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Impairment provision movement 2020 Stage 1: Stage 2: Stage 3: Total Gross loan balances by Stage 2020 Stage 1: Stage 2: Stage 3: Total
£’000 subject to subject to subject to £000 subject to subject to subject to
12-month ECL lifetime ECL lifetime ECL 12-month ECL lifetime ECL lifetime ECL Contents
Closing Balance at 31 December 2020 3,332 4,867 4,252 12,451 Closing Balance at 31 December 2020 625,510 182,749 32,572 840,831
Contents
Opening Balance at 1 January 2020 3,423 1,303 3,455 8,181 Opening Balance at 1 January 2020 703,704 38,948 27,032 769,684

Increase (decrease) in provision (91) 3,564 797 4,270 Increase (decrease) in loan balances (78,194) 143,801 5,540 71,147
Increase (decrease) in provision Increase (decrease) in loan balances Strategic Report
New loans originated 1,231 279 – 1,510 New loans originated 187,490 13,824 – 201,314
Derecognised loans (356) (57) (409) (822) Derecognised loans (95,690) (1,205) (1,908) (98,803)

Loan commitments 95 – – 95 Allowance utilised in respect of write-offs (102) (272) (5,357) (5,731)
Allowance utilised in respect of write-offs (56) (18) (1,464) (1,538) Transfers between Stages and increase in credit risk
Transfers between Stages and increase in credit risk – Transfers from Stage 1 (152,421) 150,915 1,506 –

– Transfers from Stage 1 (1,084) 1,075 9 – – Transfers from Stage 2 470 (13,476) 13,006 –
– Transfers from Stage 2 25 (480) 455 – – Transfers from Stage 3 – 1,325 (1,325) –
– Transfers from Stage 3 – 94 (94) – – Increase in credit risk (17,941) (7,310) (382) (25,633) Corporate Governance Statement
– Increase in credit risk 54 2,671 2,300 5,025 (78,194) 143,801 5,540 71,147
(91) 3,564 797 4,270

P&L charge £’000 Gross loan balance Expected Credit Loss (ECL) Net balance
Increase (decrease) in provision (91) 3,564 797 4,270 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Total
Write-offs 72 108 1,542 1,722 Real Estate 560,875 178,145 32,017 2,972 4,489 3,993 557,903 173,657 28,023 759,583
Finance
Income Adjustment* – – (176) (176)
Asset 64,635 4,604 555 360 378 259 64,275 4,226 296 68,797
Non customer lending related post write-off recoveries – – (3) (3)
Finance
Total P&L impairment charge (19) 3,672 2,160 5,813
At 31 625,510 182,749 32,572 3,332 4,867 4,252 622,178 177,883 28,319 828,380
December Independent Auditor’s Report
* Interest originally charged on the gross carrying amount for credit impaired stage 3 assets which has subsequently been recalculated on the 2020
net carrying amount. This resulted in a reduced interest income and impairment charge in the income statement of £176k.
Real Estate 758,879 113,270 28,334 2,277 5,793 5,766 756,602 107,477 22,568 886,647
Finance
Gross loan balances by Stage 2021 Stage 1: Stage 2: Stage 3: Total Asset 89,198 2,678 241 559 161 210 88,639 2,517 31 91,187
£000 subject to subject to subject to Finance
12-month ECL lifetime ECL lifetime ECL
At 31 848,077 115,948 28,575 2,836 5,954 5,976 845,241 109,994 22,849 977,834
Closing Balance at 31 December 2021 848,077 115,948 28,575 992,601 December
Opening Balance at 1 January 2021 625,510 182,749 32,572 840,831 2021
Increase (decrease) in loan balances 222,567 (66,801) (3,997) 151,770 Financial Statements
2021 2020
Increase (decrease) in loan balances
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
New loans originated 299,081 8,002 – 307,083
Loan loss coverage ratio % 0.3% 5.1% 20.9 % 1.5% 0.5% 2.7% 13.1% 1.5%
Derecognised loans 71,769 30,778 3,799 106,345
Allowance utilised in respect of write-offs 141 753 3,334 4,229
Transfers between Stages and increase in credit risk

– Transfers from Stage 1 61,057 60,286 771 –
– Transfers from Stage 2 94,704 101,385 6,681 –
– Transfers from Stage 3 772 494 1,266 – Notes to the Financial Statements

– Increase in credit risk 39,023 2,667 3,050 44,739
222,567 (66,801) (3,997) 151,770