If, at any time, the Common

Equity Tier 1 Capital Ratio of

the Group falls below 7.00% as

determined by the Issuer (or by

the Supervisory Authority or its

agent)

N/A

If convertible, fully or partially

N/A

Fully

N/A

If convertible, conversion rate

N/A

£6.65 per Ordinary Share

subject to the limited anti-

dilution adjustments

N/A

If convertible, mandatory or optional conversion

N/A

Mandatory upon satisfaction of

certain conditions

N/A

If convertible, specify instrument type convertible into

N/A

Ordinary Shares

N/A

If convertible, specify issuer of instrument it converts into

N/A

Close Brothers Group Plc

N/A

Write-down features

N/A

Yes

N/A

If write-down, write-down trigger(s)

N/A

If a Trigger Event occurs after

the occurrence of a Non-

Qualifying Relevant Event, the

Securities would not be subject

to Conversion and instead

would be automatically written

down to zero and cancelled

N/A

If write-down, full or partial

N/A

Fully

N/A

If write-down, permanent or temporary

N/A

Permanent

N/A

If temporary write-down, description of write-up mechanism

N/A

34a

Type of subordination (only for eligible liabilities)

Contractual

UK-34b

Ranking of the instrument in normal insolvency proceedings

Ranks behind all other forms of

capital

Subordinated debt qualifying

as AT1 ranking junior to Tier 2

and senior to CET1

Ranks in priority to all other

forms of capital

Position in subordination hierarchy in liquidation (specify instrument type immediately senior to

instrument)

Additional Tier 1

Tier 2

Senior Unsecured

Non-compliant transitioned features

N/A

If yes, specify non-compliant features

N/A

37a

Link to the full terms and conditions of the instrument (signposting)

N/A

https://

www.closebrothers.com/at1

https://

www.closebrothers.com/tier-2

Qualitative or quantitative information

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex IX: Countercyclical capital buffers

The CCyB is intended to protect the banking sector against losses that could be caused by cyclical systemic risks. In each jurisdiction the relevant authority (the Bank of England in the UK) sets an

individual CCyB rate based on their assessment of systemic risks in that jurisdiction. Accordingly, each institution calculates its specific CCyB based on a weighted average of the CCyB rates for each

jurisdiction in which it has an exposure. During the 2026 financial year, the CCyB rate for Ireland increased to 1.5%, this did not materially impact the group's weighted countercyclical buffer rate which

remained at 1.9% at 31 July 2026 (31 July 2025: 1.9%).

UK CCyB1 – Geographical distribution of credit exposures relevant for the calculation of the countercyclical buffer

The table below shows the geographical distribution of credit exposures relevant for the calculation of the CCyB at 31 July 2026:

General credit exposures

Relevant credit exposures –

Market risk

Securitisation

exposures

Exposure value

for non-trading

book

Total exposure

value

Own fund requirements

Risk-weighted

exposure

amounts

Own fund

requirements

weights (%)

Countercyclical

buffer rate (%)

£m

Exposure value

under the

standardised

approach

Exposure value

under the IRB

approach

Sum of long

and short

positions of

trading book

exposures for

Value of trading

book

exposures for

internal models

Relevant credit

risk exposures

- Credit risk

Relevant credit

exposures –

Market risk

Relevant credit

exposures –

Securitisation

positions in the

non-trading

book

Total

010

Breakdown by

country:

United Kingdom

8,519.3

—

459.9

8,979.2

604.4

—

604.4

7,555.3

92.74

2.00

Ireland

551.5

—

3.1

554.6

31.6

—

0.9

32.6

406.9

5.00

1.50

Jersey

81.0

—

81.0

5.8

—

5.8

72.6

0.89

0.00

Other countries1

120.9

—

120.9

9.0

—

8.9

111.9

1.37

020

Total

9,272.7

—

463.0

9,735.7

650.8

—

0.9

651.7

8,146.7

100.00

'Other countries' includes general credit exposures to countries where the own funds requirement is less than 0.5% of the group's total. Included in this row are exposures to Austria, Belgium, British Virgin Islands, Canada, Cayman Islands, Colombia,

Denmark, Finland, France, Germany, Guernsey, Indonesia, Isle of Man, Italy, Malta, Monaco, Netherlands, New Zealand, Norway, Peru, Portugal, Spain, Sweden, Switzerland and the United States, of which Belgium, Denmark, France, Germany,

Luxembourg, Netherlands, Norway and Sweden have a CCyB rate. All other countries have no published CCyB rate or a 0.0% CCyB rate.

UK CCyB2 – Amount of institution-specific countercyclical capital buffer

Total risk exposure amount1

8,971.8

Institution specific countercyclical capital buffer rate

1.9

Institution specific countercyclical capital buffer requirement

173.3

£m

‘Total risk exposure amount’ is equivalent to RWAs in Annex I.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XI: Leverage ratio

The leverage ratio is a transparent, comparable measure not affected by risk weightings. It is calculated as tier 1 capital divided by adjusted

balance sheet exposure. Leverage is actively monitored and regularly assessed alongside capital and capital ratios and is reported to the

CAC on a monthly basis.

UK LRA – Disclosure of LR qualitative information

(a) Processes used to manage the risk of excessive leverage

The group has policies and procedures in place for the identification, management and monitoring of the risk of excessive leverage.

Leverage ratios are computed on a monthly basis through a controlled process and reported to the CFO and CAC. Leverage ratios are

forecast as part of capital planning, including under stress in the ICAAP with a number of enterprise wide scenario analyses which, among

other things, forecast accounting expected losses and their impact upon own funds under these scenarios.

Risk of excessive leverage is considered low for the group as the CRR leverage ratio is in excess of 13% (see row 25 of UK LR2).

(b) Factors that had an impact on the leverage ratio during the period

At 31 July 2026, the group's leverage ratio (excluding central bank claims) stood at 13.5%, a slight increase from 12.9% on 31 July 2025.

The 60bps year-on-year increase reflects a £1.2 billion reduction in total assets, primarily driven by the disposal of Winterflood, partially

offset by an £82.0 million decrease in Tier 1 capital. Further details are provided in templates UK KM1 and Annex VII.

UK LR1 – LRSum: Summary reconciliation of accounting assets and leverage ratio exposures

The table below shows a reconciliation between the total assets under IFRS standards and the leverage ratio exposure measure calculated

in accordance with CRR.

Total assets as per published financial statements

12,058.4

Adjustment for entities which are consolidated for accounting purposes but are outside the scope of prudential

consolidation

—

(Adjustment for securitised exposures that meet the operational requirements for the recognition of risk

transference)

—

(Adjustment for exemption of exposures to central banks)

(1,190.7)

(Adjustment for fiduciary assets recognised on the balance sheet pursuant to the applicable accounting

framework but excluded from the total exposure measure in accordance with point (i) of Article 429a(1) of the

CRR)

—

Adjustment for regular-way purchases and sales of financial assets subject to trade date accounting

—

Adjustment for eligible cash pooling transactions

—

Adjustment for derivative financial instruments

(34.3)

Adjustment for securities financing transactions (SFTs)

—

Adjustment for off-balance sheet items (i.e. conversion to credit equivalent amounts of off-balance sheet

exposures)

150.0

(Adjustment for prudent valuation adjustments and specific and general provisions which have reduced tier 1

capital (leverage))

—

UK-11a (Adjustment for exposures excluded from the total exposure measure in accordance with point (c) of Article

429a(1) of the CRR)

—

UK-11b (Adjustment for exposures excluded from the total exposure measure in accordance with point (j) of Article

429a(1) of the CRR)

—

Other adjustments

(154.6)

Total exposure measure

10,828.8

£m

Applicable amount

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LR2 – LRCom: Leverage ratio common disclosure

The table below shows the composition of the group’s leverage ratio at 31 July 2026 in the disclosure format required by the CRR. Certain

rows of this table have not been presented as they are not applicable to the group.

Leverage ratio exposures

£m

31 Jul 2026

31 Jul 2025

On-balance sheet exposures (excluding derivatives and SFTs)

On-balance sheet items (excluding derivatives, SFTs, but including collateral)

11,965.0

13,946.3

Gross-up for derivatives collateral provided, where deducted from the balance sheet assets

pursuant to the applicable accounting framework

—

(Deductions of receivables assets for cash variation margin provided in derivatives

transactions)

—

(Adjustment for securities received under securities financing transactions that are

recognised as an asset)

—

(General credit risk adjustments to on-balance sheet items)

—

(Asset amounts deducted in determining tier 1 capital (leverage))

(154.5)

(170.0)

Total on-balance sheet exposures (excluding derivatives and SFTs)

11,810.5

13,776.3

Derivative exposures1

Replacement cost associated with SA-CCR derivatives transactions (i.e. net of eligible

cash variation margin)

14.2

3.3

UK-8a

Derogation for derivatives: replacement costs contribution under the simplified

standardised approach

—

Add-on amounts for potential future exposure associated with SA-CCR derivatives

transactions

44.8

27.6

UK-9a

Derogation for derivatives: potential future exposure contribution under the simplified

standardised approach

—

UK-9b

Exposure determined under the original exposure method

—

4.8

(Exempted CCP leg of client-cleared trade exposures) (SA-CCR)

—

UK-10a (Exempted CCP leg of client-cleared trade exposures) (simplified standardised approach)

—

UK-10b (Exempted CCP leg of client-cleared trade exposures) (original exposure method)

—

Adjusted effective notional amount of written credit derivatives

—

(Adjusted effective notional offsets and add-on deductions for written credit derivatives)

—

Total derivatives exposures

59.0

35.7

Securities financing transaction (SFT) exposures

Gross SFT assets (with no recognition of netting), after adjustment for sales accounting

transactions

—

22.3

(Netted amounts of cash payables and cash receivables of gross SFT assets)

—

(18.5)

Counterparty credit risk exposure for SFT assets

—

UK-16a Derogation for SFTs: counterparty credit risk exposure in accordance with Articles 429e(5)

and 222 of CRR

—

Agent transaction exposures

—

UK-17a (Exempted CCP leg of client-cleared SFT exposures)

—

Total securities financing transaction exposures

—

3.8

Other off-balance sheet exposures

Off-balance sheet exposures at gross notional amount

855.7

832.5

(Adjustments for conversion to credit equivalent amounts)

(705.7)

(691.0)

(General provisions deducted in determining tier 1 capital (leverage) and specific

provisions associated with off-balance sheet exposures)

—

Off-balance sheet exposures

150.0

141.5

Capital and total exposure measure

Tier 1 capital (leverage)

1,466.1

1,548.1

Total exposure measure including claims on central banks

12,019.5

13,957.3

UK-24a (-) Claims on central banks excluded

1,190.7

1,917.0

UK-24b Total exposure measure excluding claims on central banks

10,828.8

12,040.3

Leverage ratio1

Leverage ratio excluding claims on central banks (%)

13.5

12.9

UK-25a Fully loaded ECL accounting model leverage ratio excluding claims on central banks (%)

13.5

12.8

UK-25c Leverage ratio including claims on central banks (%)

12.2

11.1

The temporary treatment of unrealised gains and losses measured at fair value through other comprehensive income under CRR article 468 is no longer applicable and

so row UK-25b has not been included.

Close Brothers is not an LREQ firm so rows 26 to UK-34 are not applicable.

The explanations for changes in the leverage ratio are included in UK LRA.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LR3 – LRSpl: Split-up of on balance sheet exposures

UK-1

Total on-balance sheet exposures (excluding derivatives, SFTs, and exempted exposures), of which:

11,964.6

UK-2

Trading book exposures

—

UK-3

Banking book exposures, of which:

11,964.6

UK-4

Covered bonds

83.9

UK-5

Exposures treated as sovereigns

1,559.2

UK-6

Exposures to regional governments, MDB, international organisations and PSE not treated as sovereigns

162.1

UK-7

Institutions

267.7

UK-8

Secured by mortgages of immovable properties

239.5

UK-9

Retail exposures

4,350.3

UK-10

Corporates

3,362.2

UK-11

Exposures in default

152.4

UK-12

Other exposures (e.g. speculative immovable property, securitisations, and other non-credit obligation

assets)

1,787.4

£m

Leverage ratio

exposures

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XIII: Liquidity requirements

UK LIQA – Liquidity risk management

Group funding and liquidity matters are overseen by the Group Asset and Liability Committee (GALCO), while matters specific to the bank

(Close Brothers Limited and its subsidiaries) are overseen by the Asset and Liability Committee (ALCO). The group's funding and liquidity

framework is governed at both group and bank level. Liquidity is managed in accordance with regulatory requirements and the Board-

approved Internal Liquidity Adequacy Assessment Process ("ILAAP"), which forms the primary framework for assessing liquidity adequacy

and resilience. Unless otherwise stated, references within this section to governance, oversight and approval processes should be

interpreted as applying at the appropriate group or bank level.

(a) Strategies and processes in the management of the liquidity risk

The group adopts a conservative approach to funding and liquidity risk and seeks to maintain a position characterised by preserving a

simple and transparent balance sheet, sustaining a diverse range of funding sources and holding a prudent level of high-quality liquidity. As

such, the weighted average funding allocated to the loan book is always longer than the weighted average maturity of the loan book and

liquidity levels are maintained well above internally defined stress outflow assumptions.

(b) Structure and organisation of the liquidity risk management function

The group operates a three lines of defence model for the management of funding and liquidity risk. Treasury acts as the first line of

defence and is responsible for the measurement and management of the bank's funding and liquidity position. Group Asset and Liability

Management Risk acts as the second line of defence, providing independent oversight, review and challenge. ALCO at bank level and

GALCO at group level provide oversight of funding and liquidity and supports the relevant Senior Managers in discharging their

responsibilities. Group Internal Audit provides independent assurance over the effectiveness of first and second line activities, including the

design and operation of internal controls and compliance with approved policies.

Liquidity management is governed through the group's risk management framework, with oversight provided by ALCO and GALCO. The

Bank holds liquidity centrally and funds the lending businesses on a matched basis through intercompany funding arrangements. ALCO

oversees liquidity and funding within the bank, while GALCO provides oversight of liquidity and funding matters at group level.

(d) Scope and nature of liquidity risk reporting and measurement systems

Funding and liquidity are measured and monitored on a daily basis with monthly reports forming standing items for discussion at the ALCO

GALCO and GRCC, with the Risk Committee maintaining overall oversight. Any liquidity and funding issues are escalated as required to

the ALCO, and then onwards to the GRCC and the Risk Committee.

A variety of metrics are used to measure the funding and liquidity position to ensure compliance with both external regulatory requirements

and internal risk appetite. These metrics cover both the short and long-term view of liquidity and funding and have limits and early warning

indicators in place that are approved via the ALCO,GALCO and the Risk Committee. These metrics include the surplus tenor of weighted

average funding allocated to the loan book, available cash balance with the Bank of England, and the liquid assets to total assets ratio.

Funding is measured and monitored in accordance with the funding plan which seeks to ensure that a balanced and prudent approach to

its funding risk is maintained that is in line with Board approved risk appetite. The funding plan is supplemented by metrics that highlight

any funding concentration risks, funding ratios and levels of encumbrance.

