# EDGAR Filing Document

**Accession Number:** 0001087711
**File Stem:** 0001087711-25-000007
**Filing Date:** 2025-8
**Character Count:** 282138
**Document Hash:** 6440089bff8e4cd9e92d400388882ff2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001087711-25-000007.hdr.sgml**: 20250829

**ACCESSION NUMBER**: 0001087711-25-000007

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 131

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250829

**DATE AS OF CHANGE**: 20250829

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Santander UK plc
- **CENTRAL INDEX KEY:** 0001087711
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMERCIAL BANKS, NEC [6029]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 000000000
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-14928
- **FILM NUMBER:** 251277563

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 2 TRITON SQUARE, REGENT'S PLACE
- **CITY:** LONDON
- **PROVINCE COUNTRY:** X0
- **BUSINESS PHONE:** 011 44 870 607 6000

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 2 TRITON SQUARE, REGENT'S PLACE
- **CITY:** LONDON
- **PROVINCE COUNTRY:** X0

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ABBEY NATIONAL PLC
- **DATE OF NAME CHANGE:** 19990601

?xml version='1.0' encoding='ASCII'? san-20250630

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549**

**FORM6-K**

**Report of Foreign Private Issuer** 

**Pursuant to Rule 13a-16 or 15d-16 under the** 

**Securities Exchange Act of 1934**

For the month of August,2025

Commission File Number 001-14928

SANTANDER UK PLC

(Translation of registrant's name into English)

2 Triton Square,

Regent's Place,

London NW1 3AN, England

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F . . . .X. . . . Form 40-F . . . . . . . .

THE REGISTRANT HEREBY INCORPORATES ALL PARTS OF THIS REPORT ON FORM 6-K BY REFERENCE INTO REGISTRATION STATEMENT NO.

333-288263 FILED BY THE REGISTRANT WITH THE SECURITIES AND EXCHANGE COMMISSION ON FORM F-3ASR UNDER THE SECURITIES ACT OF

1933. This Report on Form 6-K contains references to websites of the registrant and its affiliates. The registrant is not incorporating by reference any information posted on such

websites.

Santander UK plc

Half Yearly Financial Report 2025

**Important information for readers**

Santander UKplc and its subsidiaries (collectively called Santander UK or the Santander UK group) operate primarily in the UK and are part of Banco Santander

(comprising Banco Santander SA and its subsidiaries). Santander UK plc is regulated by the UK Prudential Regulation Authority (PRA) and the Financial

Conduct Authority (FCA) and certain other companies within the Santander UK group are regulated by the FCA.

This Half Yearly Financial Report contains forward-looking statements that involve inherent risks and uncertainties. Actual results may differ materially from those

contained in such forward-looking statements. See 'Forward-looking statements' in the Shareholder information section.

None of the websites referred to in this Half Yearly Financial Report on Form 6-K for the six months ended 30 June 2025 (the Form 6-K), including where a link is

provided, nor any of the information contained on such websites, is incorporated by reference into the Form 6-K.

Santander UK plc**1**

---

| | | |
|:---|:---|:---|
| Santander UK plc |  |  |
| Half Yearly Financial Report 2025 |  |  |
|  | **Contents** |  |
|  | **CEO review** | **<u>[2](#if12dce57771a4a33887463cdb1b49da6_13)</u>** |
|  | **Financial overview** | **<u>[3](#if12dce57771a4a33887463cdb1b49da6_16)</u>** |
|  | **Risk review** | **<u>[7](#if12dce57771a4a33887463cdb1b49da6_55)</u>** |
|  | **Financial statements** | **<u>[41](#if12dce57771a4a33887463cdb1b49da6_454)</u>** |
|  | **Shareholder information** | **<u>[64](#if12dce57771a4a33887463cdb1b49da6_628)</u>** |

---

Santander UK plc**2**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

CEO review

**Mike Regnier, Chief Executive Officer, commented** 

"In the first six months of 2025 we continued to build momentum in our strategy to become the best bank for customers in the UK by investing in technology and

service, and improving our processes and efficiency. Banco Santander's recent agreement to acquire 100% of TSB from Sabadell<sup>1</sup>accelerates our

transformation, allowing us to enhance our customer proposition and invest more in innovative products and our digital offering. This is an excellent deal for

customers, combining two strong and complementary banks. The transaction remains subject to regulatory and other approvals.

Our H1-25 results demonstrate that business performance continues to improve, with an increase in net interest income and a reduction in operating expenses.

However, profit before tax reduced to £746m due to higher transformation related charges as we invest in our future to become simpler, more agile, and better

able to innovate to meet the challenges and expectations of our customers.

I would like to thank outgoing Santander UK Chair, William Vereker, for his invaluable leadership over the past five years, and warmly welcome our new Chair,

Tom Scholar. I look forward to working with him as we build on our current momentum, and begin to plan the integration of TSB into the wider business, subject

to regulatory and other approvals."

**H1-25 financial and business highlights**

**Focus on providing our customers with products and services that meet their needs; continued support for our communities**

–Continued to focus on customer service.

–Enhanced functionality across our fast-growing digital channels as customers continue to choose digital over traditional channels.

–Announced a new five-year charity partnership with The King's Trust, aimed at helping young people facing disadvantage and adversity.

**H1-25 profit before tax reduced by £67m to £746m (H1-24: £813m), driven by higher transformation related charges**

–Net interest income increased 4%, driven by lower cost of deposits and supported by our structural hedge.

–Operating expenses were down 2% due to simplification and automation, including headcount reduction, driven by our transformation.

–Credit impairment charges were up £44m, trending to pre-pandemic levels, as previously guided.

–Provisions for other liabilities and charges were up 75%, driven by higher transformation related charges.

**Customer loans and deposits were broadly stable**

–Mortgage loans were flat at £165.3bn (Dec-24: £165.2bn); higher gross mortgage lending in H1-25 of £10.6bn (H1-24: £7.4bn).

–Customer deposits increased slightly by £1bn in H1-25 to £177.7bn (Dec-24: £176.7bn) driven by an increase in CCB.

–Asset quality remains good. Stage 3 ratio<sup>2</sup> of 1.35% was down 7bps from Dec-24; arrears remain low.

**Strong liquidity and funding, with our capital position maintaining significant buffers to regulatory requirements** 

–CET1 capital ratio broadly stable at 15.0% (Dec-24: 14.9%).

–Equivalent of £6.6bn in medium-term funding issued in H1-25; we expect to issue £9.0-11.5bn in total for the year.

–LCR of 159% (Dec-24: 154%) increased largely due to higher funding issuances ahead of £4.7bn TFSME repayment due in Oct-25, £1.2bn of which was

repaid in July 2025.

**Outlook**

–We continue to anticipate a gradual return to net lending growth in 2025, with a good mortgage pipeline heading into H2-25.

–Our structural hedge position and recent pricing decisions keep us well positioned for further Bank Rate reductions. Our net interest margin is expected to

stabilise over H2-25.

–Transformation through simplification and automation of our business is expected to continue to drive cost efficiencies over 2025.

–We continue to monitor risks from geopolitical events and the potential impact on our customers.

**Mike Regnier**

**Chief Executive Officer** 

1. See 'Other' in the Shareholder Information section for more on Banco Santander's agreement to acquire TSB.

2. See 'Calculations' in the Shareholder Information section for details.

Santander UK plc**3**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Financial overview

Income statement review

SUMMARISED CONSOLIDATED INCOME STATEMENT

**For the half year to**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
|  | **£m** | £m |
| Net interest income | **2194** | 2104 |
| Non-interest income<sup>1</sup> | **157** | 191 |
| **Total operating income** | **2351** | 2295 |
| Operating expenses<sup>2</sup> | **(1252)** | (1279) |
| Credit impairment charges | **(105)** | (61) |
| Provisions for other liabilities and charges | **(248)** | (142) |
| **Total credit impairment charges, provisions and charges** | **(353)** | (203) |
| **Profit before tax** | **746** | 813 |
| Tax on profit | **(195)** | (213) |
| **Profit after tax attributable to equity holders of the parent** | **551** | 600 |

---

1 Comprises 'Net fee and commission income' and 'Other operating income'.

2 Operating expenses before credit impairment (charges)/ write-backs, provisions for other liabilities and charges.

A more detailed Consolidated Income Statement is contained in the Condensed Consolidated Interim Financial Statements.

**H1-25 profit before tax down 8% vs H1-24**

–Net interest income increased 4%, driven by lower cost of deposits and supported by our structural hedge.

–Non-interest income was down 18%, mainly due to the timing of unrealised losses arising from hedging ineffectiveness.

–Operating expenses were down 2%, due to simplification and automation, including 12-month headcount reduction of over 2,000, driven by our

transformation.

–Credit impairment charges were up £44m, trending to pre-pandemic levels after a period of write-backs, as previously guided.

–Provisions for other liabilities and charges were up 75%, driven by higher transformation related charges, including £42m in charges relating to changes to our

branch network in Q1-25 and other restructuring charges.

**Historical motor finance commission payments**

The Supreme Court handed down its judgment on 1 August 2025 in relation to the appeals of Wrench, Johnson and Hopcraft decision by the Court of Appeal.

We welcome the clarity brought by the Supreme Court's judgment and will be responding to the FCA's subsequently announced consultation. Santander UK has

updated the key assumptions related to the current provision in light of the Supreme Court decision and the FCA announcement and has concluded that the

existing provision balance of £287m at 30 June 2025 remains appropriate. See Note 21 to the Condensed Consolidated Interim Financial Statements for more

details.

Santander UK plc**4**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Balance sheet review

CUSTOMER BALANCES

This section analyses customer loans and customer deposits at a consolidated level and by business segment. The customer balances below exclude Joint

ventures and Other items, mainly accrued interest that we have not yet charged to the customer's account and cash collateral. A reconciliation between the

customer balances below and the total assets as presented in the Condensed Consolidated Balance Sheet is set out in the Risk review.

**Balance sheet information**

---

| | | |
|:---|:---|:---|
| **Assets**  | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| Customer loans | **194.9** | 194.5 |
| Loans to JVs, accrued interest, ECL and other | **5.3** | 4.9 |
| **Loans and advances to customers** | **200.2** | 199.4 |
| Cash at central banks | **34.2** | 29.9 |
| Reverse repurchase agreements | **11.4** | 10.3 |
| Other financial assets | **13.4** | 14.8 |
| Other assets - non-interest earning | **6.4** | 5.5 |
| **Total assets** | **265.6** | 259.9 |

---

---

| | | |
|:---|:---|:---|
| **Liabilities and Equity** | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| Customer deposits | **177.7** | 176.7 |
| Deposits from JVs, accrued interest and other | **3.9** | 4.2 |
| **Deposits by customers** | **181.5** | 181.0 |
| Financial liabilities at amortised cost | **56.5** | 52.1 |
| Repurchase agreements | **7.6** | 8.6 |
| Other liabilities - non-interest bearing | **5.3** | 4.5 |
| **Total liabilities** | **250.9** | 246.2 |
| Shareholders' equity | **14.7** | 13.8 |
| **Total liabilities and equity** | **265.6** | 259.9 |

---

For more analysis of credit risk on customer loans, see the Credit risk section of the Risk review. For an analysis of customer loans by segment, see the 'Credit

Performance' table in the Credit risk section of the Risk review.

**Customer deposits by segment**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| Retail & Business Banking | **151.1** | 151.8 |
| –Current accounts | **60.1** | 62.3 |
| –Savings | **77.0** | 74.8 |
| –Business banking accounts | **8.9** | 9.5 |
| –Other retail products | **5.1** | 5.2 |
| Corporate & Commercial Banking | **22.7** | 22.1 |
| Corporate Centre | **3.9** | 2.8 |
| **Total** | **177.7** | 176.7 |

---

**Customer deposits increased by £1bn in H1-25, driven by an increase in CCB**

–Savings increased following a successful ISA season and customer migration from Current Accounts.

–Cost of deposits continued to fall from last year's peak.

Santander UK plc**5**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Summary segmental information

SEGMENTAL ANALYSIS

**For the half year to**

---

| | | |
|:---|:---|:---|
| **Customer loans**  | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| Retail & Business Banking | **171.8** | 171.7 |
| Consumer Finance | **4.8** | 4.8 |
| Corporate & Commercial Banking | **18.3** | 18.0 |
| Corporate Centre | **—** |  |
| **Total** | **194.9** | 194.5 |

---

---

| | | |
|:---|:---|:---|
| **Customer deposits** | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| Retail & Business Banking | **151.1** | 151.8 |
| Corporate & Commercial Banking | **22.7** | 22.1 |
| Corporate Centre | **3.9** | 2.8 |
| **Total** | **177.7** | 176.7 |

---

---

| | | |
|:---|:---|:---|
| **RWA** | **30 June 2025** | 31 December 2024 |
|  | **£bn** | £bn |
| **Total** | **66.0** | 67.8 |

---

---

| | | |
|:---|:---|:---|
| **Profit/(loss) before tax** | **30 June 2025** | 30 June 2024 |
|  | **£m** | **£m** |
| Retail & Business Banking | **567** | 600 |
| Consumer Finance | **55** | 57 |
| Corporate & Commercial Banking | **146** | 224 |
| Corporate Centre | **(22)** | (68) |
| **Total** | **746** | 813 |

---

**Retail & Business Banking**

–Customer loans and deposits were broadly stable.

–Profit before tax was down, driven by higher transformation related charges, including charges relating to changes in our branch network.

**Consumer Finance**

–Customer loans were stable, and we continue to focus on value and capital generation.

–Profit before tax was broadly stable.

**Corporate & Commercial Banking**

–Continued focus on high-value and international business, with over 200 new clients onboarded inH1-25.

–Profit before tax was down, largely due to higher transformation related charges.

**Corporate Centre**

–Loss before tax was down, mainly due to internal transfer pricing gains reflecting current market conditions.

Principal risks and uncertainties

A description of our principal risks and uncertainties for the remaining six months of the financial year is set out in the Risk governance section of the Risk review,

mainly in Top risks and Emerging risks as well as a discussion of how the relevant risks and uncertainties have changed since our 2024 Annual Report was

published. See also 'Risk Factors'.

Santander UK plc**6**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Page intentionally blank

Santander UK plc**7**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

---

| | | |
|:---|:---|:---|
| Risk review |  |  |
|  | **In this section** |  |
|  | **Risk governance** | **<u>[8](#if12dce57771a4a33887463cdb1b49da6_58)</u>** |
|  | **Credit risk** | **<u>[10](#if12dce57771a4a33887463cdb1b49da6_88)</u>** |
|  | **Liquidity risk** | **<u>[29](#if12dce57771a4a33887463cdb1b49da6_346)</u>** |
|  | **Capital risk** | **<u>[32](#if12dce57771a4a33887463cdb1b49da6_376)</u>** |
|  | **Market risk** | **<u>[33](#if12dce57771a4a33887463cdb1b49da6_397)</u>** |
|  | **Pension risk** | **<u>[34](#if12dce57771a4a33887463cdb1b49da6_412)</u>** |
|  | **Strategic and business risk** | **<u>[35](#if12dce57771a4a33887463cdb1b49da6_418)</u>** |
|  | **Reputational risk** | **<u>[36](#if12dce57771a4a33887463cdb1b49da6_424)</u>** |
|  | Non Financial Risks: |  |
|  | **Operational risk** | **<u>[37](#if12dce57771a4a33887463cdb1b49da6_430)</u>** |
|  | **Economic crime risk** | **<u>[38](#if12dce57771a4a33887463cdb1b49da6_436)</u>** |
|  | **Model risk** | **<u>[39](#if12dce57771a4a33887463cdb1b49da6_442)</u>** |
|  | **Compliance risk**  | **<u>[40](#if12dce57771a4a33887463cdb1b49da6_448)</u>** |

---

Santander UK plc**8**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Risk governance

INTRODUCTION

As a financial services provider, managing risk is a core part of our day-to-day activities. To manage our business effectively, it is vital that we understand and

control risk in everything we do. We adopt a prudent approach, underpinned by advanced risk management techniques to help us deliver robust financial

performance, withstand stresses, and build sustainable value for our stakeholders. We aim to keep a predictable medium-low risk profile, consistent with our

business model. This is key to achieving our strategic objectives.

RISK FRAMEWORK

**How we define risk**

**Risk types**

Our risk types help us define the risks to which we are exposed and support consistent governance and oversight. For definitions of our risk types, see 'How we

define risk' in the 2024 Annual Report.

**Top and emerging risks**

Several of our risk types also have top and/or emerging risks associated with them. For more, see 'Top and emerging risks' in the 2024 Annual Report.

30 June 2025 compared to 31 December 2024

In H1-25, our risk types remained as described in the 2024 Annual Report. There were no material changes in our risk governance, other than two updates were

applied to our risk taxonomy, namely Financial Crime risk is now referred to as Economic Crime risk, which also includes Fraud. Conduct and Regulatory risk is

now Compliance risk and includes People risk.

**Top risks**

In H1-25, our Top risks consisted of:

–Compliance (formerly known as Conduct and Regulatory)

–Economic crime

–Technology

–Margin compression

–Operational resiliency

–Cybersecurity

–Data quality

–Outsourcing and third-party

–Strategic transformation

–Regulatory capital

–Climate change

–Payments risk transformation

–Artificial Intelligence (AI) & machine learning, and

–Global geopolitical and macroeconomic (added in H1-25).

In H1-25, the existing Top risks profile was broadly stable. We introduced a new Top risk, Global geopolitical and macroeconomic risks. This was to recognise

increased risks in relation to: global trade tariffs and supply chains, economic security, and elevated geopolitical tensions reflected in ongoing conflicts. Given this

highly fluid environment, we mobilised a cross-functional team across Risk and other business areas to pro-actively monitor and co-ordinate our responses and

management updates with respect to external developments, via our regular EWRM report updates to Executive Risk Control Committee (ERCC), Board Risk

Committee (BRC) and other Senior Management Committees.

**Other Top risk profile movements**

The risk outlook improved in H1-25 for Compliance, Resiliency, Regulatory Capital, and Payments Transformation. Compliance risk has a positive outlook given

the Government's 'push for growth' initiatives, the proposed 'Leeds Reforms' aiming to reduce the regulatory burden across financial services, and actions we

continue to take to ensure we deliver good customer outcomes. However, changes in the overall regulatory operating environment may take some time to

materialise. Resiliency improved with closure of regulatory deadline deliverables in March 2025, although it remained a key area given regulatory focus. Although

regulatory uncertainty remained over Regulatory Capital, particularly in terms of IRB models, we have significant current and projected capacity to absorb

potential adverse capital movements. Payments Transformation improved though our enhanced capacity to address critical initiatives, given the rapidly evolving

payments landscape.

We maintained a significant focus on Financial Crime, Cyber and Information security, Technology, and Strategic Transformation. We continued to reduce our

residual risk from Financial Crime by implementing planned enhancements to our prevention and detection systems and controls. We took ongoing steps to

ensure we were prepared for added complexity from potential changes in the sanctions landscape due to tariff and geopolitical developments. We continued

enhancing our control environment within Cyber and Information security, against the backdrop of a highly fluid and evolving external threat landscape. In order to

protect our information technology estate against technology and cyber risks, we continued to remediate obsolescence and prioritised the implementation of a

range of mitigation strategies and preventative security controls. We progressed execution of our Strategic Transformation programme, with a key focus on

improving customer experience, product simplification, digitalisation and automation of our operating model by leveraging Banco Santander's common platforms.

In parallel, we continued to enhance our governance processes to mitigate risks that could arise from implementing change.

Santander UK plc**9**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Emerging risks**

In H1-25, our Emerging risks consisted of:

–Uncertain regulatory agenda:

–UK regulatory demand on banking sector

–Net zero transition, and

–Chevron deference

–Increased uncertainty in macroeconomic and geopolitical environment:

–UK fiscal and policy-related (replaced UK political in H1-25)

–US political (deregulation)

–Trade tariffs, sanctions and supply chains

–Quantitative tightening, and

–Eurozone Sovereign Bank Contagion

–Markets, competition & technology:

–Digital bank challengers

–Digital pound (central bank digital currency), and

–Digital

–Environmental and social.

In H1-25, our Emerging risks profile increased overall, reflecting a fast changing geopolitical environment and an evolving reshaping of international trade, which

is now also reflected specifically in our Top risks. Key areas in focus in H1-25 were UK fiscal and policy-related risks, Quantitative Tightening (QT) risks and

Eurozone Sovereign Bank Contagion risks. UK fiscal and policy-related risks replaced 'UK political risks', as significant fiscal challenges became more evident,

including the potential for further tax increases, set against existing high government borrowing costs from elevated gilt yields, and persistent weak UK economic

growth. QT added more gilts supply to the market, at the same time as the government required issuance to fund the budget deficit, and could ultimately present

challenges in terms of market absorption, putting further pressure on gilt yields.

In addition, Eurozone sovereign bank contagion risks remained in focus, given elevated debt levels, high budget deficits, and plans for further military spending.

These could trigger concerns over sovereign debt sustainability, similar to the UK. Our overall Financial Risk profile remained robust across Capital, Funding and

Liquidity, and Market risks (Traded and Non-Traded) and is well positioned to withstand any further market volatility from Emerging risks.

With the sale of TSB approved by the shareholders of Sabadell in August 2025, we continue to work on regulatory filings as we proceed towards regulatory

approval, and we will be considering the potential for medium to longer-term impacts on our risk profile.

**Other Emerging risk profile movements**

With a range of digital technologies, including Artificial Intelligence (AI), accelerating innovation and elevating competition in the banking sector, we remained

focused on enhancing our risk management approach to these innovations. With respect to AI in particular we worked on establishing a robust and

comprehensive risk framework, whilst focusing on the customer and shareholder benefits of these initiatives. We continue to monitor the evolution of AI and its

potential implications on our risk profile, governance and regulatory expectations going forward.

Santander UK plc**10**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Credit risk

---

| | |
|:---|:---|
| **Overview**<br>Credit risk is the risk of financial loss due to the default or credit quality deterioration of <br>a customer or counterparty to which we provided credit, or for whom we assumed a <br>financial obligation.<br>**Credit risk management**<br>In H1-25, there were no significant changes in the way we manage credit risk as <br>described in the 2024 Annual Report. <br>**Credit risk review**<br>In this section, we analyse our key credit risk metrics.<br>| **Key metrics** <br>Stage 3 ratio of 1.35% (2024: 1.42%). <br>Loss allowances of £879m (2024: £869m). <br>Balance weighted average LTV of63% (2024: 65%) on <br>new mortgage lending.<br>|

---

**Introduction** 

We manage credit risk across all our business segments in line with the credit risk lifecycle. We tailor the way we manage risk across the lifecycle to the type of

customer. There were no significant changes in the way we manage credit risk as described in the 2024 Annual Report.

Recognising ECL

The ECL approach estimates the credit losses arising from defaults in the next 12 months on qualifying exposures, or defaults over the lifetime of the exposure

where there is evidence of a SICR since the origination date. The ECL approach takes into account forward-looking data, including a range of possible outcomes,

which should be unbiased and probability-weighted to reflect the risk of a loss being incurred even when it is unlikely.

**Multiple economic scenarios and probability weights**

For all our portfolios we use four forward-looking economic scenarios.At30 June 2025, they consisted of a central base case, one upside scenario and two

downside scenarios. We use these scenarios to reflect a wide range of possible outcomes for the UK economy.

**Our forecasting approach**

In H1-25, there were no significant changes in our forecasting approach as described in the 2024 Annual Report.

**Base case**

We review the scenarios and associated weights every quarter to ensure they appropriately reflect the current economic circumstances, and UK Government

policy which is subject to change in this fluid environment.

In summary, the outlook for the UK economy in 2025 sees modest GDP growth with inflation elevated in the near term due to rising utility bills, but further Bank

Rate cuts are expected as the labour market loosens. Increased risk of uncertainty to the outlook with global trade frictions and the possibility for geopolitical

tensions to escalate, which may dampen the UK's economic performance. Productivity growth is expected to remain weak, this will limit our medium-term

prospects. In addition, robust wage growth remains a key risk to inflation reaching the 2% target.

---

| |
|:---|
| Base case key macroeconomic assumptions |
| **–House price growth:** Housing market activity slowed following the changes to stamp duty in April 2025. Monthly house price growth was lower than expected with <br>survey indicators pointing to a slump in buyer demand, coinciding with a loosening of the labour market. Assuming the Bank Rate continues to fall gradually, this should <br>support a modest recovery in house price growth. We forecast annual property price increases to remain broadly in line with average household disposable income <br>growth of c.3-4% throughout the forecast period.<br>|
| **–GDP:** The UK economy posted the strongest growth in the G7 in Q1-25, expanding by 0.7% q/q. However, the breakdown suggests some front-loading of <br>activity ahead of potential US tariffs in Q2-25 with a large rise in business investment and a positive contribution from net trade. It is unlikely these sources of <br>growth will be sustained in Q2-25 with the economy contracting 0.3% m/m in April 2025, the sharpest since October 2023. A weaker Q2-25 and ongoing <br>uncertainty in the global economy means we expect below trend growth of around 1% in the next couple of years.<br>|
| **–Unemployment rate:** The unemployment rate rose to 4.6% in the three months to April 2025, up from 4.4% at the end of 2024. The number of payrolled employees <br>fell every month since higher employment costs were announced in the October 2024 budget. Job vacancies fell to 736k in the three months to May 2025, 150k lower <br>than a year earlier and 59k above pre-pandemic levels. With companies under pressure from rising employment taxes and higher wages, it is likely that some will <br>become insolvent, although we do not envisage a large rise in unemployment. The jobless rate peaks at 4.9% by the end of 2026 before falling gradually.<br>|
| **–Bank Rate:** The Monetary Policy Committee (MPC) maintained Bank Rate at 4.25% at the June 2025 MPC meeting. The MPC repeated its "gradual and careful" <br>approach to further interest rate cuts despite three members voting to reduce rates again. Our base case assumes two further cuts this year in August 2025 and <br>November 2025 taking Bank Rate to 3.75% by the end of the year. A further 50bps of loosening through the rest of the five-year forecast period would take the bank <br>rate to the terminal rate of 3.25%.<br>|
| **–CRE price growth:** Commercial property prices look to be past their trough. Q1-25's 0.4% q/q rise in prices pushed annual growth to 1.5%, up from 0.4% at the end <br>of 2024 and to the highest rate since the third quarter of 2022. Bank Rate cuts boosted prices and, as we expect interest rate cuts to continue at a gradual pace, we <br>forecast modest commercial property price growth of around 2% for much of the forecast period.<br>|

---

In the medium-term, the projections assume that current demographic and productivity trends will continue, limiting scope for an improvement in the UK's growth

potential. For instance, it is likely that the reduction in the UK workforce continues and that this will have a knock-on impact for the economy, particularly if there

are shortages of skilled workers in particular sectors. This is reflected in an average annual growth expectation of 1.3%, below the OBR's latest estimate of the

UK's long run average growth rate. CPI inflation is forecast to remain above the 2% target rate for most of the initial five-year forecast period.

Santander UK plc**11**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Key changes to our base case in H1-25**

Base case has been updated to reflect stronger growth in Q1-25. Despite inflation remaining elevated in the near term, we continue to forecast two further two

Bank Rate cuts in H2-25. We anticipate a modest rise in unemployment as firms adjust to the higher cost of employment.

The key changes to our base case assumptions in H1-25 were: (i) the 2025 GDP growth forecast was revised down in response to increased uncertainty in the

global economy and also impacts growth in 2026; (ii) the strength of services inflation, which is linked to robust wage growth, means headline CPI remains above

3% for most of 2025, and above the 2% target for most of the forecast period; and (iii) a higher peak in unemployment reflecting current labour market weakness

and businesses' response to higher employment costs.

**Other scenarios**

Based on the revised base case, we reviewed our suite of scenarios to ensure that they capture the wide range of potential outcomes for the UK economy.

These include (i) reflecting persistent above target inflation over the forecast period, underpinned by strong wage growth and leading to interest rates being

higher for longer; (ii) a slower recovery that is more akin to the 'U' shape of past recessions; (iii) labour market frictions due to skills mismatches and a shrinking

workforce as longer term sickness levels remain above pre-pandemic levels); and (iv) the global economy recovering more swiftly from higher inflation.

We continue to use the base case and three additional scenarios, which we consider provides a range wide enough to reflect all the above potential outcomes.

With risks still skewed to the downside we concluded that only one upside scenario was needed to reflect the upside risks to the base case.

The other scenarios are:

**One upside scenario**

This scenario has a quicker recovery in growth than the Baseline and is a bull case to the base forecasts with the supply side of the economic improving which

allows for stronger growth with lower inflation. It assumes that inflation falls slightly below target in the forecast period helped by lower wage growth. This allows

the Bank of England to cut rates faster than the base case, bringing them back towards what might be considered the neutral rate earlier. This results in higher

consumer and business confidence, enabling greater levels of spending and investment, with savings rates returning to levels consistent with economic growth

as real earnings growth returns. GDP remains stronger than the base case, with house prices growth remaining robust given the unemployment rate peaks at a

lower level and drops more quickly than the base case.

**Two downside scenarios**

**Downside 1** - This scenario is a bear case to the baseline. In this scenario the economy contracts and although the recession is small and short lived, the

recovery is weak and below its potential. The increase in employment costs mean growth is weak and employment shrinks as businesses restructure to deal with

the extra cost. Consumers opt to save more rather than spend, as consumer confidence remains low, partly reflecting concerns about the unstable geopolitical

environment and the increase in job losses. House prices fall as more households look to downsize to lower their mortgage repayments in case of

unemployment or a squeeze on incomes due to the higher tax burden. With inflation remaining above target, the Bank Rate remains in restrictive territory but

gradually falls back as inflation declines to the mild recession and a weak recovery.

**Downside 2** - This scenario is similar in severity to a typical stress test scenario. It shows a marked fall in GDP, with unemployment rising to levels consistent

with the GFC and house prices falling. It also reflects the increase in geopolitical risk which affects market sentiment and causes further fragmentation of the

global economy. It also assumes that major risk events continue to occur, exposing countries' fiscal vulnerabilities and their ability to respond to such events.

Global growth is further undermined by weakness in the Far East and in the US economy, as tariffs are imposed across countries with a significant and

widespread recession restricting the governments ability to support the economy. Business investment contracts and insolvencies rise, and although there are

some inflationary pressures, the sharp fall in demand means inflation falls below target and the MPC cuts rates sharply to stabilise the economy.

**Key changes to our alternative scenarios in H1-25**

Economic scenarios were updated for H1-25 to reflect the latest market data, including expectations for inflation and Bank rate.Upside scenario incorporates a

quicker economic recovery.

