In 2025, we reached a defining milestone in the journey for Afin Bank by launching a new digital bank into the market in July 2025. This is the culmination of work that began in October 2021, when I joined as Chairman, and reflects the commitment of our colleagues, the Executive Management team, the Board, and the support of our shareholders, WAICA Reinsurance Corporation Plc (WAICA Re).

Since launch, our focus has been on building a bank that serves customers who may not fit traditional underwriting approaches, supported by effective affordability assessments and a clear commitment to strong customer outcomes. This has been developed with the foundations required of a regulated bank to scale safely and sustainably, including embedding high standards of conduct, operational resilience, and robust financial crime controls.

These foundations have been built under the supervision of the regulatory teams at the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). We look forward to continuing to work with the teams as we continue to grow the Bank and support our customers.

The operating environment remains challenging, but we enter 2026 with clear priorities:

• Deepen our proposition for our core market;

• Deliver disciplined and sustainable growth; and

• Continue strengthening governance and controls in line with the expectations of a newly authorised bank.

I would like to thank our colleagues for their dedication during an intense year of delivery, and our shareholders for their continued support.

The directors present the Strategic Report for Afin Bank Limited (the ‘Company’, ‘Bank’ or ‘Afin’) for the year ended 31 December 2025. The Chairman’s Statement on page 2 and the Chief Executive’s Statement on page 3 form an integral part of the Strategic Report.

• Purposeful – Giving back is at our core. We are here for our customers and their communities

• Ownership – We do what we say and stick to our word, we are transparent in our offering and clear in our communication

• Innovative – We are focused on providing effortless banking to our customers. We will constantly seek new ways to make our service better

• Supportive – We know the unique challenges our customers face. We act quickly and with compassion

• Excellence – We are proactive. We listen to our customers and colleagues. We ensure affinity with their needs and deliver the best experience for all

This is the risk of reductions in net interest margin arising from unfavourable movements in interest rates due to:

• Mismatches between the dates on which interest receivable on assets and interest payable on liabilities

are reset to market rates (re-pricing risk); and

• The re-pricing of assets and liabilities according to different interest bases (basis risk).

The Board approved risk appetite statement and the Treasury Risk Management Policy set out risk metrics, and these are regularly reviewed by ALCO and the BRCC.

The Bank has benefitted from a high level of engagement from its colleagues and has established the following priorities:

• deliver positive outcomes for employees, investors, future customers and society;

• improve the level of diversity;

• reduce our impact on the environment;

• manage our business in an ethical and responsible way; and

• maximise the potential of our people and attract new talent.

During the year, the Board approved an action plan to achieve Net Zero by 2050.

This section explains how, as required by Section 172, the Directors have acted to promote the success of the Bank for the benefit of its stakeholders. In meeting this responsibility, the Directors have taken into consideration the long-term impact of any decisions on stakeholder relationships, whilst always maintaining its high business conduct standards. During the year, the Directors have had regard, amongst other matters, to:

• the likely consequences of any decisions made in the long term

• the interests of the Bank's employees

• the need to foster the Bank's business relationships with its suppliers, customers and others

• the impact of the Bank's operations on the community and the environment

• the desirability of the Bank to maintain a reputation for high standards of business conduct; and

• the need to act fairly as between members of the Bank

Since the reporting date, Mrs Sally Veitch was formally appointed to the Board on 3 February 2026. Mrs Veitch joined the Bank in October 2025 as an Independent Non-Executive Director.

1,545,706 B Ordinary shares were cancelled after the reporting date following the departure of two members of the Executive team by way of a written resolution.

6,500,000 A Ordinary shares were issued at £1.00 per share (£6.5m) on 31 January 2026 to its parent company WAICA Reinsurance Corporation Plc.

The results for the year are set out on page 36.

The directors are not recommending a dividend in respect of the year ending 31 December 2025 (2024: £nil).

The corporate governance statement set out on pages 19 to 24 forms part of this report.