The ILAAP incorporates internally developed stress scenarios that are monitored daily to assess potential liquidity exposures, determine

liquidity requirements, and identify emerging vulnerabilities. This enables the bank to actively monitor its position against risk appetite and

take appropriate management actions where required. The outcomes of these assessments are formally reported to ALCO, GRCC and the

Risk Committee. The Recovery Plan builds on the ILAAP framework by applying a prolonged liquidity stress, supported by an assessment

of the contingency funding options available to the group.

(e) Policies for hedging and mitigating the liquidity risk and strategies and processes

The funding strategy is based on the principles of "borrow long, lend short" and maintaining a diversified range of funding sources and

funding channels. During the year, the group continued to operate successfully in a competitive funding environment, maintaining strong

access to funding and executing its predominantly retail deposit focused funding strategy as planned.

The retail deposit franchise continues to provide the primary source of funding with optimisation of the deposit mix where appropriate, and

the funding base remains well diversified by source, product and tenor. Customer deposits are supplemented by wholesale funding

programmes, including unsecured medium-term notes and securitisation programmes. The balance sheet and Board approved funding

plan are calibrated to operate within risk appetite, while maintaining total available funding comfortably in excess of lending requirements,

supporting a strong and resilient funding and liquidity position as reflected in the NSFR and LCR.

(f) An outline of liquidity contingency planning and governance

The bank has in place a robust Liquidity Contingency Plan (LCP) which outlines funding and liquidity management options in the event of a

stressed liquidity and / or funding environment. The LCP is a sub-set of the bank's broader Recovery Plan, which details recovery options

that can be invoked in the event of a stress. The LCP contains details on:

•

The actions required to invoke the recovery options:

•

The process once the recovery options are invoked: and

•

The role and responsibilities of individuals if the recovery options are invoked

Execution of the recovery options would be overseen by ALCO and the LCP is updated and approved annually as part of the wider

Recovery Plan.

Close Brothers Group plc

Pillar 3 Disclosures 2026

(g) An explanation of how stress testing is used

Stress testing activity within the group is designed to meet three principal objectives:

Inform capital and liquidity planning – including liquidity and funding risk assessment, contingency planning, and recovery and

resolution planning;

Support ongoing risk and portfolio management – including risk appetite calibration, strategic decisioning and planning, risk and

reward optimisation, and business resilience planning; and

Provide a check on the outputs/accuracy of risk models – including the identification of non-linear effects when aggregating risks.

In addition to regulatory metrics, the bank also uses a suite of internally developed liquidity stress scenarios to monitor its potential liquidity

exposure daily and determine its requirements. This ensures that the bank remains within risk appetite and identifies potential areas of

vulnerability. The outcomes of these scenarios are formally reported to the ALCO, GRCC and board.

(h) A declaration approved by the management body on the adequacy of liquidity risk management arrangements

The group maintains a prudent approach to ensure adequate liquidity risk management arrangements, reflecting its low appetite for both

funding and liquidity risk. The group seeks to maintain sufficient and diverse funding sources, across source, type and tenor, and to ensure

that an appropriate level of liquidity is available at all times to meet its obligations as they fall due.

The Internal Liquidity Adequacy Assessment Process (ILAAP) is the primary document through which the group assesses the adequacy of

its funding and liquidity risk management framework, liquidity resources and funding arrangements. The ILAAP sets out the group's liquidity

risk appetite, risk appetite measures and limits, liquidity survival period requirements and stress testing framework. These collectively

support the group's objective of maintaining sufficient liquidity resources to survive a severe-yet-plausible stress event.

The ILAAP is approved by the Board annually, or more frequently where there is a material change to the group's business model or risk

profile. It provides the framework through which the group demonstrates compliance with the Overall Liquidity Adequacy Rule (OLAR) and

supports the Board's assessment that sufficient liquidity resources are maintained under both normal and stressed conditions.

For further details see page 91 of the group's Annual Report.

(i) A concise liquidity risk statement approved by the management body

A core part of the group’s business model is taking a conservative approach to funding and liquidity based on the principle of "borrow long,

lend short", with a spread of maturities over the medium and longer term, comfortably ahead of a shorter average loan book maturity. The

group’s funding profile comprises a broad range of channels. Its diversified approach to funding includes secured funding, unsecured

funding, retail deposits and non-retail deposits. The Group’s approach to funding and liquidity is governed by Board-approved funding and

liquidity risk appetite statements:

Funding Risk: We have a low appetite for funding risk and seek to maintain sufficient and diverse (in terms of source, type and tenor)

funding and to ensure a sound level of liquidity is maintained at all times.

Liquidity Risk: We have a low appetite for liquidity risk and seek to maintain sufficient liquidity resources to survive a combined market-

wide and idiosyncratic stress for a period of at least three months.

For more information on key ratios and figures on group funding and liquidity see page 53 to 54 of the group’s Annual Report and the LCR

template (UK LIQ1) and NSFR template (UK LIQ2) below.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LIQ1 – Quantitative information of LCR

The table below shows the breakdown of the group’s HQLAs, cash outflows and cash inflows, calculated as the simple averages of month-

end observations over the 12 months preceding the reporting date, on an unweighted and weighted basis.

UK 1a

Quarter ending on

31 Jul

2026

30 Apr

2026

31 Jan

2026

31 Oct

2025

31 Jul

2026

30 Apr

2026

31 Jan

2026

31 Oct

2025

UK 1b

Number of data points used in the

calculation of averages

HIGH-QUALITY LIQUID ASSETS

Total high-quality liquid assets

(HQLA)

2,248.2 2,455.4 2,643.8 2,591.8

CASH - OUTFLOWS

Retail deposits and deposits from

small business customers, of which:

2,671.5 2,651.7 2,615.4 2,441.2

407.6

405.8

409.8

374.5

Stable deposits

1,323.7 1,209.1 1,119.5 1,020.6

66.2

60.5

56.0

51.0

Less stable deposits

1,347.8 1,442.6 1,495.9 1,420.6

341.4

345.4

354.0

323.5

Unsecured wholesale funding

371.7

461.3

495.5

515.6

227.2

282.3

306.4

330.2

Operational deposits (all

counterparties) and deposits in

networks of cooperative banks

—

Non-operational deposits (all

counterparties)

334.6

422.4

453.2

484.6

190.1

243.4

264.1

299.3

Unsecured debt

37.1

38.9

42.3

30.9

37.1

38.9

42.3

30.9

Secured wholesale funding

1.6

2.4

3.1

3.9

Additional requirements

297.2

301.9

293.4

343.0

108.2

112.4

113.7

119.3

Outflows related to derivative

exposures and other collateral

requirements

58.9

63.5

69.7

75.5

58.9

63.5

69.7

75.5

Outflows related to loss of funding on

debt products

—

Credit and liquidity facilities

238.3

238.4

223.7

267.5

49.3

48.8

44.0

43.8

Other contractual funding obligations

30.4

50.8

63.1

73.9

10.8

29.2

38.9

46.3

Other contingent funding obligations

609.4

601.2

618.4

587.2

52.3

53.1

55.1

52.6

TOTAL CASH OUTFLOWS

807.6

885.2

927.0

926.8

CASH - INFLOWS

Secured lending (e.g. reverse repos)

7.5

13.4

18.5

23.2

3.9

6.8

9.3

11.9

Inflows from fully performing

exposures

1,823.3 1,818.4 1,850.7 1,888.0 1,019.8 1,026.9 1,057.2 1,095.1

Other cash inflows

33.0

57.3

73.3

75.0

33.0

57.3

73.3

75.0

UK-19

(Difference between total weighted

inflows and total weighted outflows

arising from transactions in third

countries where there are transfer

restrictions or which are denominated

in non-convertible currencies)

—

UK-19

(Excess inflows from a related

specialised credit institution)

—

TOTAL CASH INFLOWS

1,863.8 1,889.1 1,942.5 1,986.3 1,056.7 1,091.0 1,139.8 1,182.1

UK-20

Fully exempt inflows

—

UK-20

Inflows subject to 90% cap

—

UK-20c Inflows subject to 75% cap

1,863.8 1,889.1 1,942.5 1,986.3 1,056.7 1,091.0 1,139.8 1,182.1

TOTAL ADJUSTED VALUE

UK-21

LIQUIDITY BUFFER

2,248.2 2,455.4 2,643.8 2,591.8

TOTAL NET CASH OUTFLOWS

201.9

221.3

231.8

231.7

LIQUIDITY COVERAGE RATIO %

1,113.5 1,109.5 1,140.8 1,118.6

£m

Total unweighted value (average)

Total weighted value (average)

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LIQB – Qualitative information on LCR, which compliments template UK LIQ1

(a) Main drivers of LCR results

The group's LCR result has been primarily driven by lower 30-day cash outflows.

(b) Explanations on the changes in the LCR over time

The average LCR increased over the financial year primarily due to lower corporate deposit outflows. It should also be noted that the LCR

is subject to the regulatory 75% inflow cap, which limits the extent to which inflows can offset outflows. As a result, not all eligible inflows

are recognised within the ratio, meaning movements in inflows may not be fully reflected in the reported liquidity position.

Average HQLA also reduced over the period, due to lower central bank reserves this was partially offset by an increase in central

government gilt portfolio.

The group's approach to funding is conservative and diverse, drawing on a wide range of wholesale and deposit markets including several

public debt securities as well as a number of securitisations.

Over the 12 months to 31 July 2026 62% of funding has been sourced from the retail sector.

(d) High-level description of the composition of the institution`s liquidity buffer

The group's liquidity buffer comprises of reserves held at central bank, debt securities issued by sovereign and UK/ French central banks,

highly rated supranational securities along with UK covered bonds.

(e) Derivative exposures and potential collateral calls

The group has in place a number of derivative contracts to hedge interest rate and foreign exchange exposures. The group does not have

potential collateral calls.

(f) Currency mismatch in the LCR

Liquid assets are denominated in sterling and euro, with the currency mix subject to internal risk limits and policy requirements. These are

reviewed annually to ensure the liquidity buffer remains appropriately aligned with the group’s liquidity risk appetite.

(g) Other items in the LCR calculation that are not captured in the LCR disclosure template

There are no other relevant items.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK LIQ2 – Net Stable Funding Ratio (NSFR)

The table below shows the breakdown of the group’s available stable funding ("ASF") and required stable funding ("RSF"), calculated as

the simple averages of quarter-end observations over the 12 months preceding the reporting date, on an unweighted and weighted basis.

Unweighted value by residual maturity (average)

Total weighted

value

(average)

£m

No maturity

< 6 months

6 months to <

1yr

≥ 1yr

Available stable funding (ASF) Items

Capital items and instruments

1,453.7

0.5

—

224.6

1,875.8

Own funds

1,453.7

0.5

—

224.6

1,875.8

Other capital instruments

—

Retail deposits

4,140.8

1,428.1

1,195.3

6,346.9

Stable deposits

2,091.4

699.5

708.8

3,360.2

Less stable deposits

2,049.4

728.6

486.5

2,986.7

Wholesale funding

1,112.2

537.2

1,506.2

2,075.0

Operational deposits

—

Other wholesale funding

1,112.2

537.2

1,506.2

2,075.0

Interdependent liabilities

—

Other liabilities

12.7

714.1

5.7

12.5

15.3

NSFR derivative liabilities

12.7

—

All other liabilities and capital instruments not included in

the above categories

714.1

5.7

12.5

15.3

Total available stable funding (ASF)

10,313.0

Required stable funding (RSF) Items

Total high-quality liquid assets (HQLA)

7.1

UK-15

Assets encumbered for more than 12m in cover pool

—

Deposits held at other financial institutions for operational

purposes

—

Performing loans and securities:

3,705.4

1,404.3

4,235.4

6,425.5

Performing securities financing transactions with financial

customers collateralised by Level 1 HQLA subject to 0%

haircut

—

Performing securities financing transactions with financial

customer collateralised by other assets and loans and

advances to financial institutions

166.5

5.6

20.3

39.5

Performing loans to non- financial corporate clients, loans

to retail and small business customers, and loans to

sovereigns, and PSEs, of which:

3,538.8

1,398.7

4,208.6

6,380.3

With a risk weight of less than or equal to 35% under the

Basel II Standardised Approach for credit risk

10.3

11.1

37.8

35.3

Performing residential mortgages, of which:

—

With a risk weight of less than or equal to 35% under the

Basel II Standardised Approach for credit risk

—

Other loans and securities that are not in default and do

not qualify as HQLA, including exchange-traded equities

and trade finance on-balance sheet products

0.1

—

6.5

5.7

Interdependent assets

—

Other assets:

—

713.6

12.5

278.7

679.3

Physical traded commodities

—

Assets posted as initial margin for derivative contracts and

contributions to default funds of CCPs

42.0

—

35.7

NSFR derivative assets

15.7

—

15.7

NSFR derivative liabilities before deduction of variation

margin posted

47.1

—

2.4

All other assets not included in the above categories

608.8

12.5

278.7

625.5

Off-balance sheet items

259.7

161.0

429.2

48.8

Total RSF

7,160.7

Net Stable Funding Ratio (%)

144.0

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XV: Credit risk quality

UK CRA – General qualitative information about credit risk

(a) Risk statement in accordance how the business model translates into the components of the group's credit risk profile ((f) of

Article 435(1) CRR)

Credit risk arises primarily from the group's lending and treasury activities. As a lender to businesses and individuals, the group is exposed

to credit losses if customers are unable to repay loans and outstanding interest and fees. At 31 July 2026 the group had gross loans and

advances to customers of £9.7 billion.

(b) The criteria and approach used for defining the credit risk management policy and for setting credit risk limits (points (a) and

(d) of Article 435(1) CRR)

The group seeks to maintain the discipline of its lending criteria, both to preserve its business model and maintain an acceptable return that

appropriately balances risk and reward. This is underpinned by a strong customer focus and credit culture that extend across people,

structures, policies and principles. This in turn provides an environment for long-term sustainable growth and low, predictable loan losses.

To support this approach, the group maintains a credit risk appetite framework to define and align credit risk strategy with its overall

appetite for risk and business strategies as defined by the Board.

The group Credit Risk Appetite Statement (“CRAS”) outlines the specific level of credit risk that the group is willing to assume, utilising

defined quantitative limits and triggers against agreed measures, and covers both credit concentration and portfolio performance measures.

The measures supporting the group CRAS are based on the following key principles:

To lend within familiar asset classes, in well-known and understood markets.

To operate as a predominantly secured, or structurally protected, lender against identifiable and accessible assets, and maintain

conservative loan-to-value (“LTV”) ratios across the group's portfolios.

To maintain a diversified loan portfolio (by business, asset class and UK geography), as well as a short average tenor and low

average loan size.

To rely on local underwriting expertise, with authority delegated from the Risk Committee, and ongoing central oversight.

To maintain rigorous and timely collections and arrears management processes.

To operate strong control and governance within the lending businesses, overseen by a central group credit risk team.

Ultimate responsibility for the approval and governance of the group CRAS lies with the Board, on recommendation from the GRCC, with

support from the Credit Risk Management Committee (“CRMC”). Performance is monitored against agreed appetites on a monthly basis.

The CRAS is embedded into business-level credit risk management through a hierarchy of local triggers and limits, which are approved by

the Chief Credit Risk Officer ("CCRO") and noted at CRMC. Performance is also monitored monthly via divisional Risk and Compliance

Committees (“RCCs"). Material breaches are escalated via established governance channels.