The downside scenarios capture a range of risks, including further escalation of geopolitical events, continuing weaker investment; reflecting the unstable

environment and higher cost of employment; a continuing and significant mismatch between job vacancies and skills, as well as a smaller labour force; and a

return to upside inflation surprises causing interest rates to remain at higher levels for longer.

In H1-25, there were no significant changes to our alternative scenarios as described in the 2024 Annual Report.

Santander UK plc**12**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

The table below sets out our macroeconomic assumptions and their evolution throughout the forecast period for each of the scenarios at 30 June 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Economic scenarios**<sup>1</sup> |  | **Upside** | **Base case** | **Downside 1** | **Downside 2** | **Weighted** |
|  |  | **%** | **%** | **%** | **%** | **%** |
| GDP | 2024 (actual) | **1.1** | **1.1** | **1.1** | **1.1** | **1.1** |
| (Calendar year annual growth rate) | 2025 | **1.4** | **1.0** | **0.6** | **(0.3)** | **0.8** |
|  | 2026 | **1.7** | **1.0** | **(0.4)** | **(3.5)** | **0.3** |
|  | 2027 | **2.4** | **1.4** | **0.3** | **—** | **1.1** |
|  | 2028 | **2.6** | **1.4** | **0.4** | **1.2** | **1.3** |
|  | 2029 | **2.7** | **1.5** | **0.5** | **2.5** | **1.5** |
|  | 2030 | **2.3** | **1.5** | **1.1** | **2.3** | **1.6** |
|  | Start to trough<sup>2</sup> | **n/a** | **n/a** | **(0.7)** | **(5.0)** | **(0.1)** |
|  | 5-year average increase/decrease<sup>3</sup> | **2.2** | **1.3** | **0.2** | **—** | **n/a** |
| Bank Rate | 2024 (actual) | **4.75** | **4.75** | **4.75** | **4.75** | **4.75** |
| (at 31-Dec for each period) | 2025 | **3.75** | **3.75** | **4.50** | **3.25** | **3.89** |
|  | 2026 | **3.00** | **3.50** | **3.50** | **1.75** | **3.25** |
|  | 2027 | **3.00** | **3.25** | **3.25** | **2.00** | **3.09** |
|  | 2028 | **3.00** | **3.25** | **3.25** | **2.50** | **3.14** |
|  | 2029 | **3.00** | **3.25** | **3.25** | **3.00** | **3.19** |
|  | 2030 | **3.00** | **3.25** | **3.25** | **3.00** | **3.19** |
|  | 5-year end period | **3.00** | **3.25** | **3.25** | **3.00** | **n/a** |
|  | 5-year peak | **4.25** | **4.25** | **4.50** | **4.25** | **4.25** |
| HPI | 2024 (actual) | **4.0** | **4.0** | **4.0** | **4.0** | **4.0** |
| (Q4 annual growth rate) | 2025 | **3.8** | **3.0** | **(3.1)** | **(5.9)** | **0.7** |
|  | 2026 | **4.6** | **3.0** | **(4.9)** | **(12.4)** | **(0.1)** |
|  | 2027 | **4.6** | **3.0** | **(0.3)** | **(12.0)** | **1.3** |
|  | 2028 | **4.6** | **3.0** | **3.3** | **5.3** | **3.5** |
|  | 2029 | **4.5** | **3.0** | **3.6** | **7.0** | **3.7** |
|  | 2030 | **6.5** | **3.0** | **4.4** | **9.4** | **4.4** |
|  | Start to trough<sup>2</sup> | **n/a** | **n/a** | **(9.5)** | **(28.0)** | **n/a** |
|  | 5-year average increase/decrease<sup>3</sup> | **4.5** | **3.0** | **(0.2)** | **(3.8)** | **n/a** |
| Unemployment | 2024 (actual) | **4.4** | **4.4** | **4.4** | **4.4** | **4.4** |
| (at 31-Dec for each period) | 2025 | **4.6** | **4.7** | **5.0** | **5.8** | **4.9** |
|  | 2026 | **4.5** | **4.9** | **5.6** | **7.7** | **5.3** |
|  | 2027 | **4.0** | **4.7** | **5.8** | **8.3** | **5.2** |
|  | 2028 | **4.0** | **4.4** | **5.8** | **7.5** | **5.0** |
|  | 2029 | **4.0** | **4.3** | **5.9** | **6.7** | **4.9** |
|  | 2030 | **4.0** | **4.3** | **5.5** | **5.9** | **4.7** |
|  | 5-year end period | **4.0** | **4.3** | **5.9** | **6.7** | **n/a** |
|  | 5-year peak | **4.6** | **4.9** | **5.9** | **8.5** | **5.4** |
| CRE price growth | 2024 (actual) | **0.4** | **0.4** | **0.4** | **0.4** | **0.4** |
| (Q4 annual growth rate) | 2025 | **4.4** | **2.1** | **(3.6)** | **(9.7)** | **(0.2)** |
|  | 2026 | **6.2** | **1.9** | **(1.9)** | **(15.2)** | **0.1** |
|  | 2027 | **5.0** | **2.5** | **(1.1)** | **2.6** | **2.1** |
|  | 2028 | **2.6** | **2.2** | **1.2** | **4.7** | **2.3** |
|  | 2029 | **2.5** | **1.9** | **1.4** | **4.4** | **2.1** |
|  | 2030 | **2.3** | **1.8** | **1.6** | **3.2** | **2.0** |
|  | Start to trough<sup>2</sup> | **n/a** | **n/a** | **(6.9)** | **(24.5)** | **(0.6)** |
|  | 5-year average increase/decrease<sup>3</sup> | **4.2** | **2.2** | **(0.8)** | **(2.9)** | **n/a** |

---

1. GDP is the calendar year annual growth rate, HPI and CRE price growth is Q4 annual growth rate and all other data points are at 31 December in the year indicated.

2. GDP, HPI and CRE start is taken from the level at Q1-25.

3. This is the compound growth rate (CAGR) based on a 5-year period which represents an average annualised growth rate.

Santander UK plc**13**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

The table below sets out our macroeconomic assumptions and their evolution for each of the scenarios at 31 December 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  | Upside | Base case | Downside 1 | Downside 2 | Weighted |
|  |  | % | % | % | % | % |
| GDP<sup>1</sup> | 2023 (actual) | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
| (Calendar year annual growth rate) | 2024 | 0.9 | 0.9 | 0.8 | 0.4 | 0.8 |
|  | 2025 | 2.0 | 1.4 | (0.4) | (3.4) | 0.6 |
|  | 2026 | 2.5 | 1.6 | 0.3 | (0.9) | 1.2 |
|  | 2027 | 2.5 | 1.4 | 0.9 | 1.3 | 1.4 |
|  | 2028 | 2.5 | 1.4 | 1.0 | 2.8 | 1.6 |
|  | 2029 | 2.5 | 1.4 | 1.1 | 2.8 | 1.6 |
|  | Start to trough<sup>2</sup> | n/a | n/a | (0.7) | (5.2) | n/a |
|  | 5-year average increase/decrease<sup>3</sup> | 2.4 | 1.5 | 0.6 | 0.3 | n/a |
| Bank Rate<sup>1</sup> | 2023 (actual) | 5.25 | 5.25 | 5.25 | 5.25 | 5.25 |
| (at 31-Dec for each period) | 2024 | 4.75 | 4.75 | 4.75 | 4.75 | 4.75 |
|  | 2025 | 3.25 | 3.75 | 4.50 | 2.25 | 3.71 |
|  | 2026 | 3.00 | 3.50 | 3.25 | 1.50 | 3.16 |
|  | 2027 | 3.00 | 3.25 | 3.00 | 2.50 | 3.08 |
|  | 2028 | 3.00 | 3.25 | 3.00 | 2.75 | 3.10 |
|  | 2029 | 3.00 | 3.25 | 3.00 | 3.00 | 3.13 |
|  | 5-year end period | 3.00 | 3.25 | 3.00 | 3.00 | n/a |
|  | 5-year peak | 4.75 | 4.75 | 4.75 | 4.75 | 4.75 |
| HPI<sup>1</sup> | 2023 (actual) | (0.7) | (0.7) | (0.7) | (0.7) | (0.7) |
| (Q4 annual growth rate) | 2024 | 4.8 | 4.5 | 2.0 | 1.3 | 3.6 |
|  | 2025 | 4.3 | 3.0 | (5.8) | (20.1) | (1.2) |
|  | 2026 | 4.7 | 3.0 | (3.7) | (14.7) | 0.3 |
|  | 2027 | 4.6 | 3.0 | 2.9 | 5.8 | 3.4 |
|  | 2028 | 4.5 | 3.0 | 4.4 | 9.6 | 4.0 |
|  | 2029 | 4.6 | 3.0 | 4.6 | 7.7 | 4.0 |
|  | Start to trough<sup>2</sup> | n/a | n/a | (10.1) | (33.0) | (0.8) |
|  | 5-year average increase/decrease<sup>3</sup> | 4.7 | 3.2 | n/a | (3.7) | n/a |
| Unemployment<sup>1</sup> | 2023 (actual) | 3.8 | 3.8 | 3.8 | 3.8 | 3.8 |
| (at 31-Dec for each period) | 2024 | 4.4 | 4.3 | 4.4 | 4.4 | 4.4 |
|  | 2025 | 4.1 | 4.4 | 5.2 | 8.3 | 4.9 |
|  | 2026 | 4.0 | 4.2 | 5.5 | 8.2 | 4.9 |
|  | 2027 | 4.0 | 4.2 | 5.5 | 7.6 | 4.8 |
|  | 2028 | 4.0 | 4.2 | 5.5 | 7.0 | 4.8 |
|  | 2029 | 4.0 | 4.2 | 5.5 | 6.4 | 4.7 |
|  | 5-year end period | 4.0 | 4.2 | 5.5 | 6.4 | n/a |
|  | 5-year peak | 4.4 | 4.4 | 5.5 | 8.5 | 4.9 |
| CRE price growth<sup>1</sup> | 2023 (actual) | (5.6) | (5.6) | (5.6) | (5.6) | (5.6) |
| (Q4 annual growth rate) | 2024 | 0.4 | (0.1) | (2.3) | (2.7) | (0.9) |
|  | 2025 | 5.7 | 2.5 | (5.5) | (14.9) | (0.7) |
|  | 2026 | 5.2 | 2.8 | 1.7 | (8.5) | 2.0 |
|  | 2027 | 2.9 | 2.5 | 2.0 | 4.4 | 2.6 |
|  | 2028 | 3.3 | 2.2 | 1.8 | 3.8 | 2.4 |
|  | 2029 | 3.0 | 2.1 | 2.4 | 3.4 | 2.4 |
|  | Start to trough<sup>2</sup> | n/a | n/a | (7.4) | (24.7) | (1.2) |
|  | 5-year average increase/decrease<sup>3</sup> | 4.0 | 2.3 | (0.1) | (3.3) | n/a |

---

1. GDP is the calendar year annual growth rate, HPI and CRE price growth rate is Q4 annual growth rate and all other data points are at 31 December in the year indicated.

2. GDP, HPI and CRE start is taken from level at Q3-24.

3. This is the compound annual growth rate (CAGR) based on a 5-year period which represents an average annualised growth rate.

Santander UK plc**14**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Scenario weights**

Each quarter, we undertake a full review of the scenario weights we apply. We consider the weighting of the economic scenarios as a whole, while ensuring that

the scenarios capture the non-linear distribution of losses across a reasonable range. To support our initial assessment of the weighting of a scenario, we

undertake a Monte Carlo analysis to find out the likelihood of a five-year average GDP forecast growth rate occurring based on the long run historically observed

average. Creating a standard distribution bell curve around this long run average provides an estimate of the probability of a given GDP scenario occurring based

on past experience and therefore assign a provisional weight to that scenario.

The scenario weights we applied for 30 June 2025 and 31 December 2024 were:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Upside** | **Base case** | **Downside 1** | **Downside 2** | **Weighted** |
| **Scenario weights** | **%** | **%** | **%** | **%** | **%** |
| **30 June 2025** | **15** | **50** | **25** | **10** | **100** |
| 31 December 2024 | 15 | 50 | 25 | 10 | 100 |

---

30 June 2025 compared to 31 December 2024

In H1-25, there were no significant changes to our methodology as described in the Annual Report 2024.

The scenario weights remain unchanged, appropriately reflecting the UK's economic and political outlooks where the risks are skewed to the downside.

**Judgemental Adjustments (JAs)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Retail & Business Banking** | **Retail & Business Banking** | **Retail & Business Banking** |  |  |  |  |
|  |  | **Everyday Banking** | **Everyday Banking** |  |  |  |  |
|  | **Mortgages** | **Credit Cards** | **Other** | **Consumer** <br>**Finance**<br>| **Corporate &** <br>**Commercial** <br>**Banking**<br>| **Corporate** <br>**Centre**<br>| **Total** |
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** |
| Modelled ECL | **118** | **152** | **118** | **75** | **131** | **—** | **594** |
| Individually assessed | **6** | **—** | **—** | **—** | **207** | **—** | **213** |
| **ECL before Judgemental Adjustments** | **124** | **152** | **118** | **75** | **338** | **—** | **807** |
| **Judgemental Adjustments** |  |  |  |  |  |  |  |
| **Affordability and Cost of Living**  | **6** | **—** | **7** | **—** | **4** | **—** | **17** |
| Adjustments to modelled forecast parameters | **28** | **1** | **13** | **—** | **—** | **—** | **42** |
| Corporate single large exposure | **—** | **—** | **—** | **—** | **13** | **—** | **13** |
| **Total Judgemental Adjustments** | **34** | **1** | **20** | **—** | **17** | **—** | **72** |
| **Total ECL** | **158** | **153** | **138** | **75** | **355** | **—** | **879** |
| **Total JAs as a percentage of Total ECL (%)** |  |  |  |  |  |  | **8** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| 31 December 2024 | £m | £m | £m | £m | £m | £m |
| Modelled ECL | 127 | 149 | 122 | 69 | 142 | 609 |
| Individually assessed | 6 |  |  |  | 162 | 168 |
| **ECL before Judgemental Adjustments** | 133 | 149 | 122 | 69 | 304 | 777 |
| **Judgemental Adjustments** |  |  |  |  |  |  |
| Affordability and Cost of Living  | 11 |  | 6 |  | 14 | 31 |
| Adjustments to modelled forecast parameters | 28 | 1 | 8 |  |  | 37 |
| Corporate single large exposure |  |  |  |  | 24 | 24 |
| **Total Judgemental Adjustments** | 39 | 1 | 14 |  | 38 | 92 |
| **Total ECL** | 172 | 150 | 136 | 69 | 342 | 869 |
| **Total JAs as a percentage of Total ECL (%)** |  |  |  |  |  | 11 |

---

30 June 2025 compared to 31 December 2024

In H1-25, JAs reduced from£92m to£72mdue to a reduction in the Mortgage LGD JA within 'Adjustments to modelled forecast parameters' driven by a refresh

of data, part-utilisation of the Corporate single large exposure JA, and releases from the Corporate supply chain JA within 'Affordably and Cost of Living'. In

addition, we introduced a new Mortgage JA within 'Adjustments to modelled forecast parameters' to address observed underestimation risks in PD and LGD.

Santander UK plc**15**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Sensitivity of ECL allowance to ECL scenarios and weights**

The ECL allowance is sensitive to the methods, assumptions and estimates underlying its calculation. For example, management could have applied different

probability weights to the economic scenarios. In addition, the ECL for residential mortgages is significantly affected by the HPI assumptions which determine the

valuation of collateral used in the calculations.

Had management used different assumptions on probability weights and HPI, a larger or smaller ECL charge would have resulted that could have had a material

impact on the ECL allowance and profit before tax. We incorporated JAs into the sensitivity analysis, and these assumptions are set out below.

**Scenario sensitivity**

The tables below show the ECL allowances that would have arisen had management applied a 100% weight to each economic scenario. The allowances were

calculated using a stage allocation appropriate to each scenario and differs from the probability-weighted stage allocation used to determine the ECL allowance

shown above. For exposures subject to individual assessment, the distribution of ECL which could reasonably be expected has also been considered, assuming

no change in the number of cases subject to individual assessment, and within the context of a potential best to worst case outcome.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Upside** | **Base case** | **Downside 1** | **Downside 2** | **Weighted** |
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **£m** |
| **Exposure** | **291802** | **291802** | **291802** | **291802** | **291802** |
| Retail & Business Banking | **199539** | **199539** | **199539** | **199539** | **199539** |
| Of which: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Mortgages | **178584** | **178584** | **178584** | **178584** | **178584** |
| Consumer Finance | **4787** | **4787** | **4787** | **4787** | **4787** |
| Corporate & Commercial Banking | **26987** | **26987** | **26987** | **26987** | **26987** |
| Corporate Centre | **60489** | **60489** | **60489** | **60489** | **60489** |
| **ECL** | **797** | **827** | **942** | **1167** | **879** |
| Retail & Business Banking | **384** | **407** | **497** | **692** | **449** |
| Of which: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Mortgages | **113** | **125** | **190** | **365** | **158** |
| Consumer Finance | **74** | **75** | **76** | **77** | **75** |
| Corporate & Commercial Banking | **339** | **345** | **369** | **398** | **355** |
| Corporate Centre | **—** | **—** | **—** | **—** | **—** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 31 December 2024 | £m | £m | £m | £m | £m |
| **Exposure** | 283860 | 283860 | 283860 | 283860 | 283860 |
| Retail & Business Banking | 196732 | 196732 | 196732 | 196732 | 196732 |
| Of which: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Mortgages | 176026 | 176026 | 176026 | 176026 | 176026 |
| Consumer Finance | 4759 | 4759 | 4759 | 4759 | 4759 |
| Corporate & Commercial Banking | 26307 | 26307 | 26307 | 26307 | 26307 |
| Corporate Centre | 56062 | 56062 | 56062 | 56062 | 56062 |
| **ECL** | 741 | 774 | 921 | 1524 | 869 |
| Retail & Business Banking | 380 | 403 | 517 | 1051 | 458 |
| Of which: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;– Mortgages | 112 | 128 | 218 | 705 | 172 |
| Consumer Finance | 67 | 68 | 69 | 70 | 69 |
| Corporate & Commercial Banking | 294 | 303 | 335 | 403 | 342 |
| Corporate Centre |  |  |  |  |  |

---

Santander UK plc**16**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

SANTANDER UK GROUP LEVEL – CREDIT RISK REVIEW

The credit risk balances in these credit risk review sections include interest we have charged to the customer's account, but not accrued interest that we have not

charged to the account yet, unless otherwise stated.

**Rating distribution**

The Santander UK risk grade consists of eight grades for non-defaulted exposures ranging from 9 (lowest risk) to 2 (highest risk). For details, including the

approximate equivalent credit rating grade used by Standard & Poor's Rating Services, see 'Single credit rating scale' in the 'Santander UK group level - credit

risk review' section of the Risk review in the 2024Annual Report.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** |  | **Loss** <br>**allowance** | **Total** |
|  | **9** | **8** | **7** | **6** | **5** | **4** | **3 to 1** | **Other**<sup>1,2</sup> | **Loss** <br>**allowance** | **Total** |
| **30 June 2025** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** |
| **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** | **Exposures - On balance sheet** |
| Financial assets at amortised cost: |  |  |  |  |  |  |  |  |  |  |
| –Loans and advances to customers<sup>2</sup> | **3.9** | **30.6** | **83.9** | **48.3** | **15.4** | **6.5** | **5.1** | **7.3** | **(0.8)** | **200.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 1 | **3.8** | **30.0** | **80.6** | **42.8** | **12.4** | **2.8** | **0.5** | **7.1** | **(0.1)** | **179.9** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 2 | **0.1** | **0.6** | **3.3** | **5.5** | **3.0** | **3.7** | **2.3** | **0.1** | **(0.3)** | **18.3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 3 | **—** | **—** | **—** | **—** | **—** | **—** | **2.3** | **0.1** | **(0.4)** | **2.0** |
| Of which mortgages: | **3.2** | **29.0** | **78.3** | **42.1** | **6.7** | **3.2** | **2.8** | **—** | **(0.2)** | **165.1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 1 | **3.2** | **28.5** | **75.0** | **36.7** | **4.3** | **0.4** | **0.1** | **—** | **—** | **148.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 2 | **—** | **0.5** | **3.3** | **5.4** | **2.4** | **2.8** | **1.2** | **—** | **(0.1)** | **15.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;–Stage 3 | **—** | **—** | **—** | **—** | **—** | **—** | **1.5** | **—** | **(0.1)** | **1.4** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** |  | **Total** | **Coverage** <br>**Ratio** |
|  | **9** | **8** | **7** | **6** | **5** | **4** | **3 to 1** | **Other**<sup>1,2</sup> | **Total** | **Coverage** <br>**Ratio** |
| **30 June 2025** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **%** |
| **ECL - On balance sheet** |  |  |  |  |  |  |  |  |  |  |
| Financial assets at amortised cost: |  |  |  |  |  |  |  |  |  |  |
| –Loans and advances to customers<sup>2</sup> | **—** | **—** | **—** | **—** | **0.2** | **0.1** | **0.5** | **—** | **0.8** | **0.4** |
| –Stage 1 | **—** | **—** | **—** | **—** | **0.1** | **—** | **—** | **—** | **0.1** | **0.1** |
| –Stage 2 | **—** | **—** | **—** | **—** | **0.1** | **0.1** | **0.1** | **—** | **0.3** | **1.6** |
| –Stage 3 | **—** | **—** | **—** | **—** | **—** | **—** | **0.4** | **—** | **0.4** | **20.0** |
| Of which mortgages: | **—** | **—** | **—** | **—** | **—** | **0.1** | **0.1** | **—** | **0.2** | **0.1** |
| –Stage 1 | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** |
| –Stage 2 | **—** | **—** | **—** | **—** | **—** | **0.1** | **—** | **—** | **0.1** | **0.6** |
| –Stage 3 | **—** | **—** | **—** | **—** | **—** | **—** | **0.1** | **—** | **0.1** | **7.1** |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade |  | Loss <br>allowance |  |
|  | 9 | 8 | 7 | 6 | 5 | 4 | 3 to 1 | Other<sup>1,2</sup> | Loss <br>allowance | Total |
| 31 December 2024 | £bn | £bn | £bn | £bn | £bn | £bn | £bn | £bn | £bn | £bn |
| **Exposures - On balance sheet** |  |  |  |  |  |  |  |  |  |  |
| Financial assets at amortised cost: |  |  |  |  |  |  |  |  |  |  |
| –Loans and advances to customers<sup>2</sup> | 5.8 | 31.3 | 81.8 | 46.4 | 15.6 | 6.8 | 5.4 | 7.1 | (0.8) | 199.4 |
| –Stage 1 | 5.7 | 30.6 | 78.1 | 40.5 | 12.4 | 2.8 | 0.6 | 6.9 | (0.1) | 177.5 |
| –Stage 2 | 0.1 | 0.7 | 3.7 | 5.9 | 3.2 | 3.9 | 2.4 | 0.1 | (0.3) | 19.7 |
| –Stage 3 |  |  |  |  |  | 0.1 | 2.4 | 0.1 | (0.4) | 2.2 |
| Of which mortgages: | 5.2 | 29.8 | 76.5 | 40.8 | 6.5 | 3.3 | 3.1 |  | (0.2) | 165.0 |
| –Stage 1 | 5.1 | 29.3 | 72.9 | 35.0 | 4.0 | 0.4 |  |  |  | 146.7 |
| –Stage 2 | 0.1 | 0.5 | 3.6 | 5.8 | 2.5 | 2.9 | 1.3 |  | (0.1) | 16.6 |
| –Stage 3 |  |  |  |  |  |  | 1.8 |  | (0.1) | 1.7 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade | Santander UK risk grade |  | Total | Coverage <br>Ratio |
|  | 9 | 8 | 7 | 6 | 5 | 4 | 3 to 1 | Other<sup>1,2</sup> | Total | Coverage <br>Ratio |
| 31 December 2024 | £bn | £bn | £bn | £bn | £bn | £bn | £bn | £bn | £bn | % |
| **ECL - On balance sheet** |  |  |  |  |  |  |  |  |  |  |
| Financial assets at amortised cost: |  |  |  |  |  |  |  |  |  |  |
| –Loans and advances to customers<sup>2</sup> |  |  |  |  | 0.2 | 0.1 | 0.5 |  | 0.8 | 0.4 |
| –Stage 1 |  |  |  |  | 0.1 |  |  |  | 0.1 | 0.1 |
| –Stage 2 |  |  |  |  | 0.1 | 0.1 | 0.1 |  | 0.3 | 1.5 |
| –Stage 3 |  |  |  |  |  |  | 0.4 |  | 0.4 | 18.2 |
| Of which mortgages: |  |  |  |  |  | 0.1 | 0.1 |  | 0.2 | 0.1 |
| –Stage 1 |  |  |  |  |  |  |  |  |  |  |
| –Stage 2 |  |  |  |  |  | 0.1 |  |  | 0.1 | 0.6 |
| –Stage 3 |  |  |  |  |  |  | 0.1 |  | 0.1 | 5.9 |

---

1. Includes Joint Ventures and Bounce Back Loans (BBLs) balances. We use scorecards for these items, rather than rating models.

2. Includes interest we have charged to the customer's account and accrued interest we have not charged to the account yet.

Santander UK plc**17**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Credit performance**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Customer Loans** | **Customer Loans** | **Customer Loans** |  |  | **6 month** <br>**Gross** <br>**write-offs** | **Loan Loss** <br>**Allowances** |
|  | **Total** | **Stage 1**<sup>1</sup> | **Stage 2**<sup>1</sup> | **Stage 3**<sup>1</sup> | **Stage 3**<sup>1</sup> | **6 month** <br>**Gross** <br>**write-offs** | **Loan Loss** <br>**Allowances** |
| **30 June 2025** | **£bn** | **£bn** | **£bn** | **£bn** | **%** | **£m** | **£m** |
| Retail & Business Banking | **171.8** | **153.5** | **16.5** | **1.8** | **1.08** | **82** | **408** |
| – Mortgages | **165.3** | **148.1** | **15.6** | **1.6** | **1.01** | **7** | **158** |
| – Credit Cards | **3.0** | **2.5** | **0.4** | **0.1** | **2.80** | **27** | **137** |
| – Unsecured Personal Loans | **2.1** | **1.9** | **0.2** | **—** | **1.24** | **32** | **60** |
| – Overdrafts | **0.4** | **0.2** | **0.2** | **—** | **6.92** | **12** | **39** |
| – Business Banking | **1.0** | **0.8** | **0.1** | **0.1** | **5.71** | **4** | **14** |
| Consumer Finance | **4.8** | **4.4** | **0.3** | **0.1** | **1.04** | **12** | **75** |
| Corporate & Commercial Banking | **18.3** | **15.9** | **1.8** | **0.6** | **3.93** | **7** | **318** |
| Corporate Centre | **—** | **—** | **—** | **—** | **0.15** | **—** | **—** |
| **Total Drawn** | **194.9** | **173.8** | **18.6** | **2.5** | **1.35** | **101** | **801** |
| Retail & Business Banking | **27.6** | **26.9** | **0.7** | **—** |  | **—** | **41** |
| – Mortgages | **13.2** | **13.0** | **0.2** | **—** |  | **—** | **—** |
| – Credit Cards | **11.2** | **10.9** | **0.3** | **—** |  | **—** | **16** |
| – Unsecured Personal Loans | **—** | **—** | **—** | **—** |  | **—** | **—** |
| – Overdrafts | **3.0** | **2.8** | **0.2** | **—** |  | **—** | **24** |
| – Business Banking | **0.2** | **0.2** | **—** | **—** |  | **—** | **1** |
| Consumer Finance | **—** | **—** | **—** | **—** |  | **—** | **—** |
| Corporate & Commercial Banking | **8.8** | **8.3** | **0.4** | **0.1** |  | **—** | **37** |
| Corporate Centre | **2.4** | **2.4** | **—** | **—** |  | **—** | **—** |
| **Total Undrawn** | **38.8** | **37.6** | **1.1** | **0.1** |  | **—** | **78** |
| **Total** | **233.7** | **211.4** | **19.7** | **2.6** |  | **101** | **879** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Customer Loans | Customer Loans | Customer Loans |  |  | 12 month <br>Gross write-<br>offs | Loan Loss <br>Allowances |
|  | Total | Stage 1<sup>1</sup> | Stage 2<sup>1</sup> | Stage 3<sup>1</sup> | Stage 3<sup>1</sup> | 12 month <br>Gross write-<br>offs | Loan Loss <br>Allowances |
| 31 December 2024 | £bn | £bn | £bn | £bn | % | £m | £m |
| Retail & Business Banking | 171.7 | 152.2 | 17.6 | 1.9 | 1.17 | 156 | 421 |
| – Mortgages | 165.1 | 146.7 | 16.7 | 1.7 | 1.08 | 9 | 172 |
| – Credit Cards | 2.8 | 2.3 | 0.5 |  | 2.75 | 51 | 135 |
| – Unsecured Personal Loans | 2.1 | 1.9 | 0.2 |  | 1.20 | 60 | 63 |
| – Overdrafts | 0.5 | 0.3 | 0.2 |  | 7.40 | 26 | 37 |
| – Business Banking | 1.2 | 1.0 |  | 0.2 | 7.10 | 10 | 14 |
| Consumer Finance | 4.8 | 4.5 | 0.3 |  | 0.77 | 25 | 69 |
| Corporate & Commercial Banking | 18.0 | 15.2 | 2.1 | 0.7 | 3.96 | 49 | 294 |
| Corporate Centre |  |  |  |  |  |  |  |
| **Total Drawn** | 194.5 | 171.9 | 20.0 | 2.6 | 1.42 | 230 | 784 |
| Retail & Business Banking | 25.0 | 24.3 | 0.7 |  |  |  | 37 |
| – Mortgages | 10.8 | 10.5 | 0.3 |  |  |  |  |
| – Credit Cards | 10.9 | 10.7 | 0.2 |  |  |  | 15 |
| – Unsecured Personal Loans |  |  |  |  |  |  |  |
| – Overdrafts | 3.1 | 2.9 | 0.2 |  |  |  | 20 |
| – Business Banking | 0.2 | 0.2 |  |  |  |  | 2 |
| Consumer Finance |  |  |  |  |  |  |  |
| Corporate & Commercial Banking | 8.3 | 7.7 | 0.5 | 0.1 |  |  | 48 |
| Corporate Centre | 2.4 | 2.4 |  |  |  |  |  |
| **Total Undrawn** | 35.7 | 34.4 | 1.2 | 0.1 |  |  | 85 |
| **Total** | 230.2 | 206.3 | 21.2 | 2.7 |  | 230 | 869 |

---

1. Stage 1 ratio is the sum of Stage 1 drawn assets divided by the sum of total drawn assets.Stage 2 ratio is the sum of Stage 2 drawn assets divided by the sum of total drawn assets.Stage 3 ratio is the sum of

Stage 3 drawn and Stage 3 undrawn assets divided by the sum of total drawn assets and Stage 3 undrawn assets.