• Board Audit Committee (BAC)

• Board Risk and Compliance Committee (BRCC)

• Board Remuneration and Nominations Committee (BRNC)

Committee’s Roles and Responsibilities

The BAC is a key element of the Bank’s corporate governance. It monitors the integrity of the financial statements and the effectiveness of internal controls and oversees internal and external audit. The Committee’s primary functions are:

• Monitoring the integrity of the financial statements and the financial reporting process

• The appropriateness and completeness of the system of internal control and ensuring that the system of internal control is adequately resourced (including controls for outsourced service providers)

• Reviewing the manner and framework in which management ensures / monitors the adequacy of the nature, extent and effectiveness of internal control systems (including accounting control systems)

• Advising the Board (in close liaison with the Board Risk and Compliance Committee) in relation to the Bank’s risk appetite and setting standards for the Bank’s risk control framework

• Oversight of the relationship with the internal and external auditors

• Review changes in regulations that would impact the financial statements and any impacts on fraud requirements and controls

Key topics discussed by the Committee in 2025 financial reporting:

The Committee undertook the following core activities, which were considered and approved during the year:

• Assessing the integrity of the annual financial statements, with a focus on key accounting policies and judgements, including IFRS 9 ECL

• Reviewing the clarity and completeness of disclosures in the financial statements to ensure compliance with accounting standards, legal requirements and regulations

• Reviewing the internal controls, including the internal controls self-assessment and to assess the scope and effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks

• Reviewing the Board and management’s approach to, and assessment of, the ability to remain as a going concern

• Reviewing the Pillar 3 Disclosures

• Horizon scanning for upcoming accounting changes that may impact financial operations and planning

• Approval of the internal audit plan and the monitoring of that plan

• Approval of the BAC terms of reference

I would particularly like to thank the finance team for the outstanding work they have done over this year and look forward to tackling new challenges and opportunities together in 2026.

Jerry Loy

Chair of the Board Audit Committee

Committee’s Roles and Responsibilities

The BRCC is a key element of the Bank’s corporate governance. The BRCC’s purpose is to assist the Board in carrying out its responsibilities in relation to the oversight of risk within the Bank. It is the responsibility of the Committee to provide advice to the Board on risk strategy, including the oversight of current risk exposure of the Bank through the Bank’s risk appetite, risk profile and overall effectiveness of the Risk Management Framework to support the long term sustainable success of the Bank. The Committee’s primary functions are:

• Approving (ahead of Board approval where relevant) risk strategy and risk appetites for the Bank that mandate it to achieve a Board approved plan whilst protecting outcomes for stakeholders

• Overseeing all major risks to the Bank including (where appropriate) those matters under the Senior Managers & Certification Regime, including safeguarding the independence and overseeing the performance of the Risk and Compliance functions

• Providing advice, oversight, and challenge necessary to embed and maintain a supportive risk culture

• Seeking any information it requires from any employee of the Bank in order to perform its duties

Key topics discussed by the Committee in 2025

The Committee’s activities in 2025 reflected the journey that the Bank followed and can be split into three distinct phases:

• Responding to requests from the PRA and FCA to enable the Bank to exit mobilisation;

• Preparing to go live having exited mobilisation; and

• Overseeing the risks arising from the first few months of trading and reviewing new products offered by the Bank as part of its phased launch.

Within this context, the Committee undertook the following core activities during the year:

I would particularly like to thank:

• the Risk and Compliance team for the outstanding work they have done and look forward to tackling new challenges and opportunities together in 2026; and

• my fellow Committee members, particularly my predecessor Huw Evans who left the Bank in May 2025.

David Kenmir

Chair of the Board Risk and Compliance Committee

Committee’s Roles and Responsibilities

The BRNC ensures the Board and Senior Executive team retain an appropriate balance of skills to support the Bank’s strategic objectives. The Committee ensures that remuneration arrangements support the strategic aims of the business and enable the recruitment, motivation, and retention of all staff within the required regulatory frameworks.

The Committee’s primary functions are:

• Approving (ahead of Board approval where relevant) total reward (fixed and variable pay and benefits) strategies and mechanisms for the Bank that mandates it to achieve Board approved outcomes whilst protecting outcomes for stakeholders and customers;

• Providing the advice, oversight, and challenge necessary to embed and maintain a supportive culture throughout the Bank;

• Ensuring all senior management and board appointments are assessed as being fully experienced and have the required competencies, knowledge and skills to be able to adequately perform their duties and to keep the bank safe; and

• Seeking any information it requires from any employee of the Bank, or external counsel and/or expertise to perform its duties.