CRAS metrics are closely aligned with the group’s overall strategy to facilitate monitoring of the composition and quality of the loan book in

line with defined appetite.

Lending is underpinned by a strong control and governance framework both within the lending businesses and through oversight via a

central group credit risk team.

The group’s credit risk governance framework is structured as follows:

Close Brothers Group plc

Pillar 3 Disclosures 2026

Credit underwriting is undertaken either centrally or through regional office networks, depending on the nature of the business and the size

and complexity of the transaction. Underwriting authority is delegated from the Risk Committee, with lending businesses approving lower-

risk exposures locally subject to compliance with credit policy and risk appetite.

(d) The relationships between credit risk management, risk control, compliance and internal audit functions (point (b) of Article

435(1) CRR)

The credit risk framework aligns with the broader three lines of defence approach, with a governance structure flowing from local first-line

business teams, up to second-line risk directors (and key oversight committees such as credit committees, divisional RCCs, the CRMC, the

Model Governance Committee ("MGC") and the Risk Committee), overlaid with a third line formed by the group internal audit function.

Local risk directors assure the quality of underwriting decisions for all facilities within the business’ delegated sanctioning authority level via

a quality assurance programme, the outputs of which are reported biannually with consolidated summaries presented to the CRMC.

These underwriting approaches are reinforced by timely collections and arrears management, working in conjunction with the customer to

achieve the best possible outcomes.

The local model is supported by central oversight and control. An independent central group credit risk team provides ongoing monitoring of

material credit risks through regular reviews of appetite and policy.

UK CRB – Additional information related to the credit quality of assets

(a) The scope and definitions of ‘past-due’ and ‘impaired’ exposures used for accounting purposes and the differences, if any, for

accounting and regulatory purposes (in accordance with Article 178 CRR)

For accounting purposes, when objective evidence exists that a financial asset is credit impaired, such as the occurrence of a credit default

event or identification of an unlikeliness to pay indicator the financial asset is considered to be in Stage 3 default. As a backstop, all

financial assets 90 days or more past due are considered to be credit impaired and transferred to Stage 3. For regulatory purposes, all

financial assets 90 days or more past due are treated as in default.

(b) The extent of past-due exposures (more than 90 days) that are not considered to be impaired and the reasons for this

All financial assets 90 days past due or more are considered to be credit impaired.

All provisions are considered specific credit risk adjustments that are allocated against individual loans.

(d) Definition of a restructured exposure (point (d) of Article 178(3) CRR)

The group applies its identification of distressed restructures in line the definition of forbearance defined in Article 47b of the CRR.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CR1 – Performing and non-performing exposures and related provisions

005

Cash balances at central

banks and other demand

deposits

1,311.0 1,311.0

—

(0.1)

—

010

Loans and advances

9,367.5 8,027.8 1,329.3

474.6

—

474.6

(89.1)

(55.3)

(33.8)

(177.0)

—

(177.0)

(34.0) 8,212.3

288.1

020

Central banks

—

030

General governments

61.2

46.5

14.7

—

(0.2)

—

(0.2)

—

53.9

—

040

Credit institutions

25.6

—

050

Other financial corporations

129.7

125.3

4.4

0.2

—

0.2

(0.2)

(0.1)

—

(0.1)

—

33.4

0.1

060

Non-financial corporations

6,526.7 5,362.6 1,153.7

393.4

—

393.4

(46.5)

(27.5)

(19.0)

(134.3)

—

(134.3)

(34.0) 5,606.2

250.4

070

Of which SMEs

4,324.9 3,625.0

689.5

291.7

—

291.7

(35.6)

(21.3)

(14.3)

(75.4)

—

(75.4)

(34.0) 3,592.5

208.4

080

Households

2,624.3 2,467.8

156.5

81.0

—

81.0

(42.2)

(27.7)

(14.5)

(42.6)

—

(42.6)

— 2,518.8

37.6

090

Debt securities

593.6

570.9

—

(0.4)

—

100

Central banks

—

110

General governments

340.4

—

(0.3)

—

120

Credit institutions

231.1

230.5

—

(0.1)

—

130

Other financial corporations

22.1

—

140

Non-financial corporations

—

150

Off-balance-sheet exposures

801.9

787.0

14.9

4.6

—

4.6

—

160

Central banks

—

170

General governments

1.6

—

180

Credit institutions

1.7

—

190

Other financial corporations

26.0

—

200

Non-financial corporations

758.0

743.1

14.9

4.6

—

4.6

—

210

Households

14.6

—

220

Total

12,074.0 10,696.7 1,344.2

479.2

—

479.2

(89.6)

(55.8)

(33.8)

(177.0)

—

(177.0)

(34.0) 8,212.3

288.1

Gross carrying amount/nominal amount

Accumulated impairment, accumulated negative changes in fair value due to credit

risk and provisions

Accumulated

partial write-

off

Collateral and financial

guarantees received

Performing exposures

Non-performing exposures

Performing exposures – accumulated

impairment and provisions

Non-performing exposures –

accumulated impairment, accumulated

negative changes in fair value due to

credit risk and provisions

performing

exposures

On non-

performing

exposures

£m

Of which

stage 1

Of which

stage 2

Of which

stage 2

Of which

stage 3

Of which

stage 1

Of which

stage 2

Of which

stage 2

Of which

stage 3

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CR1-A – Maturity of exposures

Loans and advances

162.2

5,059.7

4,212.8

141.2

0.1

9,576.0

Debt securities

—

118.9

262.7

189.5

—

571.1

Total

162.2

5,178.7

4,475.5

330.7

0.1

10,147.2

Net exposure value

£m

On demand

<= 1 year

> 1 year <= 5 years

> 5 years

No stated maturity

Total

UK CR2 – Changes in the stock of non-performing loans and advances

£m

Gross carrying amount

Initial stock of non-performing loans and advances

494.2

Inflows to non-performing portfolios

344.2

Outflows from non-performing portfolios

(363.8)

Outflows due to write-offs

(70.0)

Outflow due to other situations

(293.8)

Final stock of non-performing loans and advances

474.6

UK CR2-A – Changes in the stock of non-performing loans and advances and related net accumulated recoveries

As per Disclosure (CRR), the group is not required to disclose this template as it is not defined as a large institution in line with CRR article 433a.

UK CQ1 – Credit quality of forborne exposures

Cash balances at central banks and other

demand deposits

—

Loans and advances

131.1

304.2

(4.7)

(120.5)

291.1

182.3

Central banks

—

General governments

—

Gross carrying amount/nominal amount of exposures with forbearance measures

Accumulated impairment, accumulated

negative changes in fair value due to credit

risk and provisions

Collateral received and financial guarantees

received on forborne exposures

Performing forborne

Non-performing forborne

On performing

forborne exposures

On non-performing

forborne exposures

Of which collateral

and financial

guarantees received

on non-performing

exposures with

forbearance

measures

£m

Of which defaulted

Of which impaired

Close Brothers Group plc

Pillar 3 Disclosures 2026

Credit institutions

—

Other financial corporations

0.3

—

0.2

—

Non-financial corporations

102.6

271.0

(2.1)

(107.6)

245.3

162.1

Households

28.2

33.1

(2.6)

(12.9)

45.5

20.1

Debt Securities

—

Loan commitments given

—

1.0

—

100

Total

131.1

305.2

(4.7)

(120.5)

291.1

182.3

Gross carrying amount/nominal amount of exposures with forbearance measures

Accumulated impairment, accumulated

negative changes in fair value due to credit

risk and provisions

Collateral received and financial guarantees

received on forborne exposures

Performing forborne

Non-performing forborne

On performing

forborne exposures

On non-performing

forborne exposures

Of which collateral

and financial

guarantees received

on non-performing

exposures with

forbearance

measures

£m

Of which defaulted

Of which impaired

UK CQ2 – Quality of forbearance

As per Disclosure (CRR), the group is not required to disclose this template as it is not defined as a large institution in line with CRR article 433a.

UK CQ3 – Credit quality of performing and non-performing exposures by past due days

005

Cash balances at central banks

and other demand deposits

1,311.0

—

010

Loans and advances

9,367.5

9,266.8

100.7

474.6

141.3

93.3

63.6

80.2

69.9

5.1

21.2

474.6

020

Central banks

—

030

General governments

61.2

—

040

Credit institutions

25.6

—

050

Other financial corporations

129.7

—

0.2

—

0.2

060

Non-financial corporations

6,526.7

6,447.0

79.7

393.4

109.6

72.4

48.1

71.7

66.5

4.2

20.9

393.4

070

Of which SMEs

4,324.9

4,269.7

55.2

291.7

73.3

60.3

46.5

55.9

30.6

4.2

20.9

291.7

080

Households

2,624.3

2,603.3

21.0

81.0

31.5

20.9

15.5

8.5

3.4

0.9

0.3

81.0

090

Debt securities

593.6

—

100

Central banks

—

Gross carrying amount/nominal amount

Performing exposures

Non-performing exposures

Not past due

or past due ≤

30 days

Past due > 30

days ≤ 90

days

Unlikely to pay

that are not

past due or

are past due ≤

90 days

Past due > 90

days ≤ 180

days

Past due >

180 days ≤ 1

year

Past due > 1

year ≤ 2 years

Past due > 2

years ≤ 5

years

Past due > 5

years ≤ 7

years

Past due > 7

years

Of which

defaulted

£m

Close Brothers Group plc

Pillar 3 Disclosures 2026

110

General governments

340.4

—

120

Credit institutions

231.1

—

130

Other financial corporations

22.1

—

140

Non-financial corporations

—

150

Off-balance-sheet exposures

801.9

4.6

160

Central banks

—

170

General governments

1.6

—

180

Credit institutions

1.7

—

190

Other financial corporations

26.0

—

200

Non-financial corporations

758.0

4.6

210

Households

14.6

—

220

Total

12,074.0

11,171.4

100.7

479.2

141.3

93.3

63.6

80.2

69.9

5.1

21.2

479.2

Gross carrying amount/nominal amount

Performing exposures

Non-performing exposures

Not past due

or past due ≤

30 days

Past due > 30

days ≤ 90

days

Unlikely to pay

that are not

past due or

are past due ≤

90 days

Past due > 90

days ≤ 180

days

Past due >

180 days ≤ 1

year

Past due > 1

year ≤ 2 years

Past due > 2

years ≤ 5

years

Past due > 5

years ≤ 7

years

Past due > 7

years

Of which

defaulted

£m

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CQ4 - Quality of non-performing exposures by geography

The group does not have non-domestic exposures equal to or higher than 10% of total exposures and so this template has not been

presented.

UK CQ5 - Credit quality of loans and advances to non-financial corporations by industry

As per Disclosure (CRR), the group is not defined as a large institution in line with CRR article 433a and so columns b to d of this template

have not been presented.

010

Agriculture, forestry and fishing

69.2

(1.9)

—

020

Mining and quarrying

22.2

(0.3)

—

030

Manufacturing

777.0

(10.2)

—

040

Electricity, gas, steam and air conditioning supply

494.6

(1.8)

—

050

Water supply

70.8

(1.5)

—

060

Construction

2,301.8

(113.3)

—

070

Wholesale and retail trade

692.6

(12.8)

—

080

Transport and storage

554.5

(10.7)

—

090

Accommodation and food service activities

75.6

(1.9)

—

100

Information and communication

85.8

(1.0)

—

110

Real estate activities

73.5

(1.1)

—

120

Financial and insurance activities

—

130

Professional, scientific and technical activities

280.2

(2.8)

—

140

Administrative and support service activities

939.5

(10.7)

—

150

Public administration and defence, compulsory social security

3.6

—

160

Education

28.9

(0.5)

—

170

Human health services and social work activities

125.1

(1.6)

—

180

Arts, entertainment and recreation

129.1

(4.3)

—

190

Other services

196.1

(4.4)

—

200

Total

6,920.1

(180.8)

—

Gross carrying

amount

Accumulated

impairment

Accumulated negative

changes in fair value due to

credit risk on non-performing

exposures

£m

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CQ6 - Collateral valuation - loans and advances

As per Disclosure (CRR), the group is not required to disclose this template as it is not defined as a large institution in line with Article 433a.

UK CQ7 - Collateral obtained by taking possession and execution processes

The group has no collateral obtained by taking possession recognised on balance sheet so this template has not been presented.

UK CQ8 - Collateral obtained by taking possession and execution processes – vintage breakdown

As per Disclosure (CRR), the group is not required to disclose this template as it is not defined as a large institution in line with Article 433a. The group has no collateral obtained by taking possession

recognised on balance sheet so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XVII: Credit risk mitigation (CRM) techniques

UK CRC – Information related to CRM techniques

(a) Core policies and processes for on- and off-balance sheet netting (Article 453 (a) CRR)

Financial assets and liabilities are offset and the net amount reported in the balance sheet when the bank or the group has a legally

enforceable right to set off the recognisable amounts and intends to settle either on a net basis or to realise the asset and settle the liability

simultaneously.

(b) The core features of policies and processes for eligible collateral evaluation (Article 453 (b) CRR)

Policies and procedures govern the protection of the group’s position from the outset of a customer relationship for example, requiring

standard terms and conditions and through controls over the integrity and, if necessary, realisation of collateral.

Core features include:

•

Assets must be sufficiently liquid and their value stable over time;

•

The group must have the right to liquidate / retain the asset in a timely manner upon borrower default or insolvency;

•

The collateral can be realised within a reasonable timeframe; and

•

The CRM technique used should be legally enforceable.

As security for its loans, the group takes physical assets (such as property, vehicles or energy installations) as collateral. These physical

assets do not have an inherent maturity or expiry date. However, no collateral is recognised to mitigate credit risk under the standardised

approach.

(d) Guarantees and credit derivatives used as credit protection (Article 453 (d) CRR)

At 31 July 2026, the group recognised £664.3 million of credit risk mitigation with substitution effect which relate to the loans granted with

government guarantees, including those under coronavirus support schemes.

The group participates in both the ENABLE Guarantee Scheme and the ENABLE Build Guarantee Scheme sponsored by the British

Business Bank ("BBB"). These programmes provide qualifying portfolios with government-backed credit protection and reduce regulatory

RWAs through the application of credit risk mitigation and the securitisation framework.

The group does not apply any other unfunded credit protection. Whilst receipt of guarantees is a common feature within the terms of a

credit agreement these are not captured in regulatory calculations with the exception of loans granted with government guarantees,

including under coronavirus support schemes as noted above. The group does not buy protection via credit derivatives and does not have

any credit derivatives in its banking portfolio.

(e) Information about market or credit risk concentrations within the credit mitigation taken (Article 453 (e) CRR)

The group considers credit and market risk concentrations with a view to ensuring that any potential undue concentrations are identified

and suitably managed.

UK CR3 - CRM techniques overview: Use of credit risk mitigation techniques

The table below shows the carrying value of loans and advances and debt securities split between unsecured exposures and secured

exposures. Exposures for which some security or collateral has been received are classed as secured in this table irrespective of the level

of collateralisation or whether the collateral qualifies as eligible credit risk mitigation for credit risk calculated under the standardised

approach.

