TO HELP THE PEOPLE AND BUSINESSES OF BRITAIN THRIVE …

1 CLOSE BROTHERS group PLC. ANNUAL REPORT 2019. TO HELP THE PEOPLE AND. BUSINESSES OF BRITAIN THRIVE . OVER THE LONG TERM. WE WANT TO HELP YOU TO THRIVE , TO SUPPORT. YOU BY DOING THE THINGS THAT WE DO BEST. WE WILL TAKE THE TIME TO LEARN ABOUT YOUR. WORLD SO WE KNOW HOW TO HELP IT FLOURISH, BY. HELPING YOU NAVIGATE UNCERTAINTY AND SEIZE. OPPORTUNITIES, ALLOWING YOU TO UNLOCK YOUR. POTENTIAL AND BUILD FOR THE LONG TERM. At Close Brothers we provide financial support and advice to small BUSINESSES and individuals throughout the UK. Our clients are the makers of things, the wealth creators, the investors and the savers. They are playing an important role driving growth in the British economy and we are supporting them as they grow. The photography within this Annual Report was photographed on location at our clients' BUSINESSES . We would like to thank them for their generous support and cooperation. Annual Report 2019 Close Brothers group plc Strategic Report Governance Report financial Statements 01.

2 financial Highlights1. for the year ending 31 July 2019. AD JUSTED 2 OPER ATING PROFIT OPER ATING PROFIT BEFORE TA X. 2018: 2019 2018 2017 2016 2015 ADJUSTED 3 BASIC E ARNINGS PER SHARE BASIC E ARNINGS PER SHARE. 2019. 2018: 2018 2017 2016 2015 RE TURN ON OPENING EQUIT Y4 PROFIT AT TRIBUTABLE TO SHAREHOLDERS. 2018: 2019 2018 2017 2016 2015 ORDINARY DIVIDEND PER SHARE 5 1 financial highlights with the exception of profit attributable to shareholders presented on the basis of continuing operations, which exclude the unsecured retail point of sale finance business classified as a discontinued operation for the 2018 and 2019 financial years. See page 27 for more details on the basis of presentation. 2 Adjusted operating profit/(loss) is stated before amortisation of intangible assets on acquisition of million (2018: million) and profit from discontinued operations of million (2018: million loss). 3 Excludes amortisation of intangible assets on acquisition, discontinued operations and the tax effect of such adjustment.

3 2019 4 Return on opening equity calculated as adjusted operating profit after tax and non-controlling interests 2018 on opening equity less non-controlling interests. 5 Represents the final dividend proposed for the respective years together with the interim dividend 2017 declared and paid in those years. 2016 2015 Strategic Report Governance Report financial Statements 02 Our BUSINESSES 52 Board of Directors 97 Independent Auditors' Report 04 Our Purpose 54 Executive Committee 104 Consolidated Income Statement 05 Our Culture 55 Directors' Report 105 Consolidated Statement of 06 Chairman's Statement 59 Corporate Governance Report Comprehensive Income 08 Chief Executive's Statement 70 Risk Committee Report 106 Consolidated Balance Sheet 12 Case Study BCW 72 Audit Committee Report 107 Consolidated Statement of Changes in Equity 14 Business Model 74 Nomination and Governance 108 Consolidated Cash Flow Statement 16 Strategy and Key Performance Indicators Committee Report 109 Company Balance Sheet 18 Principal Risks and Uncertainties 76 Directors' Remuneration Report 110 Company Statement of Changes in Equity 24 Case Study Brighton Gin 111 The Notes 26 financial Overview 160 Glossary 30 Banking 163 Investor Relations/Cautionary Statement

4 34 Asset Management 36 Securities 38 Non- financial Information Statement 40 Case Study Nicholas King Homes 42 Sustainability Report Close Brothers group plc Annual Report 2019. Strategic Report 02 Governance Report financial Statements Our BUSINESSES CLOSE BROTHERS IS A LEADING UK MERCHANT. BANKING group PROVIDING LENDING, WEALTH. MANAGEMENT SERVICES AND SECURITIES. TRADING. WE OPERATE PRINCIPALLY IN THE UK. AND EMPLOY OVER 3,000 PEOPLE . BANKING READ MORE ABOUT BANKING SEE PAGES 30 TO 33. COMMERCIAL. AD JUSTED OPER ATING PROFIT The Commercial business lends principally The Invoice and Speciality Finance to small and medium sized enterprises business works with ,300 small ( SME ), both through its direct sales force BUSINESSES , providing debt factoring, invoice and via broker distribution channels. discounting and asset-based lending. It also includes our smaller specialist The Asset Finance business has ,000 BUSINESSES such as Novitas, a specialist 2018: customers and provides commercial asset provider of finance for the legal sector, financing, hire-purchase and leasing solutions Brewery Rentals, which provides solutions for a diverse range of assets and sectors, for brewery equipment and container including the financing of commercial maintenance and vehicle hire, which vehicles, machine tools, contractors' provides heavy goods and light commercial plant, printing equipment, company car vehicles on long-term rental contracts.