Key topics discussed by the Committee in 2025

During the year, the Committee has:

• Recommended the appointment of one Non-Executive Director and two members of the Executive team. All appointments were subject to extensive external checks and, where necessary, regulatory approval;

• Reviewed and agreed the succession plans for both the Board and the Executive Committee members;

• Evaluated the diversity of skills and experience among the Board and Senior Management;

• Had oversight of the activities undertaken by the Executives in relation to reward;

• Conducted a pay benchmarking review for the Executive roles and for Board fees;

• Agreed an approach to paying bonus awards for the year;

• Reviewed and developed a long-term incentive plan;

• Considered the annual pay review for all eligible employees; and

• Approved the BRNC terms of reference.

I would particularly like to thank the HR team for the outstanding work they have done over this year and look forward to tackling new challenges and opportunities together in 2026.

Andrew Holmes

Chair of the Board Remuneration and Nomination Committee

For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Afin Bank Limited. For the purposes of the table on pages 31 to 32 that sets out the key audit matters and how our audit addressed the key audit matters, the terms “we” and “our” refer to MHA. The “Bank” is defined as Afin Bank Limited. The relevant legislation governing the Bank is the United Kingdom Companies Act 2006 (“Companies Act 2006”).

The financial reporting framework that has been applied in the preparation of the Bank’s financial statements is applicable law and UK-adopted international financial reporting standards (IFRS).

• the Statement of Comprehensive Income,

• the Statement of Financial Position,

• the Statement of Changes in Equity,

• the Statement of Cash Flows, and

• Notes 1 to 28 of the financial statements, including material accounting policies.

The financial reporting framework that has been applied in the preparation of the Bank’s financial statements is applicable law and UK-adopted international financial reporting standards (“IFRS”).

In our opinion the financial statements:

• give a true and fair view of the state of the Bank’s affairs as at 31 December 2025 and of the Bank’s loss for the year then ended;

• have been properly prepared in accordance with UK-adopted international financial reporting standards (IFRS); and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Our opinion is consistent with our reporting to the Board Audit Committee.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Bank in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to public interest entities, and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Bank’s ability to continue to adopt the going concern basis of accounting included:

• Using our knowledge of the strategic objectives of the Bank and the general economic environment to identify inherent risks in the business model of the Bank and how such risks might affect the financial resources available to the Bank or its ability to continue operations as a going concern over the going concern period;

• Evaluating management’s going concern assessment including the Bank’s capital and liquidity position, including review of internal capital adequacy and stress testing models;

• Reviewing current and forecast performance, including assessing the reasonableness of the key assumptions applied;

• Reviewing the capital funding arrangements of the Bank, including the additional capital resources required to meet its business objectives, the expected timing of receipt of those capital resources and the ability of the Bank to deploy those resources in line with its forecasts;

• Obtained and reviewed minutes of meetings of those charged with governance to identify matters that might have an impact on financial resources available to the Bank or going concern of the Bank;

• Obtained and reviewed, board resolutions of the Parent Company to corroborate the commitment to provide capital resources to the Company.

• Obtained and reviewed letter of support issued by the Parent Company (WAICA Reinsurance Corporation Plc) to the Directors of the Bank.

• Agreed capital investment receipts to bank statement received from the Parent Company from January 2025 up to date;

• Corroborated the Parent’s ability and intent to continue providing financial support to the Bank by making specific enquiries of the Group auditors regarding any going concern matters at the Parent entity that could impact the Bank. In addition, we reviewed the Parent Company’s most recent audited financial statements to assess the availability of sufficient liquidity and resources to honour its stated commitments to the Bank;

• Reviewed correspondence with the Prudential Regulation Authority (“PRA”) and Financial Conduct Authority (“FCA”) for matters that may impact the going concern assessment; and

• Reading and evaluating the adequacy of the disclosures made in the financial statements in relation to going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Bank’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Strategic report and Directors' report 

In our opinion, based on the work undertaken in the course of the audit: 

• the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and 

• the strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. 