Loans and advances

2,383.9

8,500.4

8,385.0

115.4

—

Debt securities

593.2

—

Total

2,977.1

8,500.4

8,385.0

115.4

—

Of which non-performing exposures

9.5

288.1

284.6

3.5

—

Of which defaulted

9.5

288.1

Unsecured carrying

amount

Secured carrying amount

Of which secured by

collateral1

Of which secured by financial guarantees

Of which secured by

credit derivatives

£m

No collateral qualifies as eligible credit risk mitigation for credit risk calculated under the standardised approach

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XIX: Standardised approach

UK CRD - Information related to standardised model

(a) Names of the external credit assessment institutions (ECAIs) and export credit agencies (ECAs) (Article 444 (a) CRR)

The group uses ECAI ratings provided by Moody’s Investors Service (“Moody’s”) to determine the risk weight of rated counterparties in

each standardised credit risk exposure class.

(b) The exposure classes for which each ECAI or ECA is used (Article 444 (b) CRR)

ECAI ratings are used for determining the risk weight of central governments, central banks and institutions. ECAI ratings are used for

exposures to multilateral development banks where it is not listed in Article 117 and would receive a 0% risk weighting as well as exposure

to public sector entities that do not have central government guarantees.

(c) The process used to transfer the issuer and issue credit ratings onto comparable assets items not included in the trading

book (Article 444 (c) CRR)

The group applies an unrated risk weight according to the relevant CRR articles for the standardised exposure classes as mentioned above

where the ECAI rating is unavailable and does not use issuer or issue credit assessments under Article 139.

(d) The association of the external rating of each nominated ECAI or ECA with the risk weights that correspond with the credit

quality steps (Article 444 (d) CRR)

ECAIs ratings are mapped across to the Credit Quality Step requirements in CRR using the mapping tables within Commission

Implementing Regulation (EU) 2019/2028.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CR4 - Standardised approach – Credit risk exposure and CRM effects

The table below shows credit risk exposures pre- and post-application of credit conversion factors ("CCF") and CRM and the RWAs for those exposures.

Central governments or central banks

1,559.2

—

2,223.5

0.2

70.9

3.2

Regional government or local authorities

10.1

—

10.1

—

2.0

20.0

Public sector entities

66.2

—

50.9

—

10.2

20.0

Multilateral development banks

85.6

—

85.6

—

International organisations

—

Institutions

267.7

—

224.6

—

30.8

13.7

Corporates

3,137.1

195.1

3,058.5

57.2

2,754.8

88.4

Retail

4,177.0

2.1

4,038.5

0.2

2,655.9

65.8

Secured by mortgages on immovable property

239.5

16.7

239.5

3.1

229.6

94.7

Exposures in default

148.8

0.1

136.3

0.1

169.0

123.9

Exposures associated with particularly high risk

1,297.6

583.9

1,297.6

25.1

1,984.2

150.0

Covered bonds

83.9

—

83.9

—

9.2

10.9

Institutions and corporates with a short-term credit assessment

—

Collective investment undertakings

—

Equity

—

Other items

332.2

—

332.2

—

332.2

100.0

Total

11,404.9

797.9

11,781.2

85.9

8,248.8

69.5

Exposure classes

Exposures before CCF and before CRM

Exposures post CCF and post CRM

RWAs and RWAs density

On-balance-sheet

exposures

Off-balance-sheet

exposures

On-balance-sheet

exposures

Off-balance-sheet

amount

RWAs

RWAs density (%)

£m

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CR5 - Standardised approach

The table below shows a breakdown of exposures post-CCF and post-CRM. Risk weight categories do not reflect where the SME supporting factor has been applied. Exposures are classed as ‘rated’ only

where an ECAI rating has been used to derive the risk weight. Where a rating is unavailable, or where the risk weight has been determined by application of specific CRR provisions, exposures have been

classed as unrated.

Central governments or central banks

2,195.3

—

28.3

—

— 2,223.6

—

Regional government or local authorities

—

10.1

—

10.1

Public sector entities

—

50.9

—

50.9

Multilateral development banks

85.6

—

85.6

—

International organisations

—

Institutions

—

78.6

—

— 146.0

—

224.6

78.6

Corporates

—

— 3,115.7

—

— 3,115.7 3,115.7

Retail exposures

—

— 4,038.6

—

— 4,038.6 4,038.6

Exposures secured by mortgages on

immovable property

—

— 242.8

—

242.8

Exposures in default

—

71.2

65.2

—

136.4

Exposures associated with particularly

high risk

—

— 1,322.8

—

— 1,322.8 1,322.8

Covered bonds

—

76.3

7.6

—

83.9

—

Exposures to institutions and corporates

with a short-term credit assessment

—

Units or shares in collective investment

undertakings

—

Equity exposures

—

Other items

—

— 332.1

—

332.1

Total

2,280.9

78.6

—

76.3 214.6

—

— 4,038.6 3,761.8 1,388.0

28.3

—

— 11,867.1 9,327.9

Exposure classes

Risk weight

Total

Of which

unrated

10%

20%

35%

50%

70%

75%

100%

150%

250%

370%

1250%

Others

£m

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXI: IRB approach to credit risk

The group does not use the Internal Ratings Based (IRB) approaches for credit risk and capital management and so the tables and

templates in this annex have not been presented.

Annex XXIII: Specialised lending

The group does not use the Internal Ratings Based (IRB) approaches for credit risk and capital management and so the tables and

templates in this annex have not been presented.

Annex XXV: Counterparty credit risk

UK CCRA - Information related to CCR

(a) Methodology used to assign internal capital and credit limits for counterparty credit exposures (Article 439 (a) CRR)

The group does not use the internal ratings approach for rating derivative counterparties. Counterparty credit risk arises from the need to

enter derivatives transactions to support the group's treasury operations. Capital allocation is a consequence of those operations. Credit

limits are approved at Group Credit Committee under delegated authority from the board.

(b) Policies related to guarantees and other credit risk mitigants (Article 439 (b) and (h) CRR)

The group does not enter into guarantees to mitigate counterparty credit risk. Collateral is posted and received via standard International

Swaps and Derivatives Association ("ISDA") agreements with credit support annexes. The group does not have a hedging programme for

CVA risk.

The group enters into transactions with highly rated counterparties under standard ISDA agreements. Cash collateral is posted or received

and provided against these agreements therefore the group is not exposed to any wrong-way risk.

(d) Any other risk management objectives and relevant policies related to CCR (Article 431 (3) and (4) CRR)

Counterparty credit risk arises only as a consequence of the group's treasury operations through a small number of derivatives agreements

and secured financing transactions.

(e) The amount of collateral the group would have to provide if its credit rating was downgraded (Article 439 (d) CRR)

Were the group's credit rating to be downgraded, there would not be any additional collateral requirements.

UK CCR1 - Analysis of CCR exposure by approach

UK1

Original Exposure Method (for derivatives)1

—

1.4

—

UK2

Simplified SA-CCR (for derivatives)

—

SA-CCR (for derivatives)1

10.2

29.9

—

1.4

56.0

24.7

IMM (for derivatives and SFTs)

—

Of which securities financing transactions

netting sets

—

Of which derivatives and long settlement

transactions netting sets

—

Of which from contractual cross-product

netting sets

—

Financial collateral simple method (for

SFTs)

—

Financial collateral comprehensive method

(for SFTs)

—

VaR for SFTs

—

Total

56.0

24.7

£m

Replacement

cost (RC)

Potential

future

exposure

(PFE)

EEPE

Alpha used

for

computing

regulatory

exposure

value

Exposure

value pre-

CRM

Exposure

value post-

CRM

Exposure

value

RWEA

SA-CCR is used for derivative financial instruments within the Banking division.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CCR2 - Transactions subject to own funds requirements for CVA risk

Total transactions subject to the Advanced method

—

(i) VaR component (including the 3× multiplier)

—

(ii) stressed VaR component (including the 3× multiplier)

—

Transactions subject to the Standardised method

56.0

24.6

UK4

Transactions subject to the Alternative approach (Based on the Original Exposure Method)

—

Total transactions subject to own funds requirements for CVA risk

56.0

24.6

Exposure value

RWEA

£m

UK CCR3 - Standardised approach – CCR exposures by regulatory exposure class and risk weights

Central governments or central banks

—

Regional government or local authorities

—

Public sector entities

—

Multilateral development banks

—

International organisations

—

Institutions

—

5.5

—

2.5

48.0

—

56.0

Corporates

—

Retail

—

Institutions and corporates with a short-term credit assessment

—

Other items

—

Total exposure value

—

5.5

—

2.5

48.0

—

56.0

Exposure classes

Risk weight

£m

10%

20%

50%

70%

75%

100%

150%

Others

Total

exposure

value

UK CCR4 - IRB approach – CCR exposures by exposure class and PD scale

The group does not use the IRB approaches for credit risk and capital management and so the tables and templates in this annex have not been presented.

UK CCR5 - Composition of collateral for CCR exposures

In accordance with the Disclosure (CRR) framework, the group is not required to disclose this template, as it does not meet the criteria set out in Article 439 regarding exposures to counterparty credit risk

UK CCR6 – Credit derivative exposures

The group does not use credit derivatives to mitigate credit risk so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK CCR7 – RWEA flow statements of CCR exposures under the IMM

The group does not use the Internal Model Method for CCR exposures so this template has not been presented.

UK CCR8 – Exposures to CCPs

Exposure value

RWEA

£m

Exposures to QCCPs (total)

0.1

Exposures for trades at QCCPs (excluding initial margin and default fund contributions); of which

5.5

0.1

(i) OTC derivatives

5.5

0.1

(ii) Exchange-traded derivatives

—

(iii) SFTs

—

(iv) Netting sets where cross-product netting has been approved

—

Segregated initial margin

59.5

Non-segregated initial margin

—

Prefunded default fund contributions

—

Unfunded default fund contributions

—

Exposures to non-QCCPs (total)

—

Exposures for trades at non-QCCPs (excluding initial margin and default fund contributions); of which

—

(i) OTC derivatives

—

(ii) Exchange-traded derivatives

—

(iii) SFTs

—

(iv) Netting sets where cross-product netting has been approved

—

Segregated initial margin

—

Non-segregated initial margin

—

Prefunded default fund contributions

—

Unfunded default fund contributions

—

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXVII: Securitisation positions

UK SECA - Qualitative disclosure related to securitisation exposures

(a) Description of securitisation and re-securitisation activities (Article 449(a) CRR)

CBL securitises its own insurance premium and motor finance loan receivables via the sale of these assets to securitisation special

purpose entities ("SSPEs"). The purchase of the underlying receivables is made via the issuance of loans and securities. As the group has

retained exposure to substantially all the risk and rewards of the residual benefit of the underlying assets it continues to recognise these

assets in loans and advances to customers on its consolidated balance sheet.

Securitisations issued under the Orbita Funding public motor programme are simple, transparent and standardised ("STS") compliant. The

use of securitisations provides term funding and generates contingent collateral for the bank. As at 31 July 2026, CBL has securitised

without recourse and restrictions £1,570.3 million (31 July 2025: £1,554.8 million) of its insurance premium and motor loan receivables in

return for cash and securities in issue of £1,443.1 million (31 July 2025: £1,323.4 million).

Close Brothers Finance DAC, a subsidiary of CBL, historically securitised its motor finance loan receivables via a forward flow agreement

with notes issued by a SSPE, Magna Auto Funding No. 1 DAC ("Magna"). The risks and rewards have been substantially transferred and

therefore the underlying assets have been de-recognised from the consolidated balance sheet and excluded from credit risk RWA

calculations under Chapter 2 of Title II of Part Three of the CRR. The group has exposure to the securitisation via the retention of 5% of the

nominal value of each tranche sold to investors. The retained notes are recognised on the consolidated balance sheet and risk-weighted in

accordance with section 3 of Chapter 5 of Title II of Part Three of the CRR. The last batch of agreements were sold into the structure in

December 2024 and the forward flow book is now in run off.

The British Business Bank (“BBB”) is a UK Government-owned economic development bank established to increase the supply of finance

to small and medium-sized enterprises (“SMEs”) and support business growth. During the financial year, two BBB guarantee schemes were

effective within Close Brothers Limited (“CBL”), providing credit risk mitigation through synthetic securitisation structures.

Under the ENABLE Guarantee Scheme, £300.0 million of CBL’s Commercial loan book portfolio and £350.0 million of CBL's Property loan

book portfolio benefited from a 75% government-backed guarantee provided by the BBB.The scheme provides unfunded credit protection

for qualifying loans, reducing the credit risk associated with the underlying exposures and supporting increased lending to SMEs. Together,

these schemes enhance CBL’s ability to support SME lending while optimising regulatory capital efficiency through the recognition of

eligible government-backed credit protection.

The group does not have any re-securitisation exposures.

(b) The type of risk Close Brothers are exposed to in securitisation and re-securitisation activities (Article 449(b) CRR)

(i) risk retained in own-originated transactions

CBL holds the first loss tranche on its insurance premium securitisation issued by Close PF Funding 1 Limited.

Under the Orbita Funding public motor securitisation programme, CBL retains the mezzanine and junior positions issued by Orbita Funding

2023-1 Plc. CBL retains all notes issued by Orbita Funding 2026-1 Plc. Both transactions are STS compliant.

CBL retains 5% of the securitisation positions issued by Magna as a vertical slice across the senior and mezzanine tranches sold to third

parties.

The group does not have any exposure to securitisations originated by third parties.

For transactions originated by CBL, the group has retained substantially all the credit risk and rewards of its securitised exposures and

therefore continues to recognise these in loans and advances to customers on its consolidated balance sheet. The risk-weighted exposure

amounts on the underlying assets are calculated in accordance with Chapter 2 of Title II of Part Three of the CRR under the credit risk

framework.

In November 2025, CBL's ENABLE Build Guarantee with the British Business Bank ("BBB") became effective. The scheme is delivered

through a synthetic securitisation structure supported by a government guarantee designed to facilitate increased lending to UK SMEs.

Under the arrangement, £350.0 million of Property loan exposures benefit from a 75% BBB guarantee. In accordance with the

securitisation framework, CBL retains a first-loss position of £15.8 million, which is deducted from CET1 capital. The guaranteed portion of

the portfolio attracts a 0% risk weight under the CRR, resulting in a reduction in credit risk RWAs of £269.9 million through the application of

credit risk mitigation ("CRM").

CBL also continues to participate in the ENABLE Commercial Guarantee scheme, under which £11.3 million of first-loss risk is retained and

deducted from CET1 capital in accordance with Article 245(1)(b) of the UK CRR. Exposures benefiting from the UK Government guarantee

attract a 0% risk weight under Article 114(4) of the UK CRR, generating a further reduction in Commercial loan book RWAs of £139.4

million through the application of CRM.

Loan receivables securitised via the forward flow transaction originated by Close Brothers Finance DAC have been derecognised from the

consolidated balance sheet and significant credit risk associated with the underlying assets has been transferred to third parties. The

underlying assets are therefore excluded from the calculation of risk-weighted exposure amounts. The group retains a vertical slice of 5%

of the nominal value of each of the tranches sold to investors,The retained securitisation positions are risk-weighted using the Securitisation

Standardised Approach (SEC-SA) in accordance with Section 3, Chapter 5, Title II, Part Three of the CRR.