Santander UK plc**18**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Arrears over 90 days past due

---

| | | |
|:---|:---|:---|
| | **30 June 2025** | 31 December 2024 |
| | **%** | % |
| Retail & Business Banking |  |  |
| –Mortgages | **0.74** | 0.80 |
| –Credit Cards | **0.58** | 0.56 |
| –Unsecured Personal Loans | **0.90** | 0.88 |
| –Overdrafts | **3.00** | 3.05 |
| –Business Banking | **3.77** | 3.89 |
| Consumer Finance | **0.46** | 0.53 |
| Corporate & Commercial Banking | **1.21** | 1.04 |

---

30 June 2025 compared to 31 December 2024

InH1-25, early and late arrears remained at low levels despite a slight decrease across the portfolio over the period. Loans in Stage 2 and 3 remained low

compared to historic trends.

**Loans in Stage 2 and Stage 3 improved, highlighting underlying asset quality**

Mortgage loans in Stage 2 and 3 decreased, slightly offset by increases in Consumer Finance and unsecured retail lending.

CCB loans in Stage 2 and 3 decreased, driven by overall improvement in asset quality.

ECL provision

The ECL provision at30 June 2025 increased by£10m to£879m (2024:£869m), driven by a wholesale exposure in Consumer Finance.

6-month gross write-off utilisation of £101m (H1-24: £98m) largely driven by unsecured retail lending.

For more on the credit performance of our key portfolios by business segment, see the credit risk review section for each business segment.

Santander UK plc**19**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Credit quality**

Total on-balance sheet exposures at 30 June 2025 comprised £194.9bn of customer loans, loans and advances to banks of £1.4bn,£15.1bn of sovereign

assets measured at amortised cost, £7.4bnof assets measured at FVOCI, and £34.2bnof cash and balances at central banks.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Stage 1** | **Stage 2** | **Stage 3** | **Total** |
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** |
| **Exposures** |  |  |  |  |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking | **153515** | **16433** | **1804** | **171752** |
| Consumer Finance | **4392** | **345** | **50** | **4787** |
| Corporate & Commercial Banking | **15875** | **1756** | **688** | **18319** |
| Corporate Centre | **58116** | **—** | **—** | **58116** |
| **Total on-balance sheet** | **231898** | **18534** | **2542** | **252974** |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking<sup>1</sup> | **27002** | **731** | **54** | **27787** |
| Consumer Finance | **—** | **—** | **—** | **—** |
| Corporate & Commercial Banking | **8273** | **362** | **33** | **8668** |
| Corporate Centre | **2373** | **—** | **—** | **2373** |
| **Total off–balance sheet**<sup>2</sup> | **37648** | **1093** | **87** | **38828** |
| **Total exposures** | **269546** | **19627** | **2629** | **291802** |
| **ECL and Gross write-offs** |  |  |  |  |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking | **52** | **217** | **139** | **408** |
| Consumer Finance | **15** | **27** | **33** | **75** |
| Corporate & Commercial Banking | **41** | **59** | **218** | **318** |
| Corporate Centre | **—** | **—** | **—** | **—** |
| **Total on-balance sheet** | **108** | **303** | **390** | **801** |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking | **12** | **28** | **1** | **41** |
| Consumer Finance | **—** | **—** | **—** | **—** |
| Corporate & Commercial Banking | **18** | **11** | **8** | **37** |
| Corporate Centre | **—** | **—** | **—** | **—** |
| **Total off–balance sheet** | **30** | **39** | **9** | **78** |
| **Total ECL** | **138** | **342** | **399** | **879** |
| **Coverage ratio**<sup>3</sup> | **%** | **%** | **%** | **%** |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking | **—** | **1.3** | **7.7** | **0.2** |
| Consumer Finance | **0.3** | **7.9** | **66.7** | **1.6** |
| Corporate & Commercial Banking | **0.3** | **3.3** | **31.7** | **1.7** |
| Corporate Centre | **—** | **—** | **—** | **—** |
| **Total on-balance sheet** | **—** | **1.6** | **15.3** | **0.3** |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking | **—** | **3.9** | **2.5** | **0.1** |
| Consumer Finance | **—** | **—** | **—** | **—** |
| Corporate & Commercial Banking | **0.2** | **3.0** | **23.9** | **0.4** |
| Corporate Centre | **—** | **—** | **—** | **—** |
| **Total off-balance sheet** | **0.1** | **3.6** | **10.6** | **0.2** |
| **Total coverage** | **0.1** | **1.7** | **15.2** | **0.3** |

---

1. Off-balance sheet exposures include£8.7bn of residential mortgage offers in the pipeline.

2. Off-balance sheet amounts consist of contingent liabilities and commitments. For more, see Note24.

3. ECL as a percentage of the related exposure.

Santander UK plc**20**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Total on-balance sheet exposures at31 December 2024 comprised£194.5bnof customer loans, loans and advances to banks of £1.0bn,£13.7bn of sovereign

assets measured at amortised cost £9.0bnof assets measured at FVOCI, and £29.9bnof cash and balances at central banks.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Stage 1 | Stage 2 | Stage 3 | Total |
| 31 December 2024 | £m | £m | £m | £m |
| **Exposures** |  |  |  |  |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking | 152198 | 17571 | 1955 | 171724 |
| Consumer Finance | 4389 | 334 | 36 | 4759 |
| Corporate & Commercial Banking | 15280 | 2098 | 651 | 18029 |
| Corporate Centre | 53699 |  |  | 53699 |
| **Total on-balance sheet** | 225566 | 20003 | 2642 | 248211 |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking<sup>1</sup> | 24211 | 745 | 52 | 25008 |
| Consumer Finance |  |  |  |  |
| Corporate & Commercial Banking | 7743 | 470 | 65 | 8278 |
| Corporate Centre | 2363 |  |  | 2363 |
| **Total off–balance sheet**<sup>2</sup> | 34317 | 1215 | 117 | 35649 |
| **Total exposures** | 259883 | 21218 | 2759 | 283860 |
| **ECL** |  |  |  |  |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking | 52 | 223 | 146 | 421 |
| Consumer Finance | 16 | 27 | 26 | 69 |
| Corporate & Commercial Banking | 55 | 71 | 168 | 294 |
| Corporate Centre |  |  |  |  |
| **Total on-balance sheet** | 123 | 321 | 340 | 784 |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking | 12 | 24 | 1 | 37 |
| Consumer Finance |  |  |  |  |
| Corporate & Commercial Banking | 18 | 14 | 16 | 48 |
| **Total off–balance sheet** | 30 | 38 | 17 | 85 |
| **Total ECL** | 153 | 359 | 357 | 869 |
| **Coverage ratio**<sup>3</sup> | **%** | **%** | **%** | **%** |
| **On-balance sheet** |  |  |  |  |
| Retail & Business Banking |  | 1.3 | 7.5 | 0.2 |
| Consumer Finance | 0.4 | 8.2 | 71.2 | 1.4 |
| Corporate & Commercial Banking | 0.4 | 3.4 | 25.9 | 1.6 |
| Corporate Centre |  |  |  |  |
| **Total on-balance sheet** | 0.1 | 1.6 | 12.9 | 0.3 |
| **Off–balance sheet** |  |  |  |  |
| Retail & Business Banking |  | 3.2 | 2.6 | 0.1 |
| Consumer Finance |  |  |  |  |
| Corporate & Commercial Banking | 0.2 | 3.0 | 24.2 | 0.6 |
| **Total off-balance sheet** | 0.1 | 3.1 | 14.6 | 0.2 |
| **Total coverage** | 0.1 | 1.7 | 13.0 | 0.3 |

---

1. Off-balance sheet exposures include £6.1bn of residential mortgage offers in the pipeline.

2. Off-balance sheet amounts consist of contingent liabilities and commitments. For more, see Note24.

3. ECL as a percentage of the related exposure.

Santander UK plc**21**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Stage 2 analysis**

The following table analyses our Stage 2 exposures and ECL by the reason the exposure is classified as Stage 2.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **30 June 2025** | **30 June 2025** | **Backstop** | **Quantitative** | **Quantitative** | **Qualitative** | **Qualitative** | **JAs** | **Total** |
| **30 June 2025** | **30 June 2025** | **30 DPD** | **PD deterioration** | **PD threshold** | **Forbearance** | **Other**<sup>1</sup> | **Mortgage** <br>**Refinancing**<br>| **Total** |
| Retail & Business <br>Banking | Exposure £m | **542** | **9288** | **415** | **299** | **4999** | **890** | **16433** |
| Retail & Business <br>Banking | ECL £m | **18** | **130** | **28** | **5** | **30** | **6** | **217** |
| Of which<br>-Mortgages | Exposure £m | **462** | **8683** | **312** | **289** | **4929** | **890** | **15565** |
| Of which<br>-Mortgages | ECL £m | **7** | **46** | **3** | **3** | **14** | **6** | **79** |
| Consumer Finance | Exposure £m | **29** | **171** | **—** | **—** | **145** | **—** | **345** |
| Consumer Finance | ECL £m | **9** | **11** | **—** | **—** | **7** | **—** | **27** |
| Corporate & <br>Commercial Banking | Exposure £m | **6** | **826** | **98** | **117** | **709** | **—** | **1756** |
| Corporate & <br>Commercial Banking | ECL £m | **1** | **24** | **9** | **3** | **22** | **—** | **59** |
| Corporate Centre | Exposure £m | **—** | **—** | **—** | **—** | **—** | **—** | **—** |
| Corporate Centre | ECL £m | **—** | **—** | **—** | **—** | **—** | **—** | **—** |
| Total Drawn | Exposure £m | **577** | **10285** | **513** | **416** | **5853** | **890** | **18534** |
|  | ECL £m | **28** | **165** | **37** | **8** | **59** | **6** | **303** |
| Undrawn | ECL £m | **—** | **27** | **5** | **2** | **5** | **—** | **39** |
| Total Reported | Exposure £m | **580** | **10937** | **544** | **479** | **6197** | **890** | **19627** |
|  | ECL £m | **28** | **193** | **42** | **9** | **64** | **6** | **342** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| 31 December 2024 | 31 December 2024 | Backstop | Quantitative | Quantitative | Qualitative | Qualitative | JAs | Total |
| 31 December 2024 | 31 December 2024 | 30 DPD | PD deterioration | PD Threshold | Forbearance | **Other**<sup>1</sup> | Mortgage <br>Refinancing<br>| Total |
| Retail & Business <br>Banking | Exposure £m | 592 | 9434 | 478 | 308 | 4955 | 1804 | 17571 |
| Retail & Business <br>Banking | ECL £m | 20 | 133 | 29 | 5 | 25 | 11 | 223 |
| Of which<br>-Mortgages | Exposure £m | 504 | 8834 | 350 | 298 | 4898 | 1804 | 16688 |
| Of which<br>-Mortgages | ECL £m | 7 | 48 | 3 | 3 | 12 | 11 | 84 |
| Consumer Finance | Exposure £m | 30 | 155 |  |  | 149 |  | 334 |
| Consumer Finance | ECL £m | 10 | 11 |  |  | 6 |  | 27 |
| Corporate & <br>Commercial Banking | Exposure £m | 54 | 930 | 61 | 57 | 996 |  | 2098 |
| Corporate & <br>Commercial Banking | ECL £m | 1 | 38 | 7 | 1 | 24 |  | 71 |
| Corporate Centre | Exposure £m |  |  |  |  |  |  |  |
| Corporate Centre | ECL £m |  |  |  |  |  |  |  |
| Total Drawn | Exposure £m | 676 | 10519 | 539 | 365 | 6100 | 1804 | 20003 |
|  | ECL £m | 31 | 182 | 36 | 6 | 55 | 11 | 321 |
| Undrawn | ECL £m | 1 | 23 | 6 | 2 | 6 |  | 38 |
| Total Reported | Exposure £m | 701 | 11180 | 605 | 434 | 6494 | 1804 | 21218 |
|  | ECL £m | 32 | 205 | 42 | 8 | 61 | 11 | 359 |

---

1. Mainly consists of Qualitative triggers for Mortgages, over-indebted customers £2.5bn (2024: c£2.5bn), Interest-only accounts 24 months pre-maturity £1.4bn (2024: c£1.3bn), and for CCB customers operating

in a high-risk sector £0.4bn (2024: £0.7bn).

Where balances satisfy more than one of the criteria above for determining a SICR, we have assigned the corresponding gross carrying amount and ECL in

order of the categories presented.

Santander UK plc**22**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Reconciliation of exposures, loss allowance and net carrying amounts**

The table below shows the relationships between disclosures in this Credit risk review section which refer to drawn exposures and the associated ECL, and the

total assets as presented in the Consolidated Balance Sheet. The Credit risk review disclosures exclude Joint ventures, as they carry low credit risk and therefore

have an immaterial ECL, and Other items, mainly accrued interest that we have not yet charged to the customer's account and cash collateral.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **On-balance sheet** | **On-balance sheet** | **On-balance sheet** | **Off-balance sheet** | **Off-balance sheet** |
|  | **Exposures** | **Loss**<br>**allowance**<br>| **Net carrying**<br>**amount**<br>| **Exposures** | **Loss**<br>**allowance**<br>|
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **£m** |
| Retail & Business Banking<sup>1</sup> | **171752** | **408** | **171344** | **27787** | **41** |
| Consumer Finance | **4787** | **75** | **4712** | **—** | **—** |
| Corporate & Commercial Banking | **18319** | **318** | **18001** | **8668** | **37** |
| Corporate Centre | **58116** | **—** | **58116** | **2373** | **—** |
| **Total exposures presented in Credit Quality tables** | **252974** | **801** | **252173** | **38828** | **78** |
| Intercompany balances (including joint ventures) |  |  | **5364** |  |  |
| Other items<sup>2</sup> |  |  | **807** |  |  |
| **Adjusted net carrying amount** |  |  | **258344** |  |  |
| Assets classified at FVTPL  |  |  | **911** |  |  |
| Non-financial assets<sup>3</sup> |  |  | **6379** |  |  |
| **Total assets per the Consolidated Balance Sheet** |  |  | **265634** |  |  |
| 31 December 2024 |  |  |  |  |  |
| Retail & Business Banking<sup>1</sup> | 171724 | 421 | 171303 | 25008 | 37 |
| Consumer Finance | 4759 | 69 | 4690 |  |  |
| Corporate & Commercial Banking | 18029 | 294 | 17735 | 8278 | 48 |
| Corporate Centre | 53699 |  | 53699 | 2363 |  |
| **Total exposures presented in Credit Quality tables** | 248211 | 784 | 247427 | 35649 | 85 |
| Intercompany balances (including joint ventures) |  |  | 4832 |  |  |
| Other items<sup>2</sup> |  |  | 848 |  |  |
| **Adjusted net carrying amount** |  |  | 253107 |  |  |
| Assets classified at FVTPL  |  |  | 1340 |  |  |
| Non-financial assets<sup>3</sup> |  |  | 5497 |  |  |
| **Total assets per the Consolidated Balance Sheet** |  |  | 259944 |  |  |

---

1. Off-balance sheet exposures include offers in the pipeline, undrawn flexible mortgage products and credit cards.

2. Other includes accrued interest of£664m(2024:£714m).

3. Non-financial assets includes £208m (2024: £738m) of Macro hedge of interest rate risk.

Santander UK plc**23**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Movement in total exposures and the corresponding ECL**

The following table shows changes in total on and off-balance sheet exposures, subject to ECL assessment, and the corresponding ECL, in the period. The table

presents total gross carrying amounts and ECLs at a Santander UK group level. We present segmental views in the sections below.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Stage 1**  | **Stage 1**  | **Stage 2**  | **Stage 2**  | **Stage 3**  | **Stage 3**  | **Total** | **Total** |
| **At 1 January 2025** | **Exposures**<sup>1</sup><br>**£m**<br>**259883** | **ECL**<br>**£m**<br>**153** | **Exposures**<sup>1</sup><br>**£m**<br>**21218** | **ECL**<br>**£m**<br>**359** | **Exposures**<sup>1</sup><br>**£m**<br>**2759** | **ECL**<br>**£m**<br>**357** | **Exposures**<sup>1</sup><br>**£m**<br>**283860** | **ECL**<br>**£m**<br>**869** |
| Transfers from Stage 1 to Stage 2<sup>2</sup> | **(5143)** | **(9)** | **5143** | **9** | **—** | **—** | **—** | **—** |
| Transfers from Stage 2 to Stage 1<sup>2</sup> | **4926** | **63** | **(4926)** | **(63)** | **—** | **—** | **—** | **—** |
| Transfers to Stage 3<sup>2</sup> | **(123)** | **(1)** | **(643)** | **(25)** | **766** | **26** | **—** | **—** |
| Transfers from Stage 3<sup>2</sup> | **8** | **4** | **340** | **23** | **(348)** | **(27)** | **—** | **—** |
| **Transfers of financial instruments** | **(332)** | **57** | **(86)** | **(56)** | **418** | **(1)** | **—** | **—** |
| Net ECL remeasurement on stage transfer<sup>3</sup> | **—** | **(59)** | **—** | **69** | **—** | **83** | **—** | **93** |
| Change in economic scenarios<sup>4</sup> | **—** | **(6)** | **—** | **2** | **—** | **(4)** | **—** | **(8)** |
| Change to ECL models | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** |
| New lending and assets purchased<sup>5</sup> | **30547** | **21** | **294** | **16** | **27** | **3** | **30868** | **40** |
| Redemptions, repayments and assets sold<sup>6</sup> | **(16080)** | **(15)** | **(1990)** | **(42)** | **(440)** | **(32)** | **(18510)** | **(89)** |
| Changes in risk parameters and other movements<sup>7</sup> | **(4472)** | **(13)** | **191** | **(6)** | **107** | **94** | **(4174)** | **75** |
| Assets written off<sup>6</sup> | **—** | **—** | **—** | **—** | **(242)** | **(101)** | **(242)** | **(101)** |
| **At 30 June 2025** | **269546** | **138** | **19627** | **342** | **2629** | **399** | **291802** | **879** |
| Net movement in the period | **9663** | **(15)** | **(1591)** | **(17)** | **(130)** | **42** | **7942** | **10** |
| ECL (release)/charge to the Income Statement |  | **(15)** |  | **(17)** |  | **143** |  | **111** |
| Less: Discount unwind |  | **—** |  | **—** |  | **(10)** |  | **(10)** |
| Less: Recoveries net of collection costs |  | **—** |  | **—** |  | **4** |  | **4** |
| Total ECL (release)/charge to the Income Statement |  | **(15)** |  | **(17)** |  | **137** |  | **105** |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **At 1 January 2024** | 268211 | 170 | 23595 | 461 | 3071 | 361 | 294877 | 992 |
| Transfers from Stage 1 to Stage 2<sup>2</sup> | (10701) | (14) | 10701 | 14 |  |  |  |  |
| Transfers from Stage 2 to Stage 1<sup>2</sup> | 7780 | 112 | (7780) | (112) |  |  |  |  |
| Transfers to Stage 3<sup>2</sup> | (221) | (1) | (688) | (37) | 909 | 38 |  |  |
| Transfers from Stage 3<sup>2</sup> | 12 |  | 304 | 24 | (316) | (24) |  |  |
| **Transfers of financial instruments** | (3130) | 97 | 2537 | (111) | 593 | 14 |  |  |
| Net ECL remeasurement on stage transfer<sup>3</sup> |  | (98) |  | 115 |  | 101 |  | 118 |
| Change in economic scenarios<sup>4</sup> |  | (9) |  | (19) |  | 1 |  | (27) |
| Change to ECL models | (2287) | (5) | 2361 | 37 | (74) | (26) |  | 6 |
| New lending and assets purchased<sup>5</sup> | 18165 | 31 | 721 | 31 | 122 | 27 | 19008 | 89 |
| Redemptions, repayments and assets sold<sup>6</sup> | (23128) | (30) | (2574) | (41) | (652) | (52) | (26354) | (123) |
| Changes in risk parameters and other movements<sup>7</sup> | 4757 | (5) | (3379) | (69) | 225 | 75 | 1603 | 1 |
| Assets written off<sup>6</sup> |  |  |  |  | (135) | (98) | (135) | (98) |
| **At 30 June 2024** | 262588 | 151 | 23261 | 404 | 3150 | 403 | 288999 | 958 |
| Net movement in the period | (5623) | (19) | (334) | (57) | 79 | 42 | (5878) | (34) |
| ECL (release)/charge to the Income Statement |  | (19) |  | (57) |  | 140 |  | 64 |
| Less: Discount unwind |  |  |  |  |  | (11) |  | (11) |
| Less: Recoveries net of collection costs |  |  |  |  |  | 8 |  | 8 |
| Total ECL (release)/charge to the Income Statement |  | (19) |  | (57) |  | 137 |  | 61 |

---

1. Exposures that have attracted an ECL, and as reported in the Credit Quality table above.

2. Total impact of facilities that moved Stage(s) in the period. This means, for example, that where risk parameter changes (model inputs) or model changes (methodology) result in a facility moving Stage, the full

impact is reflected here (rather than in Other). Stage flow analysis only applies to facilities that existed at both the start and end of the period. Transfers between Stages are based on opening balances and ECL

at the start of the period.

3. Relates to the revaluation of ECL following the transfer of an exposure from one Stage to another.

4. Changes to assumptions in the period. Isolates the impact on ECL from changes to the economic variables for each scenario, the scenarios themselves, and the probability weights from all other movements.

Also includes the impact of quarterly revaluation of collateral. The impact of changes in economics on exposure Stage allocations are shown in Transfers of financial instruments.

5. Exposures and ECL of facilities that did not exist at the start of the period but did at the end. Amounts in Stage 2 and 3 represent assets which deteriorated in the period after origination in Stage 1.

6. Exposures and ECL for facilities that existed at the start of the period but not at the end.

7. Residual movements on existing facilities that did not change Stage in the period, and which were not acquired in the period. Includes the net increase or decrease in the period of the mortgage pipeline, cash at

central banks, the impact of changes in risk parameters in the period, unwind of discount rates and increases in ECL requirements of accounts which ultimately were written off in the period.

Santander UK plc**24**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

RETAIL & BUSINESS BANKING – CREDIT RISK REVIEW

We provide detailed credit risk analysis for Retail & Business Banking in separate sections below for Mortgages, our largest portfolio, and our Everyday Banking

portfolio.

Retail & Business Banking: Mortgages – Credit risk review

**Borrower profile**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Stock** | **Stock** | **Stock** | **Stock** | **New business**<sup>1</sup> | **New business**<sup>1</sup> | **New business**<sup>1</sup> | **New business**<sup>1</sup> |
|  | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 | **30 June 2025** | **30 June 2025** | 30 June 2024 | 30 June 2024 |
|  | **£m** | **%** | £m | % | **£m** | **%** | £m | % |
| Home movers<sup>2</sup> | **68948** | **41** | 69354 | 42 | **4192** | **39** | 2909 | 43 |
| Remortgagers<sup>3</sup> | **45653** | **28** | 45226 | 27 | **3909** | **37** | 1950 | 29 |
| First-time buyers | **35464** | **22** | 35702 | 22 | **1613** | **15** | 1799 | 26 |
| Buy-to-let | **15256** | **9** | 14931 | 9 | **906** | **9** | 156 | 2 |
|  | **165321** | **100** | 165213 | 100 | **10620** | **100** | 6814 | 100 |

---

---

| | |
|:---|:---|
| **Movement in mortgage lending** | **£bn** |
| **1 January 2025** | **165.2** |
| New business | **10.6** |
| Redemptions and repayments | **(10.5)** |
| **30 June 2025** | **165.3** |

---

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
| Proportion of mortgage internal transfers retained online | **76%** | 77% |

---

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
| Internal transfers (£bn)<sup>4</sup> | **14.9** | 18.1 |
| Further advances and flexi drawdowns (£bn) | **0.5** | 0.4 |

---

1. The 2024 values exclude advances, flexible drawdown and fees.

2. Home movers include both existing customers moving house and taking out a new mortgage with us, and customers who switch their mortgage to us when they move house.

3. Remortgagers are new customers who are taking a new mortgage with us.

4. Internal transfers relate to current customers switching from one product to another.

30 June 2025 compared to 31 December 2024

In H1-25, mortgage asset stock and borrower profile was broadly stable, with an increase in new business replacing the asset balances lost through repayments

and redemptions. New business increased year-on-year in all sectors except first-time buyers, with remortgages causing the largest portion of the overall

increase.

**Interest rate profile**

The interest rate profile of our maturing mortgage asset stock was:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 |
|  | **£m** | **%** | £m | % |
| Fixed rate | **150383** | **91** | 148495 | 90 |
| Of which maturing: |  |  |  |  |
| –< 12 months | **41549** | **25** | 37656 | 23 |
| –Later than 1 year but no later than 3 years | **82421** | **50** | 84704 | 51 |
| –Later than 3 years but no later than 4 years | **12641** | **8** | 11122 | 7 |
| –Later than 4 years but no later than 5 years | **10918** | **6** | 11645 | 7 |
| –Later than 5 years | **2854** | **2** | 3368 | 2 |
| Variable rate | **10635** | **6** | 12105 | 7 |
| Standard Variable Rate (SVR) | **2805** | **2** | 3007 | 2 |
| Follow on Rate (FoR) | **1498** | **1** | 1606 | 1 |
|  | **165321** | **100** | 165213 | 100 |

---

30 June 2025 compared to 31 December 2024

In H1-25, we continued to see customers refinance from reversion to fixed rate products influenced by continued high interest rates. Demand for fixed rate

products increased, particularly with shorter fixed rate terms.

Santander UK plc**25**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Geographical distribution** 

The geographical distribution of our mortgage asset stock and new business was:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Stock** | **Stock** | **New business**<sup>1</sup> | **New business**<sup>1</sup> |
|  | **30 June 2025** | 31 December 2024 | **30 June 2025** | 30 June 2024 |
| **Region** | **£bn** | £bn | **£bn** | £bn |
| London | **43.3** | 42.7 | **3.1** | 1.7 |
| Midlands and East Anglia | **22.9** | 23.1 | **1.4** | 1.0 |
| North | **21.5** | 21.7 | **1.3** | 0.9 |
| Northern Ireland | **2.3** | 2.3 | **0.1** | 0.1 |
| Scotland | **6.0** | 6.0 | **0.4** | 0.3 |
| South East excluding London | **52.3** | 52.3 | **3.3** | 2.1 |
| South West, Wales and other | **17.0** | 17.1 | **1.0** | 0.7 |
|  | **165.3** | 165.2 | **10.6** | 6.8 |

---

1. The 2024 values exclude advances, flexible drawdown and fees.

30 June 2025 compared to 31 December 2024

The portfolio's geographical distribution continued to represent a broad footprint across the UK, with a concentration around London and the South East. The

loan-to-income multiple of mortgage lending in the period, based on average earnings of new business at inception, was 2.81 (2024: 2.93).

**Mortgage loan size**

The split of our mortgage asset by size was:

---

| | | |
|:---|:---|:---|
| Mortgage loan size | **30 June 2025** | 31 December 2024 |
| >£1.0m | **2%** | 2% |
| £0.5m to £1.0m | **10%** | 10% |
| £0.25m to £0.5m | **32%** | 31% |
| <£0.25m | **56%** | 57% |
| Average loan size (stock)<sup>1</sup> | **£197k** | £193k |
| Average loan size (new business) | **£250k** | £246k |

---

1. Average initial advance of existing stock.

**Loan-to-value analysis**

This table shows the LTV distribution for the gross carrying amount and the related ECL of our total mortgage portfolio and Stage 3 mortgages, and new

business. We also show the collateral value and average LTV. We use our estimate of the property value at the balance sheet date and include fees that have

been added to the loan. For flexible products, we only include the drawn amount, not undrawn limits.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 | 30 June 2024 |
|  | **Stock** | **Stock** | **Stage 3**  | **Stage 3**  | **New** <br>**Business** | Stock | Stock | Stage 3  | Stage 3  | New Business<sup>3</sup> |
|  | **Total** | **ECL** | **Total** | **ECL** | **New** <br>**Business** | Total | ECL | Total | ECL | New Business<sup>3</sup> |
| **LTV** | **£m** | **£m** | **£m** | **£m** | **£m** | £m | £m | £m | £m | £m |
| Up to 50% | **76824** | **33** | **818** | **13** | **2548** | 76122 | 33 | 880 | 13 | 1588 |
| >50-60% | **33658** | **20** | **296** | **7** | **2020** | 33067 | 21 | 317 | 8 | 1003 |
| >60-70% | **28453** | **24** | **243** | **9** | **1664** | 29171 | 27 | 254 | 10 | 965 |
| >70-80% | **17145** | **22** | **134** | **9** | **2192** | 17132 | 27 | 150 | 12 | 1501 |
| >80-90% | **7453** | **18** | **74** | **9** | **1526** | 7989 | 19 | 72 | 8 | 1277 |
| >90-100% | **1485** | **10** | **29** | **5** | **662** | 1452 | 12 | 38 | 7 | 472 |
| >100% | **303** | **31** | **53** | **18** | **8** | 280 | 33 | 56 | 20 | 8 |
|  | **165321** | **158** | **1647** | **70** | **10620** | 165213 | 172 | 1767 | 78 | 6814 |
| Collateral value<sup>1</sup> | **165283** |  | **1638** |  | **10620** | 165176 |  | 1756 |  | 6814 |
|  | **%** |  | **%** |  | **%** | **%** |  | **%** |  | **%** |
| Average balance weighted LTV<sup>2</sup> | **51** |  | **51** |  | **63** | 51 |  | 51 |  | 65 |
| Of which: |  |  |  |  |  |  |  |  |  |  |
| London lending (new business) |  |  |  |  | **62** |  |  |  |  | 64 |

---

1. Collateral value is limited to the balance of each loan and excludes the impact of any over-collateralisation. Includes collateral against loans in negative equity of £265m(2024: £244m).

2. Balance weighted LTV = (Loan 1 balance x (Loan 1 Balance/Loan 1 latest property valuation) + (Loan 2 balance x (Loan 2 balance/Loan 2 latest property valuation) + ...) /(Loan 1 balance + Loan 2

balance+...).

