M&G Outsourcing Agreement

Prudential PLC
26 November 2002

Tuesday 26 November 2002



M&G AND INTERNATIONAL FINANCIAL DATA SERVICES (IFDS) SIGN OUTSOURCING AGREEMENT
                   TO PROVIDE RETAIL ADMINISTRATION SERVICES

M&G, the UK and European fund management arm of Prudential plc, and IFDS
announced today that they have signed an outsourcing agreement for IFDS to
provide M&G with retail administration services.

This agreement follows a review of M&G's retail IT systems platform and will
involve the transfer of M&G's retail administration team. M&G will migrate onto
IFDS' FAST platform by the end of the third quarter of 2003. M&G customer
contact and intermediary services will remain in-house. M&G expects to achieve
annual cost savings of approximately £10 million from 2004 as a result of this
agreement.

As part of the deal, IFDS will purchase two of M&G's properties in Chelmsford, M
&G House and Dorset House, for £10.6 million.

Gary Shaughnessy, Chief Executive UK Retail of M&G, comments: 'We are delighted
to have signed contracts with IFDS, the largest and one of the most respected
Third Party Administrators in the UK.

'IFDS recognises the quality and experience of our retail administration staff
and this agreement will enable M&G to build on the high quality administration
service we currently provide to both customers and intermediaries.'

Charles H Eppinger, Chief Executive Officer of IFDS, comments: 'We are excited
that we have secured a deal with M&G to provide administration services for its
UK-based range of funds. IFDS is committed to providing its customers the
highest quality administrative services and this agreement is testimony that we
are the leading provider of services and systems in the UK.'

M&G's retail administration team will transfer to IFDS under the Transfer of
Undertakings Protection of Employment (TUPE) regulations.

                                     -ENDS-



Enquiries to:
Media                                Investors/Analysts
Asmita Kapadia     020 7548 3025     Laura Presland                020 7548 3511



Notes to Editors:


  • This announcement follows the press release issued on 6 August 2002 by M&G
    announcing exclusive negotiations with IFDS regarding outsourcing of retail
    administration services.

  • IFDS will provide a full administration service for M&G's retail funds and
    Prudential unit trusts.

M&G:


  • M&G is Prudential's UK and European fund manager, responsible for managing
    over £116 billion of funds (at the end of June 2002).

  • M&G has 578,000 retail customers in the UK (as at 30 September 2002).

  • M&G launched the UK's first unit trust in 1931 and has continued this
    history of innovation over the past 70 years.

  • M&G pioneered the corporate bond fund market in the UK with the launch of
    the M&G Corporate Bond Fund in 1994 and the M&G High Yield Corporate Bond
    Fund in 1998.

  • M&G offers investors a range of over 45 funds available as an ISA or unit
    trust/OEIC.

  • M&G employs 1,300 staff of which 320 are part of Retail Operations.

  • M&G's customer service centre and staff located at Fairbairn House,
    Chelmsford, were not included in the review and will remain part of M&G.

  • M&G's website: www.mandg.co.uk

  • In the first half of 2002, M&G achieved gross retail fund inflows of £549
    million, net retail fund inflows of £210 million and an operating profit of
    £34 million.

IFDS:


  • International Financial Data Services ('International Financial') is a
    joint venture between affiliates of Boston-based State Street Corporation
    (NYSE: STT), a world leader in financial services providing investment
    servicing, investment management, trading services and investment research,
    and DST Systems Inc, a Kansas City-based leading provider of shareholder
    accounting services and proprietary systems.

  • International Financial is today recognised as the world's leading
    provider of ASP (Application Service Provision) and BPO (Business Process
    Outsourcing) solutions to the global collective investment industry,
    supporting over 12 million accounts for over 50 organisations, and with over
    1,300 experienced staff based in three locations (Canada, Luxembourg &
    United Kingdom).

For more information visit:

International Financial web site      www.ifdsgroup.com

Or DST's web site      www.dstsystems.com

Or State Street's web site     www.statestreet.com






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