Close Brothers Group plc

Pillar 3 Disclosures 2026

(d) A list of SSPEs (Article 449(d) CRR)

SSPE name

(i) Acquire exposures

originated by the group

(ii) Sponsored by the

group

iii) To which the group

provides securitisation-

related services

iv) Included in the

regulatory scope of

consolidation

Close PF Funding 1 Limited

Orbita Funding 2023-1 Plc1

Orbita Funding 2026-1 Plc

Magna Auto Funding No. 1 DAC 1

SSPE is dormant or in run-off and no longer acquiring exposures originated by the group as at 31 July 2026.

(e) A list of legal entities in relation to which Close Brothers have disclosed that they have provided support (Article 449(e) CRR)

There are no legal entities to which the group has disclosed that they have provided support in accordance with Chapter 5 of Title II of Part

Three.

(f) A list of legal entities affiliated with Close Brothers that invest in securitisations originated by the institutions or in

securitisation positions issued by SSPEs sponsored by the institutions (Article 449(f) CRR)

There are no legal entities affiliated with the group that invest in securitisation positions issued by the group or SSPEs sponsored by the

group.

(g) A summary of accounting policies for securitisation activity (Article 449(g) CRR)

Financial assets are derecognised when the contractual rights to receive cash flows from the financial assets have expired or where the

group has transferred the contractual rights to receive cash flows and transferred substantially all risks and rewards of ownership.

For transactions originated by CBL, substantially all the risks and rewards of the underlying assets have been retained and therefore all

financial assets continue to be recognised on the group's consolidated balance sheet, together with the financial liability for the debt

securities in issue.

For the Magna securitisation, substantially all the risks and rewards have been transferred and therefore all underlying assets are

derecognised from the group's consolidated balance sheet. The retained position in the senior and mezzanine tranches is recognised on

balance sheet, together with the financial liability for the debt securities in issue.

For the ENABLE Guarantee synthetic securitisations, substantially all the risks and rewards of the underlying assets have been retained

and therefore all financial assets continue to be recognised on the group's consolidated balance sheet. The fees relating to the guarantee

are included within operating expenses.

(h) The names of the ECAIs used for securitisations and the types of exposure for which each agency is used (Article 449(h)

CRR)

The group uses the following ECAI's to obtain external credit ratings on its Orbita Funding securitisations: Moody's Investor Services

Espana S.A and Fitch Ratings Limited. The appointment of ECAI's is reviewed at each new issuance and may change from time to time.

No other securitisation positions are rated externally.

(i) A description of the Internal Assessment Approach (Article 449(i) CRR)

The group does not use the Internal Assessment Approach in order to calculate risk-weighted exposure amounts.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK SEC1 - Securitisation exposures in the non-trading book

The table below shows the retained carrying amount of securitisation exposures for all securitisations noted in UK SECA.

STS: Orbita 2023-1 and Orbita 2026-1 Securitisations,and Synthetic securitisation: ENABLE Guarantee Schemes

Institution acts as originator

Institution acts as sponsor

Institution acts as investor

Traditional

Synthetic

Sub-total

Traditional

Synthetic

Sub-total

Traditional

Synthetic

Sub-total

STS

Non-STS

of which

SRT

STS

Non-STS

STS

Non-STS

£m

of which

SRT

of which

SRT

Total exposures

1,009.5

—

93.4

3.1

459.9

459.9 1,562.7

—

Retail (total)

1,009.5

—

93.4

3.1

212.0

212.0 1,314.9

—

Residential mortgage

—

Credit card

—

Other retail exposures 1,009.5

—

93.4

3.1

212.0

212.0 1,314.9

—

Re-securitisation

—

Wholesale (total)

—

247.8

—

Loans to corporates

—

Commercial mortgage

—

Lease and receivables

—

Other wholesale

—

247.8

—

Re-securitisation

—

UK SEC2 - Securitisation exposures in the trading book

The group does not have any securitisation exposures in the trading book and so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK SEC3 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institutions acting as originator or as sponsor

The table below shows the carrying amount and associated risk-weighted exposure amount of securitisation exposures for which risk-weighted exposure amounts are calculated in accordance with Chapter

5 of Title II of Part Three of the CRR as significant credit risk associated with the underlying assets has been transferred to third parties.

Capital requirements were calculated only for the Magna and ENABLE securitisations; see UK SECA for further details.

The ENABLE Guarantee scheme requires CBL to retain a 5% first-loss tranche (£25.8 million), the synthetic securitisation position is deducted from own funds (CET1 capital) in accordance with Article 245

(1) b) of the CRR

Exposure values (by RW bands/deductions)

Exposure values (by regulatory approach)

RWEA (by regulatory approach)

Capital charge after cap

£m

≤20% RW

>20% to

50% RW

>50% to

100%

>100% to

<1250%

1250%

RW/

deductions

SEC-IRBA

SEC-

ERBA

(including

IAA)

SEC-SA

1250%/

deductions

SEC-IRBA

SEC-

ERBA

(including

IAA)

SEC-SA

1250%/

deductions

SEC-IRBA

SEC-

ERBA

(including

IAA)

SEC-SA

1250%/

deductions

Total exposures

436.1

—

0.6

26.4

—

437.2

25.8

—

11.7

25.8

—

0.9

25.8

Traditional transactions

2.0

—

0.6

—

3.1

—

11.7

—

0.9

—

Securitisation

2.0

—

0.6

—

3.1

—

11.7

—

0.9

—

Retail underlying

2.0

—

0.6

—

3.1

—

11.7

—

0.9

—

Of which STS

—

Wholesale

—

Of which STS

—

Re-securitisation

—

Synthetic transactions

434.1

—

25.8

—

434.1

25.8

—

25.8

—

25.8

Securitisation

434.1

—

25.8

—

434.1

25.8

—

25.8

—

25.8

Retail underlying

202.1

—

10.0

—

202.1

10.0

—

10.0

—

10.0

Wholesale

232.0

—

15.8

—

232.0

15.8

—

15.8

—

15.8

Re-securitisation

—

UK SEC4 - Securitisation exposures in the non-trading book and associated regulatory capital requirements - institution acting as investor

The group does not have any securitisation exposures in the non-trading book where the group is acting as an investor and so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK SEC5 - Exposures securitised by the institution - exposures in default and specific credit risk adjustments

The table below shows relevant information on securitised exposures for all securitisations noted in UK SECA.

Exposures securitised by the institution - Institution acts as originator or as sponsor

Total outstanding nominal amount

Total amount of specific credit risk

adjustments made during the period

£m

Of which exposures in default

Total exposures

2,084.9

13.0

(9.1)

Retail (total)

1,837.1

8.0

(9.1)

residential mortgage

—

credit card

—

other retail exposures

1,837.1

8.0

(9.1)

re-securitisation

—

Wholesale (total)

247.8

5.0

—

loans to corporates

247.8

5.0

—

commercial mortgage

—

10 lease and receivables

—

other wholesale

—

12 re-securitisation

—

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXIX: Standardised approach and internal model for market risk

UK MRA - Information related to market risk

(a) The group's strategies and processes to manage market risk (Points (a) and (d) of Article 435 (1) CRR)

Following the disposal of Winterflood, the group no longer has any exposure to traded market risk. Therefore, the group's market risk

exposure consists of Interest Rate Risk in the Banking Book ("IRRBB"), Credit Spread Risk in the Banking Book ("CSRBB"), and Foreign

Exchange ("FX") risk.

IRRBB is incurred in the group as a result of its lending and funding activities and the funding position of the parent company. Further

information on IRRBB is provided in annex XXXVII on pages 69 to 73.

CSRBB arises from the HQLA portfolio held in the bank.

FX risk is incurred across the group and arises from foreign currency loan commitments; translating foreign currency assets, liabilities and

profits; and non-sterling investments.

The group has a restricted appetite for interest rate risk which is limited to that required to operate efficiently. The group’s policy is to match

repricing characteristics of assets and liabilities naturally. The bank's (Close Brothers Limited and its subsidiaries) treasury is responsible

for hedging the interest rate risk in the banking book. Any residual risk which cannot be naturally matched is hedged utilising vanilla

derivative transactions to remain within prescribed risk limits. GALCO and ALCO are respectively responsible for approving any changes to

hedging strategies before implementation for the group and bank.

Derivative transactions can only be undertaken with approved counterparties and within the respective credit risk limits assigned to those

counterparties.

The group has a limited appetite for CSRBB which occurs due to the HQLA portfolio. The portfolio primarily comprises of highly rated UK

and European sovereign debt, sovereign-guaranteed debt, supranational debt and UK covered bonds.

All marketable securities are “hold to collect and sell” and have their interest rate exposure hedged on a back-to-back basis with vanilla

interest rate swaps. The exception to this is the £250 million group bond, which is hedged as part of the overall group exposure.

The group has a restricted appetite for FX risk. It avoids large open positions and sets individual currency limits to mitigate the risk.

FX exposures are generally hedged using foreign exchange forwards or currency swaps with exposures monitored daily against approved

limits.

(b) The structure and organisation of the market risk management function (Point (b) of Article 435 (1) CRR)

As noted in Annex III, UK OVA (a), risk appetite is set on a top-down basis by the board.

GALCO monitors the market risk exposure across the group's balance sheet. ALCO monitors the market risk exposure for the bank.

Treasury is responsible for the day-to-day management of all market risk exposure for the bank. Day-to-day oversight is exercised via a

combination of daily reporting by the treasury finance team, and business RCC review and challenge. Further independent oversight is

provided via the second line of defence through the asset liability management risk team ("Group ALM Risk").

Close Brothers Group plc

Pillar 3 Disclosures 2026

Two measures are used for measuring IRRBB, namely Earnings at Risk (“EaR”) and Economic Value (“EV”):

•

EaR measures short term impacts to earnings, including basis risk, highlighting any earnings sensitivity should rates change

unexpectedly; and

•

EV measures longer term earnings sensitivity due to rate changes, highlighting the potential future sensitivity of earnings, and any

risk to capital.

The group recognises three categories of FX risk:

transaction risk; the risk relating to foreign currency loan commitments;

translation risk: the risk relating to converting foreign currency balances and profits into sterling;

structural FX risk: the risk relating to the potential impact on capital ratios relating to non-GBP exposures.

Transaction risk is measured daily within treasury based on net cash flows and contracted future exposures. Treasury’s strategy is to hedge

the FX risk as soon as it arrives, and to have zero FX transaction exposure each day at close of business.

Translation risk is monitored within each business monthly, translating non-UK profits regularly to mitigate fluctuations in FX rates.

Structural FX risk is assessed at least annually and is deemed to be immaterial.

Banking businesses have operational processes and controls in place to monitor their exposure to IRRBB and ensure it remains within

approved local risk appetites. Any exceptions are reported to ALM Risk on the same working day. Residual IRRBB that is not transferred

into treasury for central management through the bank’s funding transference process is monitored by the businesses through their

respective RCCs, treasury’s first line of defence, and ALM Risk.

Treasury ALM is responsible for maintaining processes and controls to monitor the group position and report exposures to ALCO and

GALCO, and subsequently to GRCC and the Risk Committee. An ALM system is deployed as the primary source for IRRBB reporting and

risk measurement.

UK MR1 - Market risk under the standardised approach

The group applies CRR Article 351 de minimis exemption, under which foreign exchange positions below the prescribed threshold are

excluded from market risk own funds requirements and so this template has not been presented.

UK MRB – Information on the internal Market Risk Models

The group does not use an internal Market Risk Model for market risk and so this template has not been presented.

UK MR2-A – Market Risk under the Internal Model Approach (IMA)

The group does not use an Internal Model Approach for market risk and so this template has not been presented.

UK MR2-B – RWA flow statements of market risk exposures under the IMA

The group does not use an Internal Model Approach for market risk and so this template has not been presented.

UK MR3 – IMA values for trading portfolios

The group does not use an Internal Model Approach for market risk and so this template has not been presented.

UK MR4 – Composition of VaR estimates with gains/losses

The group does not use an Internal Model Approach for market risk and so this template has not been presented.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXXI: Operational risk

UK ORA - Information on operational risk

(a) Risk management objectives and policies (Points (a), (b), (c) and(d) of Article 435(1) CRR)

Definition, strategies and processes

Operational risk is the risk of loss or customer harm resulting from inadequate or failed processes, people and systems or external events.

This includes the risk of being unable to recover systems quickly and maintain critical services.

Impacts to our business, customers, third parties and the markets in which the group operates are considered within a maturing framework

for resilient delivery of our important business services and setting of impact tolerances.

Operational risk is a core component of the ERMF and is embedded in day-to-day business activities. Requirements and responsibilities

are set out in the Operational Risk Policy and supporting standards and procedures as part of the framework to identify, assess, mitigate,

monitor and report the operational risks, events and issues that could impact the achievement of business objectives or impact core

business processes.

Exposures

The principal operational risks to the group, which could result in customer detriment, unfair customer outcomes, financial loss, disruption

and/or reputational damage include:

•

Inadequate protection against internal and/or external crime, including cyber-attack and economic crime.

•

Failure of business processes, IT and/or critical third parties, including inability to recover timely from failure (e.g. of IT systems or

data) within agreed impact tolerance.

•

Failure to ensure compliance with increasingly complex and detailed regulations.

•

Failure to implement the policies, procedures, and culture to enable the group to appropriately manage its people risks. This

includes recruitment, remuneration, retention, and succession; capability and development; colleague wellbeing; and continuity /

resilience.

We operate controls over the group’s most significant operational risks ensuring there are near-term mitigation strategies where risks are

greatest and ensure these are sufficient to prevent material disruption of our service to customers and/or our businesses.

Structure and organisation of the risk management function for operational risk

Businesses are responsible for the day-to-day management of operational risk, with oversight from the risk and compliance function, and

independent assurance activities undertaken by group internal audit.

The board delegates authority to the GRCC to manage the group’s operational risk framework on a day-to-day basis and provide oversight

of its exposure. The committee is supported by the Operations and Technology Risk Committee which is responsible for oversight of

technology, information security, third-party and certain other resilience-related risks. Regular management information is presented to and

discussed by these committees and additionally local business RCCs.

The Risk function has a dedicated operational risk team which is responsible for maintaining the framework, tool sets and reporting

necessary for effective operational risk management. The group has identified, assessed and monitored key operational risks, including

undertaking an assessment of control effectiveness, monitoring key risk indicator trends and escalating events, in accordance with policy

and standard requirements. In the second line, operational risk managers are aligned to businesses, with an additional technical second

line of defence team providing specialist oversight of technology, information security, data, resilience and third-party risks. Monitoring of all

operational risk domains is conducted via divisional RCCs with escalation to the GRCC and Risk Committee as appropriate.

Measurement and reporting

Operational risk is managed across the group through an operational risk framework and policies. This framework includes a risk and

control self-assessment process, risk impact likelihood matrix, risk and control indicators, risk appetite setting, a robust operational loss

event management and escalation process, and use of scenario analysis. This is supplemented by group-level and local management

information and reporting across a suite of defined KRIs, which are regularly monitored via local, divisional and group committees with

exceptions reported to GRCC and the Risk Committee.

Lessons are learned and root cause analysis is undertaken, with appropriate management action plans implemented. Losses may result

from both internal and external events and are categorised using risk categories defined as part of the taxonomy deployed within our risk

management tool.