In the light of the knowledge and understanding of the Bank and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report. 

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: 

• adequate accounting records have not been kept, or returns adequate for our audit have not been received by branches not visited by us; or 

• the financial statements are not in agreement with the accounting records and returns; or 

• certain disclosures of Directors’ remuneration specified by law are not made; or 

• we have not received all the information and explanations we require for our audit. 

Responsibilities of directors

As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.  

In preparing the financial statements, the Directors are responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Bank or to cease operations, or have no realistic alternative but to do so.  

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor’s report.  

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.

The extent of the procedures undertaken to identify and assess the risks of material misstatement in respect of irregularities, including fraud, included the following:

• We considered the nature of the industry and sector the control environment, business performance including remuneration policies and the Bank’s own risk assessment that irregularities might occur as a result of fraud or error. From our sector experience and through discussion with the Directors, we obtained an understanding of the legal and regulatory frameworks applicable to the Bank focusing on laws and regulations that could reasonably be expected to have a direct material effect on the financial statements, such as provisions of the Companies Act 2006, UK tax legislation or those that had a fundamental effect on the operations of the Bank including the regulatory and supervisory requirements of the PRA and the FCA.

• We enquired of the Directors, management and the Board Audit Committee concerning the Bank’s policies and procedures relating to:

  • identifying, evaluating and complying with the laws and regulations and whether they were aware of any instances of non-compliance;

  • detecting and responding to the risks of fraud and whether they had any knowledge of actual or suspected fraud; and

  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.

• We assessed the susceptibility of the Bank’s financial statements to material misstatement, including how fraud might occur by evaluating management’s incentives and opportunities for manipulation of the financial statements. This included utilising the spectrum of inherent risk and an evaluation of the risk of management override of controls. We determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce costs and creating fictitious transactions to hide losses or to improve financial performance.

In respect of the above procedures:

• we corroborated the results of our enquiries through our review of the minutes of the Bank’s Board of Directors’ meetings, Board Audit Committee meetings, inspection of legal and regulatory correspondence and correspondences with the regulators PRA and the FCA;

• audit procedures performed by the engagement team in connection with the risks identified included:

• reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations expected to have a direct impact on the financial statements.

• testing journal entries, including those processed late for financial statements preparation, those posted by infrequent or unexpected users, those posted to unusual account combinations;

• evaluating the business rationale of significant transactions outside the normal course of business, and reviewing accounting estimates for bias;

• enquiry of management around actual and potential litigation and claims;

• challenging the assumptions and judgements made by management in its significant accounting estimates; and

• obtaining confirmations from third parties to confirm existence of a sample of balances.

• the Bank operates in a highly regulated UK banking industry. As such, the Senior Statutory Auditor considered the experience and expertise of the engagement team to ensure that the team had the appropriate competence and capabilities; and

• we communicated relevant laws and regulations and potential fraud risks to all engagement team members, including experts, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We were appointed by the Directors on 12 August 2024 to audit the financial statements for the year ended 31 December 2024 and subsequent years. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 2 years initially under the legal entity Macintyre Hudson LLP and subsequently under MHA Audit Services LLP.  

We did not provide any non-audit services which are prohibited by the FRC’s Ethical Standard to the Bank, and we remain independent of the Bank in conducting our audit.  

Use of our report

This report is made solely to the Bank’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Bank’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Bank and the Bank’s members as a body, for our audit work, for this report, or for the opinions we have formed. 

The income and loss made for all the years presented are from continuing operations.

The notes on pages 40 to 66 form part of these financial statements.

The income and loss made for all the years presented are from continuing operations.

The notes on pages 40 to 66 form part of these financial statements.

The income and loss made for all the years presented are from continuing operations.

The notes on pages 40 to 66 form part of these financial statements.

Afin Bank Limited is a private company limited by shares incorporated in the United Kingdom and registered in England and Wales with company number 13090556. The registered office is Lower Ground Floor, 10 Chiswell Street, London, EC1Y 4UQ. The Bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA to conduct banking activities. The Bank's principal activities and nature of its operations are disclosed in the directors' report.

The financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards(IFRS) and in accordance with the requirements of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis except for investment securities which have been measured at fair value with changes in fair value recorded through other comprehensive income as required.

The financial statements are prepared in pound sterling, which is the functional currency of the Bank. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements are prepared on a going concern basis, as the directors are satisfied that the trueBank has the resources to continue in business for the foreseeable future. This is taken as a minimum of 12 months from the date of approval of the financial statements.

Afin Bank received confirmation on 16 July 2025 from the Prudential Regulation Authority (PRA) that the deposit-taking restrictions imposed on banks during the mobilisation phase had been lifted. This resulted in Afin Bank being able to launch into the market to provide residential mortgages and deposits to customers.

Following the restrictions being lifted, Afin Bank undertook a phase of broker onboarding and engagements to ensure the products and market segment within the specialist mortgage market were understood. This resulted in a number of additional products being launched to ensure customers and intermediary partners within the target market have the product to meet their customer needs.

In assessing going concern, the directors have considered the current Statement of Financial Position, the financial projections, the longer-term strategy of the business and future capital injections from the principal shareholder. The principal shareholder has provided a letter of support to the Directors of the Bank in respect of the principal shareholder’s commitment to provide capital resources to the Bank.

Interest income and expense are recognised in profit or loss using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, the next repricing date) to the net carrying amount of the financial asset or liability. When calculating the effective interest rate, the Bank estimates future cash flows considering all contractual terms of the financial instruments but not future credit losses.

The calculation of the effective interest rate includes contractual fees paid or received, transaction costs, and discounts or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability. The effective interest rate method is used for financial assets and financial liabilities measured at amortised cost, and financial assets measured at FVOCI. Income is deferred if the performance obligation has not been fully satisfied or if management assess that there is a possibility of the income not being received.

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computer software               5 years straight line

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset and is recognised in the income statement.

At each reporting end date, the Bank reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Bank estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less. Cash and cash equivalents are held at amortised cost in the statement of financial position.

Financial assets are recognised in the Bank's statement of financial position when the Bank becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary. Financial assets classified as amortised cost include cash and cash equivalents and loans to customers. For financial assets held at amortised cost, the carrying value is approximate to the fair value.

IFRS 9 uses an expected credit loss (“ECL”) approach which applies to all financial assets measured at amortised cost and FVOCI, as well as off-balance sheet loan commitments.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument. Further details are provided in note 2.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when the Bank transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The Bank recognises financial liabilities when the Bank becomes a party to the contractual provisions of the instruments. The Bank classifies all financial liabilities, other than those classified as FVTPL, at amortised cost'.

Financial liabilities measured at amortised cost are initially recognised at fair value, net of directly attributable transaction costs, and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective interest basis. Financial liabilities classified at amortised cost include deposits from customers.

Financial liabilities are derecognised when, and only when, the Bank's obligations are discharged, cancelled, or they expire.

The Bank is required to maintain a regulatory minimum capital as prescribed by the Individual Capital Guidance (ICG) which is based on Pillar 1 and 2 capital and other requirements.

The Bank manages its capital through an Internal Capital Adequacy Assessment Process (“ICAAP”) and regular monitoring of the capital requirements based on the business profile. The Bank manages its capital structure and adjusts it according to changes in economic conditions and the risk characteristics of its activities. Further details of the Bank's share capital are shown in note 21.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Bank's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Bank has a legally enforceable right to offset current tax assets and liabilities, and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

For cash-settled share-based payments, a liability is recognised for the goods and services acquired, measured initially at the fair value of the liability. At each succeeding financial reporting period end and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the period.

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the Bank is demonstrably committed to terminating the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Bank's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the Bank is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is remeasured when there is a change in, future lease payments arising from a change in an index or rate; the Bank's estimate of the amount expected to be payable under a residual value guarantee; or the Bank's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Bank has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

Changes in accounting policy

The adoption of the following mentioned standards, amendments and interpretations in the current year has not had a material impact on the Bank's financial statements.

