Acquisition

Paragon Group Of Companies PLC
30 June 2003

PARAGON ACQUIRES BRITANNIC MONEY

The Paragon Group of Companies PLC ('Paragon') has today agreed to acquire the
entire share capital of Britannic Money plc from Britannic Group. Completion is
expected later today.

The consideration, payable in cash is £18.7 million. The transaction is expected
to be earnings enhancing in the 2003/04 financial year.

At 31 December 2002 Britannic Money had loan assets under management of £2.2
billion, of which £0.9 billion were in respect of buy-to-let loans and the
balance owner-occupied first mortgages. The statutory consolidated financial
statements of Britannic Money reported a pre-tax loss of £5.2 million for the
year to 31 December 2002, at which date net assets stood at £42.2 million.

Strategic rationale

On 20 May 2003, Paragon reported an increase in interim profits before tax of
14% to £23.4 million and a year on year increase in net loan assets of 19.8% to
£2.7 billion at 31 March 2003. Paragon has achieved strong growth in its
mortgage lending operation. At 31 March 2003 Paragon Mortgages' loan portfolio
stood at £1.6 billion. The private rented sector is a growing market and is
forecast by the Centre for Economics Business Research to expand by 40% over the
next ten years.

Both Paragon Mortgages and Britannic Money are leading players in the buy-to-let
market and the acquisition will bring together two organisations with
complementary strengths in products, skills, technology and distribution.

Paragon Mortgages is focused on the professional landlord market with portfolio
requirements and bespoke funding needs. The business is distributed through a
broad range of intermediaries and achieves a significant amount of new business
from existing customers. Paragon Mortgages offers a wide range of products and
services that meet the increasingly demanding needs of its customers. Paragon
Mortgages' new lending volumes in the six months to 31 March 2003 were £331
million.

Britannic Money is focused on the mid-market and emerging professional sector.
Its 'flexible' product range is distributed through major broker networks,
packagers and other multi-lender intermediaries utilising sophisticated
technology. Britannic Money's new buy-to-let lending volumes in the first five
months of the current year to 31 May 2003 have been £159 million.

Britannic Money were one of the early participants in the innovative current
account mortgage market in the late 1990's. The company incurred major
operational and marketing expenditure during 2000 and 2001 which supported
substantial increases in volumes in current account mortgages. Subsequently,
increased competition from new entrants compressed margins and substantial
losses were incurred in this regard in recent years. Lending volumes for the
non-buy-to-let business in the first five months of the current year have been
£87 million.

Both companies share the common strength of being leading centralised lenders in
niche markets and funding their lending by securitisation of mortgage assets.
Both companies have an exemplary track record in credit quality with mortgage
arrears significantly less than the mortgage industry average.

Future strategy

Britannic Money will be rebranded Mortgage Trust at the earliest opportunity and
will continue to run as a discrete operation, focusing on the mid-market
buy-to-let sector. John Heron, Paragon Group's Director of Mortgages, will be
responsible for the development and implementation of Mortgage Trust's new
business strategies.

The future of the owner-occupied current account mortgage products will be
subject to a strategic review immediately post-acquisition.

Paragon will seek to bring together a number of functions common across both
organisations and substantial cost savings are expected to be achieved in the
2003/04 financial year after reorganisation costs. Paragon Group's Chief
Operating Officer, Pawan Pandya, will be responsible for the operational
management of Britannic Money's business and the integration programme.

Funding

The acquisition will be funded through existing cash resources and new debt
facilities. The final purchase consideration will be subject to adjustment to
reflect net assets at completion as determined by completion accounts.

Current trading

Paragon has confirmed today that it is continuing to trade in line with
expectations.

Jonathan Perry, Paragon's Executive Chairman comments: 'Our acquisition of
Britannic Money, bringing together two major buy-to-let lending organisations,
will create a major force in this very attractive niche sector. Our
complementary strengths point to strong growth opportunities which together with
substantial cost savings will be earnings enhancing in the 2003/04 financial
year.

The buy-to-let mortgage market is one of the most attractive sectors in the
mortgage market; credit quality is excellent and there remain significant growth
prospects for the future.'

For further information, please contact:

Nigel Terrington, Chief Executive, Paragon Group, Tel: [phone]

or

John Wriglesworth, The Wriglesworth Consultancy, Tel: [phone] or mobile:
07774 988275

Notes to editors:


        1.     About Paragon Group of Companies

        The Paragon Group of Companies PLC is one of the UK's largest
        independent specialist lenders offering residential investment
        mortgages, and personal, retail and vehicle finance. It is a publicly
        listed FTSE-250 company.

        In its interim results for the six months ended 31 March 2003, pre-tax
        profits rose 14.1% to £23.4 million (2002 H1: £20.5 million), with net
        loan assets up 19.8% and record growth in buy-to-let mortgages.



        Paragon Mortgages Limited ('Paragon Mortgages') is the UK's leading
        provider of residential buy-to-let mortgages to professional landlords,
        winning the 'Buy-to-Let Lender of the Year' award at the 2002 Business
        Finance Awards.

        Paragon Mortgages introduced its first specifically targeted buy-to-let
        mortgages in 1996 and, by consistently developing its product range and
        delivering outstanding service, now has mortgage balances in excess of
        £1.6 billion. Paragon Mortgages has increasingly specialised in the
        private rented sector and in lending to professional landlords in
        particular. Buy-to-let now accounts for all new mortgage lending and the
        vast majority of its existing portfolio of loans.

        Paragon Mortgages distributes its products throughout the UK both direct
        to the public and through a network of financial advisers. It runs its
        operations centrally from Solihull in the West Midlands avoiding the
        costs of maintaining a nationwide network of offices.

        Paragon Mortgages is a member of the Council of Mortgage Lenders and
        operates under the Code of Mortgage Lending Practice, the Council's code
        of regulation for the conduct of mortgage business.

 2. About Britannic Money


        Britannic Money was originally formed in 1986 under the name of Mortgage
        Trust. It is a leading UK provider of innovative flexible and buy-to-let
        mortgage products. It was previously owned by First Active plc until
        January 2000 when 60% was acquired by Britannic Group plc. Since
        December 2002, Britannic Money has been wholly owned by Britannic Group
        plc.





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