The delivery of a standardised framework and management information across all operating risks is complemented by periodic thematic

reviews conducted on key focus areas and reviewed by the GRCC and Board Risk Committee. In the last year these have covered

changes in execution including technology services material outsourcing, third party risk, fee remediation and fraud. Further independent

assurance is obtained through reviews conducted by the compliance monitoring team and specialist external partners (e.g. cyber risk

management) and group internal audit.

The Risk function performs a level of oversight of the group’s business planning process, including analysis of industry trends or forward-

looking threats that could lead to material impact on our ability to deliver on the strategic objectives or result in a significant impact on

assessment of operational risk capital.

Stress testing

Operational risk losses and scenario analysis is used to inform the ICAAP. The group calculates its minimum (Pillar 1) operational risk

capital requirements using a mix of The Standardised Approach (“TSA”) and Alternative Standardised Approach (“ASA”). Pillar 2 is

calculated using internal and external loss data and extreme but plausible scenarios that may occur in the next 12 months.These scenarios

Close Brothers Group plc

Pillar 3 Disclosures 2026

provide insights into the stresses the business could be subject to given plausible but severe circumstances. Scenarios cover material

operational risks across key risk domains and are developed by businesses and senior management across the group with the process

facilitated by the Risk function, GRCC and the Risk Committee, as part of the ICAAP process, to support the setting of operational risk

Pillar 2a capital.

Policies for hedging and mitigating operational risk

The group continues to focus on risk management requirements and developing the processes, systems and people skills and capabilities

needed to mitigate risks.

The group is prepared to tolerate a level of operational risk exposure within agreed thresholds and limits but has limited appetite for

operational risks with significant residual exposure and as such requires a near-term mitigation strategy for any such identified risks.

In line with the group’s conservative approach to risk management, controls are implemented in a manner that reduces the likelihood of

higher-impact risk events crystallising. Further, the group monitors aggregate loss trends and seeks to limit aggregate losses arising in any

given year.

(b) Approaches for the assessment of minimum own funds requirements (Article 446 CRR)

TSA is used for non-lending income in the group, with ASA applied to loan book exposures.

(c) Description of the AMA methodology approach used (Article 446 CRR) and (d) use of insurance for risk mitigation (Article 454

CRR))

The group does not apply the Advanced Measurement Approach ("AMA").

UK OR1 - Operational risk own funds requirements and risk-weighted exposure amounts12

Banking activities

Relevant indicator

Own funds

requirements

Risk weighted

exposure amount

Year-3

Year-2

Last year

Banking activities subject to basic

indicator approach (BIA)

—

Banking activities subject to

standardised (TSA) / alternative

standardised (ASA) approaches

405.4

370.3

380.0

53.0

662.0

Subject to TSA:

20.6

0.6

19.7

Subject to ASA:

384.8

369.7

360.3

Banking activities subject to

advanced measurement approaches

AMA

—

Amounts in this template shown in £ millions.

Winterflood has been removed from the calculation in accordance with permission provided by the PRA.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXXIII: Remuneration policy

On 5 December 2023 the PRA published Policy Statement PS 16/23 which amends the proportionality requirements applying to

remuneration disclosures. These amendments apply to a firm’s performance year starting on or after 8 December 2023 and therefore will

apply for the first time to disclosures for the year-ended 31 July 2025. For the year-ended 31 July 2024 the proportionality levels set out in

the PRA’s Supervisory Statement on Remuneration (SS2/17) as at 1 August 2023 apply.

Under the Supervisory Statement the group is classed as a listed small CRR firm, CBL must disclose specific remuneration details under

Article 433c, covering points (a)–(d), (h)(i), and (h)(ii) of Article 450(1).Of the six PRA templates, only REMA and REM1 are applicable to

CBL’s Pillar 3 disclosures.

UK REMA – Remuneration policy

Approach to Remuneration

In accordance with the Remuneration Code, a firm must establish, implement and maintain remuneration policies, procedures and

practices that are consistent with and promote sound and effective risk management. Policies and procedures must be comprehensive and

proportionate to the nature, scale and complexity of the firm’s activities. The Group ensures its approach to remuneration, and in particular

variable pay, is aligned with clear risk principles which aim to drive sustainable growth, with no reward for inappropriate risk taking.

The Remuneration Part of the PRA Rulebook require the group to identify Material Risk takers ("MRTs"), being those staff whose activities

have a material impact on the firm’s risk profile. The Group employed a total of 71 individuals who were identified as MRTs for the year

ended 31 July 2026.

Remuneration Committee Membership

The Remuneration Committee ("the Committee") comprises Tracey Graham as chair, together with Mike Biggs, Mark Pain and Patricia

Halliday. The Committee met five times during the year, in-line with the annual meeting timetable.

The Committee Responsibilities

The Committee’s main responsibilities are to:

•

Review and determine the total remuneration packages of executive directors and other senior executives, including our MRTs, in

consultation with the chairman and chief executive and within the terms of the agreed policy;

•

Approve the design of any performance related pay schemes operated by the group;

•

Review the design of all employee share incentive plans;

•

Ensure that contractual terms on termination and any payments made are fair to the individual and the group, that failure is not

rewarded and that a duty to mitigate loss is fully recognised;

•

Review any major changes in employee benefits structures throughout the group;

•

Select, appoint and determine terms of reference for independent remuneration consultants to advise the Committee on

remuneration policy and levels of remuneration;

•

Ensure that the remuneration structures in the group are compliant with the rules and requirements of regulators and relevant

legislation;

•

Review and approve individual sales incentives schemes operated in the group and monitor and oversee the operation of those

schemes;

•

Ensure that provisions regarding disclosure of remuneration are fulfilled;

•

Seek advice from group chief risk officer to ensure remuneration structures and annual bonuses are appropriately aligned to the

group’s risk appetite; and

•

Assess and challenge reward outcomes across the group to encourage and ensure pay equity and non-discriminatory practices.

Advice

During the year under review the Committee consulted and took advice from Deloitte, the chairman of the board, the chief executive, the

group head of human resources, the group head of reward & hr infrastructure, the group chief risk officer and the general counsel and

company secretary. Where the Committee seeks advice from employees, such as anyone in a control function, this never relates to their

own remuneration.

Remuneration Philosophy

The reward structure aims to:

•

Attract, motivate and retain high calibre employees across the group;

•

Reward good performance;

•

Promote the achievement of the group’s annual plan and its long-term strategic objectives;

•

Align the interests of employees with those of all key stakeholders, in particular our shareholders and clients, as well as other key

stakeholders including regulators; and

•

Support effective risk management and promote a positive corporate culture and appropriate conduct to both employees and

clients.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Our Approach to Remuneration

The cultural attributes which unite our work force are prudence, integrity, teamwork, service, expertise and relationships. Together these

deﬁne our culture and the positive behaviours that underpin the high service levels we deliver to our customers. In order to attract the

calibre of employees who can support these attributes, compensation must be competitive and designed to encourage the right behaviours.

Although the risk profile of the business is short-term in nature, we seek to promote prudence, strong client relationships and sustained

performance over the medium to long term with a remuneration structure for executives and senior employees which includes levels of

deferral of the annual bonus and a Long Term Incentive Plan subject to performance measures applicable over a three year period.

All our businesses have a “pay for performance” model. Performance management is integral to our annual compensation review

processes and assessment of performance for discretionary bonus awards takes into account a broad range of performance measures,

both financial and non financial. These include an assessment of risk management behaviour which ensures that negative behaviours are

penalised, resulting in lower or no variable compensation, regardless of financial performance. Our review process to determine annual

awards is detailed below.

All employees have individual objectives against which their personal performance is rated. These objectives can include financial metrics

(or function-specific objectives where appropriate), but also include all cover non-financial measures, including but not limited to risk

management and behavioural objectives appropriate to their roles. Assessment is based on current key performance indicators, as well as

long-term actions, where appropriate. We operate a rating approach to both delivery and behavioural performance and employees are

rated on a scale of Exceptional to Action Required. We review distribution of overall performance ratings against a bell curve to encourage

differentiation.

These performance ratings drive the remuneration recommendations for all employees. There is a challenge process, which includes input

from senior management and divisional HR, Risk and Compliance. Subsequently there is a further challenge process conducted by Group

HR and the group Executives, with input from Group Risk, Compliance and Internal Audit.

Employees in control function roles have within their total remuneration a greater proportion of fixed pay than those in the front office. Their

variable compensation is determined independently from their business unit’s performance, and Group Heads of the control functions

provide oversight of compensation decisions within their functions, and all MRTs’ compensation is reviewed and approved by the

Committee.

In line with our Risk-Adjustment Policy, the group chief risk officer reports independently to the Committee to ensure that risk and control

considerations are accounted for when recommending the overall discretionary bonus proposals and individual bonuses. This process is

based on: a top-down approach which considers risk at a portfolio level across the group and its businesses, by comparing the risk profile

against risk appetite, and a bottom-up approach which considers individuals’ performance against their risk related objectives and

contribution to the risk and control environment and associated culture (including positive risk behaviours).

However, in light of the FCA's review of discretionary commission arrangements in the motor finance market, during the 2024 financial year

we added flexibility to our Remuneration Policy for executive directors by operating an interim restricted stock incentive model, which was

approved by shareholders at the November 2024 AGM. Given the challenge of setting robust and meaningful performance metrics, we

believe this interim approach is aligned with:

•

Retaining and motivating an executive team focused on executing our strategy and protecting our valuable franchise;

•

Incentivising and rewarding stewardship of the business during this period of uncertainty; and

•

Increasing the executive directors equity stake in the business in the long term interests of all of our stakeholders.

We continued to operate the interim restricted stock incentive model for the 2026 financial year. The Performance Share Award to be

granted in 2026 will:

•

Replaces both the annual bonus and the performance share award under the Long Term Incentive Plan ("LTIP"); and

•

Be granted up to 80% of base salary;

•

Be subject to performance underpins:

•

The restricted share awards will vest 100% after year 3 subject to assessment against the performance underpins. The award

will also be subject to a two-year holding period. This is to reflect that the current LTIP has a 5-year time horizon; and

•

Be consistent with the normal course policy, clawback periods will continue to be seven years, extendable to 10 years.

Remuneration Schemes for MRTs

MRTs comprise categories of staff whose professional activities have a material impact on the firm’s risk profile, as stipulated by the

Remuneration Part of the PRA Rulebook. The remuneration of MRTs is subject to specific requirements within the Remuneration Code.

Remuneration

Base Salary

The base salary is designed to attract and retain high calibre employees and reflect an employee’s role, skills and knowledge. Salaries are

set annually based on an individual’s role and experience, pay for the broader employee population and external factors, where applicable.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Bonus Schemes

The majority of employees in the group have the potential to receive a performance related element of pay as part of their overall

compensation package. This element is based on a combination of the overall assessment of the performance of the business and

individual performance. Employees have individual objectives against which their personal performance is rated. In addition to the

assessment of performance against these objectives (conducted by an individual’s line manager as part of their overall performance

review) the group chief risk officer reports independently to the Committee on behalf of group risk, compliance and internal audit to ensure

that any concerns highlighted by the control functions during the year are appropriately addressed in individual remuneration proposals.

A portion of any discretionary bonus above certain thresholds and for certain individuals is deferred. In line with the ordinary course

Remuneration Policy the group chief executive and group chief finance officer have 60% of their award deferred. Deferral is generally made

into Close Brothers Group plc shares but in certain areas, where it is appropriate for the business based on the risk profile of that business,

this may be deferred in cash or a cash plan. Both cash and deferred awards for MRTs are typically subject to forfeiture, malus and

clawback provisions. The malus provisions mean that the awards may be subject to forfeiture or may be reduced after grant in certain

adverse circumstances. The clawback provisions mean that the awards already paid out may be subject to repayment in certain

circumstances.

The aggregate level of bonuses is determined by reference to group and divisional metrics, including financial and non-financial metrics,

such as risk, compliance and conduct.

A relatively small percentage of staff in the group are eligible for formulaic bonus schemes, which are typically structured to generate

business, but operate in line with the general principles of the group’s bonus arrangements with individual performance and behaviours

assessment, and appropriate risk controls.

Performance Share Award ("PSA")

The PSA, granted in 2026, will be delivered through nil cost options awards and will vest after 3 years, subject to performance underpins

including:

•

Individual: At least strong performance rating;

•

Financial: The group achieving a CET1 of at least 1% above regulatory requirement at vesting, calculated on a standardised

basis;

•

Non-Financial: satisfactory progress against strategic objectives designed to promote long term success of the business1; and

•

Risk: No material regulatory censure relating to the executive directors' time in office1.

For all members of the executive committee, including executive directors' there is an additional two-year holding period after vesting,

therefore the overall restricted period in five years. The PSA is subject to forfeiture, mauls and clawback provisions.

These performance underpins are for executive directors only.

Risk Management

The remuneration policy approved by the Committee is designed to promote sound and effective risk management and to ensure that risk

taking within the group does not exceed the group’s risk appetite (collectively and individually). The Committee approves changes to

compensation structures for groups of individuals and mandates the involvement of group risk in determining new structures to ensure that

they are appropriately aligned to the risk profile of the business in which they operate. The group chief risk officer, group head of

compliance, internal audit, and the divisional heads of risk and compliance are closely involved in the remuneration process to ensure that

remuneration practices support this. The group chief risk officer reports independently to the Committee to ensure that remuneration

decisions and practices support these objectives. Risk and compliance provide input into, and independent review of, the remuneration

policies of the company.

Discretionary bonuses can be adjusted for positive and negative risk and compliance assessments at both an overall spend level (top-

down) and individual level (bottom-up), on an ex-ante and ex-post basis. Further details of how the risk adjustments are assessed are as

follows:

Top-down review

•

Considers risk at a portfolio level across the group and its businesses by comparing the risk profile against risk appetite; and

•

Includes a review of audit reports, risk assurance work and Audit, Risk and Compliance Committee papers, which would identify

areas of concern and areas of achievement. It also considers the concept of ‘tone from the top’.

Bottom-up review

•

Considers individual performance against stated risk related objectives, wider compliance and contributions to the risk and control

environment. Includes individual performance reviews and ratings (including behavioural), input from Compliance and Group

Internal Audit on their observations throughout the period, and a review of all relevant data capture systems which record risk

events.

Ex-ante review

•

Ex-ante risk-adjustment refers to adjustments made to take account of intrinsic risks that are inherent in the group’s business

activities. For example, this could be based on the potential for unexpected losses or weak systems and controls that could result

in a risk of undetected conduct failings. The group Chief Risk Officer provides a written paper to the Committee identifying any

potential ex-ante risk.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Ex-post review

•

The adjustment of variable remuneration to take account of specific crystallised risk or an adverse performance outcome

including those related to misconduct. Ex-post adjustments may include reducing current year awards and the application of

malus, and claw-back, particularly in line with regulatory expectations that ex-post adjustments are made where there has been a

material adverse impact on the firm’s stakeholders, including customers and shareholders. The group chief risk officer provides a

written paper to the Committee identifying any potential ex-post risk.

Recovery and Withholding

As outlined in the sections above, variable remuneration for MRTs is subject to both malus and clawback.

The cash bonus is subject to clawback from award for a period of seven years (extendable to ten years where the group or a regulatory

authority has started an investigation) for executive directors and the executive committee; three years for Senior Management Function

(“SMF”) employees, excluding the executive committee, “Higher Paid” MRTs and one year for other MRTs.

