Interim Results 2004 - Part 4

Legal & General Group PLC
29 July 2004


Part 4

Legal & General Investment Management
- supplementary information

During the first half of 2004, Legal & General Investment Management built on
its position as the largest UK fund manager. Strong new business and lower than
anticipated outflows helped push total funds under management to a record
£146bn. Fund management success was also highlighted at the 2004 Professional
Pensions Awards, where Legal & General Investment Management won Fixed Interest
Manager of the Year and Pooled Fund Manager of the Year.

Profits - Modified Statutory Solvency basis
Operating profit from institutional fund management was up 28% to £32m (1H03:
£25m).

Corporate Pensions profitability increased 35% from £17m to £23m. New business
levels have been exceptional, with gross new business for the first half of 2004
up 55%, at £8.7bn (1H03: £5.6bn). There has been continued success in attracting
active fixed interest clients. Sales of these products represented 19% (1H03:
12%) of gross new business. Despite a general market shift out of UK equity
assets, principally into fixed interest and some overseas equities, the fee rate
achieved on the core business has remained stable. Client numbers at the end of
June 2004 were 2,549 compared with 2,425 at the end of 2003, an increase of 5%.
Tight cost control meant that total costs were lower than in the equivalent
period in 2003.

Legal & General Ventures, the private equity arm, successfully completed 8
exits realising over £280m of cash for investors and made 2 new investments in
the period. Additionally, the 2004 annual partnership closed with commitments in
excess of £180m, an increase of 17% over the prior year's partnership. Profit
for the period was £1m (1H03: £2m).

The Property fund management subsidiary benefited from a full period's revenue
on its seven external property partnerships, generating profits of £2m (1H03:
£1m).

Total funds under management increased by 19% to £146bn (1H03: £123bn).
Excluding internal funds managed for Legal & General Assurance Society Ltd,
total funds under management exceeded £100bn for the first time.

Profits - Achieved Profits basis
Managed pension fund business is written as a long-term contract and so the
results of the business are also presented on an Achieved Profits basis. The
embedded value assumptions are detailed in Part 2 of this announcement.

Operating profit from institutional fund management was up 35% at £50m (1H03:
£37m). The contribution from in-force business was higher at £24m (1H03: £17m).
Lapse experience in the first six months of 2004 was significantly below long
term expectations, compared with the first half 2003 where the experience was
in-line with expectations. The new business contribution was up 42%, to £17m 
(1H03: £12m), on the back of the higher level of new business. Profit before 
tax increased to £49m (1H03: £40m)

Fund Performance
The flagship actively managed pooled corporate pension funds, including the
balanced, UK equity and fixed interest funds, were all above benchmark over the
one-year to May 2004. 75% of the retail flagship actively managed funds were
above median over one year, while the performance of the smaller/specialist
retail active funds was mixed. Index funds met their tracking parameters in the
year to June 2004.

Part 4
Legal & General Investment Management                                        P1
Consolidated Profit and Loss Account
- Modified Statutory Solvency Basis
Six months ended 30 June 2004
-------------------------------------------------------------------------------
                                                                           Full
                                                                           year
                                                   30.6.04    30.6.03      2003
                                                             restated  restated
                                                        £m         £m        £m
Profit on continuing operations
Corporate pensions                                      23         17        41
Ventures                                                 1          2         3
Property                                                 2          1         3
Other external income                                    2          1         3
Other operational income                                 4          4         5
                                                  --------  --------  --------
Operating profit                                        32         25        55
Variation from longer term
investment return                                       (2)         0       (2)
                                                  --------  --------  --------
Profit on ordinary activities
before tax                                               30        25        53
Tax charge on profit on ordinary
activities                                              (9)       (7)      (16)
                                                  --------  --------  --------
Profit for the financial period                          21        18        37
                                                  ========  ========  ========

These financial statements were approved by the Group Board on 28 July 2004 and
have been prepared for long term business using the Modified Statutory Solvency
basis. The Achieved Profits results are included in page 4.
The results for the six months to 30 June 2004 and 30 June 2003 are unaudited,
but have been subject to a review by the auditors and constitute non-statutory
accounts within the meaning of Section 240 of the Companies Act 1985. They have
been prepared on a basis which is consistent with the financial statements for
the year ended 31 December 2003 except for shareholders investment return of
Institutional fund management which has been reanalysed to provide a longer term
rate of return within operating profit, 2003 comparatives have been restated
accordingly.
The 2003 Accounts have been filed with the Registrar of Companies and include an
auditors' report which is unqualified and does not contain a statement under
either sections 237(2) or 237(3) of the Companies Act 1985.
===============================================================================  

Legal & General Investment Management                                        P2
Funds under management
Six months ended 30 June 2004
-------------------------------------------------------------------------------