3. Excludes advances, flexible drawdowns and fees.

30 June 2025 compared to 31 December 2024

There were no significant changes in collateral quality in H1-25. Balance weighted average LTVs of stock were broadly flat, with a reduction in new business due

to continued price competition in the market at higher LTVs.

Santander UK plc**26**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Credit performance** 

For credit performance details, see the Credit performance section in Santander UK Group level - Credit risk review.

**Movement in total exposures and the corresponding ECL**

The following tables show changes in total on and off-balance sheet exposures and ECL in the period. The footnotes to the Santander UK group level table on

page[23](#if12dce57771a4a33887463cdb1b49da6_157)also apply to these tables.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Stage 1**  | **Stage 1**  | **Stage 2** | **Stage 2** | **Stage 3** | **Stage 3** | **Total** | **Total** |
| **At 1 January 2025** | **Exposures**<sup>1</sup><br>**£m**<br>**157268** | **ECL**<br>**£m**<br>**10** | **Exposures**<sup>1</sup><br>**£m**<br>**16973** | **ECL**<br>**£m**<br>**84** | **Exposures**<sup>1</sup><br>**£m**<br>**1785** | **ECL**<br>**£m**<br>**78** | **Exposures**<sup>1</sup><br>**£m**<br>**176026** | **ECL**<br>**£m**<br>**172** |
| Transfers from Stage 1 to Stage 2<sup>2</sup> | **(3908)** | **—** | **3908** | **—** | **—** | **—** | **—** | **—** |
| Transfers from Stage 2 to Stage 1<sup>2</sup> | **3902** | **10** | **(3902)** | **(10)** | **—** | **—** | **—** | **—** |
| Transfers to Stage 3<sup>2</sup> | **(54)** | **—** | **(339)** | **(4)** | **393** | **4** | **—** | **—** |
| Transfers from Stage 3<sup>2</sup> | **—** | **—** | **276** | **8** | **(276)** | **(8)** | **—** | **—** |
| **Transfers of financial instruments** | **(60)** | **10** | **(57)** | **(6)** | **117** | **(4)** | **—** | **—** |
| Net ECL remeasurement on stage transfer<sup>3</sup> | **—** | **(9)** | **—** | **7** | **—** | **6** | **—** | **4** |
| Change in economic scenarios<sup>4</sup> | **—** | **(5)** | **—** | **(5)** | **—** | **(4)** | **—** | **(14)** |
| Change to ECL models | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **—** |
| New lending and assets purchased<sup>5</sup> | **19002** | **3** | **119** | **2** | **18** | **1** | **19139** | **6** |
| Redemptions, repayments and assets sold<sup>6</sup> | **(10407)** | **—** | **(1247)** | **(4)** | **(243)** | **(7)** | **(11897)** | **(11)** |
| Changes in risk parameters and other movements<sup>7</sup> | **(4700)** | **—** | **28** | **1** | **15** | **7** | **(4657)** | **8** |
| Assets written off<sup>6</sup> | **—** | **—** | **—** | **—** | **(27)** | **(7)** | **(27)** | **(7)** |
| **At 30 June 2025** | **161103** | **9** | **15816** | **79** | **1665** | **70** | **178584** | **158** |
| Net movement in the period | **3835** | **(1)** | **(1157)** | **(5)** | **(120)** | **(8)** | **2558** | **(14)** |
| ECL release to the Income Statement |  | **(1)** |  | **(5)** |  | **(1)** |  | **(7)** |
| Less: Discount unwind |  | **—** |  | **—** |  | **(1)** |  | **(1)** |
| Less: Recoveries net of collection costs |  | **—** |  | **—** |  | **10** |  | **10** |
| Total ECL (release)/charge to the Income Statement |  | **(1)** |  | **(5)** |  | **8** |  | **2** |
| **At 1 January 2024** | 161163 | 24 | 17997 | 110 | 2028 | 108 | 181188 | 242 |
| Transfers from Stage 1 to Stage 2<sup>2</sup> | (8703) | (2) | 8703 | 2 |  |  |  | **—** |
| Transfers from Stage 2 to Stage 1<sup>2</sup> | 6184 | 22 | (6184) | (22) |  |  |  |  |
| Transfers to Stage 3<sup>2</sup> | (113) |  | (402) | (8) | 515 | 8 |  |  |
| Transfers from Stage 3<sup>2</sup> | 3 |  | 244 | 8 | (247) | (8) |  |  |
| **Transfers of financial instruments** | (2629) | 20 | 2361 | (20) | 268 |  |  |  |
| Net ECL remeasurement on stage transfer<sup>3</sup> |  | (22) |  | 38 |  | 7 |  | 23 |
| Change in economic scenarios<sup>4</sup> |  | (7) |  | (11) |  | 2 |  | (16) |
| Change to ECL models | (1859) | (3) | 1869 | 21 | (10) | (37) |  | (19) |
| New lending and assets purchased<sup>5</sup> | 12720 | 3 | 71 | 1 | 11 | 1 | 12802 | 5 |
| Redemptions, repayments and assets sold<sup>6</sup> | (11368) | (2) | (1736) | (7) | (316) | (13) | (13420) | (22) |
| Changes in risk parameters and other movements<sup>7</sup> | 335 | (2) | (1834) | (21) | 33 | 22 | (1466) | (1) |
| Assets written off<sup>6</sup> |  |  |  |  | (16) | (5) | (16) | (5) |
| **At 30 June 2024** | 158362 | 11 | 18728 | 111 | 1998 | 85 | 179088 | 207 |
| Net movement in the period | (2801) | (13) | 731 | 1 | (30) | (23) | (2100) | (35) |
| ECL (release)/charge to the Income Statement |  | (13) |  | 1 |  | (18) |  | (30) |
| Less: Discount unwind |  |  |  |  |  | (1) |  | (1) |
| Less: Recoveries net of collection costs |  |  |  |  |  | 15 |  | 15 |
| Total ECL (release)/charge to the Income Statement |  | (13) |  | 1 |  | (4) |  | (16) |

---

Santander UK plc**27**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Portfolios of particular interest - Mortgages

**Credit performance** 

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Total** | **Stage 1** | **Stage 2** | **Stage 3** | **Stage 3 ratio** | **Properties in** <br>**possession**<br>| **Balance** <br>**weighted LTV** <br>**(indexed)**<br>|
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **%** | **£m** | **%** |
| Mortgage portfolio | **165321** | **148109** | **15565** | **1647** | **1.01** | **67** | **51** |
| Of which: Portfolio of particular interest<sup>1</sup> |  |  |  |  |  |  |  |
| – Interest only | **36105** | **30007** | **5364** | **734** | **2.05** | **33** | **48** |
| – Part interest-only, part repayment<sup>2</sup> | **11667** | **10032** | **1442** | **193** | **1.66** | **12** | **52** |
| – Flexible | **3908** | **2845** | **869** | **194** | **5.43** | **10** | **37** |
| – LTV >100% | **303** | **93** | **157** | **53** | **17.40** | **13** | **116** |
| – Buy-to-let | **15256** | **14091** | **1111** | **54** | **0.36** | **3** | **59** |
| 31 December 2024 |  |  |  |  |  |  |  |
| Mortgage portfolio | 165213 | 146758 | 16688 | 1767 | 1.08 | 46 | 51 |
| Of which: Portfolio of particular interest<sup>1</sup> |  |  |  |  |  |  |  |
| – Interest only | 36188 | 29802 | 5572 | 814 | 2.27 | 23 | 48 |
| – Part interest-only, part repayment<sup>2</sup> | 11873 | 10112 | 1542 | 219 | 1.85 | 8 | 52 |
| – Flexible | 4333 | 3190 | 933 | 210 | 5.25 | 8 | 38 |
| – LTV >100% | 280 | 75 | 149 | 56 | 20.15 | 10 | 117 |
| – Buy-to-let | 14931 | 13672 | 1204 | 55 | 0.37 | 2 | 59 |

---

1. Where a loan falls into more than one category, we include it in all the categories that apply.

2. Mortgage balance includes both the interest-only part of £8,909m (2024: £9,046m) and the non-interest-only part of the loan.

Retail & Business Banking: Everyday Banking – Credit risk review

**Credit performance**

For credit performance details, see the Credit performance section in Santander UK Group level - Credit risk review. In addition, we monitor the following credit

performance metrics that are specific to Everyday Banking:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
| BBLS with 100% Government Guarantee (£bn) | **0.9** | 1.1 |
| % of credit card customers that repay balance in full each month | **55%** | 56% |
| UPL average customer balance (£) | **6000** | 6000 |

---

CONSUMER FINANCE – CREDIT RISK REVIEW

**Credit Performance** 

For credit performance details, see the Credit performance section in Santander UK Group level - Credit risk review. In addition, we monitor the following credit

performance metrics that are specific to Consumer Finance:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
| Wholesale loans (stock finance) to car dealerships as approximate % of the Consumer loan book | **10.0%** | 9.7% |
| % of lending collateralised on the vehicle | **96%** | 95% |
| Average Consumer (auto) finance loan size (£) | **19090** | 16045 |

---

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
| Consumer (auto) finance new business gross lending (£m) | **1034** | 752 |

---

Santander UK plc**28**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

CORPORATE & COMMERCIAL BANKING – CREDIT RISK REVIEW

**Rating distribution**

These tables show our credit risk exposure according to our internal rating scale (see the 'Santander UK group level – credit risk review' section) for each

portfolio. On this scale, the higher the rating, the better the quality of the counterparty.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** | **Santander UK risk grade** |  |
|  | **9** | **8** | **7** | **6** | **5** | **4** | **3 to 1** | **Other**<sup>1</sup> | **Total** |
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** |
| SME and mid corporate | **—** | **509** | **883** | **3331** | **4070** | **3024** | **1418** | **47** | **13282** |
| Commercial Real Estate | **—** | **—** | **567** | **2265** | **2426** | **450** | **294** | **—** | **6002** |
| Social Housing | **105** | **1747** | **5951** | **—** | **—** | **—** | **—** | **—** | **7803** |
|  | **105** | **2256** | **7401** | **5596** | **6496** | **3474** | **1712** | **47** | **27087** |
| Of which: |  |  |  |  |  |  |  |  |  |
| –Stage 1 | **105** | **2256** | **7401** | **5476** | **6093** | **2582** | **290** | **47** | **24250** |
| –Stage 2 | **—** | **—** | **—** | **120** | **403** | **892** | **701** | **—** | **2116** |
| –Stage 3 | **—** | **—** | **—** | **—** | **—** | **—** | **721** | **—** | **721** |
| 31 December 2024 |  |  |  |  |  |  |  |  |  |
| SME and mid corporate |  | 253 | 723 | 3170 | 4295 | 3013 | 1589 | 82 | 13125 |
| Commercial Real Estate |  |  | 567 | 1913 | 2460 | 620 | 309 |  | 5869 |
| Social Housing | 13 | 1983 | 5868 |  |  |  |  |  | 7864 |
|  | 13 | 2236 | 7158 | 5083 | 6755 | 3633 | 1898 | 82 | 26858 |
| Of which: |  |  |  |  |  |  |  |  |  |
| –Stage 1 | 13 | 2236 | 7115 | 4991 | 6159 | 2597 | 382 | 82 | 23575 |
| –Stage 2 |  |  | 43 | 92 | 596 | 1036 | 800 |  | 2567 |
| –Stage 3 |  |  |  |  |  |  | 716 |  | 716 |

---

1. Typically smaller exposures which use scorecards instead of a rating model.

**Credit performance**

For credit performance details, see the Credit performance section in Santander UK Group level - Credit risk review.

Portfolios of particular interest - Commercial Real Estate

In H1-25, committed exposures in our CRE portfolio increased by 2.3% and the rating distribution improved.

CORPORATE CENTRE – CREDIT RISK REVIEW

**Committed exposures**

**Rating distribution**

Corporate Centre committed exposures mainly comprise Sovereign exposures and Structured Products (High Quality Liquid Assets, mainly Asset Backed

Securities and covered bonds) managed as part of our Eligible Liquidity Pool. These are low risk, high quality, investment grade exposures with a credit rating of

8 or 9 according to our internal rating scale (see the 'Santander UK group level – credit risk review' section).

**Credit performance**

For credit performance details, see the Credit performance section in Santander UK Group level - Credit risk review.

Santander UK plc**29**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

Liquidity risk

---

| | |
|:---|:---|
| **Overview** <br>Liquidity risk is the risk that, while still being solvent, we do not have the liquid financial <br>resources to meet our obligations when they fall due, or we can only get them at high <br>cost.<br>**Liquidity risk management**<br>In H1-25, there were no significant changes in the way we manage liquidity risk as <br>described in the 2024 Annual Report.<br>L**iquidity risk review**<br>In this section, we analyse our key liquidity metrics and our wholesale funding. We also <br>provide information on asset encumbrance.<br>| **Key metrics**<br>RFB DoLSub LCR of 153% (2024: 151%) <br>RFB DoLSub LCR eligible liquidity pool of £49.0bn (2024: <br>£44.4bn)<br>RFB DoLSub NSFR of 136% (2024: 135%)<br>Wholesale funding with maturity <1 year £20.9bn (2024: <br>£19.6bn)<br>|

---

LIQUIDITY RISK REVIEW

**Liquidity Coverage Ratio**

This table shows our LCR at 30 June 2025 and 31 December 2024.

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
| **RFB DoLSub LCR**<sup>2</sup> | **£bn**  | £bn  |
| Eligible liquidity pool (liquidity value)<sup>1</sup> | **48.4** | 43.7 |
| Net stress outflows | **(31.6)** | (28.9) |
| Surplus | **16.8** | 14.8 |
| Eligible liquidity pool as a percentage of anticipated net cash flows | **153%** | 151% |

---

1. The liquidity value is calculated as applying an applicable haircut to the carrying value.

2. The RFB LCR was 159% (2024:154%).

30 June 2025 compared to 31 December 2024

Strong LCR of153% (2024: 151%)increased largely due to higher funding issuances ahead of£4.7bn TFSME repayment due in Oct-25, £1.2bn of which was

repaid in Jul-25.

**LCR eligible liquidity pool**

RFB DoLSub LCR eligible liquidity pool of £49.0bn(2024: £44.4bn) includes £33.2bn cash and central bank reserves (2024: £29.0bn).

30 June 2025 compared to 31 December 2024

We remained in a strong liquidity position. We held sufficient liquid resources and had adequate governance and controls in place to manage the liquidity risks

arising from our business and strategy. At 30 June 2025 and 31 December 2024, the LCR significantly exceeded regulatory requirements.

**RFB DoLSub Net Stable Funding Ratio (NSFR)**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **%** | % |
| RFB DoLSub NSFR | **136** | 135 |

---

30 June 2025 compared to 31 December 2024

At 30 June 2025 and 31 December 2024, the RFB DoLSub NSFR significantly exceeded regulatory requirements.

Santander UK plc**30**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

FUNDING RISK REVIEW

Our funding strategy continues to be based on maintaining a conservatively structured balance sheet and diverse sources of funding to meet the needs of our

business strategy and plans. The CFO Division maintains a funding plan that complies with our Liquidity Risk Appetite (LRA) and regulatory liquidity and capital

requirements.

**Maturity profile of wholesale funding**

This table shows our main sources of wholesale funding. It does not include securities finance agreements. The table is based on exchange rates at issue and

scheduled repayments and call dates. It does not reflect the final contractual maturity of the funding.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **≤ 1** <br>**month**<br>| **>1 and ≤ 3** <br>**months**<br>| **>3 and ≤ 6** <br>**months**<br>| **>6 and ≤ 9** <br>**months**<br>| **>9 and ≤** <br>**12 months**<br>| **Sub-total**<br>**≤ 1 year**<br>| **>1 and**<br> **≤ 2 years**<br>| **>2 and**<br>**≤ 5 years**<br>| **>5 years** | **Total** |
| **30 June 2025** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** |
| **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> | **Downstreamed from Santander UK Group Holdings plc to Santander UK plc**<sup>1</sup> |
| Senior unsecured | **—** | **0.8** | **1.3** | **0.5** | **0.7** | **3.3** | **1.6** | **5.7** | **0.5** | **11.1** |
| Subordinated liabilities and equity (incl. AT1) | **—** | **0.2** | **—** | **0.2** | **—** | **0.4** | **—** | **1.5** | **1.4** | **3.3** |
|  | **—** | **1.0** | **1.3** | **0.7** | **0.7** | **3.7** | **1.6** | **7.2** | **1.9** | **14.4** |
| **Other Santander UK plc** |  |  |  |  |  |  |  |  |  |  |
| Deposits by banks | **0.4** | **0.4** | **0.3** | **—** | **—** | **1.1** | **—** | **—** | **—** | **1.1** |
| Certificates of deposit and commercial paper  | **2.3** | **2.7** | **1.0** | **—** | **—** | **6.0** | **—** | **—** | **—** | **6.0** |
| Senior unsecured | **—** | **—** | **0.1** | **0.1** | **0.1** | **0.3** | **0.7** | **2.1** | **0.3** | **3.4** |
| Covered bonds | **—** | **0.1** | **0.1** | **2.8** | **0.8** | **3.8** | **4.4** | **9.2** | **1.7** | **19.1** |
| Securitisation & structured issuance<sup>2</sup> | **—** | **—** | **0.8** | **—** | **—** | **0.8** | **0.8** | **3.4** | **—** | **5.0** |
| Of which: |  |  |  |  |  |  |  |  |  |  |
| – RMBS and ABS | **—** | **—** | **0.8** | **—** | **—** | **0.8** | **0.8** | **3.4** | **—** | **5.0** |
| TFSME | **—** | **—** | **4.7** | **—** | **—** | **4.7** | **2.5** | **—** | **1.4** | **8.6** |
| Subordinated liabilities | **—** | **—** | **—** | **—** | **—** | **—** | **—** | **0.2** | **0.5** | **0.7** |
|  | **2.7** | **3.2** | **7.0** | **2.9** | **0.9** | **16.7** | **8.4** | **14.9** | **3.9** | **43.9** |
| **Other group entities** |  |  |  |  |  |  |  |  |  |  |
| Securitisation & structured issuance<sup>3</sup> | **—** | **—** | **—** | **—** | **0.5** | **0.5** | **—** | **—** | **—** | **0.5** |
| **Total at 30 June 2025** | **2.7** | **4.2** | **8.3** | **3.6** | **2.1** | **20.9** | **10.0** | **22.1** | **5.8** | **58.8** |
| Of which: |  |  |  |  |  |  |  |  |  |  |
| – Secured | **0.1** | **0.1** | **5.5** | **2.8** | **1.3** | **9.8** | **7.8** | **12.6** | **3.1** | **33.3** |
| – Unsecured | **2.6** | **4.1** | **2.8** | **0.8** | **0.8** | **11.1** | **2.2** | **9.5** | **2.7** | **25.5** |
| **Total at 31 December 2024** | 3.3 | 4.8 | 1.8 | 1.2 | 8.5 | 19.6 | 9.0 | 22.0 | 5.1 | 55.7 |
| Of which: |  |  |  |  |  |  |  |  |  |  |
| – Secured | 0.9 | 0.5 | 1.3 | 0.2 | 7.2 | 10.1 | 6.8 | 14.1 | 2.5 | 33.5 |
| – Unsecured  | 2.4 | 4.3 | 0.5 | 1.0 | 1.3 | 9.5 | 2.2 | 7.9 | 2.6 | 22.2 |

---

1.99% of senior unsecured debt issued from Santander UK Group Holdings plc has been downstreamed to Santander UK plc as 'secondary non-preferential debt' in line with the guidelines from the Bank of

England for Internal MREL.

2. Includes funding from mortgage-backed securitisation vehicles where Santander UK plc is the asset originator.

3. Includes funding from asset-backed securitisation vehicles where entities other than Santander UK plc are the asset originator.

Santander UK plc**31**

---

| | | | | |
|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Term issuance**

In H1-25, our external term issuance (sterling equivalent) was:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Sterling** | **US Dollar** | **Euro** | **Other** | **Total H1-25** | Total H1-24 |
|  | **£bn** | **£bn** | **£bn** | **£bn** | **£bn** | £bn |
| **Downstreamed from Santander UK Group Holdings plc to Santander UK plc** |  |  |  |  |  |  |
| Senior unsecured | **—** | **1.0** | **—** | **—** | **1.0** |  |
| Subordinated debt and equity (inc. AT1) | **0.5** | **—** | **—** | **—** | **0.5** | 0.4 |
|  | **0.5** | **1.0** | **—** | **—** | **1.5** | 0.4 |
| **Other Santander UK plc** |  |  |  |  |  |  |
| Securitisations and other secured funding | **1.0** | **—** | **—** | **—** | **1.0** | 0.8 |
| Of which: |  |  |  |  |  |  |
| –RMBS and ABS | **1.0** | **—** | **—** | **—** | **1.0** |  |
| Covered bonds | **1.0** | **—** | **1.7** | **—** | **2.7** | 4.1 |
| Senior unsecured | **—** | **—** | **1.9** | **—** | **1.9** | 0.2 |
|  | **2.0** | **—** | **3.6** | **—** | **5.6** | 5.1 |
| **Other group entities** |  |  |  |  |  |  |
| Securitisations | **—** | **—** | **—** | **—** | **—** |  |
| **Total gross issuances** | **2.5** | **1.0** | **3.6** | **—** | **7.1** | 5.5 |

---

**Encumbrance** 

**Encumbrance of customer loans and advances**

We issued securitised products to a diverse investor base through our prime mortgage-backed and other asset-backed funding programmes. We raised funding

with mortgage-backed notes, both issued to third parties and retained – the latter being central bank eligible collateral for funding purposes in other Bank of

England facilities. We also have a covered bond programme, under which we issue securities to investors secured by a pool of residential mortgages. For more

on these programmes, see Notes14and25 to theConsolidated Financial Statements in the 2024 Annual Report.

30 June 2025 compared to 31 December 2024

Our level of encumbrance from external and internal issuance of securitisations and covered bonds increased in H1-25to £36.9bn(2024: £33.9bn). For more,

see Note 14 to the Consolidated Financial Statements in the 2024 Annual Report and Note10 to theCondensed Consolidated Interim Financial Statements.

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Capital risk

---

| | |
|:---|:---|
| **Overview**<br>Capital risk is the risk that we do not have an adequate amount or quality of capital to <br>meet our internal business needs, regulatory requirements and market expectations.<br>**Capital risk management**<br>In H1-25, there were no significant changes in the way we manage capital risk as <br>described in the 2024 Annual Report.<br>**Capital risk review**<br>In this section, we analyse our capital resources and key capital ratios.<br>| **Key metrics**<br>CET1 capital ratio of 15.0% (2024: 14.9%)<br>Total qualifying regulatory capital of £13.7bn (2024: <br>£13.7bn)<br>|

---

CAPITAL RISK REVIEW

**Meeting evolving capital requirements**

We target a CET1 management buffer of sufficient size to absorb volatility in CET1 deductions, capital supply and capital demand whilst remaining above the

current and expected future regulatory CET1 requirement. Distribution restrictions would be expected to be applied if we were unable to meet both our minimum

requirement, which consists of the Pillar 1 minimum plus Pillar 2A, the CRD IV buffers consisting of the Capital Conservation Buffer (CCB), the Countercyclical

Capital Buffer (CCyB), and the Other Systemically Important Institutions Buffer (O-SII).

**Key capital ratios** 

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **%** | % |
| CET1 capital ratio | **15.0** | 14.9 |
| AT1 | **2.8** | 2.8 |
| Tier 2 | **2.9** | 3.3 |
| **Total capital ratio** | **20.7** | 21.0 |
| Total subordination available to Santander UK plc senior unsecured bondholders as a % of RWAs | **20.7** | 21.0 |
|  | **30 June 2025** | 30 June 2024 |
| Return on assets - profit after tax divided by average total assets | **0.20** | 0.22 |

---

30 June 2025 compared to 31 December 2024

CET1 capital ratio was broadly stable at 15.0%. Ongoing organic capital generation partially offset by dividends accrued.

In anticipation of the proposed acquisition of TSB by Santander UK (subject to regulatory approvals and other consents), the Board passed a resolution to cancel

the dividends that were accrued in the CET1 capital ratio calculations at 30 June 2025. At 30 June 2025, the accrued dividends decreased the CET1 capital ratio

by 0.4pp.

**Regulatory capital resources**

This table shows our qualifying regulatory capital:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| CET1 capital | **9916** | 9791 |
| AT1 capital | **1860** | 1860 |
| Tier 1 capital | **11776** | 11651 |
| Tier 2 capital | **1882** | 2093 |
| Total capital<sup>1</sup> | **13658** | 13744 |

---

1. Capital resources include a transitional IFRS 9 benefit at 30 June 2025 of £nil(2024: £12.2m).

In anticipation of the proposed acquisition of TSB by Santander UK (subject to regulatory approvals and other consents), the Board passed a resolution to cancel

the dividends that were accrued in the CET1 capital calculations at 30 June 2025, the impact of which is shown in the table above.

**Risk-weighted assets**

Total Risk-weighted assets at 30 June 2025 were £66.0bn (2024: £65.5bn), which are consistent with our regulatory filings.

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Market risk

---

| | |
|:---|:---|
| **Overview**<br>Market risk comprises banking market risk and trading market risk.<br>**Market risk management**<br>In H1-25, there were no significant changes in the way we manage market risk as <br>described in the 2024 Annual Report.<br>**Market risk review**<br>In this section, we analyse our key banking and trading market risk metrics.<br>| **Key metrics**<br>Net Interest Income (NII) sensitivity to +100bps was <br>£127m and to -100bps was £(140)m (2024: £167m and <br>£(201)m).<br>Economic Value of Equity (EVE) sensitivity to +100bps <br>was £(519)m and to -100bps was £477m (2024: £(496)m<br>and £425m).<br>|

---

NON-TRADED MARKET RISK REVIEW

**Interest rate risk**

**Yield curve risk**

The table below shows how our net interest income would be affected by a parallel shift (both up and down) applied instantaneously to the yield curve at 30 June

2025 and 31 December 2024. Sensitivity to parallel shifts represents the amount of risk in a way that we think is both simple and scalable.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 |
|  | **+100bps** | **-100bps** | +100bps | -100bps |
|  | **£m** | **£m** | £m | £m |
| NII sensitivity<sup>1</sup> | **127** | **(140)** | 167 | (201) |
| EVE sensitivity | **(519)** | **477** | (496) | 425 |

---

1. Based on modelling assumptions of repricing behaviour.

30 June 2025 compared to 31 December 2024

In H1-25, we continued to actively manage the structural position in line with rate-insensitive liabilities in order to manage interest rate risk.

NII sensitivity decreased, and EVE sensitivity increased, reflecting the reduction in non-rate sensitive liabilities relative to the structural hedge position.

TRADED MARKET RISK REVIEW

30 June 2025 compared to 31 December 2024

In H1-25, there were no significant changes to our traded market risk exposures. The Internal VaR for exposure to traded market risk at 30 June 2025was less

than £1m (2024: less than £1m).

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Pension risk

---

| | |
|:---|:---|
| **Overview**<br>Pension risk is the risk caused by our statutory contractual or other liabilities with respect <br>to a pension scheme (whether set up for our employees or those of a related company <br>or otherwise). It also refers to the risk that we will need to make payments or other <br>contributions with respect to a pension scheme due to some other reason.<br>**Pension risk management**<br>In H1-25, there were no significant changes in the way we manage pension risk as <br>described in the 2024 Annual Report. <br>**Pension risk review**<br>In this section, we give an update on key movements in pension risk profile in H1-25. <br>| **Key metrics**<br>Funding Deficit at Risk was £810m (2024: £830m)<br>Funded defined benefit pension scheme accounting <br>surplus was £527m (2024: £439m)<br>|

---

PENSION RISK REVIEW

30 June 2025 compared to 31 December 2024

The underlying level of risk in the Scheme reduced during H1-25, primarily driven by the continuing disposal of illiquid assets.

Risk monitoring and measurement

Our main focus is to ensure the Scheme achieves the right balance between risk and reward whilst minimising the impact on our capital and financial position. At

30 June 2025, the Funding Deficit at Risk decreased to £810m(2024: £830m), mainly due to disposals of illiquid assets noted above.

The impact from variations in the IAS 19 position on CET1 capital was not significant in H1-25. For more on the impact of our defined benefit schemes on capital,

see the 'Capital risk' section.

Accounting position

The accounting position improved in H1-25. The Scheme sections in surplus had an aggregate surplus of £527m at 30 June 2025 (2024: £439m) while there

was no section which had a deficit (2024: none). The overall funded position was a £527m surplus (2024: £439m surplus). A number of sections are in deficit on

the funding basis agreed with the Trustee and we pay deficit contributions to those sections. We reported unfunded liabilities of £23mat 30 June 2025 (2024:

£23m). A number of factors contributed to the change in position over H1-25, with the increase mainly driven by deficit contributions paid over the period. There

remains considerable market uncertainty and our position could change materially over a short period.

For more on our pension schemes, including the asset allocation and our accounting assumptions, see Note 22to the Condensed Consolidated Interim Financial

Statements.

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|:---|:---|:---|:---|:---|
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Strategic and business risk

**Overview**<br>Strategic and business risk is the risk of significant loss or underperformance against planned objectives; damage arising from strategic decisions or their <br>poor implementation; an inability to adapt to external developments that impact the long-term interests of our key stakeholders.<br>**Strategic and business risk management**<br>In H1-25, there were no significant changes in the way we manage strategic and business risk as described in the 2024 Annual Report. <br>**Strategic and business risk review**<br>In this section, we give an update on key movements in strategic and business risk in H1-25. <br>

STRATEGIC AND BUSINESS RISK REVIEW

30 June 2025 compared to 31 December 2024

In H1-25, we continued our transformation journey to deliver value for all our stakeholders. Our transformation is centred around three core pillars: Commercial

Transformation - enhancing propositions; Operational Transformation, improving capabilities, and Cultural Transformation - emphasising high performance and

customer focus.

Through our commercial transformation, we aimed to grow customer loyalty, and made strong progress toward this goal. For example, we strengthened our new

build mortgage proposition to support brokers and customers with a broader range of 60-95% LTV products. Our Cahoot Sunny Day Saver Issue 5 account

which launched in April 2025, helped savers capitalise on higher interest rates. We also expanded our business and corporate customer base and supported

their international growth through access to our global network. Over the past six months, we managed our balance sheet prudently in a "higher for longer"

interest rate environment and have now pivoted toward asset growth.