The deferred bonuses for MRTs are subject to malus prior to vesting. In addition, the deferred bonuses for MRTs are subject to clawback

from the date of grant for the period of seven years (extendable to ten years where the group or a regulatory authority has started an

investigation) for executive directors the executive committee; four years for SMF employees, excluding the executive committee,“Higher

Paid” MRTs and for other MRTs.

The PSA is subject to malus for the three year period to the point of vesting. In addition, the PSA is subject to clawback from the date of

grant for seven years (extendable to ten years where the group or a regulatory authority has started an investigation) for executive directors

and the executive committee; four years for SMF employees excluding the executive committee, “Higher Paid”MRTs and other MRTs.

The events which may trigger malus are as follows:

•

The assessment of any performance target or condition in respect of an award or the information used to determine the number

of shares subject to an award was based on material error, or materially inaccurate or misleading information;

•

(a) The participant has been terminated for misconduct, or has been issued with a formal disciplinary warning for misconduct

under the Company’s disciplinary policy; or (b) if the participant has left employment, the Committee becomes aware of

circumstances that, in its reasonable opinion, if you had still been in employment, would have led to their employment being

terminated for misconduct or to the issue of a formal disciplinary warning for misconduct under the firm’s disciplinary policy;

•

An event has occurred which has caused, or in the opinion of the Committee is reasonably likely to cause, serious reputational

damage to the Company or any member of the group, and for which the Committee determines the participant was wholly or

partly responsible;

•

The Company or any member of the group suffers a material loss, financial or otherwise, where the participant has operated

outside the risk parameters or risk profile applicable to their position and for which the Committee determines the participant was

wholly or partly responsible;

•

The payment of the award in whole or in part is not sustainable when assessing the overall financial viability of the Company; and

•

The company or a material proportion of the group become(s) insolvent or suffer(s) a corporate failure so that ordinary shares in

the company no longer have material value, and for which the Committee determines the participate was wholly or partly

responsible. (Executive directors only).

In the event that one of these is triggered, the Committee may, at its discretion, defer and/or reduce, in whole or in part any unvested

award.

The events which may trigger clawback are as follows:

•

There has been a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company, or the

audited accounts of any group member, for any financial year that was wholly or partly before the end of the period over which the

related bonus or performance target(s) applicable to the award was assessed;

•

The assessment of any performance target or condition in respect of an award or the information used to determine the related

annual bonus and/or the number of shares subject to an award was based on material error, or materially inaccurate or

misleading information;

•

The company or a material proportion of the group become(s) insolvent or suffer(s) a corporate failure so that ordinary shares in

the company no longer have material value, and for which the Committee determines the participant was wholly or partly

responsible;

•

(a) The participants action or conduct, in the reasonable opinion of the Committee, amounts to fraud or gross misconduct; or (b) if

the participant has left employment, the Committee becomes aware of events or circumstances that, in its reasonable opinion, if

the participant had still been in employment, would have amounted to fraud or gross misconduct;

•

An event has occurred which is reasonably likely to cause serious reputational damage to the Company or any member of the

group and for which the Committee determines the participant was wholly or partly responsible; and

•

The Company suffers a material loss, financial or otherwise, where the participant has operated outside the risk parameters or

risk profile applicable to their position and for which the Committee determines the participant was wholly or partly responsible.

(Executive directors only).

In the event that one of these is triggered, the Committee may require the employee to repay all or part of a relevant award, and any

associated dividend equivalents.

Link between reward and performance - financial year 2026

During the 2026 financial year, the group reported a statutory operating loss before tax of £60.3 million (2025: statutory operating loss of

£122.4 million), reflecting a number of adjusting items, in particular, an increase to the provision in respect of motor finance commissions of

Close Brothers Group plc

Pillar 3 Disclosures 2026

£164.7 million, which now stands at c.£320 million, and increased restructuring costs of £14.3 million (2025: £2.3 million). On an adjusted

basis, excluding the impact from adjusting items and discontinued operations, the group’s operating profit decreased 17% to £120.3 million

(2025: £144.3 million), and return on average tangible equity ("RoTE"), reduced 160 basis points to 5.5% (2025: 7.1%), largely reflecting

the repositioning of the business and prevailing market conditions.

During this period of continued uncertainty, Close Brothers have been mindful of the need to retain and motivate our talented workforce to

continue to protect the franchise, support our customers and to operate the business within our risk appetite. Recognising this context, we

have continued to fund the bonus pool for colleagues to a limited degree, guided by affordability. These factors were taken into

consideration in determining bonus payments for the MRTs for the financial year.

With regard to the 2023 LTIP, applying the performance conditions would have resulted in the LTIP vesting at 16.7% of the maximum

opportunity. However, in recognition of the shareholder experience, and in agreement with a recommendation from the chief executive, the

Committee determined that the award should not vest.

Close Brothers Group plc

Pillar 3 Disclosures 2026

+UK REM1 - Remuneration awarded for the financial year (2026)1

Management body remuneration

£m

MB Supervisory function

MB Management function

Other senior management

Other identified staff

Fixed

remuneration

Number of identified staff

Total fixed remuneration

0.9

1.6

5.4

11.3

Of which: cash-based

0.9

1.6

5.4

11.3

UK-4a

Of which: shares or equivalent ownership interests

—

Of which: share-linked instruments or equivalent non-cash instruments

—

UK-5x

Of which: other instruments

—

Of which: other forms

—

Variable

remuneration

Number of identified staff

—

Total variable remuneration

—

1.1

0.9

2.7

Of which: cash-based

—

0.1

1.7

Of which: deferred

—

UK-13a

Of which: shares or equivalent ownership interests

—

1.1

0.8

1.0

UK-14a

Of which: deferred

—

UK-13b

Of which: share-linked instruments or equivalent non-cash instruments

—

UK-14b

Of which: deferred

—

UK-14x

Of which: other instruments

—

UK-14y

Of which: deferred

—

Of which: other forms

—

Of which: deferred

—

Total remuneration (2 + 10)

0.9

2.7

6.3

14.0

Certain rows of this table have not been presented as they are not applicable in the UK or are not applicable to the group.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXXV: Encumbered and unencumbered assets

UK AE4 – Accompanying narrative information

(a) Information on asset encumbrance

Asset encumbrance is the process by which assets are pledged in order to secure, collateralise or credit-enhance a financial transaction from which they cannot be freely withdrawn.

There are no differences in the scope of consolidation for the purposes of asset encumbrance disclosures and those applied for accounting requirements.

Templates UK AE1, UK AE2 and UK AE3 use accounting values which reflect the median of the sums of the four-calendar quarter-end values over the previous 12 months as per CRR disclosure

requirements.

There are no differences between the treatment of transactions that have been pledged and transferred compared to their level of encumbrance and status.

(b) Information on the impact of the business model on asset encumbrance and the importance of encumbrance to the institution’s business model

As an integral aspect of its business, the group engages in activities that result in certain assets being encumbered. The primary source of encumbrance relates to securitisation, as detailed in Annex XXVII.

These encumbered assets are reported in row 120 of template UK AE1, with the corresponding liabilities disclosed in template UK AE3.

ALCO monitors the level of encumbrance to ensure it remains within approved risk appetite limits which are based on loan book and balance sheet encumbrance levels. Further information on asset

encumbrance and collateralisation can be found in note 24 of the group’s Annual Report under the section “Assets pledged and received as collateral” and “Financial assets: loans and advances to

customers”.

Most encumbered assets disclosed in template UK AE1 are denominated in sterling with the majority of unencumbered assets included in column 060 available for encumbrance and only a small proportion

of other assets deemed unavailable for encumbrance in the normal course of business (including derivatives, fixed assets, intangible assets and deferred tax assets).

UK AE1 - Encumbered and unencumbered assets1

Carrying amount of encumbered

assets

Fair value of encumbered assets

Carrying amount of unencumbered

assets

Fair value of unencumbered

assets

£m

010

040

060

090

010

Assets of the reporting institution

1,224.6

11,394.3

030

Equity instruments

—

040

Debt securities

6.9

797.4

793.0

050

of which: covered bonds

—

88.8

060

of which: securitisations

—

4.2

—

070

of which: issued by general governments

6.6

559.7

080

of which: issued by financial corporations

—

144.4

090

of which: issued by non-financial corporations

—

120

Other assets

1,226.6

10,357.7

Median values calculated based on the last reporting date of each calendar quarter.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK AE2 – Collateral received and own debt securities issued1

Fair value of encumbered

collateral received or own

debt securities issued

Unencumbered

Fair value of collateral

received or own debt

securities issued available

for encumbrance

£m

010

040

130

Collateral received by the reporting institution

—

140

Loans on demand

—

150

Equity instruments

—

160

Debt securities

—

170

of which: covered bonds

—

180

of which: securitisations

—

190

of which: issued by general governments

—

200

of which: issued by financial corporations

—

210

of which: issued by non-financial corporations

—

220

Loans and advances other than loans on demand

—

230

Other collateral received

—

240

Own debt securities issued other than own covered bonds or securitisations

—

241

Own covered bonds and asset-backed securities issued and not yet pledged

221.5

250

TOTAL ASSETS, COLLATERAL RECEIVED AND OWN DEBT SECURITIES

ISSUED

1,224.6

Median values calculated based on the last reporting date of each calendar quarter.

UK AE3 – Sources of encumbrance1

Matching liabilities, contingent

liabilities or securities lent

Assets, collateral received

and own debt securities

issued other than covered

bonds and securitisations

encumbered

£m

010

030

010

Carrying amount of selected financial liabilities

1,011.3

1,224.6

Median values calculated based on the last reporting date of each calendar quarter.

Close Brothers Group plc

Pillar 3 Disclosures 2026

Annex XXXVII: Interest rate risk in the banking book (IRRBB)

UK IRRBBA – IRRBB risk management objectives and policies

(a) How the group defines, measures, mitigates and controls IRRBB for the purposes of risk control and measurement

Interest Rate Risk in the Banking Book is the current or prospective risk to the group’s capital or earnings arising from adverse movements

in interest rates applied to the group’s banking book.

Close Brothers' exposure to interest rate risk arises in the bank (Close Brothers Limited and its subsidiaries) and via funding activities in the

group. Consequently the text below relates to the bank and the group.

The Board is responsible for setting the group's market risk appetite which includes interest rate risk in the banking book. The Board has

delegated authority for recommending appetites consistent with the group's long-term strategy: for the bank to ALCO; and, for the group as

a whole, and the parent company, to GALCO.

The group adopts a three lines of defence model to the management of market risk. In relation to IRRBB, Treasury engage in first-line

responsibilities, with robust check and challenge performed by second line ALM Risk and Model Validation teams, and third line

responsibilities discharged by Internal Audit. This governance structure is a key principle supporting the comprehensive risk framework

together with policies, standards, metrics and limits.

The group has a simple and transparent balance sheet and a low appetite for interest rate risk that is limited to that required to operate

efficiently. There are three sources of interest rate risk for the bank, which could adversely impact future income or the value of the balance

sheet:

•

Repricing risk - the risk presented by assets and liabilities that reprice at different times

•

Embedded optionality risk - the risk presented by contractual terms embedded into certain assets and liabilities, and

•

Basis risk - the risk presented by a mismatch in the reference interest rate for assets and liabilities.

Principle

Risk

Mitigating Actions

Controls

Repricing

Risk

•

The bank’s strategy for IRRBB is to centrally manage

and control interest rate risk by transferring risk from

the lending businesses to the Treasury function.

•

Group policy is for Treasury to match the repricing

characteristics of assets and liabilities naturally where

possible or by using interest rate swaps where

necessary.

•

Bank-wide EV and EaR metrics measure the

effectiveness of risk transference and subsequent risk

management.

•

Business risk and compliance forums ensure repricing

risk is transferred to Treasury within defined risk

tolerances, with any exceptions escalated in a timely

fashion.

•

Dedicated first and second line functions ensure there

is appropriate independent review and challenge of the

risk transfer process, the centralised interest rate risk

hedging, and the overall risk management process.

•

Exposures are monitored against a comprehensive set

of EV and EaR limits.

Embedded

Optionality

Risk

•

Certain lending products and Treasury instruments

contain embedded optionality.

•

First and second line ensure the embedded optionality

is consistent with the overall IRRBB strategy and within

defined tolerances.

•

EV and EaR metrics, which are reported to ALCO and

GALCO, include the impact of embedded optionality.

•

The impact of optionality is discussed at business risk

and compliance forums and is also monitored by

Treasury and Risk.

•

Additionally, optionality risk is covered in the annual

risk assessment carried out by first line, and reviewed

by second line, for each business.

Basis Risk

•

Lending business predominantly price and fund off the

same reference interest rate, consistent with the

objectives of the risk transference process.

•

Treasury monitor and manage centralised basis risk

exposure.

•

Business basis risk is monitored and challenged by

local business risk and compliance forums.

•

Basis risk is calculated using an Earnings at Risk

approach and is reviewed against limit by ALCO each

month.

In line with the Risk Management Framework and Group Policy, the measurement techniques used include:

•

Gap ladder analysis

•

Earnings at Risk (Net interest income sensitivity)

•

Economic Value

•

Economic Value of Equity and the corresponding Supervisory Outlier Test

•

Stress testing

•

Sensitivity analysis, and

•

Scenario analysis.

Close Brothers Group plc

Pillar 3 Disclosures 2026

(b) The group's overall IRRBB management and mitigation strategies

Interest rate risk is governed by a committee hierarchy responsible for the market risk strategy and the discharge of oversight by means of

timely monitoring and reporting.

IRRBB Governance and Committees

The structure and organisation of the market risk management function (see also UK MRA in Annex XXIX for more information):

Business Risk and Compliance committees monitor market risk within the individual business units. The committees conduct timely reviews

of local risk metrics and early warning indicators including escalating any breaches to GRCC as required.

Business limits and controls:

•

Each business unit has procedures and controls in place to monitor its exposures

•

Each business unit is responsible for the review of the completeness, accuracy and timeliness of the risk transfer to Treasury, in

line with the bank's standards

•

Business units operate within limits that are approved by the relevant business board or committee on an at least annual basis

•

A business risk assessment is carried out each year by first line with the resultant report reviewed and challenged by second line.

The final report is presented to the respective business Risk and Compliance forums, and Technical ALCO (TALCO).

GALCO and ALCO are responsible for monitoring the current and future risk profile within defined limits, for approving any changes to

hedging strategies before implementation within the group and bank respectively, and for recommending risk appetite to the board. ALCO

reviews and challenges the effectiveness of the IRRBB management and control framework, and ensures it is proportionate to the size,

complexity and scope of the bank.

TALCO is a sub-committee of ALCO. TALCO supports ALCO and the duties include the approval of less material matters, as well as

reviewing technical issues such as model outputs. TALCO will escalate agenda items to ALCO as deemed appropriate by either committee.

Regular risk reporting, recommendations and issues for escalation are presented to the group Board Risk Committee via GRCC.

Close Brothers Group plc

Pillar 3 Disclosures 2026

The two main internal measures used for measuring IRRBB are Earnings at Risk (EaR) and Economic Value (EV):

•

EaR measures short term impacts to earnings, highlighting any earnings sensitivity should rates change unexpectedly; and

•

EV measures longer term earnings capacity, by estimating the present value sensitivity of the balance sheet, should rates change

unexpectedly.