                                          At 30.6.04   At 30.6.03   At 31.12.03
                                                  £m           £m            £m
Total investments                            145,854      122,583       135,337
                                            ========     ========      ========
Represented by
Index tracking funds:
- UK equities                                 44,806       38,442        42,944
- Overseas equities                           22,898       19,813        21,144
- Fixed interest                              18,295       15,051        16,950
- Index linked                                13,071        8,666        10,650
- Cash/deposits                                  482          293           359
                                            --------     --------      --------
Total index tracking funds                    99,552       82,265        92,047
Actively managed funds                        46,302       40,318        43,290
                                            --------     --------      --------
                                             145,854      122,583       135,337
                                            ========     ========      ========
By fund management approach
Indexed equities                              67,704       58,255        64,088
Active bonds (including
index linked funds)                           31,760       26,911        28,883
Indexed bonds (including
index linked funds)                           31,848       24,010        27,959
Active equities                                8,123        7,336         7,905
Property                                       6,118        5,614         6,022
Private equity (ventures)                        301          457           480
                                            --------     --------      --------
                                             145,854      122,583       135,337
                                            ========     ========      ========
By source of business
Institutional funds under
management*:
- Managed pension funds pooled                81,502       64,600        72,841
- Managed pension funds segregated             9,327        6,980         8,522
- Other                                        2,594        3,084         2,713
                                            --------     --------      --------
Total institutional funds under
management                                    93,423       74,664        84,076
UK Operations (unit trusts -
excluding life fund investment)                7,392        6,150         6,948
UK Operations (life and general
insurance funds)                              45,039       41,769        44,313
                                            --------     --------      --------
                                             145,854      122,583       135,337
                                            ========     ========      ========

* excludes institutional investments in unit trust funds

===============================================================================

Legal & General Investment Management                                        P3
New business
Six months ended 30 June 2004
-------------------------------------------------------------------------------


                     6 months  3 months  3 months  6 months  3 months  3 months
                      30.6.04   30.6.04   31.3.04   30.6.03   30.6.03   31.3.03
                           £m        £m        £m        £m        £m        £m
Managed pension
funds*
- Pooled funds          7,610     3,198     4,412     5,207     2,456     2,751
- Segregatedfunds       1,063       101       962       359       347        12
                     --------  --------  --------  --------  --------  --------
                        8,673     3,299     5,374     5,566     2,803     2,763
Other funds                70        13        57       414       349        65
                     --------  --------  --------  --------  --------  --------
                        8,743     3,312     5,431     5,980     3,152     2,828
                     ========  ========  ========  ========  ========  ========
                                                                           Full 
                                                                           year
                                                    30.6.04   30.6.03      2003
                                                         £m        £m        £m
Managed pension
funds*
- Pooled funds                                        7,610     5,207    11,066
- Segregated funds                                    1,063       359     1,504
                                                   --------  --------  --------
                                                      8,673     5,566    12,570
Other funds**                                            70       414       482
                                                   --------  --------  --------
                                                      8,743     5,980    13,052
                                                   ========  ========  ========
By fund management approach
Active equities                                        5.6%      1.4%      0.0%
Active bonds (including cash)                         21.8%     11.6%     11.8%
Indexed equities                                      46.4%     51.4%     59.0%
Indexed bonds (including cash)                        21.8%     31.6%     27.3%
Property                                               4.2%      3.6%      1.7%
Private equity                                         0.2%      0.4%      0.2%
                                                   --------  --------  --------
                                                     100.0%    100.0%    100.0%
                                                   ========  ========  ========

* New monies from pension fund clients of Legal & General Assurance (Pensions
Management) Ltd.
Corporate pensions gross new business excludes £2.2bn (1H03: £1.0bn; FY03:
£4.0bn) which was held through the year on a temporary basis, generally as part
of a portfolio reconstruction.
** Includes segregated property, property partnerships, ventures and
institutional clients excluding trusts.
===============================================================================


Legal & General Investment Management                                        P4
Consolidated Profit and Loss Account
- Achieved Profits Basis
Six months ended 30 June 2004
-------------------------------------------------------------------------------


                                                                           Full 
                                                                           year
                                                    30.6.04   30.6.03      2003
                                                             restated  restated
Profit on continuing operations                          £m        £m        £m
Managed pension funds:
Contribution from:
New business                                             17        12        31
In-force business
- expected return                                         8         6        13
- experience variances                                    8         1         5
- operating assumption changes                            8        10        20
Development costs                                         0         0        (1)
Shareholder net worth                                     3         3         5
                                                   --------  --------  --------
Total                                                    44        32        73
Ventures                                                  1         2         3
Property                                                  2         1         3
LGIM                                                      2         1         3
Other operational income                                  1         1         -
                                                   --------  --------  --------
Operating profit from
institutional fund management                            50        37        82
Variation from longer term
investment return*                                        0         3        14
Effect of economic
assumption changes                                       (1)        -         -
                                                   --------  --------  --------
Profit on ordinary activities
before tax                                               49        40        96
Tax charge on profit on
ordinary activities                                     (16)      (12)      (29)
                                                   --------  --------  --------
Profit for the financial period                          33        28        67
                                                   ========  ========  ========
*The variation from longer term investment return represents the effect of the
investment performance in respect of shareholder net worth and in-force
business, compared with embedded value assumptions at the beginning of the
period.

Managed pension funds embedded                                             Full 
value                                                                      year
                                                    30.6.04   30.6.03      2003
                                                         £m        £m        £m
At 1 January                                            305       262       262
Profit after tax                                         31        25        61
Distributions and capital
movements                                                 -         -       (18)
                                                   --------  --------  --------
At period end                                           336       287       305
                                                   ========  ========  ========
Comprising:
Value of in-force business                              175       142       162
Shareholder net worth                                   161       145       143
                                                   --------  --------  --------
                                                        336       287       305
===============================================================================








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