For operational transformation, we simplified and automated our processes with a sharp focus on improving customer experience and accelerating time to

market. Leveraging the Banco Santander group's global platforms and technologies, we are working towards becoming a digital-first bank with a human touch.

This is reflected in ongoing enhancements to OneApp which has improved customer experience, and deployment of AI virtual assistants that has led to shorter

wait times at our contact centres.

We operate in an evolving environment that impacts both us and our stakeholders. We continued to monitor geopolitical factors (e.g. trade tariffs and ongoing

conflicts) and UK macroeconomic trends (e.g., employer National Insurance tax changes, persistent inflation, and sustained high interest rates) to take timely and

appropriate actions. Competitive pressures persisted in H1-25, with renewed interest in mergers and acquisitions activity, seen through several significant

transactions in the UK banking sector. Delivery of our transformation remained a key focus to provide value in an ever-evolving external environment.

Our customers remained at the heart of everything we do. We continued to prioritise their needs, demonstrating our commitment to Consumer Duty and to

delivering good outcomes across the business. We won awards for 'Best Digital Financial Inclusion Initiative' for OneApp, 'Universal Design' for OneApp, and for

our business app. We are also one of only three banks offering British Sign Language translations through our partnership with Signly.

Encouragingly, the regulatory environment appears to be improving. The FCA's recent proposals to ease mortgage rules suggest a more supportive outlook for

UK banks and the wider economy, while the PRA is exploring reforms to ring-fencing rules that could enhance operational and strategic flexibility for the sector.

We remained committed to delivering good customer outcomes, enhancing efficiency and building a responsible and sustainable business. This will enable us to

adapt to evolving customer needs and deliver improved long-term returns.

Santander UK plc**36**

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Reputational risk

**Overview**<br>Reputational risk is the risk of damage to the way our reputation and brand are perceived by the public, clients, government, colleagues, investors, or any <br>other interested party.<br>**Reputational risk management**<br>In H1-25, there were no significant changes in the way we manage reputational risk as described in the 2024 Annual Report. <br>**Reputational risk review**<br>In this section, we provide an update on key movements in reputational risk in H1-25.<br>

REPUTATIONAL RISK REVIEW

30 June 2025 compared to 31 December 2024

In H1-25, our key reputational risks arose from rumours in the media about a potential sale of Santander UK which was addressed by Banco Santander who

reaffirmed the importance of its presence in the UK market.

The economic environment presented challenges to a number of our customers. We continued to regularly and proactively share information with key external

stakeholders on actions taken and support available to customers, colleagues and communities.

Changes to our branch network announced in March 2025 generated considerable media coverage and questions from affected MPs. We engaged fully with the

media and relevant MPs to explain the rationale behind the decisions and how we will be supporting customers through continued investment in the network,

digital, chat and telephone banking services, enhanced by Community Bankers, Work Cafés and our part in banking hubs.

In addition, we engaged with the media as legal and regulatory developments with respect to historical motor finance commission payments generated media

coverage.

Santander UK has continued to engage with the Government over potential reforms to the regulatory framework and how the banking sector can support growth

in the UK economy.

Santander UK plc**37**

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Operational risk

**Overview**<br>Operational risk is the risk of loss due to inadequate or failed internal processes, people and systems, or external events. <br>**Operational risk management**<br>In H1-25, we introduced a refreshed Non-Financial Risk taxonomy to further align with industry reporting and therefore some sub-risk types may differ <br>from the 2024 Annual Report. There were no significant changes in the way we manage operational risk as described in the 2024 Annual Report.<br>**Operational risk review**<br>In this section, we give an update on key movements in operational risk in H1-25.<br>

OPERATIONAL RISK REVIEW

30 June 2025 compared to 31 December 2024

Operational risk event losses

InH1-25, losses remained within our risk appetite. We did not experience any material (greater than £10m) operational risk losses, with the exception of overall

fraud losses. We continued to maintain provisions to cover customer remediation programmes and their associated costs.

Operational Resilience

We continued to mature our frameworks and capabilities, confirming their compliance with Operational Resilience regulatory requirements though the Board Self-

Assessment, which went live at the end of Q1-25. We also progressed our assessment of the resilience of our Important Business Services, applying a broad

range of severe but plausible disruption scenarios, including successful cyber-attack and loss of third party scenarios. These scenarios were designed to ensure

that our contingency and recovery strategies were effective in minimising harm to our customers, any risk to the safety and soundness of the firm or to the orderly

functioning or stability to the UK market. We continued to invest in strategic programmes that will further strengthen our resilience position, in particular across our

IT estate.

Cybersecurity

We continued to enhance our threat prevention controls and test our business area recovery plans against a range of scenarios. We continued to see increasing

ransomware attacks across all sectors, driven by compromises in supply chain tools, and we expect this trend to remain. We continued to invest in skills and

resources to manage cybersecurity risks, and monitor cybersecurity threats, including from the geopolitical environment. In H1-25 we did not experience material

information security or cyber incidents, however, as any other organisation, we remain exposed to the threat of attack and the possibility of breaches.

Data Management

In H1-25, we continued to monitor and mitigate data risk through enhanced governance structures and processes. We remained focused on building a strong

data foundation for the future by prioritising the critical data universe. This was supported by a new operating model including business process ownership with

enhanced focus on end-to-end controls. Our multiyear data programme delivered in line with the data strategy driven by the Chief Data Officer, with a renewed

focus on improving the quality and architecture of the key data underpinning our critical business and regulatory processes.

IT

Over the past three years, we made significant progress in addressing IT risks through a programme of remediation activities. In H1-25, we achieved further

improvements in reducing IT related incidents and further reducing technology obsolescence. As part of our strategy, we also leveraged the Banco Santander

Group provided technology services to simplify our IT estate and drive operational efficiencies.

Legal

Our legal risk profile remained heightened but broadly stable in H1-25, reflecting the number and value of legal risks that we managed, but has deteriorated since

30 June 2025. The Santander UK group's exposure to legal risk is principally driven by the material litigation matters outlined in Note 24 - Contingent Liabilities

and Commitments, and Note 21- Provisions. Since 30 June 2025 a judgment in the large-scale complex PPI related litigation brought by AXA was handed down

by the High Court on 25 July 2025 and the Supreme Court handed down its judgment in the appeal of the Court of Appeal's decision in Hopcraft, Wrench and

Johnson related to motor finance commission litigation. The impact and implications of these decisions for Santander UK are outlined in Notes 24 and 21. There

were no material developments in H1-25 in relation to the German criminal and tax investigation relating to historical dividend tax arbitrage transactions. We

continued to monitor and manage our legal risk in relation to thematic Court actions and FOS complaints related to fraud, mortgages and unaffordable lending,

including a judicial review of a FOS decision on the scope of its jurisdiction to consider and award redress in relation to alleged acts and omissions more than 6

years prior to the date of the complaint. While litigated PPI claim volumes remained stable, we continued successfully to respond to attempts by claimant law

firms to re-open cases subject to the FCA redress regime for PPI complaints. The legal and regulatory environment in which the Santander UK group business

operates continues to evolve and we are evaluating and responding to that change, including the Employment Rights Bill, the Data (Use and Access) Act 2025,

the implementation of failure to prevent fraud offence under the Economic Crime and Corporate Transparency Act 2024, and the HM Treasury consultation on

changes to the Consumer Credit Act 1974.

Third party suppliers

We continued to rely extensively on third parties for a range of goods and services, provided by both Banco Santander and external suppliers. In H1-25, we

continuously monitored our suppliers against a set of controls and metrics to manage our risk exposure.

Transformation and change

In H1-25, we continued to simplify, digitise processes and customer journeys, reduce costs, extend internal capabilities and ensure a resilient operating model as

part of our ongoing transformation. We focused on ensuring transformation and change is safely and sustainably transitioned into our business without having an

impact on our risk profile underpinning strategic decisions.

Santander UK plc**38**

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Economic crime risk

**Overview**<br>In H1-25, we introduced Economic crime risk as the collective term used for Financial Crime (FC) risk and Fraud risk. FC risk is the risk that we use to <br>further FC, including money laundering, terrorist financing, sanctions evasion, bribery and corruption, and the facilitation of tax evasion. Fraud risk is the <br>risk associated with attempted or successful fraud being committed against the RFB, a customer or a third party.<br>**Economic crime risk management**<br>In H1-25, there were no significant changes in the way we manage economic crime risk as described in the 2024 Annual Report.<br>**Economic crime risk review**<br>In this section, we give an update on key developments in economic crime risk in H1-25.<br>

ECONOMIC CRIME RISK REVIEW

30 June 2025 compared to 31 December 2024

Financial Crime

We take our FC responsibilities extremely seriously. Protecting the communities we serve from the social and economic impacts of FC remains a top priority. The

FC landscape continues to be complex, with evolving regulatory and legal requirements, geopolitical factors and ever-changing criminal methods influencing the

risks we face. In H1-25 we:

–Continued maturing our FC oversight capabilities and our FC Centre of Excellence operations, to further integrate FC risk management operations across the

business.

–Maintained the Board and senior management's focus on the management of FC risk as one of our top priorities, including through the Executive Economic

Crime Committee.

–Updated our FC policies and standards to reflect the latest external requirements and best practice, and to align with the Banco Santander group policy

requirements. We continue to support business areas with implementation guidance.

–Enhanced our screening systems and controls, improving control coverage and accelerating risk mitigation.

–Continued to enhance and digitise customer due diligence processes for new and existing customers.

–Shared best practice with the wider Banco Santander group to collaborate and explore opportunities to leverage platforms and technologies.

–Played a key role in a wide variety of industry association hosted forums, actively engaging with our peers on best practice, benchmarking and other efforts

that boost our FC compliance programme.

–Continued to play an active role across the public-private partnerships, working closely with government, trade bodies and industry on issues that may impact

our FC compliance capabilities. This included extensive work on ongoing HM Treasury consultations on the Money Laundering Regulations and AML

Supervisory Reform, and various Financial Action Task Force consultations.

–Took part in external engagements in relation to international anti-corruption and ongoing government initiatives including the upcoming Anti-Corruption

Strategy 2025 and the 2026 Countering Illicit Finance Summit, and operational initiatives focused on Santander UK's day-to-day anti-fraud prevention efforts.

–Continued engaging externally on critical strategic public sector documents, such as the ongoing implementation of the Economic Crime Plan 2 and Fraud

Strategy, and ongoing work on system prioritisation and an economic crime data strategy.

Fraud

Fraud risk losses remained a material driver of our operational risk loss position, in line with the wider UK financial services industry. Social engineering

techniques used by fraudsters are a significant threat to customers and are outside of our direct control. We focus on preventative measures in response to

increasing fraud attacks and protecting customers from harm. In H1-25 we:

–Enhanced our preventative capabilities and our controls further, including new tools to identify fraud in our digital channels using behaviour biometrics.

–Continued to see that Debit and Credit Card Fraud and APP fraud remained our most significant fraud types, now dominated by social engineering.

–Maintained focus on customer education, with a key part of our strategy including presenting customers with tailored questions and warnings specific to their

payment journey.

–Launched a quarterly 'ScamTracker' for media and local government usage to highlight the scale and nature of fraud currently impacting the UK.

Santander UK plc**39**

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Model risk

**Overview**<br>Model risk is the risk that the predictions from models may be inaccurate, causing sub-optimal decisions to be made; or that a model may be used <br>inappropriately. These potential adverse consequences can lead to reputational damage, regulatory non-compliance, a deterioration in prudential position, <br>or financial losses.<br>**Model risk management**<br>In H1-25, there were no significant changes in the way we manage model risk as described in the 2024 Annual Report.<br>**Model risk review**<br>In this section, we give an update on key developments in model risk in H1-25.<br>

MODEL RISK REVIEW

30 June 2025 compared to 31 December 2024

We maintained a risk-based approach to management and control, focusing on model monitoring and independent reviews of our more material models, such as

those for credit losses and those with defined regulatory standards.

We continued work to fully embed requirements relating to the regulations introduced by the PRA which came into effect in 2024 (Supervisory Statement SS1/23)

that increased focus on model risk management across the industry. We continued developing our regulatory model suite in line with supervisory expectations,

focusing on capital adequacy to reflect the most recent and accurate data. Following the 2024 implementation of impairment models for mortgages and CCB, we

shifted our focus to developing new models for the unsecured retail portfolio to embed long standing adjustments to the ECL into models.

As part of our ESG commitment and the overall industry focus, we continued to evolve our internal risk models that consider climate change risk factors with

longer forecast horizons. We increased internal climate change risk expertise to reduce reliance on our external providers to future proof capabilities for future

regulation.

As the use of AI tools is increasing within the industry, we continued to develop a robust control environment to support these tools.

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Compliance risk

**Overview**<br>We manage the compliance risk (previously known as conduct and regulatory risk) types in one framework. Compliance risk also includes data privacy <br>and people risk.<br>**Compliance risk management**<br>In H1-25, we introduced a refreshed Non-Financial Risk taxonomy to further align with industry reporting and therefore some sub-risk types may differ <br>from the 2024 Annual Report. There were no significant changes in the way we manage compliance risk as described in the 2024 Annual Report.<br>**Compliance risk review**<br>In this section, we give an update on key developments in compliance risk in H1-25.<br>

COMPLIANCE RISK REVIEW

30 June 2025 compared to 31 December 2024

Our customers remained at the centre of our culture and purpose and we continued to monitor and regularly review their experiences to ensure they were

receiving good outcomes:

Conduct and Consumer Duty

We continued to monitor developments with respect to historical motor finance commission payments. We remain committed to our Consumer Duty (CD)

regulations by continuing to ensure our risk tools and processes focus on the provision of good customer outcomes. In addition, through amendments to our risk

taxonomy we have taken steps to reinforce the requirement for Conduct and CD to be considered throughout all risk types and business activities.

Customer and client protection

–In H1-25 we delivered a number of enhancements to our products and services across business and support areas to ensure we deliver good customer

outcomes. These included improving, simplifying and digitising customer journeys, and adjusting fees and charges offering fair value to our customers.

–We announced changes as part of our Branch transformation programme, which reflect how customers bank with us. Through these changes, we continued

to ensure customers receive the right support.

–We invested in customer communication channels, including our branch network, Work Cafés and community bankers, digital chat and telephone banking

services.

–We actively participated in schemes to ensure the long-term future of access to cash, including supporting the set-up of shared banking hubs and wider

engagement with LINK and industry partners.

–We continued to proactively contact customers who may be at risk of experiencing early signs of financial stress, to try and help them avoid longer-term

financial difficulty by referring them to internal and external sources of assistance, alongside ongoing customer engagement and support plans.

–We enhanced our customer outcome monitoring and customer testing to strengthen our ability to identify and report any areas of potential harm, poor

outcomes or customer experiences. We ensured that timely decisions and actions are taken.

Compliance standards

–We continued to maintain open and regular dialogue with regulators and continued to engage with policy makers to ensure the UK regulatory regime enabled

us to better support our customers and deliver economic growth.

–We are committed to adhering to our regulatory requirements, including maintaining systems and controls. Where we identified instances of non-compliance,

we are taking timely action to resolve this.

Data privacy and protection

We remain committed to protecting the personal data we collect and use, and respecting the data protection rights of our customers, our people and others

associated with us. Our data protection policy and processes reflect current data protection laws and regulations, and all of our stakeholders who we share

personal data with are required to comply with them.

People

People risk continued to be impacted by our ongoing transformation. We continued to adapt and respond to these risks, including those associated with changes

to our site strategy and the move to increased office attendance. Wellbeing-related absence remained at a steady state, and attrition continued to trend

downwards. We continued to evolve our Employee Value Proposition to respond to the needs of our multi-generational workforce, including the introduction of

free health assessments and financial coaching for all colleagues.

Accounting position

For more on our provisions, see Note21to the Condensed Consolidated Interim Financial Statements. For more on our contingent liabilities, see Note24to the

Condensed Consolidated Interim Financial Statements.

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| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

---

| | | |
|:---|:---|:---|
| Financial statements |  |  |
|  | **Contents** |  |
|  | **Primary financial statements** | **<u>[43](#if12dce57771a4a33887463cdb1b49da6_466)</u>** |
|  | Condensed Consolidated Income Statement | <u>[43](#if12dce57771a4a33887463cdb1b49da6_466)</u> |
|  | Condensed Consolidated Statement of <br>Comprehensive Income<br>| <u>[44](#if12dce57771a4a33887463cdb1b49da6_469)</u> |
|  | Condensed Consolidated Balance Sheet | <u>[45](#if12dce57771a4a33887463cdb1b49da6_472)</u> |
|  | Condensed Consolidated Cash Flow Statement | <u>[46](#if12dce57771a4a33887463cdb1b49da6_478)</u> |
|  | Condensed Consolidated Statement of Changes in <br>Equity<br>| <u>[47](#if12dce57771a4a33887463cdb1b49da6_481)</u> |
|  | **Notes to the financial statements** | **<u>[48](#if12dce57771a4a33887463cdb1b49da6_487)</u>** |

---

Santander UK plc**42**

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Santander UK plc**43**

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**Condensed Consolidated Income Statement (unaudited)**

**For the half year to**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **30 June 2025** | 30 June 2024 |
|  | Notes | **£m** | £m |
| Interest and similar income |  | **5780** | 6279 |
| Interest expense and similar charges |  | **(3586)** | (4175) |
| **Net interest income** |  | **2194** | 2104 |
| Fee and commission income |  | **363** | 370 |
| Fee and commission expense |  | **(219)** | (242) |
| **Net fee and commission income** |  | **144** | 128 |
| Other operating income |  | **13** | 63 |
| **Total operating income** |  | **2351** | 2295 |
| **Operating expenses before credit impairment charges, provisions and charges** | 3 | **(1252)** | (1279) |
| Credit impairment charges | 4 | **(105)** | (61) |
| Provisions for other liabilities and charges | 4 | **(248)** | (142) |
| **Total credit impairment charges, provisions and charges** |  | **(353)** | (203) |
| **Profit before tax** |  | **746** | 813 |
| Tax on profit | 5 | **(195)** | (213) |
| **Profit after tax attributable to equity holders of the parent** |  | **551** | 600 |

---

The accompanying Notes to the Financial Statements form an integral part of these Condensed Consolidated Interim Financial Statements.

Santander UK plc**44**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

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**Condensed Consolidated Statement of Comprehensive Income (unaudited)**

**For the half year to**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **30 June 2025** | 30 June 2024 |
|  | Notes | **£m** | £m |
| **Profit after tax attributable to equity holders of the parent** |  | **551** | 600 |
| Other comprehensive income/(expense) that may be reclassified to profit or loss subsequently: |  |  |  |
| Movement in fair value reserve (debt instruments): |  |  |  |
| - Change in fair value |  | **46** | (29) |
| - Income statement transfers |  | **(37)** | 39 |
| - Taxation |  | **(3)** | (3) |
|  |  | **6** | 7 |
| Cash flow hedges: |  |  |  |
| - Effective portion of changes in fair value |  | **(130)** | (412) |
| - Income statement transfers |  | **755** | 72 |
| - Taxation  |  | **(175)** | 95 |
|  |  | **450** | (245) |
| **Net other comprehensive income/(expense) that may be reclassified to profit or loss subsequently** |  | **456** | (238) |
| Other comprehensive income/(expense) that will not be reclassified to profit or loss subsequently: |  |  |  |
| Pension remeasurement: |  |  |  |
| - Change in fair value | 22 | **2** | (159) |
| - Taxation |  | **(1)** | 45 |
|  |  | **1** | (114) |
| Own credit adjustment: |  |  |  |
| - Change in fair value |  | **4** | (11) |
| - Taxation |  | **(1)** | 3 |
|  |  | **3** | (8) |
| **Net other comprehensive income/(expense) that will not be reclassified to profit or loss subsequently** |  | **4** | (122) |
| **Total other comprehensive income/(expense) net of tax** |  | **460** | (360) |
| **Total comprehensive income attributable to equity holders of the parent** |  | **1011** | 240 |

---

The accompanying Notes to the Financial Statements form an integral part of these Condensed Consolidated Interim Financial Statements.

Santander UK plc**45**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

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**Condensed Consolidated Balance Sheet (unaudited)**

**At 30 June 2025**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **30 June 2025** | 31 December 2024 |
|  | Notes | **£m** | £m |
| **Assets** |  |  |  |
| Cash and balances at central banks |  | **34201** | 29881 |
| Derivative financial instruments | 7 | **787** | 1204 |
| Other financial assets at fair value through profit or loss | 8 | **124** | 136 |
| Loans and advances to banks |  | **1411** | 1032 |
| Loans and advances to customers | 9 | **200228** | 199408 |
| Reverse repurchase agreements - non-trading | 11 | **11405** | 10338 |
| Other financial assets at amortised cost | 12 | **3718** | 3408 |
| Macro hedge of interest rate risk |  | **(208)** | (738) |
| Financial assets at fair value through other comprehensive income |  | **7381** | 9040 |
| Interests in other entities |  | **315** | 289 |
| Intangible assets | 14 | **1520** | 1539 |
| Property, plant and equipment | 15 | **1508** | 1563 |
| Current tax assets |  | **354** | 506 |
| Retirement benefit assets | 22 | **527** | 439 |
| Other assets |  | **2343** | 1887 |
| Assets held for sale | 29 | **20** | 12 |
| **Total assets** |  | **265634** | 259944 |
| **Liabilities** |  |  |  |
| Deposits by banks | 16 | **11907** | 13993 |
| Deposits by customers | 17 | **181546** | 180967 |
| Repurchase agreements - non-trading | 18 | **7590** | 8617 |
| Derivative financial instruments | 7 | **1133** | 702 |
| Other financial liabilities at fair value through profit or loss | 19 | **1061** | 1055 |
| Debt securities in issue | 20 | **42202** | 35673 |
| Macro hedge of interest rate risk |  | **76** | 47 |
| Other liabilities |  | **1959** | 1852 |
| Provisions | 21 | **639** | 611 |
| Deferred tax liabilities |  | **433** | 246 |
| Retirement benefit obligations | 22 | **23** | 23 |
| Subordinated liabilities | 23 | **2348** | 2385 |
| **Total liabilities** |  | **250917** | 246171 |
| **Equity** |  |  |  |
| Share capital |  | **3105** | 3105 |
| Share premium |  | **5620** | 5620 |
| Other equity instruments | 25 | **1860** | 1860 |
| Other reserves |  | **123** | (333) |
| Retained earnings |  | **4009** | 3521 |
| **Total equity** |  | **14717** | 13773 |
| **Total liabilities and equity** |  | **265634** | 259944 |

---

The accompanying Notes to the Financial Statements form an integral part of these Condensed Consolidated Interim Financial Statements.

The Financial Statements were approved and authorised for issue by the Board on 28 August 2025 and signed on its behalf by:

---

| | |
|:---|:---|
| **Mike Regnier** | **Angel Santodomingo** |
| Chief Executive Officer | Chief Financial Officer |
| Company Registered Number: 02294747 |  |

---

Santander UK plc**46**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Condensed Consolidated Cash Flow Statement (unaudited)**

**For the half year to**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **30 June 2025** | 30 June 2024 |
|  | Notes | **£m** | £m |
| **Cash flows from operating activities** |  |  |  |
| Profit before tax |  | **746** | 813 |
| **Adjustments for:** |  |  |  |
| Non-cash items included in profit |  | **440** | 327 |
| Change in operating assets |  | **(2252)** | 2063 |
| Change in operating liabilities |  | **(124)** | (10935) |
| Corporation taxes paid |  | **(23)** | (171) |
| Effects of exchange rate differences |  | **(781)** | 154 |
| **Net cash flows from operating activities** |  | **(1994)** | (7749) |
| **Cash flows from investing activities** |  |  |  |
| Purchase of property, plant and equipment and intangible assets |  | **(205)** | (176) |
| Proceeds from sale of property, plant and equipment and intangible assets |  | **96** | 91 |
| Purchase of financial assets at amortised cost and financial assets at FVOCI |  | **(1430)** | (7017) |
| Proceeds from sale and redemption of financial assets at amortised cost and financial assets at FVOCI |  | **2832** | 4875 |
| **Net cash flows from investing activities** |  | **1293** | (2227) |
| **Cash flows from financing activities** |  |  |  |
| Issue of other equity instruments |  | **500** | 400 |
| Issue of debt securities and subordinated notes |  | **6859** | 5135 |
| Issuance costs of debt securities and subordinated notes |  | **(14)** | (14) |
| Repayment of debt securities and subordinated notes |  | **(1565)** | (4791) |
| Repurchase of other equity instruments |  | **(500)** | (500) |
| Dividends paid on ordinary shares | 6 | **–** | (554) |
| Dividends paid on preference shares and other equity instruments |  | **(67)** | (66) |
| Principal elements of lease payments |  | **(12)** | (20) |
| **Net cash flows from financing activities** |  | **5201** | (410) |
| **Change in cash and cash equivalents** |  | **4500** | (10386) |
| Cash and cash equivalents at beginning of the period |  | **29181** | 36781 |
| Effects of exchange rate changes on cash and cash equivalents |  | **(28)** | 9 |
| **Cash and cash equivalents at the end of the period** |  | **33653** | 26404 |
| **Cash and cash equivalents consist of:** |  |  |  |
| Cash and balances at central banks |  | **34201** | 26875 |
| Less: restricted balances |  | **(1420)** | (1330) |
|  |  | **32781** | 25545 |
| Other cash equivalents: Loans and advances to banks - non-trading |  | **872** | 859 |
| **Cash and cash equivalents at the end of the period** |  | **33653** | 26404 |

---

The accompanying Notes to the Financial Statements form an integral part of these Condensed Consolidated Interim Financial Statements.

Santander UK plc**47**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

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**Condensed Consolidated Statement of Changes in Equity (unaudited)**

**For the half year to**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | **Other reserves** | **Other reserves** | **Other reserves** | **Other reserves** |  |
|  | **Share** <br>**capital** | **Share** <br>**premium** | **Other** <br>**equity** <br>**instruments** | **Fair value** | **Cash flow** <br>**hedging** | **Currency** <br>**translation** | **Retained** <br>**earnings** |  |
|  | **Share** <br>**capital** | **Share** <br>**premium** | **Other** <br>**equity** <br>**instruments** | **Fair value** | **Cash flow** <br>**hedging** | **Currency** <br>**translation** | **Retained** <br>**earnings** | **Total** |
|  | **£m** | **£m** | **£m** | **£m**  | **£m** | **£m** | **£m** | **£m** |
| **At 1 January 2025** | **3105** | **5620** | **1860** | **(17)** | **(317)** | **1** | **3521** | **13773** |
| Profit after tax attributable to equity holders of the parent | **–** | **–** | **–** | **–** | **–** | **–** | **551** | **551** |
| Other comprehensive income, net of tax: |  |  |  |  |  |  |  |  |
| - Fair value reserve (debt instruments) | **–** | **–** | **–** | **6** | **–** | **–** | **–** | **6** |
| - Cash flow hedges | **–** | **–** | **–** | **–** | **450** | **–** | **–** | **450** |
| - Pension remeasurement | **–** | **–** | **–** | **–** | **–** | **–** | **1** | **1** |
| - Own credit adjustment | **–** | **–** | **–** | **–** | **–** | **–** | **3** | **3** |
| Total other comprehensive income | **–** | **–** | **–** | **6** | **450** | **–** | **4** | **460** |
| Total comprehensive income | **–** | **–** | **–** | **6** | **450** | **–** | **555** | **1011** |
| Issue of other equity instruments | **–** | **–** | **500** | **–** | **–** | **–** | **–** | **500** |
| Repurchase of other equity instruments | **–** | **–** | **(500)** | **–** | **–** | **–** | **–** | **(500)** |
| Dividends on preference shares and other equity instruments | **–** | **–** | **–** | **–** | **–** | **–** | **(67)** | **(67)** |
| **At 30 June 2025** | **3105** | **5620** | **1860** | **(11)** | **133** | **1** | **4009** | **14717** |
| **At 1 January 2024** | 3105 | 5620 | 1956 | (6) | (348) | 1 | 4295 | 14623 |
| Profit after tax attributable to equity holders of the parent | – | – | – | – | – | – | 600 | 600 |
| Other comprehensive income/(expense), net of tax: |  |  |  |  |  |  |  |  |
| - Fair value reserve (debt instruments) | – | – | – | 7 | – | – | – | 7 |
| - Cash flow hedges | – | – | – | – | (245) | – | – | (245) |
| - Pension remeasurement | – | – | – | – | – | – | (114) | (114) |
| - Own credit adjustment | – | – | – | – | – | – | (8) | (8) |
| Total other comprehensive income/(expense) | – | – | – | 7 | (245) | – | (122) | (360) |
| Total comprehensive income/(expense) | – | – | – | 7 | (245) | – | 478 | 240 |
| Issue of other equity instruments | – | – | 400 | – | – | – | – | 400 |
| Repurchase of other equity instruments | – | – | (496) | – | – | – | (4) | (500) |
| Dividends on ordinary shares | – | – | – | – | – | – | (554) | (554) |
| Dividends on preference shares and other equity instruments | – | – | – | – | – | – | (66) | (66) |
| **At 30 June 2024** | 3105 | 5620 | 1860 | 1 | (593) | 1 | 4149 | 14143 |

---

The accompanying Notes to the Financial Statements form an integral part of these Condensed Consolidated Interim Financial Statements.

Santander UK plc**48**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

1. ACCOUNTING POLICIES

The financial information in these Condensed Consolidated Interim Financial Statements is unaudited and does not constitute statutory accounts as defined in

section 434 of the UK Companies Act 2006. Santander UK plc is a public company, limited by shares and incorporated and registered in England and Wales

having a registered office at 2 Triton Square, Regent's Place, London, NW1 3AN. Statutory accounts for the year ended 31 December 2024have been delivered

to the Registrar of Companies.

The Condensed Consolidated Interim Financial Statements reflect all adjustments that, in the opinion of management, are necessary for a fair statement of the

results of operations for the interim period. All such adjustments to the financial information are of a normal, recurring nature. Because the results from common

banking activities are so closely related and responsive to changes in market conditions, the results for any interim period are not necessarily indicative of the

results that can be expected for the year.

The Condensed Consolidated Interim Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 'Interim Financial

Reporting' as adopted by the UK and IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB), and the Disclosure

Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority (FCA). They do not include all the information and disclosures normally

required for full annual financial statements and should be read in conjunction with the Consolidated Financial Statements of Santander UK plc (the Company)

and its subsidiaries (collectively Santander UK or the Santander UK group) for the year ended31 December 2024 which were prepared in accordance with UK-

adopted International Accounting Standards (IAS). Those consolidated financial statements were also prepared in accordance with International Financial

Reporting Standards (IFRS) as issued by the IASB, including interpretations issued by the IFRS Interpretations Committee, as there were no applicable

differences from IFRS as issued by the IASB for the periods presented.