• Lack of Interchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates (effective 1 January 2025).

Changes in accounting policy

Certain new standards, amendments and interpretations have been issued by the IASB that are not yet effective for these financial statements.

The Bank has not adopted any of these standards, amendments or interpretations early, and does not intend to adopt any before their mandatory effective date.

The adoption of the below mentioned standards, amendments and interpretations in future years are not expected to have a material impact on the Bank’s financial statements.

• IFRS 18 Presentation and Disclosure in Financial Statements (effective 1 January 2027)

• Amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial Instruments (effective 1 January 2026)

• Amendments to IFRS 9 and IFRS 7 – Contracts Referencing Nature‑dependent Electricity (effective 1 January 2026)

• Annual Improvements to IFRS Accounting Standards (2022–2024 Cycle) (effective 1 January 2026)

In the application of the Bank's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The financial statements have been prepared in accordance with IFRS 9 Financial Instruments.

Expected Credit Losses (ECL) are assessed on a forward-looking basis for financial assets that are measured on an amortised cost basis, such as banking book loans and advances. Afin Bank calculates ECL for the different IFRS 9 stage classifications as follows:

• Stage 1: 12-month ECL for assets with no significant increase in credit risk (SICR) since origination

• Stage 2: Lifetime ECL for assets with SICR but not credit-impaired

• Stage 3: Lifetime ECL for credit-impaired assets (typically these meet the Bank’s definition of default)

When assessing ECL, the bank is required to consider both information about current conditions and also reasonable forecasts about future expectations of credit conditions affecting entities for which the bank holds an asset. This process includes the estimation of the probability of default (‘PD’), exposure at default (‘EAD’), loss given default (‘LGD’) and the assessment of increases in credit risks all at individual facility level, in the context of future economic scenarios.

Relevant factors include:

• whether there has been a SICR of the counterparty since the initial recognition date of each facility;

• definition of default and credit-impaired assets; and

• forward looking information to be used in calculating ECLs.

The Bank considers both quantitative and qualitative information when considering if there has been a SICR. The receipt of information on existing or future adverse changes affecting a customer’s level of credit risk, or an expert credit risk assessment that identifies a material increase in an entity’s credit risk, will trigger the classification of SICR for a facility if the changes since origination meet the defined materiality threshold. The following SICR triggers have been selected for the residential mortgage portfolio:

• An actual or expected internal credit rating downgrade for the borrower since origination where internal credit rating downgrade is informed through deterioration in key factors (e.g. macroeconomic factors, payment behaviour) or by statistical models

• Past due information evidencing the rebuttable presumption of 30 days past due

• Forbearance

• Watchlist status

• Change in lifetime PD where the PD is derived by compounding the annual PDs over the contractual life of the mortgage and recalculated periodically based on updated customer behaviour. The change in lifetime PD is measured based on the difference between the PD at initial recognition and the current lifetime PD

For Afin Bank a financial instrument is defined as being in default when it meets one or more of the following criteria:

• Quantitative criteria: an agreement is in default when contractual payments are more than 90 days past due

• Qualitative criteria: contractual payments are less than 90 days past due but, having regard to known circumstances such as an insolvency arrangement, it is judged unlikely that future payments will be made in full

The definition of default is applied consistently to model the items used in the calculation of ECLs, these are; the probability of default, exposure at default and loss given default.

Under IFRS 9 rules, the Bank is required to consider a base case (average stress conditions) as well as other forward-looking scenarios (representing a range of different levels of stress in the economy). The final ECL is calculated by applying a weighted probability to the result of each scenario. The Bank currently uses a model for assessing its IFRS 9 provisions. The model was developed in conjunction with a third-party managed service provider for the credit portfolio expected to be held by Afin Bank.

Calculations within the IFRS 9 model are performed at facility level using a bottom-up approach, which facilitates the best estimate of the provision required. The bank uses a scenario-based approach with four different scenarios to forecast the probability weighted, unbiased expectation of all future losses.