Earnings at Risk and Economic Value are both used to measure repricing and embedded optionality risk. There is also a separate Earnings

at Risk metric for basis risk, measured in line with PRA guidance.

The above metrics are calculated at least monthly and reported against limits to ALCO monthly and GALCO quarterly.

Additionally, the bank also carries out the following calculations:

•

The Supervisory Outlier Test where Economic Value of Equity (EVE) is compared to Tier 1 Capital. EVE is a variant on Economic

Value, where capital is excluded from the calculation in line with the PRA Rulebook. EVE is calculated at least quarterly, applying

where applicable, the principles outlined in Supervisory Statement SS31/15.

•

In Treasury, where the interest rate risk is centralised, managed and hedged, EaR and EV metrics are reported against Treasury

sub-limits daily.

•

Interest rate risk Stress testing, Sensitivity analysis, and Scenario analysis are carried out at least annually.

The bank also measures banking book credit spread risk using a methodology consistent with PRA requirements. Credit spread risk arises

from bonds held within the HQLA portfolio and reflects the risk that changes in credit spreads may adversely affect the value of those

securities. Credit spreads represent the excess yield of a bond over an equivalent risk-free rate and are influenced by market perception of

credit risk, liquidity conditions and broader market sentiment.The credit spread risk is measured and monitored daily.

A summary on the High-Quality Liquidity Portfolio and the corresponding banking book credit spread risk, is also presented to ALCO each

month. This includes exposures, trends, and risk against the formal risk appetite limit.

(d) Interest rate shock and stress scenarios that the group uses to estimate changes in its economic value and in earnings

The group calculates Economic Value using the six prescribed interest shock scenarios outlined in the PRA Rulebook and four internal

scenarios. The PRA shocks are:

•

Parallel shock up

•

Parallel shock down

•

Steepener shock

•

Flattener shock

•

Short rates shock up

•

Short rates shock down

The four internal scenarios are ‘All rates increase 50bps’, ‘All rates increase 200bps’, ‘All rates decrease 50bps’, and ‘All rates decrease

200bps’.

Earnings at Risk is measured using the PRA Rulebook scenarios 'Parallel shock up' and 'Parallel shock down' as well as the four internal

scenarios noted above.

(e) A high-level description of key modelling and parametric assumptions used in calculating change in economic value of equity

(ΔEVE) and change in net interest income (ΔNII) in template UK IRRBB1

The change in Economic Value of Equity (EVE) and the change Earnings at Risk (EAR) are calculated in line with PRA guidance. Both

measures represent the difference between the stressed scenario estimate and the base scenario estimate.

The key Economic Value of Equity assumptions are:

•

A run-off balance sheet i.e., once balances mature, they are not replaced.

•

Equity and commercial margins are excluded.

•

Assets and liabilities are behaviouralised using the PRA's Standardised scaling parameters.

•

The impact of any embedded options within the banks’ assets and liabilities are included.

•

There is no management action in response to the stress scenarios.

The key Earnings at Risk assumptions are:

•

The risk is measured over a 1-year time horizon.

•

A constant balance sheet where maturing balances are replaced by a product with the same notional amount.

•

Commercial margins are included.

•

The Impact of any embedded options within the banks’ assets and liabilities are included.

•

There is no management action in response to the stress scenarios.

Close Brothers Group plc

Pillar 3 Disclosures 2026

(f) Modelling assumptions used in the group internal measurement systems (IMS) for purposes other than disclosure that differ

from the modelling assumptions prescribed for the disclosure in template UK IRRBB1

The bank has implemented an ALM system to identify, evaluate and measure IRRBB exposure. When measuring the change in Economic

Value of Equity for external disclosure, there are two differences, as compared to the internal Economic Value metric:

Firstly, for EVE, capital is excluded while for internal EV, capital is profiled in line with group usage. This has the impact of producing a

higher risk number for the change in Economic Value of Equity.

Secondly, for Economic Value of Equity, the behavioural profile for shocked scenarios is calculated using the PRA’s Standardised scaling

parameters, while for Economic Value, internally generated prepayment and attrition assumptions are used.

(g) How the group hedges its IRRBB, as well as the associated accounting treatment

The Treasury function is responsible for hedging the banking book interest rate risk within approved EaR and EV limits. It does this through

naturally matching assets and liabilities where possible, with any residual risk being hedged utilising vanilla derivative transactions. Where

possible assets are hedged on a portfolio basis, which in turn reduces execution costs and improves balance sheet efficiency.

Where there is a specific material exposure, Treasury hedge on a back-to-back basis with an external derivative hedge. Partial hedging is

also executed when part of the loan position can be naturally matched.

Where possible derivatives are designated into hedge accounting relationships (Fair Value and Cash Flow hedge accounting). Details of

the accounting treatment of derivatives and hedge accounting is set out in note 24 of the group’s Annual Report.

(h) Other information regarding significance and sensitivity of the IRRBB measures

EVE Sensitivity

The group measures EV sensitivity, in line with its internal risk appetite, on a monthly basis and EVE sensitivity at least on a quarterly basis.

EVE measures the change in the value of the group’s assets and liabilities under prescribed stress scenarios

The most severe EVE scenario from table IRRBB1 below is ‘Parallel shock up’ encompassing an instantaneous 250bp increase in interest

rates across the yield curve for GBP. This scenario produces an EVE sensitivity of £(90.2m) and corresponds to 6.2% of the group’s Tier 1

capital, comfortably within the regulatory 15% threshold.

EVE sensitivity for the ‘Parallel shock up’, as at 31 July 2026, increased by £7.2m compared to 31 July 2025. The increase was due to a

number of changes including the group bond being closer to maturity.

EaR (NII sensitivity)

The group measures NII sensitivity on a monthly basis against internal risk appetite.

The group measures NII over a 12-month period assuming a constant balance sheet.

The most severe scenario for the group as at 31 July 2026 is a ‘Parallel shock down’ which produces a NII sensitivity metric of £(20.5m).

This represents a potential reduction in income of £20.5m should rates decrease instantaneously by 250bps across the yield curve. Please

note that the Pillar 3 EaR of £(20.5m) is £5m higher than that reported in the Annual Report. This variance arises from differences between

the prescribed methodology used for the SOT and the methodology applied to the Risk Appetite Statement metrics.

The NII sensitivity number of £(20.5m) was primarily driven by higher cash balances following the disposal of CBAM and Winterflood, with

proceeds retained at the parent company and deposited with the bank. As cash holdings are negatively impacted by lower interest rates,

this results in increased sensitivity to a downward interest rate shock.

The group’s sensitivity calculations are impacted by a number of factors which include balance sheet mix, timing of assets and liabilities

maturities and product pricing. Due to these factors, the NII sensitivity should only be taken as an indicative guide to future performance.

(i) Average repricing maturity assigned to non-maturity deposits (NMDs)

The average repricing maturity assigned to non-maturing deposits is 0.3 years (as at 31 July 2026) which includes both rate sensitive

balances and stable rate insensitive balances.

(j) Longest repricing maturity assigned to NMDs

The longest repricing maturity assigned is 5 years.

Close Brothers Group plc

Pillar 3 Disclosures 2026

UK IRRBB1 – Quantitative information on IRRBB

UK IRRBB1 shows the 31 July 2026 and the 31 July 2025 group figures.

In reporting currency

∆EVE

∆NII

Tier 1 capital

£m

Period

31 Jul 2026

31 Jul 2025

31 Jul 2026

31 Jul 2025

31 Jul 2026

31 Jul 2025

010

Parallel shock up

(90.2)

(83.0)

18.6

13.1

020

Parallel shock down

91.9

83.9

(20.5)

(15.8)

030

Steepener shock

(0.5)

2.2

040

Flattener shock

(14.5)

(14.6)

050

Short rates shock up

(60.8)

(55.8)

060

Short rates shock down

60.8

54.5

070

Maximum

(90.2)

(83.0)

(20.5)

(15.8)

080

Tier 1 capital

1,466.1

1,548.1

Close Brothers Group plc

Pillar 3 Disclosures 2026

Glossary and Definition of Key Terms

Additional Tier 1 ("AT1") capital

Additional regulatory capital that along with CET1 capital makes up a bank’s Tier 1 regulatory

capital. Includes the group’s perpetual subordinated contingent convertible securities classified as

other equity instruments under IAS 32

Applicable requirements

Applicable capital ratio requirements consist of the Pillar 1 requirement as defined by the CRR, the

Pillar 2a requirement set by the PRA, and the capital conservation buffer and countercyclical buffer

as defined by the CRD. Any applicable PRA buffer is excluded

UK Capital Requirements Directive V

(“CRD V”)

Capital requirements Directive is the supervisory framework covering prudential rules for UK

banks, building societies and investment firms (collectively known as the "CRD")

UK Capital Requirements Regulation

("CRR")

Capital Requirements Regulation as implemented in the PRA Rulebook CRR Instrument and the

PRA Rulebook CRR Firms: Leverage Instrument (collectively known as “CRR”)

CET1 capital ratio

Measure of the group’s CET1 capital as a percentage of risk weighted assets, as required by CRR

Common equity tier 1 ("CET1")

capital

Measure of capital as defined by the CRR. CET1 capital consists of the highest quality capital

including ordinary shares, share premium account, retained earnings and other reserves, less

goodwill and certain intangible assets and other regulatory adjustments

Expected credit loss (“ECL”)

The unbiased probability-weighted average credit loss determined by evaluating a range of

possible outcomes and future economic conditions

Financial Conduct Authority

(“FCA”)

A financial regulatory body in the UK, regulating financial firms and maintaining integrity of the UK’s

financial market

Forbearance

Forbearance occurs when a customer is experiencing financial difficulty in meeting their financial

commitments and a concession is granted, by changing the terms of the financial arrangement,

which would not otherwise be considered

Gross carrying amount

Loan book before expected credit loss provision

High quality liquid assets

(“HQLAs”)

Assets which qualify for regulatory liquidity purposes, including Bank of England deposits and

sovereign and central bank debt

Internal Capital Adequacy

Assessment Process (“ICAAP”)

An annual self-assessment of a bank’s material risks and the associated level of capital needed to

be held, and undertaking appropriate stress testing of capital adequacy

Internal Liquidity Adequacy

Assessment Process (“ILAAP”)

The processes for the identification, measurement, management and monitoring of liquidity

Internal ratings based (“IRB”)

approach

A supervisor-approved method using internal models, rather than standardised risk weightings, to

calculate regulatory capital requirements for credit risk

International Financial Reporting

Standards (“IFRS”)

Globally accepted accounting standards issued by the IFRS Foundation and the International

Accounting Standards Board

Leverage ratio

Tier 1 capital as a percentage of total balance sheet assets, adjusted for certain capital deductions,

including intangible assets, and off-balance sheet exposures

Liquidity coverage ratio (“LCR”)

Measure of the group’s HQLAs as a percentage of expected net cash outflows over the next 30

days in a stressed scenario

Loan to value (“LTV”) ratio

For a secured or structurally protected loan, the loan balance as a percentage of the total value of

the asset

Net carrying amount

Loan book value after expected credit loss provision

Net stable funding ratio (“NSFR”)

Regulatory measure of the group’s weighted funding as a percentage of weighted assets

Prudential Regulation Authority

(“PRA”)

A financial regulatory body, responsible for regulating and supervising banks and other financial

institutions in the UK

Risk weighted assets (“RWAs”)

A measure of the amount of a bank’s assets, adjusted for risk in line with the CRR. It is used in

determining the capital requirement for a financial institution

Standardised approach

Generic term for regulator-defined approaches for calculating credit, operational and market risk

capital requirements as set out in the CRR

Subordinated debt

Represents debt that ranks below, and is repaid after claims of, other secured or senior debt owed

by the issuer

Term Funding Scheme for Small and

Medium-sized Enterprises (“TFSME”) The Bank of England’s Term Funding Scheme with additional incentives for SMEs

Tier 2 capital

Additional regulatory capital that along with Tier 1 capital makes up a bank’s total regulatory

capital. Includes qualifying subordinated debt

Close Brothers Group plc

Pillar 3 Disclosures 2026

Abbreviations

Abbreviation

Brief description

Abbreviation

Brief description

AIRB

Advanced internal ratings based

IFPR

Investment Firms Prudential Regime

ALCO

Asset and Liability Committee

IFRS

International Financial Reporting Standards

ALM

Asset liability management

IIP

Investment Incentive Plan

AMA

Advanced measurement approach

ILAAP

Internal Liquidity Adequacy Assessment Process

ASA

The alternative standardised approach

IMA

Internal model approach

ASF

Available stable funding

IMM

Internal model method

AT1

Additional tier 1

IRB

Internal ratings based

CAC

Capital Adequacy Committee

IRRBB

Interest rate risk in the banking book

CBAM

Close Asset Management Limited

ISDA

International Swaps and Derivatives Association

CBG

Close Brothers Group plc

LCR

Liquidity coverage ratio

CBL

Close Brothers Limited

LTIP

Long Term Investment Plan

CCF

Credit conversion factor

LTV

Loan-to-value

CCP

Central counterparty

Moodys

Moody’s Investors Service

CCR

Counterparty credit risk

MREL

Minimum requirement for own funds and eligible

liabilities

CCyB

Countercyclical buffer

MRTs

Material Risk Takers

CET1

Common equity tier 1

MTM

Mark-to-market

CRAS

Credit Risk Appetite Statement

NSFR

Net stable funding ratio

CRD

Capital Requirement Directive

PRA

Prudential Regulation Authority

CRM

Credit risk mitigation

PSA

Performance share award

CRMC

Credit Risk Management Committee

PVA

Prudent valuation adjustment

CRR

Capital Requirements Regulation

RCCs

Risk and Compliance Committees

CSRBB

Credit spread risk in the banking book

RemCo

Remuneration Committee

CVA

Credit valuation adjustment

RoTE

Return on average Tangible Equity

EaR

Earnings at Risk

RSF

Required stable funding

ECAIs

External credit assessment institutions

RWAs

Risk weighted assets

EPS

Earnings per share

RWEAs

Risk weighted exposure amounts

ERMF

Enterprise risk management framework

SME

Small and medium-sized enterprise

Economic Value

SMF

Senior Management Function

EVE

Economic Value of Equity

SREP

Supervisory review and evaluation process

FCA

Financial Conduct Authority

SV01

Sterling value of a basis point

FIRB

Foundation internal ratings based

TALCO

Technical Asset and Liability Management

Committee

Foreign exchange

TFS

Bank of England's Term Funding Scheme

GALCO

Group Assets and Liability Committee

TFSME

Term Funding Scheme for Small and Medium-sized

Enterprises

GRCC

Group Risk and Compliance Committee

TSA

The standardised approach

HQLA

High quality liquid assets

Winterflood

Winterflood Securities Limited

ICAAP

Internal capital adequacy assessment process

Close Brothers Group plc

Pillar 3 Disclosures 2026

Close Brothers Group plc

10 Crown Place

London EC2A 4FT

Tel: +44 (0)333 321 6100

www.closebrothers.com

Source: the issuer's announcement on the London Stock Exchange's Regulatory News Service, reproduced for reference. Announcement text is the issuer's; this site adds no commentary to it.