The same accounting policies and methods of computation are followed in these Condensed Consolidated Interim Financial Statements as were applied in the

Santander UK group's 2024Annual Report.

**Change in accounting policy**

In 2024, Santander UK voluntarily changed its accounting policy to remove reverse repurchase agreements (reverse repos) from being treated as cash

equivalents under IAS 7 for the purposes of the cash flow statement. This change provides reliable and more relevant information to users of the financial

statements where the bank is using reverse repos as an investment instrument to manage net interest income and operational liquidity rather than as cash

equivalents. The change in accounting policy has no effect on any other primary financial statements, income statement metrics, key indicators, liquidity ratios, or

maturity and offsetting disclosures. This change aligns Santander UK's accounting policy on the treatment of reverse repos under IAS 7 with the policy applied by

its ultimate parent, Banco Santander SA. The impact of the change on prior periods is set out below:

---

| | | | |
|:---|:---|:---|:---|
|  | **Balance before** <br>**change**<br>| **(Decrease)/**<br>**increase**<br>| **Balance after** <br>**change**<br>|
| **30 June 2024** | **£m** | **£m** | **£m** |
| Cash and cash equivalents at beginning of the period | 42502 | (5721) | 36781 |
| Cash and cash equivalents at the end of the period | 34800 | (8396) | 26404 |
| Effects of exchange rate changes on cash and cash equivalents | (14) | 23 | 9 |
| **Net change in operating assets and liabilities:** |  |  |  |
| Change in operating assets | 4724 | (2661) | 2063 |
| Change in operating liabilities | (10898) | (37) | (10935) |
| Net cash flows from operating activities | (5051) | (2698) | (7749) |

---

The value of reverse repo transactions at 30 June 2025 no longer included as cash and cash equivalents was £10,393m.

**Presentation of information**

Certain disclosures have been presented in the Risk review in the Half Yearly Financial Report 2025, rather than in the Notes to the Condensed Consolidated

Interim Financial Statements. These tables are as follows:

–Credit risk: Sensitivity of ECL allowance to economic scenarios and weights

–Credit risk: Movement in total exposures and the corresponding ECL in the Santander UK group level section

–Capital risk: Regulatory capital resources

–Market risk: NII sensitivity.

**Recent accounting developments**

The Santander UK group has applied the following amendment for the first time for their reporting period commencing 1 January 2025:

–Effective from 1 January 2025, Santander UK has adopted the IASB's amendment to IAS 21 which helps entities determine whether a currency is

exchangeable into another currency, and which spot exchange rate to use when it is not. The amendments did not have a material impact on Santander UK's

operations or financial statements.

Santander UK plc**49**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

---

**Future accounting developments**

The IASB issued the following new/amended accounting standards which are not yet mandatory for reporting periods commencing 1 January 2025:

–Effective 1 January 2026: 'Amendments to the Classification and Measurement of Financial Instruments' (Amendments to IFRS 9 'Financial Instruments' and

IFRS 7 'Financial Instruments: Disclosures') - the amendments set out changes to settling financial liabilities using an electronic payment system, assessing

contractual cash flow characteristics of financial assets including those with environmental, social and governance (ESG)-linked features and requiring

additional disclosures for certain financial instruments. The amendments were endorsed for use in the UK on 15 April 2025. The Santander UK group has

chosen not to early adopt the amendments.

–Effective 1 January 2027: IFRS 18 'Presentation and Disclosure in Financial Statements' – the new standard will replace IAS 1 'Presentation of Financial

Statements' and introduces changes to the categories for classifying income and expenses and subtotals presented in the income statement and new or

amended disclosures in respect of management-defined performance measures and specified expenses by nature. IFRS 18 has not yet been endorsed by the

IASB for use in the UK.

The Santander UK group will assess the new/amended accounting standards to determine their potential impacts on the financial statements when they become

effective or if they are otherwise early adopted when available.

**Going concern**

In light of geopolitical and economic uncertainty, the Directors updated their going concern assessment in preparing these Condensed Consolidated Interim

Financial Statements. In making their going concern assessment, the Directors considered a wide range of information that included Santander UK's long term

business and strategic plans, forecasts and projections, estimated capital, funding and liquidity requirements, contingent liabilities and the reasonably possible

changes in trading performance arising from potential economic, market and product developments.

After making enquiries, the Directors have a reasonable expectation that Santander UK has adequate resources to continue in operational existence for at least

twelve months from the date of this report and, therefore, having reassessed the principal risks and uncertainties, the Directors consider it appropriate for the

Condensed Consolidated Interim Financial Statements to be prepared on a going concern basis.

**Critical judgements and accounting estimates**

The preparation of Santander UK's Condensed Consolidated Financial Statements in accordance with IAS 34 requires management to make judgements and

assumptions in applying the accounting policies that affect the reported amounts of assets, liabilities, income and expenses. Due to the inherent uncertainty in

making estimates, actual results reported in future periods may be based on amounts which differ from those estimates. Estimates, judgements and assumptions

are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable

under the circumstances.

Management has considered the impact of developments in principal risks and uncertainties, as set out in the Risk review, on critical judgements and accounting

estimates.

The significant judgements, apart from those involving estimation, made by management in applying Santander UK's accounting policies in these Condensed

Consolidated Interim Financial Statements (key judgements) and the key sources of estimation uncertainty that may have a significant risk of causing a material

adjustment to the carrying amount of assets and liabilities within the next financial year (key estimates), which together are considered critical to Santander UK's

results and financial position, are as follows:

**a) Credit impairment allowance** 

The application of the ECL impairment methodology for calculating credit impairment allowances is highly susceptible to change from period to period. The

methodology requires management to make judgemental assumptions in determining the estimates. Any significant difference between the estimated amounts

and actual amounts could have a material impact on the future financial results and financial condition.

---

| | |
|:---|:---|
| **Key judgements** | –Establishing the criteria for a significant increase in credit risk (SICR) and, for corporate borrowers, internal credit risk rating |
|  | –Determining the need for any judgemental adjustments |
| **Key estimates** | –Forward-looking multiple economic scenario assumptions |
|  | –Probability weights assigned to multiple economic scenarios |
|  | –Expected future cash flows for individually assessed Stage 3 corporate exposures |
|  | –Collateral valuations of individually assessed Stage 3 corporate exposures |

---

There are no significant changes in these key judgements and estimates to the 'Critical judgements and accounting estimates applied in calculating ECL' in the

'Credit risk – credit risk management' section of the Risk review in the 2024 Annual Report.

Sensitivity of ECL allowance

For detailed disclosures, see 'Sensitivity of ECL allowance' in the 'Credit risk – credit risk management' section of the Risk review.

Santander UK plc**50**

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|:---|:---|:---|:---|:---|
| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

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**b) Provisions and contingent liabilities**

---

| | |
|:---|:---|
| **Key judgements** | –Determining whether a present obligation exists |
| | –Determining the likely outcome of future legal decisions |
| **Key estimates** | –Probability, timing, nature and amount of any outflows that may arise from past events |

---

Included in Litigation and other regulatory provisions in Note 21 are amounts in respect of management's best estimates of liability relating to a legal dispute

regarding allocation of responsibility for a specific PPI portfolio of complaints, the historical use of discretionary commission arrangements by Santander

Consumer (UK) plc, a legacy tax issue from 2018 and Plevin related litigation. This Note also includes property and redundancy provisions relating to the

transformation of our branch network. Note 24 provides disclosure relating to ongoing factual issues and reviews that could impact the timing and amount of any

outflows. It includes disclosure relating to an investigation in relation to the historical involvement of Santander UK plc, Santander Financial Services plc and

Cater Allen International Limited (all subsidiaries of Santander UK Group Holdings plc) in German dividend tax arbitrage transactions. It also includes disclosure

relating to the historical use of discretionary commission arrangements by Santander Consumer (UK) plc.

These judgements are based on the specific facts available and often require specialist professional advice. There can be a wide range of possible outcomes

and uncertainties, particularly in relation to legal actions, and regulatory and consumer credit matters. As a result, it is often not possible to make reliable

estimates of the likelihood and amount of any potential outflows, or to calculate any resulting sensitivities. For more on each of these key judgements and

estimates, see Notes 21 and 24.

**c) Retirement benefit plans**

---

| | |
|:---|:---|
| **Key judgements** | –Setting the criteria for constructing the corporate bond yield curve used to determine the discount rate |
| | –Determining the methodology for setting the inflation assumption  |
| **Key estimates** | –Discount rate applied to future cash flows |
|  | –Rate of price inflation |
|  | –Expected lifetime of the schemes' members |
| | –Valuation of pension fund assets whose values are not based on market observable data |

---

For more on each of these key judgements and estimates, see Note 22.

Sensitivity of defined benefit pension scheme estimates

For detailed disclosures, see 'Actuarial assumption sensitivities' in Note 22.

The Scheme is invested in certain assets whose values are not based on market observable data, such as investments in private equity funds and property. Due

diligence has been conducted to confirm that the values obtained in respect of these assets represent fair value. Given the nature of these investments, we are

unable to prepare sensitivities on how their values could vary as market conditions or other variables change.

**d) Goodwill**

---

| | |
|:---|:---|
| **Key judgement:** | –Determining the basis of goodwill impairment testing methodology, including the need for planning assumptions and internal capital allocations |
| **Key estimates:** | –Forecast cash flows for cash generating units |
|  | –Discount rates which factor in risk-free rates and applicable risk premiums |
| | All of these variables are subject to fluctuations in external market rates and economic conditions beyond management's control |

---

For more on each of these key judgements and estimates, see Note 14.

Sensitivity of goodwill

There have been no significant changes to the sensitivities set out in the 'Sensitivities of key assumptions in calculating value in use (VIU)' section in Note 19 to

the Consolidated Financial Statements in the 2024 Annual Report.

Santander UK plc**51**

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---

2. SEGMENTS

Santander UK's principal activity is financial services, mainly in the UK. The business is managed and reported on the basis of four segments, which are strategic

business units that offer different products and services, have different customers and require different technology and marketing strategies. Geographical

information is not provided, as substantially all of Santander UK's activities are in the UK.

**Results by segment**

**For the half year to**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Retail &** <br>**Business** <br>**Banking**<br>| **Consumer** <br>**Finance**<br>| **Corporate &** <br>**Commercial** <br>**Banking**<br>| **Corporate** <br>**Centre**<br>| **Total** |
| **30 June 2025** | **£m** | **£m** | **£m** | **£m** | **£m** |
| Net interest income | **1757** | **61** | **351** | **25** | **2194** |
| Non-interest income/(expense) | **77** | **97** | **55** | **(72)** | **157** |
| **Total operating income/(expense)** | **1834** | **158** | **406** | **(47)** | **2351** |
| **Operating expenses before credit impairment charges, provisions and charges** | **(978)** | **(81)** | **(193)** | **–** | **(1252)** |
| Credit impairment charges | **(78)** | **(10)** | **(17)** | **–** | **(105)** |
| Provisions for other liabilities and charges | **(211)** | **(12)** | **(50)** | **25** | **(248)** |
| **Total credit impairment charges, provisions and charges** | **(289)** | **(22)** | **(67)** | **25** | **(353)** |
| **Profit/(loss) before tax** | **567** | **55** | **146** | **(22)** | **746** |
| Revenue/(expense) from external customers | **2084** | **387** | **325** | **(445)** | **2351** |
| Inter-segment (expense)/revenue | **(250)** | **(229)** | **81** | **398** | **–** |
| **Total operating income/(expense)** | **1834** | **158** | **406** | **(47)** | **2351** |
| Revenue/(expense) from external customers includes the following fee and commission income:<sup>1</sup> |  |  |  |  |  |
| –Current account and debit card fees  | **257** | **–** | **24** | **–** | **281** |
| –Insurance, protection and investments  | **23** | **11** | **–** | **–** | **34** |
| –Credit cards | **1** | **–** | **–** | **–** | **1** |
| –Non-banking and other fees<sup>2</sup> | **1** | **–** | **42** | **4** | **47** |
| **Total fee and commission income** | **282** | **11** | **66** | **4** | **363** |
| Fee and commission expense | **(203)** | **–** | **(3)** | **(13)** | **(219)** |
| **Net fee and commission income/(expense)** | **79** | **11** | **63** | **(9)** | **144** |
| Customer loans | **171752** | **4787** | **18319** | **–** | **194858** |
| Customer deposits | **151112** | **–** | **22663** | **3906** | **177681** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| 30 June 2024 | £m | £m | £m | £m | £m |
| Net interest income/(expense) | 1684 | 74 | 383 | (37) | 2104 |
| Non-interest income/(expense) | 62 | 83 | 67 | (21) | 191 |
| **Total operating income/(expense)** | 1746 | 157 | 450 | (58) | 2295 |
| **Operating expenses before credit impairment charges, provisions and charges** | (999) | (77) | (205) | 2 | (1279) |
| Credit impairment charges | (49) | (8) | (3) | (1) | (61) |
| Provisions for other liabilities and charges | (98) | (15) | (18) | (11) | (142) |
| **Total credit impairment charges, provisions and charges** | (147) | (23) | (21) | (12) | (203) |
| **Profit/(loss) before tax** | 600 | 57 | 224 | (68) | 813 |
| Revenue from external customers | 1686 | 360 | 264 | (15) | 2295 |
| Inter-segment revenue/(expense) | 60 | (203) | 186 | (43) | – |
| **Total operating income/(expense)** | 1746 | 157 | 450 | (58) | 2295 |
| Revenue from external customers includes the following fee and commission income:<sup>1</sup> |  |  |  |  |  |
| –Current account and debit card fees  | 212 | – | 26 | – | 238 |
| –Insurance, protection and investments  | 25 | – | – | – | 25 |
| –Credit cards | 45 | – | – | – | 45 |
| –Non-banking and other fees<sup>2</sup> | 2 | 14 | 37 | 9 | 62 |
| **Total fee and commission income** | 284 | 14 | 63 | 9 | 370 |
| Fee and commission expense | (221) | (4) | (6) | (11) | (242) |
| **Net fee and commission income/(expense)** | 63 | 10 | 57 | (2) | 128 |
| **31 December 2024** |  |  |  |  |  |
| Customer loans | 171724 | 4759 | 18029 | – | 194512 |
| Customer deposits | 151815 | – | 22137 | 2781 | 176733 |

---

1 The disaggregation of fees and commission income as shown above is not included in reports provided to the chief operating decision maker but is provided to show the split by reportable segments.

2 Non-banking and other fees include mortgages (except mortgage account fees), consumer finance, commitment commission, asset finance, invoice finance and trade finance.

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The table below shows the relationship between Customer assets and Loans and advances to customers as presented in the Condensed Consolidated Balance

Sheet. Customer assets exclude Joint ventures, as they carry low credit risk and therefore have an immaterial ECL, and Other items, mainly accrued interest that

we have not yet charged to the customer's account and cash collateral. It also shows the relationship between customer liabilities (see above) and Deposits by

customers as presented in the Condensed Consolidated Balance Sheet.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Net carrying amount** | **Net carrying amount** | **Net carrying amount** | **Net carrying amount** |
|  | **Assets** | **Assets** | **Liabilities** | **Liabilities** |
|  | **30 June 2025** | 31 December 2024 | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m | **£m** | £m |
| Customer balances (gross) | **194858** | 194512 | **177681** | 176733 |
| Loan loss allowance | **(801)** | (784) | **–** | – |
| **Customer balances (net)** | **194057** | 193728 | **177681** | 176733 |
| Intercompany balances (including joint ventures) | **5364** | 4832 | **3211** | 3632 |
| Accrued interest | **664** | 714 | **908** | 854 |
| Other items | **143** | 134 | **(254)** | (252) |
| **Loans and advances to customers / Deposits by customers** | **200228** | 199408 | **181546** | 180967 |

---

3. OPERATING EXPENSES BEFORE CREDIT IMPAIRMENT CHARGES,

PROVISIONS AND CHARGES

**For the half year to**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
|  | **£m** | £m |
| Staff costs | **596** | 641 |
| Other administration expenses | **482** | 488 |
| Depreciation, amortisation and impairment | **174** | 150 |
|  | **1252** | 1279 |

---

4. CREDIT IMPAIRMENT CHARGES AND PROVISIONS

**For the half year to**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
|  | **£m** | £m |
| Credit impairment charges: |  |  |
| Loans and advances to customers | **102** | 33 |
| Recoveries of loans and advances, net of collection costs | **10** | 8 |
| Off-balance sheet credit exposures (See Note 21) | **(7)** | 20 |
|  | **105** | 61 |
| Provisions for other liabilities and charges (excluding off-balance sheet credit exposures) (See Note 21) | **247** | 141 |
| Charge for residual value and voluntary termination | **1** | 1 |
|  | **248** | 142 |
|  | **353** | 203 |

---

In H1-25 and H1-24 there were no material credit impairment charges on loans and advances to banks, non-trading reverse repurchase agreements, other

financial assets at amortised cost and financial assets at FVOCI.

Santander UK plc**53**

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---

5. TAXATION

The Santander UK group's effective tax rate for H1-25 was 26.1% (H1-24: 26.2%). Tax on profit differs from that calculated at the statutory rate as follows:

**For the half year to**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
|  | **£m** | £m |
| **Profit before tax** | **746** | 813 |
| Tax calculated at the statutory rate of25% (H1-24: 25%) | **187** | 203 |
| Bank surcharge on profits | **23** | 23 |
| Non-deductible preference dividends paid | **4** | 4 |
| Non-deductible UK Bank Levy | **6** | 5 |
| Other non-deductible costs and non-taxable income | **5** | 2 |
| Tax relief on dividends in respect of other equity instruments | **(20)** | (20) |
| Adjustment to prior year provisions  | **(10)** | (4) |
| **Tax on profit** | **195** | 213 |

---

Interim period corporation tax is accrued based on the estimated average annual effective corporation tax for the year.

6. DIVIDENDS ON ORDINARY SHARES

There wereno dividends paid on the Company's ordinary shares in issue (H1-24: £554m) as, in anticipation of the proposed acquisition of TSB by Santander UK

(subject to regulatory approvals and other consents), the Board passed a resolution in August 2025 to cancel the interim dividends that had been declared at 30

June 2025.

7. DERIVATIVE FINANCIAL INSTRUMENTS

The table below includes the notional amounts of transactions outstanding at the balance sheet date; they do not represent actual exposures.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 | 31 December 2024 |
|  |  | **Fair value**  | **Fair value**  |  | Fair value  | Fair value  |
|  | **Notional** <br>**amount** <br>| **Assets** | **Liabilities** | Notional <br>amount <br>| Assets | Liabilities |
|  | **£m** | **£m** | **£m** | £m | £m | £m |
| **Derivatives held for trading:**  |  |  |  |  |  |  |
| Exchange rate contracts | **12301** | **106** | **232** | 13755 | 238 | 156 |
| Interest rate contracts  | **28565** | **159** | **363** | 29296 | 294 | 489 |
| Inflation rate contracts | **141** | **16** | **32** | – | – | – |
| Equity and credit contracts | **605** | **106** | **22** | 681 | 124 | 21 |
| **Total derivatives held for trading** | **41612** | **387** | **649** | 43732 | 656 | 666 |
| **Derivatives held for hedging** |  |  |  |  |  |  |
| **Designated as fair value hedges:** |  |  |  |  |  |  |
| Exchange rate contracts | **3027** | **54** | **11** | 1712 | 42 | 8 |
| Interest rate contracts | **169319** | **729** | **598** | 146172 | 1055 | 477 |
|  | **172346** | **783** | **609** | 147884 | 1097 | 485 |
| **Designated as cash flow hedges:** |  |  |  |  |  |  |
| Exchange rate contracts | **21320** | **414** | **685** | 21535 | 698 | 266 |
| Interest rate contracts | **46591** | **393** | **480** | 54267 | 326 | 928 |
| Inflation rate contracts | **1850** | **100** | **–** | 1794 | 70 | – |
|  | **69761** | **907** | **1165** | 77596 | 1094 | 1194 |
| **Total derivatives held for hedging** | **242107** | **1690** | **1774** | 225480 | 2191 | 1679 |
| **Derivative netting**<sup>1</sup> | **–** | **(1290)** | **(1290)** | – | (1643) | (1643) |
| **Total derivatives** | **283719** | **787** | **1133** | 269212 | 1204 | 702 |

---

1 Derivative netting excludes the effect of cash collateral, which is offset against the gross derivative position. The amount of cash collateral received that had been offset against the gross derivative assets was

£1,116m (2024: £489m) and the amount of cash collateral paid that had been offset against the gross derivative liabilities was £24m (2024: £32m).

At 30 June 2025, the fair value of derivative assets included amounts due from Banco Santander group entities of £409m (2024: £544m) and the fair value of

derivative liabilities included amounts due to Banco Santander group entities of £596m (2024: £244m).

Santander UK plc**54**

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---

8. OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Loans and advances to customers | **40** | 44 |
| Debt securities | **56** | 56 |
| Other debt instruments | **28** | 36 |
|  | **124** | 136 |

---

9. LOANS AND ADVANCES TO CUSTOMERS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| **Loans and advances to customers** | **201053** | 200215 |
| Credit impairment loss allowances on loans and advances to customers | **(801)** | (784) |
| Residual value and voluntary termination provisions on finance leases | **(24)** | (23) |
| **Net loans and advances to customers** | **200228** | 199408 |

---

For movements in expected credit losses, see the 'Movement in total exposures and the corresponding ECL' table in the Santander UK group level - Credit risk

review section of the Risk review.

10. SECURITISATIONS AND COVERED BONDS

The information in this Note relates to securitisations and covered bonds for consolidated structured entities, used to obtain funding or collateral. It excludes

structured entities relating to credit protection transactions.

The gross assets securitised, or for the covered bond programme assigned, at 30 June 2025 and 31 December 2024 were:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| **Mortgage-backed master trust structures:** |  |  |
| –Holmes  | **6051** | 5109 |
| –Fosse | **2128** | 2383 |
|  | **8179** | 7492 |
| **Other asset-backed securitisation structures:** |  |  |
| –Repton | **761** | 718 |
| **Total securitisation programmes** | **8940** | 8210 |
| **Covered bond programme:** |  |  |
| –Euro35bn Global Covered Bond Programme | **27945** | 25695 |
| **Total securitisation and covered bond programmes** | **36885** | 33905 |

---

The following table sets out the internal and external issuances and redemptions in H1-25 and H1-24 for each securitisation and covered bond programme.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Internal issuances** | **Internal issuances** | **External issuances** | **External issuances** | **Internal redemptions** | **Internal redemptions** | **External redemptions** | **External redemptions** |
|  | **H1-25** | H1-24 | **H1-25** | H1-24 | **H1-25** | H1-24 | **H1-25** | H1-24 |
|  | **£m** | £m | **£m** | £m | **£m** | £m | **£m** | £m |
| **Mortgage-backed master trust structures:** |  |  |  |  |  |  |  |  |
| –Holmes | **86** | 106 | **750** | 750 | **–** | – | **–** | – |
| –Fosse | **–** | 760 | **–** | – | **–** | – | **–** | – |
| **Covered bond programme:** |  |  |  |  |  |  |  |  |
| –Euro35bn Global Covered Bond Programme | **–** | – | **2687** | 4099 | **–** | 41 | **894** | 1962 |
|  | **86** | 866 | **3437** | 4849 | **–** | 41 | **894** | 1962 |

---

In January 2025, £200m of the Fosse retained notes were sold to an external counterparty.

Santander UK plc**55**

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11. REVERSE REPURCHASE AGREEMENTS – NON-TRADING

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Agreements with banks | **1622** | 1363 |
| Agreements with customers | **9783** | 8975 |
|  | **11405** | 10338 |

---

12. OTHER FINANCIAL ASSETS AT AMORTISED COST

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Debt securities | **3718** | 3408 |
|  | **3718** | 3408 |

---

A significant portion of the debt securities are held in our eligible liquidity pool and consist mainly of government bonds and covered bonds.

13. INTERESTS IN OTHER ENTITIES

There have been no significant changes to the Santander UK group's interests in subsidiaries, joint ventures and unconsolidated structured entities, as set out in

Note 18 to the Consolidated Financial Statements in the 2024 Annual Report.

14. INTANGIBLE ASSETS

At 30 June 2025, intangible assets comprised goodwill of £1,199m (2024: £1,199m) and computer software of £321m (2024: £340m).

At30 June 2025, a review was performed to identify any potential impairment indicators for goodwill. No indicators of impairment were identified and so a full

impairment test was not performed for the H1-25.

There have been no significant changes to the sensitivity of value in use (VIU) to changes in assumptions, including changes required to achieve nil headroom,

as set out in Note 19 to the Consolidated Financial Statements in the 2024 Annual Report.

15. PROPERTY, PLANT AND EQUIPMENT

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Property** | **Office fixtures and** <br>**equipment**<br>| **Computer** <br>**software**<br>| **Operating lease** <br>**assets**<br>| **Right-of-use** <br>**assets**<br>| **Total**<sup>1</sup> |
|  | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** |
| Cost: |  |  |  |  |  |  |
| **At 1 January 2025** | **941** | **892** | **7** | **716** | **270** | **2826** |
| Additions | **2** | **20** | **–** | **123** | **12** | **157** |
| Reclassification to assets held for sale | **(15)** | **–** | **–** | **–** | **–** | **(15)** |
| Disposals | **(12)** | **(25)** | **–** | **(135)** | **(13)** | **(185)** |
| **At 30 June 2025** | **916** | **887** | **7** | **704** | **269** | **2783** |
| Accumulated depreciation: |  |  |  |  |  |  |
| **At 1 January 2025** | **238** | **685** | **7** | **142** | **191** | **1263** |
| Charge for the period | **10** | **26** | **–** | **42** | **9** | **87** |
| Impairment during the period | **14** | **4** | **–** | **–** | **3** | **21** |
| Reclassification to assets held for sale | **(7)** | **–** | **–** | **–** | **–** | **(7)** |
| Disposals | **(9)** | **(25)** | **–** | **(52)** | **(3)** | **(89)** |
| **At 30 June 2025** | **246** | **690** | **7** | **132** | **200** | **1275** |
| Carrying amount | **670** | **197** | **–** | **572** | **69** | **1508** |

---

1 Property, plant and equipment includes investment properties of £16m (2024: £16m).

See Note 21 for further details on the property provision made as part of transforming our branch network.

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16. DEPOSITS BY BANKS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Items in the course of transmission | **507** | 523 |
| Deposits held as collateral | **1236** | 682 |
| Other deposits<sup>1</sup> | **10161** | 12787 |
| Amounts due to Santander UK subsidiaries | **3** | 1 |
|  | **11907** | 13993 |

---

1 Includes balance drawn from the TFSME of £8.6bn (2024: £11.0bn).

17. DEPOSITS BY CUSTOMERS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Demand and time deposits<sup>1</sup> | **178335** | 177335 |
| Amounts due to other Santander UK Group Holdings plc subsidiaries | **172** | 122 |
| Amounts due to Santander UK Group Holdings plc<sup>2</sup> | **1355** | 1793 |
| Amounts due to fellow Banco Santander subsidiaries and joint ventures | **1684** | 1717 |
|  | **181546** | 180967 |

---

1 Includes capital amount guaranteed / protected equity index-linked deposits of £127m (2024: £173m).

2 Includes downstreamed funding from our immediate parent company Santander UK Group Holdings plc.

18. REPURCHASE AGREEMENTS – NON-TRADING

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Agreements with banks | **2114** | 2336 |
| Agreements with customers | **5476** | 6281 |
|  | **7590** | 8617 |

---

19. OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Structured Notes Programmes | **331** | 355 |
| Structured deposits | **639** | 605 |
| Zero Amortising Guaranteed Notes | **91** | 95 |
|  | **1061** | 1055 |

---

20. DEBT SECURITIES IN ISSUE

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Medium-term notes | **11559** | 9622 |
| Euro€35bnGlobal Covered Bond Programme | **19164** | 17211 |
| US$20bnCommercial Paper Programmes | **4382** | 3274 |
| Certificates of deposit | **1611** | 1196 |
| Credit linked notes | **602** | 441 |
| Securitisation programmes | **4884** | 3929 |
|  | **42202** | 35673 |

---

Santander UK plc**57**

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21. PROVISIONS

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Customer** <br>**remediation** | **Litigation** <br>**and other** <br>**regulatory** | **Regulatory** <br>**levies and** <br>**fees** | **Bank Levy** | **Property** | **ECL on** <br>**undrawn** <br>**facilities** <br>**and** <br>**guarantees** | **Restructuring** | **Other** | **Total** |
| | **Customer** <br>**remediation** | **Litigation** <br>**and other** <br>**regulatory** | **Regulatory** <br>**levies and** <br>**fees** | **Bank Levy** | **Property** | **ECL on** <br>**undrawn** <br>**facilities** <br>**and** <br>**guarantees** | **Restructuring** | **Other** | **Total** |
| | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** |
| **At 1 January 2025** | **348** | **112** | **2** | **4** | **28** | **85** | **18** | **14** | **611** |
| Additional provisions (See Note 4) | **9** | **9** | **93** | **–** | **17** | **5** | **68** | **98** | **299** |
| Provisions released (See Note 4) | **–** | **(42)** | **–** | **–** | **(1)** | **(12)** | **–** | **(3)** | **(58)** |
| Utilisation and other | **(51)** | **(16)** | **(27)** | **(39)** | **(2)** | **–** | **(32)** | **(85)** | **(252)** |
| Reclassification from provisions to other <br>assets<br>| **–** | **–** | **–** | **39** | **–** | **–** | **–** | **–** | **39** |
| **At 30 June 2025** | **306** | **63** | **68** | **4** | **42** | **78** | **54** | **24** | **639** |

---

**Customer remediation**

**Historical motor finance commission payments**

On 1 August 2025, the Supreme Court handed down its judgment that motor dealers acting as credit brokers do not owe fiduciary or disinterested duties to their

customers and, as a consequence, commission payments by lenders to motor dealers would not be unlawful on that basis. In addition, the Supreme Court held

that an unfair relationship under s.140A of the Consumer Credit Act 1974 had arisen in the Johnson case on its facts and awarded the amount of the commission

paid by the lender plus interest at a commercial rate as the remedy. It also confirmed that the test for unfairness was highly fact sensitive and it outlined a series

of non-exhaustive factors to consider in assessing unfair relationships in this context (indicating that no or partial disclosure was not necessarily enough on its

own to constitute an unfair relationship).