Forward looking macro-economic scenarios

As IFRS 9 is a forward-looking measure of impairment, economic scenarios were used to build economic models. Default expectation data from a third party is used to create suitable credit indices that most closely represent the types of customers Afin Bank serves. The econometric models are applied to Economic Scenarios, obtained from a specialist third-party supplier of econometric data, to forecast a Credit Cycle Index (CCI) over the next 15 years.

Multiple economic variables such as Gross Domestic Product (GDP), House Price Indices (HPI), Bank of England (BoE) base rate, and the aggregated 1-month PD time series are used in the econometric models. The output is a forecast of the Credit Cycle Index (CCI), which is referred to in the model as the Z-index. The Z-index is used to condition the PD values of each counterparty to create an expected path of their PD.

Four macroeconomic scenarios are used:

• Base Case: Most likely scenario

• Upside Scenario: Optimistic economic outlook

• Downside Scenario: Pessimistic economic outlook

• Severe Scenario: Stress scenario with extreme economic conditions

The effect of these scenarios on the ECL is shown below. The table summarises by how much the total provision would decrease/(increase) if a weighting of 100% was applied to each scenario in turn.

Exposure at Default (EAD)

A categorised schedule that considers interest, fees and arrears is used for amortising elements of the credit portfolio while the periodic payments on interest only loans are assumed to equal the interest charge at the contractual rate. The model assumes no prepayments on loans will be made. It also assumes that the probability of instantly repaying the loan in full and closing the account in a non-default state is 0%.

Expected Credit Losses (ECL)

IFRS 9 rules require that the ECL for each scenario is risk weighted to provide an overall weighted ECL figure. The final ECL figure varies depending upon the weightings applied, these weightings are shown below.

Adjustments are applied to account for risks not captured by the core ECL model, such as:

• Emerging risks due to economic uncertainty.

• Borrower-specific factors not reflected in historical data.

Adjustments are considered by a group of senior credit and business experts, with appropriate governance applied to ensure auditability of any decisions that result in a change to the ECL, which may be applied to individual assets or collectively to a group of assets that are impacted by the same risk factors. There were no post-model adjustments at 31 December 2025.

The average monthly number of persons (including directors) employed by the Bank during the year was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024: 1).

The current and deferred tax charges for the year are nil (2024: nil). The charge for the year can be reconciled to the loss per the income statement as follows:

The effective corporation tax rate for the year ended 31 December 2025 was 25.00% (2024: 25%). The Finance Bill published on 19 December 2024 announced that the corporation tax rate would continue at 25.00% for profits over £250k and 19% for companies with profits under £50k.

The Bank has unused losses of £18,820,596 (2024: £8,617,797) carried forward at the period end. No deferred tax asset has been recognised at the year-end as there is not sufficient evidence that future taxable profits are probable. This resulted in a potential deferred tax asset of £4,652,975 (2024: 2,154,449) not being recognised. There is no expiry date in relation to the carried forward losses.

The Bank holds investments in government securities, including UK gilts and Treasury bills, as part of its treasury management strategy. Investments are carried at market value and are measured at FVOCI. The allowance for impairment losses relating to FVOCI investments is classified within other reserves as ECL is presumed to form part of the fair value of the assets and therefore does not reduce the carrying amount of the asset.

The total value of investments at 31 December 2025 was £34,820,044 (2024: £9,767,797).

Due to the short-term nature of the current assets, the carrying value approximates the fair value.

Due to the short-term nature of the current assets, the carrying value approximates the fair value.

See note 19 for information on the right-of-use asset.

Due to the short-term nature the carrying value approximates the fair value.

The table below shows the maturity analysis of the undiscounted lease liabilities (actual payments):

The Bank operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the Bank in an independently administered fund.

The total costs charged to income in respect of defined contribution plans were £318,505 (2024: £218,079).

Amounts due in relation to the defined contribution pension scheme as at 31 December 2025 were £30,374 (2024: £22.497).

Each A Ordinary share is entitled to one vote and each B Ordinary share is entitled to one vote, but during the B Ordinary share period, the number of votes attached to all the B Ordinary shares is restricted to the lower of the B Ordinary share percentage cap and the number of votes if Article 27.4 did not apply.

Each A Ordinary share and each B Ordinary share have equal rights to dividends.