5 Fleets, energy production, and aircraft and marine vessels. Our highly specialist Loan book1: billion sales force operates through 15 offices Average loan size 3: c. 400,000. throughout the UK, Germany and Ireland. Typical loan maturity 2,3: 2-3 months Loan book : billion 1. Average loan size: c. 40,000. Typical loan maturity2: 3-5 years R E TA I L. AD JUSTED OPER ATING PROFIT4 The Retail business provides The Premium Finance business finances loans to predominantly individuals insurance payments for over two million and small BUSINESSES , through a companies and individuals, via a network network of intermediaries. of ,700 insurance brokers, allowing their customers to spread the cost of insurance The Motor Finance business provides premiums over a number of instalments. 2018: point of sale finance for the acquisition of predominantly used cars, motorcycles Loan book: billion and light commercial vehicles. It operates Average loan size: c.

6 500. through a network of ,000 independent Typical loan maturity2: 10 months motor dealers and has approximately 260,000 customers in the UK and Ireland. Loan book: billion Average loan size: c. 7,000. Typical loan maturity2: 3-5 years PROPERT Y. AD JUSTED OPER ATING PROFIT The Property business specialises in It also offers refurbishment and bridging short-term residential development loans through Commercial Acceptances. finance through Property Finance. This business operates in London, the South Loan book: billion East and selected regional locations, Average loan size: c. million lending to professional property 2018: Typical loan maturity 2: 9-18 months developers with a focus on small to medium-sized residential developments. Annual Report 2019 Close Brothers group plc Strategic Report Governance Report financial Statements 03. A S S E T M A N AG E M E N T READ MORE ABOUT ASSET MANAGEMENT SEE PAGES 34 AND 35. AS SET MANAGEMENT.

7 AD JUSTED OPER ATING PROFIT Close Brothers Asset Management and funds, distributed both directly via our provides financial advice and investment own advisers and bespoke investment management services to private clients managers, and through third party IFAs. in the UK. We offer financial planning advice with over 100 professional advisers Total client assets: billion across the country. We also provide Managed assets: billion 2018: a range of investment management services, including full bespoke management, managed portfolios S E C U R I T I ES READ MORE ABOUT SECURITIES SEE PAGES 36 AND 37. WINTERFLOOD. OPER ATING PROFIT Our Securities division comprises supported by our strong proprietary Winterflood, a leading UK market maker technology. Our traders have extensive for retail stockbrokers and institutions. experience of executing orders in a range Winterflood deals in ,000 securities of market conditions, enabling us to trade in the UK and overseas, and trades with successfully and profitably over many years.

8 Over 600 retail stockbrokers, wealth 2018: managers, platforms, institutional asset Average bargains per day: ,000. managers and other market counterparties, Total counterparties: providing continuous liquidity through our market-leading execution services, 1 Excludes operating lease assets of million (2018: million) in Asset Finance and million (2018: million) in Invoice and Speciality Finance. 2 Typical loan maturities for new business on a contractual basis, except Invoice Finance which is on a behavioural basis. The average maturity of new business in the UK is presented for Motor Finance. 3 Loan book statistics include the Invoice Finance business only. 4 Presented as continuing operations excluding the unsecured retail point of sale finance business, which has been classified as a discontinued operation in the group 's income statement. Close Brothers group plc Annual Report 2019. Strategic Report 04 Governance Report financial Statements Our Purpose CLOSE BROTHERS' PURPOSE IS TO HELP THE PEOPLE AND.

9 BUSINESSES OF BRITAIN THRIVE OVER THE LONG TERM. To achieve this, all of our diverse, specialist We believe in putting our customers and BUSINESSES have a deep industry knowledge clients first, and we have developed a way so they can understand the challenges and of describing our approach to ensure that opportunities that our customers and clients we can always do this; we call it the why , face. We support the unique needs of our the what and the how . customers and clients to ensure that they THRIVE , rather than simply survive, whatever The why is our purpose, the what is the market conditions. our strategy and the how is our culture, and these important pillars are at the heart of our organisation. OUR PURPOSE. THE WHY . TO HELP THE PEOPLE . AND BUSINESSES OF. BRITAIN THRIVE OVER. THE LONG TERM. OUR CULTURE OUR STRATEGY. THE HOW THE WHAT . COMBINES EXPERTISE, TO PROVIDE EXCEPTIONAL. SERVICE AND SERVICE TO OUR. RELATIONSHIPS WITH CUSTOMERS AND CLIENTS.

10 TEAMWORK, INTEGRITY ACROSS LENDING, SAVINGS, AND PRUDENCE. TRADING AND WEALTH. MANAGEMENT. Annual Report 2019 Close Brothers group plc Strategic Report Governance Report financial Statements 05. Our Culture OUR CULTURE COMBINES EXPERTISE, SERVICE AND RELATIONSHIPS. WITH TEAMWORK, INTEGRITY AND PRUDENCE. Adhering to these attributes ensures that we continue to provide excellent service for our customers and clients over the long term. We're proud of our PEOPLE whose expertise, passion and willingness to go the extra mile really set us apart. It's what builds our long-term relationships with clients and customers that stand the test of time. EXPERTISE INTEGRITY PRUDENCE. We are committed to fostering We insist on trustworthy We take a prudent, robust a culture that attracts talent, behaviour and always acting with and transparent approach grows and builds the expertise integrity doing the right thing , to risk management. of our employees.