Following the Supreme Court judgment, the FCA announced on 3 August 2025 that it intends to undertake a consultation starting in early October 2025 and

lasting six weeks on an industry wide redress scheme. The consultation is expected to cover elements of the scope and design of the scheme that could affect

the ultimate financial impact to the Santander UK group.

There continue to be uncertainties related to the outcome of the FCA consultation and there may be further legal proceedings or actions that influence that final

outcome. Santander UK has updated the key assumptions related to the current provision in light of the Supreme Court decision and the FCA announcement

and has concluded that the existing provision balance of £287m at 30 June 2025 remains appropriate. These key assumptions include various estimates for

thresholds that may indicate a customer harm, the perimeter of commission models that could be in scope for redress, alternative redress approaches including

both opt-in and opt-out approaches which directly impact the expected claim rate, the redress amount, compensatory interest and operating costs. The provision

remains sensitive to the redress approach the FCA may require lenders and/or dealers to make. The provision will continue to be reviewed for any further

information that becomes available, with an update provided as and when necessary.

**Payment Protection Insurance claim**

AXA France IARD and AXA France Vie (former GE Capital Corporation Group entities, known as Financial Insurance Company Ltd (FICL) and Financial

Assurance Company Ltd (FACL), acquired by AXA SA in 2015) (together, AXA France) brought a claim against (i) Santander Cards UK Limited (formerly known

as GE Capital Bank Limited (GECB), which was acquired by Banco Santander SA in 2008 and subsequently transferred to Santander UK plc); and (ii) Santander

Insurance Services UK Limited (a Banco Santander SA subsidiary) (SISUK, and together with GECB, the Santander Entities). The claim relates to the allocation

of liability for compensation and associated costs in respect of a large number of PPI policies distributed by GECB pre-2005, which were underwritten by FICL

and FACL. Trial for this claim was held over five weeks beginning on 11 March 2025.

On 25 July 2025, the Commercial Court of England and Wales handed down its judgment in relation to the claim brought by AXA France (the Judgment). It found

against SISUK in relation to AXA France's claim pursuant to an indemnity in an agency agreement entered into between GECB, FICL and FACL in 2000 and

novated by GECB to SISUK in 2010. It also found GECB negligent in the sale of PPI policies, but this element of the claim was time barred to PPI policies sold in

the period between 2002 and 2005 and overlaps with the indemnity claim. The Judgment required SISUK to pay £515m plus interest of £162m on 15 August

2025. SISUK, funded by Banco Santander SA, has paid the Judgment debt in full.

The Santander Entities disagree with the outcome and have sought permission to appeal from the Court of Appeal. Santander UK has retained a provision which

represents its best estimate of the residual costs of GECB, which are not material.

There was no material impact of the Judgment on the H1-25 consolidated financial results of Santander UK and Santander UK plc and no material impact on the

Santander UK and Santander UK plc consolidated CET1 ratios at 30 June 2025.

No customers have suffered loss as a consequence of the claim brought by AXA France or the Judgment, nor does it impact upon past redress paid to

customers for PPI complaints.

**Regulatory levies and fees**

Regulatory levies and fees are payable to regulatory bodies such as the FCA, PRA and Bank of England in the ordinary course of business. In H1-25 there were

charges of £93m (H1-24: £41m) including £48m (H1-24: £nil) relating to FCA fees.

**Other**

In H1-25, other provisions included charges for operational risk provisions of £71m (H1-24: £71m), including fraud losses of £54m (H1-24: £54m).

**Transforming our Branch Network** 

In H1-25 we announced changes to our branch network to enable the bank to better serve the changing needs of its customers.Starting in June 2025, the

changes involve the closure of 95 branches, with new Community Bankers providing local communities with ongoing face-to-face support in these locations. Our

refreshed network will consist of 349 branches, including 290 full-service branches, 36 reduced-hours branches, 18 counter-free branches and 5 Work Cafés. As

part of these changes, approximately 750 of our colleagues have been placed at risk of redundancy, with support provided to those impacted, including

assistance in finding redeployment roles within the bank, access to specialist outplacement support, and dedicated wellbeing support.As a result, we have taken

£63m in charges in H1-25, including £25m in redundancy provisions and £17m in property provisions which are included in the table shown above. The

remaining £21mrelates to the impairment of property, see Note 15.

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22. RETIREMENT BENEFIT PLANS

The amounts recognised in the balance sheet were as follows:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| **Assets/(liabilities)** |  |  |
| Funded defined benefit pension scheme - surplus | **527** | 439 |
| Unfunded pension and post-retirement medical benefits | **(23)** | (23) |
| **Total net assets** | **504** | 416 |

---

**a) Defined contribution pension plans**

An expense of £39m (H1-24: £40m) was recognised for defined contribution plans in the period and is included in staff costs within operating expenses.

**b) Defined benefit pension schemes**

The total amount charged to the income statement was £4m (H1-24: charge of £6m).

The amounts recognised in other comprehensive income were as follows:

**For the half year to**

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 30 June 2024 |
|  | **£m** | £m |
| Loss on plan assets (excluding amounts included in net interest expense) | **258** | 634 |
| Actuarial (gains) arising from changes in demographic assumptions | **(52)** | (88) |
| Actuarial losses arising from experience adjustments | **69** | 64 |
| Actuarial (gains) arising from changes in financial assumptions | **(277)** | (451) |
| **Pension remeasurement**  | **(2)** | 159 |

---

The net assets recognised in the balance sheet were as follows:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Present value of defined benefit obligations | **(7131)** | (7380) |
| Fair value of scheme assets | **7635** | 7796 |
| **Net defined benefit assets** | **504** | 416 |

---

**Actuarial assumptions**

The principal actuarial assumptions used for the Scheme were:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **%** | % |
| **To determine benefit obligations**<sup>1</sup>**:** |  |  |
| –Discount rate for scheme liabilities | **5.7** | 5.5 |
| –General price inflation | **2.9** | 3.1 |
| –General salary increase | **1.0** | 1.0 |
| –Expected rate of pension increase | **2.8** | 3.0 |

---

---

| | | |
|:---|:---|:---|
|  | **Years** | Years |
| **Longevity at 60 for current pensioners, on the valuation date:** |  |  |
| –Males | **27.0** | 26.9 |
| –Females | **29.9** | 29.8 |
| **Longevity at 60 for future pensioners currently aged 40, on the valuation date:** |  |  |
| –Males | **28.6** | 28.5 |
| –Females | **31.4** | 31.3 |

---

1 The discount rate and inflation-related assumptions set out in the table above reflect the assumptions calculated based on the Scheme's duration and cash flow profile as a whole. The actual assumptions used

were determined for each section independently based on each section's duration and cash flow profile.

The majority of the liability movement in H1-25 was due to the increase in discount rate and decrease in inflation rate reflecting changes in the market.

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**Actuarial assumption sensitivities**

The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting

period, while holding all other assumptions constant.

---

| | | | |
|:---|:---|:---|:---|
|  |  | **(Decrease)/increase** | **(Decrease)/increase** |
|  |  | **30 June 2025** | 31 December 2024 |
| **Assumption** | **Change in pension obligation at period end from** | **£m** | £m |
| Discount rate | 50bps increase | **(390)** | (413) |
| General price inflation  | 50bps increase | **305** | 316 |
| Mortality | Each additional year of longevity assumed | **175** | 190 |

---

23. SUBORDINATED LIABILITIES

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| £325m Sterling preference shares | **343** | 343 |
| Undated subordinated liabilities | **205** | 205 |
| Dated subordinated liabilities | **1800** | 1837 |
|  | **2348** | 2385 |

---

InH1-25, certain debt securities and subordinated liabilities were repurchased, resulting in a loss of £3m (H1-24: £nil).

24. CONTINGENT LIABILITIES AND COMMITMENTS

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| Guarantees given to third parties | **726** | 493 |
| Formal standby facilities, credit lines and other commitments | **38102** | 35156 |
|  | **38828** | 35649 |

---

**Other legal, regulatory or tax matters**

Santander UK engages in discussion, and co-operates with the FCA, PRA, CMA and other regulators and government agencies in various jurisdictions in their

supervision and review of Santander UK including reviews exercised under statutory powers, regarding its interaction with past and present customers, both as

part of general thematic work and in relation to specific products, services and activities. During the ordinary course of business, Santander UK is also subject to

complaints and threatened legal proceedings brought by or on behalf of current or former employees, customers, investors or other third parties. In addition,

Santander UK is subject to audits, reviews, challenges and tax, regulatory or law enforcement investigations or proceedings by relevant regulators or government

agencies in various jurisdictions. All such matters are assessed periodically to determine the likelihood of Santander UK incurring a liability.

In those instances where it is concluded that it is not yet probable that a quantifiable payment will be made, for example because the facts are unclear or further

time is required to fully assess the merits of the case or to reasonably quantify the expected payment, no provision is made. In addition, where it is not currently

practicable to estimate the possible financial effect of these matters, no provision is made.

Historical motor finance commission payments

As set out in Note 21, Santander UK has recognised a provision for historical motor finance commission payments. There continue to be uncertainties related to

the outcome of the FCA consultation including the approach to identifying customer harm, the perimeter of commission models that could be in scope for redress

and the redress approach which impact the expected claim rate. There may also be further legal proceedings or actions that influence that final outcome. As

such, the ultimate financial impact could be materially higher or lower than the amount provided and it is not practicable to quantify the extent of any remaining

contingent liability.

German dividend tax arbitrage transactions

In June 2018 the Cologne Criminal Prosecution Office and the German Federal Tax Office commenced an investigation in relation to the historical involvement of

Santander UK plc, Santander Financial Services plc and Cater Allen International Limited (all subsidiaries of Santander UK Group Holdings plc) in German

dividend tax arbitrage transactions (known as cum/ex transactions). These transactions allegedly exploited a loophole of a specific German settlement

mechanism through short-selling and complex derivative structuring which resulted in the German government either refunding withholding tax where such tax

had not been paid or refunding it more than once. The German authorities are investigating numerous institutions and individuals in connection with alleged

transactions and practices which may be found to be illegal under German law.

During H1-25 we continued to cooperate with the German authorities and, with the assistance of external experts, to progress an internal investigation into the

matters in question. From Santander UK plc's perspective, the investigation is focused principally on the period 2009-2011 and remains on-going. There remain

factual issues to be resolved which may have legal consequences including potentially material financial penalties. These issues create uncertainties which mean

that it is difficult to predict the resolution of the matter including timing or the significance of the possible impact. These uncertainties mean it is not currently

practicable to make a reliable assessment of the size of any related potential liability. Any potential losses, claims or expenses suffered or incurred by Santander

Financial Services plc in respect of these matters have been fully indemnified by Santander UK plc, as part of the ring-fencing transfer scheme between

Santander UK plc, Santander Financial Services plc and Banco Santander SA.

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Other

In 2016, Visa Europe Ltd was sold to Visa Inc. As a member and shareholder of Visa Europe Ltd, Santander UK received upfront consideration made up of cash

and convertible preferred stock. The convertible preferred stock is now held by Santander Equity Investments Limited (SEIL), outside the ring-fenced bank.

Conversion of the preferred stock into Class A Common Stock of Visa Inc. depends on the outcome of litigation against Visa involving UK & Ireland multilateral

interchange fees (UK&I MIFs).

In addition, Santander UK and certain other UK&I banks have agreed to indemnify Visa Inc. in the event that the preferred stock is insufficient to meet the costs of

this litigation. Visa Inc. has recourse to this indemnity once more than €1bn of losses relating to UK&I MIFs have arisen or once the total value of the preferred

stock issued on closing has been reduced to nil. Santander UK's liability under this indemnity is capped at €40m.

At this stage, our assessment is that the litigation will not give rise to more than €1bn of losses relating to UK&I MIFs, which would mean that the indemnity would

not be called upon. However, the potential impact of the litigation is still not certain, and therefore it is still possible that the indemnity could be called upon.

As part of the sale of subsidiaries, businesses and other entities, and as is normal in such circumstances, Santander UK plc (and/or, where relevant, its

subsidiaries) has given warranties and/or indemnities to the purchasers.

25. OTHER EQUITY INSTRUMENTS

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Interest rate**  |  | **30 June 2025** | 31 December 2024 |
|  | **%** | **Next call date** | **£m** | £m |
| AT1 securities: |  |  |  |  |
| -£500mPerpetual Capital Securities | 6.30 | March 2025 | **–** | 500 |
| -£210mPerpetual Capital Securities | 4.25 | March 2026 | **210** | 210 |
| -£750m Perpetual Capital Securities | 6.50 | June 2027 | **750** | 750 |
| -£400mPerpetual Capital Securities | 8.75 | Sept 2029 | **400** | 400 |
| -£500m Perpetual Capital Securities | 7.63 | Sept 2030 | **500** | – |
|  |  |  | **1860** | 1860 |

---

26. ASSETS CHARGED AS SECURITY FOR LIABILITIES AND COLLATERAL

ACCEPTED AS SECURITY FOR ASSETS

**Securitisations and covered bonds**

As described in Note 14, to the Consolidated Financial Statements in the 2024 Annual Report, Santander UK plc and certain of its subsidiaries issue

securitisations and covered bonds through or involving structured entities. At 30 June 2025, there were £36,885m (2024: £33,905m) of gross assets in these

secured programmes and £757m (2024: £1,184m) of these related to internally retained issuances that were available for use as collateral for liquidity purposes

in the future.

At 30 June 2025, £2,889m (2024: £3,003m) of notes issued under securitisation and covered bond programmes had been retained internally, a proportion of

which had been used as collateral via third party bilateral secured funding transactions, which totalled £1,500m at 30 June 2025 (2024: £1,500m), or for use as

collateral for liquidity purposes in the future.

27. RELATED PARTY DISCLOSURES

There have been no material changes to the nature of related party transactions as set out in Note 37 to the Consolidated Financial Statements in the 2024

Annual Report. The financial position and performance of the Santander UK group were not materially affected in H1-25 by any related party transactions, or

changes to related party transactions, other than as disclosed herein.

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28. FINANCIAL INSTRUMENTS

**a) Measurement basis of financial assets and liabilities**

Disclosures relating to fair value measurement and hierarchy, valuation techniques and the control framework and related aspects pertaining to financial

instruments at fair value are included in the 2024 Annual Report. Valuation techniques, sensitivity methodologies and inputs at 30 June 2025 are consistent with

those described in Note 38 to the Consolidated Financial Statements in the 2024 Annual Report.

**b) Fair values of financial instruments carried at amortised cost** 

The following tables analyse the fair value of the financial instruments carried at amortised cost at 30 June 2025 and 31 December 2024. Cash and balances at

central banks, which consist of demand deposits with the Bank of England, together with cash in tills and ATMs, have been excluded from the table as the

carrying amount is deemed an appropriate approximation of fair value.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 |
|  | **Fair** | **Carrying** | Fair  | Carrying |
| | **value** | **value** | value | value |
| | **£m** | **£m** | £m | £m |
| Assets |  |  |  |  |
| Loans and advances to customers | **200105** | **200228** | 198376 | 199408 |
| Loans and advances to banks | **1411** | **1411** | 1032 | 1032 |
| Reverse repurchase agreements - non-trading | **11413** | **11405** | 10342 | 10338 |
| Other financial assets at amortised cost | **3491** | **3718** | 3190 | 3408 |
|  | **216420** | **216762** | 212940 | 214186 |
| Liabilities |  |  |  |  |
| Deposits by customers | **182136** | **181546** | 180467 | 180967 |
| Deposits by banks | **11908** | **11907** | 13973 | 13993 |
| Repurchase agreements - non-trading | **7598** | **7590** | 8622 | 8617 |
| Debt securities in issue | **42577** | **42202** | 35854 | 35673 |
| Subordinated liabilities | **2765** | **2348** | 2761 | 2385 |
|  | **246984** | **245593** | 241677 | 241635 |

---

**c) Fair values of financial instruments measured at fair value**

The following tables summarise the fair values of the financial assets and liabilities accounted for at fair value at 30 June 2025 and 31 December 2024, analysed

by their levels in the fair value hierarchy - Level 1, Level 2 and Level 3.

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | **30 June 2025** | **30 June 2025** | **30 June 2025** | **30 June 2025** | 31 December 2024 | 31 December 2024 | 31 December 2024 | 31 December 2024 |  |
|  |  | **Level 1** | **Level 2** | **Level 3** | **Total** | Level 1 | Level 2 | Level 3 | Total | Valuation  |
|  |  | **£m** | **£m** | **£m** | **£m** | £m | £m | £m | £m | technique |
| **Assets** |  |  |  |  |  |  |  |  |  |  |
| Derivative financial instruments | Exchange rate contracts | **–** | **574** | **–** | **574** | – | 978 | – | 978 | A |
|  | Interest rate contracts | **–** | **1281** | **–** | **1281** | – | 1675 | – | 1675 | A & C |
|  | Inflation rate contracts | **–** | **116** | **–** | **116** | – | 70 | – | 70 | A |
|  | Equity and credit contracts | **–** | **72** | **34** | **106** | – | 89 | 35 | 124 | B & D |
|  | Netting | **–** | **(1290)** | **–** | **(1290)** | – | (1643) | – | (1643) |  |
|  |  | **–** | **753** | **34** | **787** | – | 1169 | 35 | 1204 |  |
| Other financial assets at FVTPL | Loans and advances to customers | **–** | **–** | **40** | **40** | – | – | 44 | 44 | A |
|  | Debt securities | **56** | **–** | **28** | **84** | – | 56 | 36 | 92 | A, B & D |
|  |  | **56** | **–** | **68** | **124** | – | 56 | 80 | 136 |  |
| Financial assets at FVOCI | Debt securities | **7162** | **219** | **–** | **7381** | 8805 | 201 | 34 | 9040 | D |
|  |  | **7162** | **219** | **–** | **7381** | 8805 | 201 | 34 | 9040 |  |
| **Total assets at fair value** |  | **7218** | **972** | **102** | **8292** | 8805 | 1426 | 149 | 10380 |  |
| **Liabilities** |  |  |  |  |  |  |  |  |  |  |
| Derivative financial instruments | Exchange rate contracts | **–** | **928** | **–** | **928** | – | 430 | – | 430 | A |
|  | Interest rate contracts | **–** | **1441** | **–** | **1441** | – | 1894 | – | 1894 | A & C |
|  | Inflation rate contracts | **–** | **32** | **–** | **32** | – | – | – | – | A |
|  | Equity and credit contracts | **–** | **8** | **14** | **22** | – | 7 | 14 | 21 | B & D |
|  | Netting | **–** | **(1290)** | **–** | **(1290)** | – | (1643) | – | (1643) |  |
|  |  | **–** | **1119** | **14** | **1133** | – | 688 | 14 | 702 |  |
| Other financial liabilities at FVTPL | Debt securities in issue | **–** | **331** | **–** | **331** | – | 355 | – | 355 | A |
|  | Structured deposits | **–** | **639** | **–** | **639** | – | 605 | – | 605 | A |
|  | Zero Amortising Guaranteed Notes | **–** | **91** | **–** | **91** | – | 95 | – | 95 | D |
|  |  | **–** | **1061** | **–** | **1061** | – | 1055 | – | 1055 |  |
| **Total liabilities at fair value** |  | **–** | **2180** | **14** | **2194** | – | 1743 | 14 | 1757 |  |

---

**Transfers between levels of the fair value hierarchy** 

In H1-25 there were no significant (H1-24: no significant) transfers of financial instruments between levels 1 and 2 of the fair value hierarchy.

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**d) Fair value adjustments** 

The internal models incorporate assumptions that Santander UK believes would be made by a market participant to establish fair value. Fair value adjustments

are adopted when Santander UK considers that there are additional factors that would be considered by a market participant that are not incorporated in the

valuation model.

Santander UK classifies fair value adjustments as either 'risk-related' or 'model-related'. The fair value adjustments form part of the portfolio fair value and are

included in the balance sheet values of the product types to which they have been applied.

The fair value adjustments are set out in the following table:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| **Risk-related:** |  |  |
| - Bid-offer and trade specific adjustments | **9** | 6 |
| - Uncertainty | **4** | 4 |
| - Credit risk adjustment | **1** | 1 |
| - Funding fair value adjustment | **1** | – |
|  | **15** | 11 |

---

**Risk-related adjustments**

Risk-related adjustments are driven, in part, by the magnitude of Santander UK's market or credit risk exposure, and by external market factors, such as the size

of market spreads. There have been no significant changes to the risk-related adjustments as set out in Note 38(f) to the Consolidated Financial Statements in

the 2024 Annual Report.

**e) Internal models based on information other than market data (Level 3)** 

**Valuation techniques**

There have been no significant changes to the valuation techniques as set out in Note 38(g) to the Consolidated Financial Statements in the 2024 Annual Report.

**Reconciliation of fair value measurement in Level 3 of the fair value hierarchy**

The following table sets out the movements in Level 3 financial instruments in H1-25:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Assets** | **Assets** | **Assets** | **Assets** | **Liabilities** | **Liabilities** |
|  | **Derivatives** | **Other** <br>**financial** <br>**assets at** <br>**FVTPL**<br>| **Financial** <br>**assets at** <br>**FVOCI**<br>| **Total** | **Derivatives** | **Total** |
|  | **£m** | **£m** | **£m** | **£m** | **£m** | **£m** |
| **At 1 January 2025** | **35** | **80** | **34** | **149** | **(14)** | **(14)** |
| Total gains/(losses) recognised: |  |  |  |  |  |  |
| Fair value movements<sup>1</sup> | **1** | **(6)** | **–** | **(5)** | **–** | **–** |
| Transfers out | **–** | **–** | **(32)** | **(32)** | **–** | **–** |
| Settlements | **(2)** | **(6)** | **(2)** | **(10)** | **–** | **–** |
| **At 30 June 2025** | **34** | **68** | **–** | **102** | **(14)** | **(14)** |
| Gains/(losses) recognised in profit or loss/other comprehensive income relating to assets and <br>liabilities held at the end of the period<sup>1</sup><br>| **1** | **(6)** | **–** | **(5)** | **–** | **–** |

---

1 Fair value movements relating to derivatives and other financial assets at FVTPL are recognised in other operating income in the income statement.

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29. ASSETS HELD FOR SALE

**Assets held for sale** 

**Sale of property**

The sale of the whole of Santander House, Milton Keynes is expected to complete in 2025. As such, the Santander UK group classified Santander House, which

is included in the Corporate Centre segment and carried at the sales price, as held for sale.

At 30 June 2025 and 31 December 2024, assets held for sale comprised:

---

| | | |
|:---|:---|:---|
|  | **30 June 2025** | 31 December 2024 |
|  | **£m** | £m |
| **Assets** |  |  |
| Property, plant and equipment | **20** | 12 |
| **Net assets held for sale** | **20** | 12 |

---

30. EVENTS AFTER THE BALANCE SHEET DATE

There have been no significant events between 30 June 2025 and the date of approval of these financial statements which would require a change to or

additional disclosure in the financial statements, except:

**Historical motor finance commission payments**

Following the Supreme Court judgment on 1 August and the subsequent FCA statement on 3 August 2025, the Santander UK group has updated the key

assumptions of the provision estimate and has concluded that the existing provision balance of £287m at 30 June 2025 remains appropriate.

**Dividends**

In anticipation of the proposed acquisition of TSB by Santander UK (subject to regulatory approvals and other consents), the Board passed a resolution in August

2025 to cancel the interim dividends that had been declared at 30 June 2025.

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| Shareholder information |  |  |
|  | **Contents** |  |
|  | **Forward-looking statements** | **<u>[65](#if12dce57771a4a33887463cdb1b49da6_631)</u>** |
|  | **Calculations** | **<u>[65](#if12dce57771a4a33887463cdb1b49da6_631)</u>** |
|  | **Other** | **<u>[66](#if12dce57771a4a33887463cdb1b49da6_640)</u>** |
|  | **Glossary** | **<u>[66](#if12dce57771a4a33887463cdb1b49da6_643)</u>** |
|  | **Board changes** | **<u>[66](#if12dce57771a4a33887463cdb1b49da6_646)</u>** |
|  | **Risk factors** | **<u>[67](#if12dce57771a4a33887463cdb1b49da6_649)</u>** |

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Santander UK plc**65**

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Forward-looking statements

The Company and its subsidiaries (together Santander UK) may from time to time make written or oral forward-looking statements. The Company makes written

forward-looking statements in this Half Yearly Financial Report and may also make forward-looking statements in its periodic reports to the SEC on Forms 20-F

and 6-K, in its offering circulars and prospectuses, in press releases and other written materials and in oral statements made by its officers, directors or

employees to third parties.

By their very nature, forward-looking statements are not statements of historical or current facts; they cannot be objectively verified, are speculative and involve

inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not

be achieved. Santander UK cautions readers that a number of important factors, could cause actual results to differ materially from the plans, objectives,

expectations, estimates and intentions expressed in such forward-looking statements made by Santander UK or on its behalf. For more, see 'Forward-looking

statements' in the Shareholder information section of the 2024 Annual Report.

Please also refer to our latest filings with the SEC (including, without limitation, our Annual Report on Form 20-F for the year ended31 December 2024) for a

discussion of certain risk factors and forward-looking statements. Undue reliance should not be placed on forward-looking statements when making decisions

with respect to any Santander UK member and/or its securities. Investors and others should take into account the inherent risks and uncertainties of forward-

looking statements and should carefully consider the non-exhaustive list of important factors in the 2024 Annual Report, and how it could affect our operations

and financial position. Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and

views taken on the date on which they are made; such knowledge, information and views may change at any time. Santander UK does not undertake any

obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Calculations

There have been no changes to the Santander UK group's calculations as set out in our 2024 Annual Report.

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| | |
|:---|:---|
| **Measure** | **Description and calculation** |
| Non-interest income | Net fee and commission income plus other operating income. |
| Stage 1 ratio | The sum of Stage 1 drawn assets divided by the sum of total drawn assets. |
| Stage 2 ratio | The sum of Stage 2 drawn assets divided by the sum of total drawn assets. |
| Stage 3 ratio | The sum of Stage 3 drawn and Stage 3 undrawn assets divided by the sum of total drawn assets and stage 3 undrawn assets. |
| Wholesale funding | Deposits by customers reported in Corporate Centre, debt securities in issue, subordinated debt, AT1 issuance and Central Bank facilities, <br>TFSME and indexed-long term repos used for funding.<br>|

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Other

**Banco Santander's acquisition of TSB from Sabadell**

On 1 July 2025, Banco Santander announced that it reached an agreement to acquire 100% of TSB from Sabadell, with a valuation of £2.65bn in an all-cash

transaction. Completion of the transaction is expected to occur in the first quarter of 2026. The transaction was approved by Sabadell shareholders on 6 August

2025 but remains subject to regulatory approvals and other consents.

TSB is a well-established UK retail bank with a nationwide network of 175 branches and outlets, and a growing digital presence. It serves approximately 5 million

customers, primarily in the personal and small business segments, with £34bn in mortgages (2% market share in the UK) and £35bn in deposits.

The acquisition further strengthens Banco Santander's position in one of its core markets, expanding its customer base and lending capacity across the UK.

Banco Santander intends to integrate TSB in the Santander UK group. Santander UK would become the third largest bank in the country by personal current

account balances and number four in mortgages<sup>1</sup>. The integration would be subject to regulatory and other approvals.

When combined, the two banks would serve nearly 28 million retail and business customers nationwide, giving TSB customers access to Banco Santander's

international network and allowing them to benefit from Banco Santander's leading technology platforms.

**Proven integration capability**

Banco Santander is one of the largest international investors in the UK financial services industry, having successfully acquired and integrated Abbey National plc

in 2004 and both Alliance & Leicester plc and the Bradford & Bingley savings business in 2008. It has a proven track record in successful banking platform

migrations.

By integrating technology across Santander UK and TSB, Banco Santander expects to unlock substantial operational efficiencies and support long-term

profitability through a simplified, scalable digital banking model. We are fully committed to ensuring a seamless integration, by leveraging our market leading

technology and significant experience. Maintaining the highest levels of service for customers across both banks will be a key priority and we will support all

colleagues through the transition, as we invest in building a stronger bank for the future.

Glossary

There have been no significant changes from the glossary in the 2024 Annual Report.

Board changes

The following changes to the Board of Directors of Santander UK Group Holdings plc and Santander UK plc (together, the Boards) have taken effect in the year

to date or have been announced as a future change:

Tom Scholar was appointed to the Boards as an Independent Non-Executive Director on 16 May 2025. He succeeded William Vereker as Chair with effect from

18 July 2025. William resigned from the Boards on 18 July 2025.

Ed Giera retired from the Boards on 31 March 2025. Enrique Alvarez Labiano was appointed to the Boards as an Executive Director on 12 February 2025.

1. Banco Santander industry analysis using latest public data available on 1 July 2025.

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Risk factors

An investment in Santander UK plc (the Company) and its subsidiaries (us, we or Santander UK) involves a number of risks. A summary of the material risks is

set out in the 'Shareholder information' section of the 2024Annual Report on Form 20-F. The principal risks described in these risk factors remain unchanged,

except for: 'Santander UK's operations, financial condition and prospects are materially impacted by economic conditions in the UK and disruptions in the global

economy and global financial markets', 'Santander UK is subject to substantial and evolving regulation and governmental oversight' and 'Santander UK is

exposed to risk of loss and damage from civil litigation and/or criminal legal and regulatory proceedings', which have been replaced as follows:

**Santander UK's operations, financial condition and prospects are materially impacted by economic conditions in the UK and disruptions in the** 

**global economy and global financial markets**

Santander UK's business activities are concentrated in the UK, where it offers a range of banking and financial products and services to UK retail and corporate

customers. As a consequence, Santander UK's operations, financial condition and prospects are significantly affected by general economic and political

conditions in the UK.

The UK economy had a strong start to 2024 with quarterly growth above pre-pandemic levels for the first and second quarters. However, growth slowed in the

second half of 2024 due, in part, to uncertainty around the UK Government's Autumn Budget which reduced confidence. As such, there remains a risk that the

UK economy will see lower growth in 2025 with interest rates falling less quickly than expected, Brexit continuing to impact exports and geopolitical events

disrupting markets and lowering business and household confidence. Interest rates have risen sharply since 2022 and although interest rates have started to

decrease, there remains a risk that increases will be needed in the future. In particular there remains a risk that increases will be needed if rising inflation returns.

