Strong financial performance

Closing receivables increased by £24m in 2023 (a reduction of 0.2% at CER), with all markets delivering strong performances except Poland where we are transitioning the business to meet new pricing and affordability legislation.

Revenue yield strengthened in 2023 reflecting price increases in some markets and a reduction in promotional activity. We expect revenue yield to improve in the medium term as we continue with these actions.

As expected, the impairment rate increased as performance normalises post-pandemic. Repayments remained strong and despite the increased costs of living, we did not see any discernible impact on customer repayments.

The cost-income ratio improved in 2023 as we maintained stringent focus on cost control while investing in growth.

RoRE and RoE are lower than our target range of 15% to 20%, as we rebuild scale and transition the Polish business to the new regulatory landscape. RoE is lower than RoRE due to the additional capital held above our target level of 40%. We expect returns in 2024 to moderate as we continue to adapt our Polish business to the evolving regulatory landscape, refinance maturing fixed rate debt and accelerate receivables growth. We would then expect returns to grow in 2025 onwards.