On any liquidation event the B Ordinary shares are entitled to first be paid an amount equal to the subscription price paid and any surplus is paid to the holders of the A Ordinary shares.

Total proceeds in the period from issue of shares is £18,204,159.

During the year all A Ordinary £1.00 shares were issued at par.

The fair value of the options granted subject to non-market performance conditions are determined using the Black-Scholes model.

The inputs for the models are as follows:

The weighted average fair value of options granted during the year was £0.05.

B Shares

Expected life (years)            3.75

Expected Volatility Rate (%)        38.35%    

Risk Free Rate (%)            5.172%    

The underlying expected volatility was determined by reference to historical data of the Bank's selected comparators’ shares over a period relevant to the expected remaining term of the share option grants.

During the year ended 31 December 2025, £47,079 was charged to the Statement of Comprehensive Income in relation to these options, representing the expense recognised over the vesting period.

The share based award is the fair value of c.£0.05 per share equating to £334,607, less the nominal share value of £0.01 per share being £66,981.

For the purposes of capital management, capital includes issued share capital. The primary objective of the directors' capital management is to ensure that the Bank will be able to continue as a going concern while sustaining the future development of the business.

As at 31 December 2025, capital resources were made up of CET1 capital, the highest quality of capital, consisting of ordinary share capital, associated share premium and allowable reserves. The Bank’s objectives when managing capital are to: (i) safeguard the Bank’s ability to continue as a going concern and thereby to provide returns for shareholders and benefits for other stakeholders; (ii) maintain a strong capital base and utilise it efficiently to support the development of its business; and (iii) comply with the regulatory capital requirements set by the PRA.

The Bank uses the internal capital adequacy assessment process (‘ICAAP') as part of its capital risk management. During the periodic supervisory review and evaluation process (‘SREP'), the PRA assesses the ICAAP and sets the total capital requirement (‘TCR').

Capital adequacy and the use of regulatory capital are monitored by Management and Board. The Bank is required to maintain appropriate levels of capital in accordance with total capital requirements issued by the PRA. For more information on the Bank’s capital management, please refer to the Pillar 3 Disclosures, which can be found on the Bank’s website.

Risk is an inherent part of the business activities. The Bank seeks to identify, assess, monitor and manage each of the various types of risk involved in its business activities in accordance with defined policies and procedures. A key component of the Bank's approach to capital management is to ensure that the Bank's policies are aligned with the Bank's overall strategy, business plans, risk management framework and risk appetite.

The risks that are actively managed by the Bank include capital risk, liquidity risk, credit risk, and interest rate risk.

Maturity analysis

Credit risk is the risk of the financial loss to the Bank if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

The impact of the provisioning calculations performed under IFRS 9 on the balance sheet as at 31 December 2025 is £2,370 (2024: nil).

The below tables show the maximum exposure to credit risk:

In 2025, there is an ECL of £1,154 relating to investments at FVOCI (2024: nil) however this does not reduce the carrying value of the asset and therefore does not impact the exposure to credit risk.

The following tables provide information on the credit quality of the loan book and off balance sheet loan commitments.

Net carrying amount of exposure by risk grade and stage

Expected credit loss by risk grade and stage

In 2024, all exposures were in stage 1 and there was no ECL reported.

Since the reporting date, Mrs Sally Veitch was formally appointed to the Board on 3 February 2026. Mrs Veitch joined the Bank in October 2025 as an Independent Non-Executive Director.

1,545,706 B Ordinary shares were cancelled after the reporting date following the departure of two members of the Executive team by way of a written resolution.

6,500,000 A Ordinary shares were issued at £1.00 per share (£6.5m) on 31 January 2026 to its parent company WAICA Reinsurance Corporation Plc.

The remuneration of key management personnel, including the executive management team, directors (executive and non-executive directors), is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

WAICA Reinsurance Corporation PLC (Registered office: 30 Junction, Hill Station, Freetown, Sierra Leone) is the ultimate parent company by virtue of its majority shareholding and they head the largest and smallest group for which consolidated accounts are prepared that include the company. Copies of the consolidated accounts can be found at the parent company's website www.waicare.com. No single ultimate shareholder has control over the company.