This would put further pressure on household finances for some of Santander UK's customers due to a sharp rise of the costs, or a continuation of higher costs

for refinancing their mortgage or a continuation of these higher costs and significantly higher costs of borrowing overall. Continued higher mortgage rates could

also dampen demand in the housing market, leading to further drops in new business or steeper falls in house prices, reducing the value of the collateral

Santander UK holds against mortgages. These risks could create further downward pressure on the economy; for example: a large surge in business failures

with knock-on effects for the labour market resulting in high rates of unemployment that affect the ability of customers to pay their debts, which could also

contribute to negative multiplier effects through delayed investment and spending; and a stronger push towards protectionism as governments look to protect

home industries. This could also lead to a longer-term turn in the credit cycle with a broader contraction of credit as lenders attempt to protect themselves from

increased losses. In addition, the UK economy and banking sector are impacted by the political environment and related government policy. For example, there

will be increased business cost as a result of increased employer's National Insurance, which will impact Santander UK's customers and the wider economy.

In particular, Santander UK faces, among others, the following risks in any period of economic uncertainty (including the effect of those risks on gross domestic

product, inflation, unemployment and house prices):

–Reduced demand for Santander UK's products and services - particularly the potential for reduced mortgage market volumes.

–Inability of Santander UK's borrowers to make payments on their loans in full or on time.

–The degree of uncertainty concerning economic conditions may adversely affect the accuracy of Santander UK's estimates, which may, in turn, impact the

reliability of the IFRS 9 model and process to determine the sufficiency of Santander UK's loan loss allowances.

–Lower house or other asset prices, reducing the value of collateral Santander UK holds on mortgage and other lending.

–Higher and more persistent inflation, reducing Santander UK's profitability and increasing the cost of living for Santander UK's borrowers.

–The value and liquidity of the portfolio of investment securities that Santander UK holds may be adversely affected.

Santander UK is also exposed to:

–Broader geopolitical issues, which remain heightened with the potential for a further pushback against globalism. Further moves towards unilateralism may also

cause increased tension and/or hostilities between nations, which could negatively impact the global economy and financial markets;

–The continuation or escalation of conflicts between Russia and Ukraine, and in Israel and the Middle East, including the spread of these conflicts to other

countries in these regions, and/or the emergence of future regional conflicts and wars with global impact, which could lead to further increases in energy prices

(in particular, gas prices, if supplies to Europe remain interrupted) and heightened inflationary pressure;

–US political risks and possible impacts of the new administration, including increased deregulation, leading to increased investor focus on UK banking sector

profitability and increased competitive pressures on non-US banks such as Santander UK, and the imposition of new tariffs, increases in existing tariffs,

retaliatory tariffs or other measures and trade policies affecting imports of goods and services, which could negatively impact the global economy or certain

sectors of the economy and increase the risk of recession;

–Climate change risks which could result in material damage to Santander UK's customers' property or businesses or have a material impact on Santander

UK's customers' business models under a transition to a low carbon economy; and

–Social unrest as a result of severe economic disruption.

Adverse changes in the credit quality of Santander UK's borrowers or counterparties or a general deterioration in UK economic conditions could reduce the

recoverability and value of Santander UK's assets and require an increase in its level of provisions for expected credit losses. There can be no assurance that

Santander UK will not have to increase its provisions for loan losses in the future as a result of increases in non-performing loans or for other reasons beyond its

control. Material increases in Santander UK's provision for loan losses and write-off or charge-offs have had and could again have a material adverse effect on its

operations, financial condition and prospects. Any significant reduction in the demand for Santander UK products and services, a sustained downturn in the UK

economy or changes in central bank interest rates could have a material adverse effect on Santander UK's operations, financial condition and prospects.

Economic instability and downturns beyond the UK may also impact the UK economy as a whole. Europe's manufacturing base is heavily dependent upon

natural gas, and any further restriction in supply and significantly increased costs are expected to have a material adverse impact on the Eurozone economy,

which could lead to disruption and volatility in the global financial markets, as a result of debt sustainability concerns. This could have a material adverse impact

on Santander UK, including Santander UK's ability to access capital and liquidity on financial terms acceptable to Santander UK, which could have a material

adverse effect on Santander UK's operations, financial condition and prospects.

A recessionary economic environment could also lead to rating downgrades affecting the UK, Santander UK, its customers, investments and/or instruments,

causing capital impacts due to increased RWAs, an increase in the volatility of wholesale markets and the cost of funding.

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**Santander UK is subject to substantial and evolving regulation and governmental oversight**

As a financial services group, Santander UK is subject to extensive financial services laws, regulations, administrative actions and policies in the UK, and in each

other location in which Santander UK operates. For a discussion of the principal laws and regulations to which Santander UK is subject, see 'Regulation of the

Santander UK group'. The sector continues to face unprecedented levels of government and regulatory intervention and scrutiny, and changes to the regulations

governing financial institutions and the conduct of business. In addition, regulatory and governmental authorities have continued to consider further enhanced or

new legal or regulatory requirements intended to reduce the probability and impact of future crises (or otherwise assure the stability and operational resilience of

institutions under their supervision), enhance consumer protection, address climate change risks, the risk of greenwashing and environmental, social and

governance risks generally, and improve controls in relation to financial crime-related risks. Santander UK expects regulatory and government intervention in the

banking sector to remain high for the foreseeable future. An intensive approach to supervision is maintained in the UK by the BoE as resolution authority, the

PRA, the FCA, the Competition and Markets Authority (CMA), the Payment Systems Regulator (PSR), the Information Commissioner's Office (ICO) and the

Serious Fraud Office (SFO).

As well as being subject to UK regulation, as part of the Banco Santander group, Santander UK is also affected by other regulators such as the Banco de

España (the Bank of Spain) and the European Central Bank (ECB), as well as various legal and regulatory regimes (including the US) that have extra-territorial

effect. Extensive legislation and implementing regulations affecting the financial services industry have recently been adopted in regions that directly or indirectly

affect Santander UK's business, including Spain, the US, the EU and other jurisdictions. Because Santander UK is subject to oversight by multiple regulators or

government bodies related to the same conduct or activity, this can increase business uncertainty and the amount of resources needed to ensure Santander

UK's compliance with the different legal and regulatory regimes.

The manner in which financial services laws, regulations and policies are applied to the operations of financial institutions has gone through great change which

is still being implemented and reviewed. Recent proposals and measures taken by governmental, tax and regulatory authorities and further future changes in

supervision and regulation (in particular in the UK), are beyond Santander UK's control and could materially affect Santander UK's business.

Changes in UK legislation and regulation applicable to the financial sector may also affect Santander UK's competitive position, particularly if such changes are

implemented before international consensus is reached on key issues affecting the industry. There has been a recognition from the UK government that changes

need to be made to the UK's regulatory architecture in order to ensure that the sector remains internationally competitive and is able to grow. This has resulted in

each of the financial services regulators setting out how they plan to improve growth in the sector. For example, the UK has delayed the implementation of Basel

3.1 in order to assess how it is implemented internationally. HMT also issued a call for evidence in November 2024 on a new "Financial Services Growth &

Competitiveness Strategy" that could result in changes to UK regulation.

Further, Santander UK may face higher compliance costs and the need to carefully manage capacity to readily respond to multiple regulatory or government

policy changes simultaneously. Any legislative or regulatory actions and any required changes to Santander UK's business operations resulting from such laws,

regulations and policies as well as any deficiencies in Santander UK's compliance with them could result in significant loss of revenue, could have an impact on

Santander UK's strategy, limit its ability to pursue business opportunities in which Santander UK might otherwise consider engaging, limit Santander UK's ability

to provide certain products and services and/or result in enforcement action (including the imposition of financial and other penalties). They may also affect the

value of assets that Santander UK holds, requiring Santander UK to increase its prices thereby reducing demand for Santander UK's products or otherwise have

a material adverse effect on its operations, financial condition and prospects. Accordingly, there can be no assurance that future changes in laws, regulations and

policies or in their interpretation or application by Santander UK or by regulatory authorities will not adversely affect Santander UK.

Specific examples of areas where regulatory changes and increased regulatory scrutiny could have a material adverse effect on Santander UK's operations,

financial condition and prospects include, but are not limited to, the following:

**–Banking Reform**:In accordance with the provisions of the Financial Services (Banking Reform) Act 2013 UK banking groups that hold significant retail

deposits (originally more than £25 billion of "core deposits"), including Santander UK, were required to separate or 'ring-fence' their retail banking activities from

their wholesale banking activities by 1 January 2019. Santander UK completed its ring-fencing plans in advance of the legislative deadline of 1 January 2019.

However, given the complexity of the ring-fencing regulatory regime and the material impact on the way Santander UK conducts its business operations in the

UK, there is a risk that Santander UK and/or Santander UK plc may be found to be in breach of one or more ring-fencing requirements. This might occur, for

example, if prohibited business activities are found to be taking place within the ring-fence, mandated retail banking activities are found being carried on in a

UK entity outside the ring-fenced part of the group or Santander UK breached a PRA ring-fencing rule. If Santander UK were found to be in breach of any of

the ring-fencing requirements placed upon it under the ring-fencing regime, it could be subject to supervisory or enforcement action by the PRA, the

consequences of which might include substantial financial penalties, imposition of a suspension or restriction on Santander UK's UK activities or, in the most

serious of cases, the forced restructuring of the UK group, entitling the PRA (subject to the consent of the UK Government) to require the sale of a Santander

ring-fenced bank or other parts of the UK group. Following the publication of the final report of the Independent Panel on Ring-Fencing and Proprietary Trading

on 15 March 2022, HMT announced its intention to implement certain limited reforms to the ring-fencing regime, including (i) increasing the ring-fencing core

deposit threshold from £25 billion to £35 billion, (ii) adding a new secondary 'trading assets' condition (exempting from the regime banks with trading assets

which do not exceed 10% of Tier 1 capital), (iii) introducing a de minimis threshold to allow ring-fenced banks to incur an exposure to relevant financial

institutions (RFIs) of up to £100,000 per RFI at any one time, and (iv) allowing ring-fenced banks to establish operations outside of the UK or the European

Economic Area, have exposure to RFIs that qualify as small and medium sized enterprises (SMEs) and undertake a wider range of activities such as market

standard trade finance activities or inflation swaps. These reforms entered into force on 4 February 2025 and may lead to further review or amendment of

Santander UK's operational and compliance arrangements in relation to the regime.

**–Competition:**Competition authorities (which in the UK include the CMA, the FCA and the PSR) can run reviews and investigations into any aspect of

Santander UK's operations or the functioning of any markets in which Santander UK operates, which could lead to Santander UK being required to change the

markets in which it operates. In addition, the CMA's widening focus on market outcomes may also result in increased reviews by the CMA of the markets in

which Santander UK operates. The recently passed Digital Markets, Competition and Consumers Bill (DMCC) will introduce significant reforms to the powers

of competition authorities in relation to the aforementioned investigations, including substantial new fining powers. The DMCC also introduces other wide-

ranging reforms to the UK's competition, consumer protection and digital markets regulatory landscape some of which could impact Santander UK's business.

For instance, the DMCC grants the CMA the power to directly determine whether certain consumer protection laws have been infringed without needing to go

through the courts.

**–Payments:**Santander UK has been required to make systems changes and update processes to comply with a number of new payment regulations. Within

the UK, the PSR has mandated Santander UK to work on the extension of Confirmation of Payee for all payment service providers (PSPs) in the UK and has

introduced a new APP mandatory reimbursement requirement which aims to reduce the level of customer fraud. Under these standards, Santander UK

assumes responsibility for certain categories of customer losses and any inherent failings in system design may lead to fines from regulators and/or

compensation being paid to customers. Santander UK also expects to see significant developments in the key UK payment systems architecture, with a

systems update of the high value Clearing House Automated Payment System (CHAPS) through the Real Time Gross Settlement (RTGS), BACS, the

potential development of a UK central bank digital currency or similar system, and the development of Open Banking payments and other lower value retail

payment schemes. In November 2024, the UK Government published its report on the "National Payments Vision", which sets out its ambitions for the

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payments sector and is expected to generate a wider industry review of the UK payments landscape in 2025. As demonstrated by other payments initiatives,

such as Open Banking and the second Payment Services Directive (PSD2), reforms in this space have the potential to exacerbate a number of existing risks

including data loss/data protection, cybersecurity, fraud and wider financial crime risk, which in turn could give rise to increased costs, litigation risk and risk of

regulatory investigation and enforcement activity.

**–Data Privacy:**In connection with its processing of personal data, Santander UK is subject to data protection laws and regulations – in particular, the UK GDPR

(as defined and interpreted in accordance with the Data Protection Act 2018) and the Data Protection Act 2018 (DPA). In the event Santander UK breaches

any such data protection laws, it could face significant enforcement action and/or financial penalties as well as reputational damage, which could ultimately

have a material adverse effect on Santander UK's operations, financial condition and prospects.

**–Cybersecurity:**Santander UK is subject to cybersecurity regulations and cybersecurity incident reporting requirements. Cybersecurity incident reporting often

require short timeframes and there is a risk that Santander UK will fail to meet the reporting deadlines for any given cybersecurity incident. There will be legal,

reputational and regulatory risks in the event Santander UK, or the third-party providers Santander UK works with, are found to be out of compliance with these

regulations and reporting requirements.

**–Consumer Duty:**The FCA's rules and guidance on a broad consumer duty that firms undertaking regulated activities with retail clients must observe (the

Consumer Duty) have been in force for open products and services since 31 July 2023 and for closed products and services since 31 July 2024. The

Consumer Duty has three elements: (i) a "Consumer Principle", which reflects the overall standards of behaviour the FCA expects from firms (a firm must act to

deliver good outcomes for retail customers), (ii) three cross-cutting rules that articulate the standards of conduct expected under the Consumer Principle (firms

must act in good faith towards retail customers, avoid causing foreseeable harm to retail customers and enable and support retail customers to pursue their

financial objectives), and (iii) four outcomes that build on the Consumer Principle and cross-cutting rules, comprising a suite of rules and guidance setting more

detailed expectations for a firm's conduct in four areas that represent the key elements of the firm-consumer relationship (product design and governance, price

and value, consumer understanding and consumer support). The Consumer Duty requires firms to end unfair charges and fees, make it as easy to switch or

cancel products as it was to take them out in the first place, provide helpful and accessible customer support, act quickly to respond to customer queries,

provide timely, clear and easily understandable information to customers regarding products and services, provide products and services that are appropriate

for their customers, and focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each

interaction. The Consumer Duty also requires firms to monitor, evidence and report against many of the requirements. Santander UK has fully implemented the

Consumer Duty, which required a review of, and changes to, Santander UK's products, services, policies, systems and procedures against the FCA

requirements. The Consumer Duty affects elements of Santander UK's business model and strategy, the products and services it offers and the pricing or costs

of those products and services, which may in turn affect the revenue and profits that Santander UK is able to generate. It may result in an increase in claims to

the Financial Ombudsman Service (FOS) by customers alleging a breach of the standards of the Consumer Duty or in regulatory action by the FCA.

**–Consumer redress:**The FOS is the statutory body responsible for handling complaints by retail customers against regulated financial services firms. The

FOS is not bound to follow law or regulation when issuing decisions but rather must decide each complaint based on what is 'fair and reasonable' in the

circumstances. As a result, there can be a lack of clarity as to how the FOS will rule on a particular complaint, even where a firm believes that it has been

operating within legal and regulatory requirements. Further, while the FOS is not formally a precedent-setting body, in practice its decisions can set a

precedent, requiring firms to apply the reasoning given in one complaint to similar historic and future complaints. This means that the ramifications of a

particular complaint can extend well beyond the circumstances of the original complainant. However, the FOS will rule on a particular case, even where the

bank believes that it is operating within the legal and regulatory requirements. The FOS is not bound by its past decisions and has the ability to change its

approach to cases, which can make it harder for firms to consistently address complaints. Together, these factors mean that Santander faces legal and

regulatory risk and uncertainty as a result of FOS decisions. The UK Government has acknowledged that there is a need to review the UK's redress system

particularly with respect to so-called 'mass redress events' where there are large numbers of complaints about the same issue and the FCA and FOS launched

a joint call for input to this effect in November 2024.

**–Outsourcing and Third-Party Risk Management:**In March 2021, the PRA published Supervisory Statement 2/21 on outsourcing and third-party risk

management (SS2/21). SS2/21 is the primary source of reference for Santander UK when interpreting and complying with its requirements on outsourcing and

third-party risk management, although it should be read alongside the EBA guidelines on outsourcing arrangements, and PRA and FCA rules and guidance on

outsourcing. The scope of contracts required to meet the PRA requirements on outsourcing and third-party risk management extends beyond that set out in the

EBA guidelines on outsourcing and also captures material non-outsourcing. SS2/21 also requires that intragroup outsourcing be subject to the same

requirements and expectations as external outsourcing and should not be treated as being inherently less risky. If Santander UK is unable to meet the PRA or

FCA requirements on outsourcing and third-party risk management, it may face supervisory measures, which could in turn have a material adverse effect on

Santander UK's operations, financial condition and prospects. In November 2024, the PRA and FCA published a joint Policy Statement setting out their final

rules for critical third parties. While Santander UK is not captured by the regime, Santander UK does outsource services to companies that will be captured

which may have an impact on Santander UK's operations and financial condition.

**–Operational Resilience**:In March 2021, the PRA and the FCA published Supervisory Statement 1/21 (SS1/21) and Policy Statement 21/3 (PS21/3), which

set out their final rules and guidance intended to strengthen operational resilience in the financial services sector. The operational resilience rules required

Santander UK to establish processes to identify its 'important business services', being those services which, if disrupted, could cause intolerable harm to

clients or pose a risk to that firm's safety and soundness or to the stability of the UK financial system. Santander UK has identified these services and has set

impact tolerances for all important business services and delivered a framework and processes to ensure it is able to remain within these tolerances in severe

but plausible disruption scenarios. On an ongoing basis, if Santander UK is unable to meet the PRA and FCA requirements relating to operational resilience, it

may face supervisory measures, which could in turn have a material adverse effect on Santander UK's operations, financial condition and prospects.

**–Climate Change:**The UK Government has announced its intention to roll out new sustainability disclosure requirements, which will expand on those required

under the TCFD framework, including transition plans to align to net-zero, as well as a new UK green taxonomy. Santander UK Group Holdings plc is

implementing the recommendations of TCFD on a group level: further reporting will require additional gathering of data and digitalisation of reporting and there

will be legal, reputational and regulatory risks should Santander UK Group Holdings plc fail to adequately report, or to demonstrate appropriate capabilities to

transition and support its customers to transition to a low carbon economy.

**–Access to Cash:**FSMA 2023 grants the BoE supervisory powers to regulate the UK wholesale cash distribution market, including powers to impose fines and

empowers HMT to designate firms to be subject to FCA oversight for the purpose of ensuring the reasonable provision of cash access (including free cash

access). Santander UK has been designated by HMT for these purposes and accordingly has been subject to the FCA's access to cash rules since September

2024. The access to cash regime is likely to have ongoing implications for Santander UK's business decisions and strategy, in particular in relation to

Santander UK's branch network and Santander UK's participation in the wholesale cash distribution market generally. In the event that the BoE imposes any

fines with respect to Santander UK's participation in the wholesale cash distribution market or the FCA were to take enforcement action against Santander UK

in relation to retail cash access, this could result in reputational damage and have a material adverse effect on Santander UK's operations, financial condition

and prospects.

**–Financial Crime**: The UK financial crime legislative framework has evolved significantly in recent years and is subject to regular change. As such, Santander

UK may face higher compliance costs and must carefully manage its capacity to respond to multiple regulatory changes simultaneously. Any deficiencies in

Santander UK's compliance with such regulatory changes could result in enforcement action including the imposition of financial or other penalties. Recent

changes to the UK financial crime legislative framework include the introduction of the Economic Crime (Transparency and Enforcement) Act 2022 (ECTEA),

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) and the Money Laundering and Terrorist Financing (Amendment) Regulations 2023.

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Further changes to the UK financial crime legal and regulatory framework are anticipated during 2025, following multiple consultations in 2024, including HMT's

consultation on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

(MLRs) and the FCA's consultation on updates to its guidance on politically exposed persons (PEPs). Responses to both consultations may follow in 2025.

Other changes have already entered into force. For instance, in November 2024, the FCA updated its Financial Crime Guide, aiming to provide clearer

expectations for firms' financial crime controls and updated guidance on emerging risks such as sanctions compliance, proliferation finance and transaction

monitoring. Further changes to the UK financial crime framework may include potential revisions to account closure rules, and the introduction of new

information sharing powers for the Department for Work and Pensions which may impose additional operational demands. On 23 January 2025, the Fraud,

Error and Recovery Bill was also introduced to Parliament, with the Department for Work and Pensions expected to consult with the financial services industry

on a Code of Practice to support understanding of any new regulatory expectations. More changes may arrive as a result of UK Government strategic

initiatives such as the Economic Crime Plan 2 and the Fraud Strategy. There may also be a new anti-corruption strategy published by the UK government in

2025. Any expansion of civil or criminal liability under UK financial crime reforms brings with it financial risk in the form of penalties and reputational risk, while

continued compliance with the changing UK financial crime framework may expose Santander UK to increased operational and compliance costs, each of

which could in turn have a material adverse effect on Santander UK's operations, financial condition and prospects.

**–Challenge to commission-based lending:**Santander UK is monitoring the FCA's review of motor finance commission arrangements which was announced

in January 2024. In August 2025, following the Supreme Court of England and Wales' judgment in relation to three motor finance commission cases (Hopcraft

v Close Brothers, Wrench v FirstRand Bank Limited and Johnson v FirstRand Bank Limited), the FCA announced that it intends to publish a consultation by

early October 2025 regarding an industry-wide redress scheme to compensate motor finance customers who it believed had been treated unfairly. There

remain significant uncertainties around the scope of any potential industry-wide redress scheme, such that the ultimate financial impact could be materially

higher or lower than the amount that Santander UK has recognised as a provision. The impact cannot be accurately assessed in full until the FCA's approach

is understood. As a result, Santander UK is subject to the risk of ongoing legal and regulatory uncertainty in relation to historical motor finance commission-

based lending, which may have a material adverse effect on Santander UK's operations and financial condition.

**Santander UK is exposed to risk of loss and damage from civil litigation and/or criminal legal and regulatory proceedings**

Santander UK faces various legal and regulatory issues that have given rise and may give rise to civil or criminal litigation, arbitration, and/or criminal, tax,

administrative and/or regulatory investigations, inquiries or proceedings. Failure to adequately manage the risks arising in connection with legal and regulatory

issues, including Santander UK's obligations under existing applicable laws and regulations or its contractual obligations, including arrangements with its

customers and suppliers, or failure to properly implement applicable laws and regulations could result in significant loss or damage including reputational

damage, all of which could have a material adverse effect on Santander UK's operations, financial condition and prospects.

Additionally, the current regulatory environment, with the continuing heightened supervisory focus, combined with the forthcoming regulatory change initiatives,

will lead to material operational and compliance costs. Relevant risks include:

Regulators, agencies and authorities with jurisdiction over Santander UK, including the BoE, the PRA and the FCA, HMT, HM Revenue & Customs (HMRC), the

CMA, the Information Commissioner's Office, the FOS, the PSR, the SFO, the National Crime Agency (NCA), the Office of Financial Sanctions Implementation

(OFSI) or the courts, may determine that certain aspects of Santander UK's business have not been or are not being conducted in compliance with applicable

laws or regulations (or that policies and procedures are inadequate to ensure compliance), or, in the case of the FOS, with what is fair and reasonable in the

FOS's opinion. Changes in policy, laws and regulations including in relation to SME dispute resolution and liability for APP fraud and unauthorised payment fraud,

may have significant consequences and lead to material implementation, operational and compliance costs.

–An adverse finding by a regulator, agency or authority could result in the need for extensive changes in systems and controls, business policies, and practices

coupled with suspension of sales, restrictions on conduct of business and operations, withdrawal of services, customer redress, fines and reputational damage.

–The increased focus on competition law in financial services and concurrent competition enforcement powers for the FCA and PSR may increase the likelihood

of competition law related inquiries or investigations initiated by either the CMA or these authorities. Santander UK may be liable for damages to third parties

harmed by Santander UK's conduct of business. For competition law, there are efforts by governments across Europe to promote private enforcement as a

means of obtaining redress for harm suffered as a result of competition law breaches. Under the Consumer Rights Act 2015, there is scope for class actions to

be used to allow the claims of a whole class of claimants to be heard in a single action in both follow-on and standalone competition cases. The UK has seen a

sharp increase in recent years in the number of class action claims being issued in the Competition Appeals Tribunal on this basis. The tribunal has granted

certification for every case that has reached the certification hearing stage to date, including cases that have presented novel competition law theories of harm.

–The alleged historical or current mis-selling of, or misconduct in relation to, financial products, including the alleged mis-selling of Payment Protection

Insurance, the alleged overcharging of interest, or alleged misconduct as a result of having sales practices and/or rewards structures that are deemed to have

been inappropriate, has given rise to and may in the future give rise to a risk of complaints to FOS and/or civil litigation (including claims management company

driven legal or complaints campaigns)(see Note 30 to the Consolidated Financial Statements for legal actions and regulatory matters). For example, a recent

judgment of the Supreme Court of England and Wales (to which Santander UK was not a party), whilst confirming that any assessment of an unfair relationship

under the Consumer Credit Act 1974 is fact specific, provides guidance as to the factors which the Court considered relevant in assessing such unfairness in

the motor finance context. It remains unclear what impact the judgment will have on the FCA's proposed consultation in relation to an industry-wide redress

scheme regarding motor finance commission arrangements and the extent to which any such redress scheme will mitigate the risk of future complaints and / or

civil litigation on this point. In the interim there is an increased risk of complaints and / or civil litigation emerging from this judgment. Such matters have given

rise to and may in the future give rise to the risk of regulatory enforcement action requiring Santander UK to amend sales processes, withdraw products or

provide restitution to affected customers, any of which may require additional provisions to be recorded in Santander UK's financial statements and could

adversely impact future revenues from affected products.

–Santander UK may have held and may continue to hold bank accounts for entities or have relationships with entities such as third parties that might be or are

subject to scrutiny from various regulators and authorities, including the SFO, the NCA and regulators in the US and elsewhere, which has led and could in the

future lead to Santander UK's conduct being reviewed as part of any such scrutiny.

–Santander UK is (and will continue from time to time to be) subject to certain legal or regulatory investigations, inquiries and proceedings, both civil and criminal

including in connection with Santander UK's lending and payment activities, treatment of customers, relationships with Santander UK's employees, financial

crime, and other commercial or tax matters (see Note 30 to the Consolidated Financial Statements for legal actions and regulatory matters). These may be

brought against Santander UK under UK legal or regulatory processes, or under legal or regulatory processes in other jurisdictions, such as the EU and the

US, in circumstances where overseas regulators and authorities may have jurisdiction by virtue of its activities or operations.

–In view of the inherent difficulty of predicting the outcome of legal or regulatory proceedings, particularly where opportunistic claimants seek very large or

indeterminate damages, cases present novel legal theories, involve a large number of parties or are in the early stages of discovery, or where the approaches

of regulators or authorities to legal or regulatory issues and sanctions applied are subject to change, Santander UK cannot state with confidence what the

eventual outcome of any pending matters will be and any such pending matters are not disclosed by name because they are under assessment. Santander

UK's provisions in respect of any pending legal or regulatory proceedings are made in accordance with relevant accounting requirements. These provisions are

Santander UK plc**71**

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| CEO review | Financial overview | Risk review | Financial <br>statements | Shareholder <br>information |

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reviewed periodically. However, in light of the uncertainties involved in such legal or regulatory proceedings, there can be no assurance that the ultimate

resolution of these matters will not exceed the provisions currently accrued by Santander UK. As a result, the outcome of a particular matter (whether currently

provided or otherwise) could have a material adverse effect on Santander UK's operations, financial condition and prospects.

–The developing legal and regulatory regime in which Santander UK operates requires it to be compliant across all aspects of its business, including the training,

authorisation and supervision of personnel and the development of systems, processes and documentation. If Santander UK fails to be compliant with relevant

law or regulation, there is a risk of an adverse impact on its business from more proactive regulatory intervention (including by any overseas regulator which

establishes jurisdiction), investigation and enforcement activity leading to sanctions, fines, civil or criminal penalties, or other action imposed by or agreed with

the regulatory authorities, as well as increased costs associated with responding to regulatory inquiries and defending regulatory actions. Customers of

financial services institutions, including Santander UK's customers, may seek redress if they consider that they have suffered loss for example as a result of the

misselling of a particular product, or through incorrect application or enforcement of the terms and conditions of a particular product or in connection with a

competition law infringement and Santander UK's rights under a contract with its customers may in certain circumstances be unenforceable or otherwise

impaired.

–The Financial Services and Markets Act 2000 (Designated Consumer Bodies) Order 2013 (the Designated Consumer Bodies Order) was made on 16

December 2013 and came into force on 1 January 2014. The Designated Consumer Bodies Order designates the National Association of Citizens Advice

Bureaux, the Consumers' Association, the General Consumer Council for Northern Ireland and the National Federation of Self Employed and Small

Businesses as consumer bodies that may submit a 'super-complaint' to the FCA. A 'super-complaint' is a complaint made by any of these designated

consumer bodies to the FCA on behalf of consumers of financial services where it considers that a feature, or a combination of features, of the market for

financial services in the UK is seriously damaging the interests of these customers. Complaints about damage to the interests of individual consumers will

continue to be dealt with by the FOS. If a 'super-complaint' were to be made against a Santander UK entity by a designated consumer body under the

Designated Consumer Bodies Order, any response published, or action taken by the FCA could have a material adverse effect on Santander UK's operations,

financial condition and prospects.

Given the: (i) requirement for compliance with an increasing volume of relevant laws and regulations; (ii) more proactive regulatory intervention and enforcement

and more punitive sanctions and penalties for infringement; (iii) inherent unpredictability of litigation; (iv) evolution of the jurisdiction of FOS and CMA and related

impacts; (v) potential for the development of a voluntary dispute resolution service to oversee the resolution of complaints from SMEs that are outside the FOS'

jurisdiction; (vi) introduction of a voluntary code to enhance protection for customers who are victims of APP fraud; and (vii) high volume of new regulations or

policy changes from multiple regulators and authorities which Santander UK is mandated to implement within compressed timescales; it is possible that related

costs or liabilities could have a material adverse effect on Santander UK's operations, financial condition and prospects.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

SANTANDER UK plc

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| By: | /s/ Angel Santodomingo |
|  | Angel Santodomingo |
|  | Chief Financial Officer |

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Dated: 29 August, 2025