Acquisition

Rathbone Brothers PLC
13 January 2006


13 January 2005

                             Rathbone Brothers Plc

 23.4% increase in funds under management and acquisition of Dexia's UK private
                                banking business

Highlights

•   Total funds under management increased by 23.4% over the 12 months to 
    31 December 2005 to £9.5 billion, including an increase of 46.5% in funds
    under management at Rathbone Unit Trusts to £1.2 billion.

•   Acquisition of Dexia's UK private banking business consisting of:

    •   An investment management business (the former business of Ely Fund 
        Managers) with total funds under investment management of just over 
        £600 million as at 31 December 2005 for an amount up to a maximum 
        of £14 million.

    •   UK private banking loan and deposit book being purchased at net 
        book value.

•   The acquisition is expected to be earnings-enhancing in 2007.


Introduction

Rathbone Brothers Plc ('Rathbones') has agreed to acquire the investment
management and private banking business of Dexia Banque Internationale a
Luxembourg S.A., London Branch (the 'Business'). The consideration payable for
the Business, made up of initial and deferred amounts, will be a maximum amount
of £14 million and is ultimately dependent on the value of the funds under
management transferred. The UK personal banking book - consisting of
approximately £50 million in loans and £20 million of deposits (in addition to
uninvested capital balances from client portfolios of approximately £30 million)
- is being purchased at book value. All consideration payments, including
deferred payments, will be met from Rathbones' existing cash resources.


Mark Powell, chairman of Rathbones, commented:

'2005 was a year of further progress for Rathbones and demonstrates our ability
to attract and retain client funds again resulting in strong funds under
management numbers for the year.  An increase in funds in our core discretionary
investment management business of nearly 21% compares with increases in the FTSE
APCIMS Balanced Index of 14.9% and of 16.7% in the FTSE 100 Index.  The growth
in unit trust funds was particularly pleasing and reflects excellent investment
performance as well as energetic marketing.

'Added to this strong organic growth result, the acquisition of Dexia's UK
private banking business is an excellent fit with Rathbones' existing
discretionary investment management activities and is consistent with our
strategy for all acquisitions and recruitments: the investment professionals
joining us share our belief in personalised discretionary investment management
and we are confident that the acquisition will be earnings-enhancing.'


Description of the Business

The Business being acquired generated revenues of £5.77 million in the year
ending 31 December 2004 and £2.9 million in the first half of 2005.  It made an
estimated positive contribution in 2004 of approximately £2.0 million and in the
first half of 2005 of approximately £0.9 million after allocating client-facing
front office and investment back office staff direct costs but before Dexia's
central cost allocations.

The Business being purchased consists of the former business of Ely Fund
Managers, which was originally acquired by the Dexia group in 2001 and which has
been integrated with the personal banking business of Dexia-BIL, London Branch.

As at 31 December 2005, the Business' total funds under investment management
were just over £600 million, including £326 million of private investor
discretionary managed accounts, £190 million of charity funds and pension
accounts, and a very successful managed pension fund and multi-manager
portfolios. The loan book being acquired predominantly consists of secured loans
to individuals and family groups.

The Business will include the investment managers responsible for managing
client accounts and separate agreements have been made with key individuals to
effect their move to Rathbones.  It will also include related investment support
and operations staff.


Terms of the acquisition

The initial consideration for the investment management part of the Business
will consist of £10 million or £7 million dependent on the final nature of the
scheme implemented by the Court (see below).  The deferred consideration will
also be a variable element with maxima of £4 million and £7 million,
respectively, depending on the total funds under management which are eventually
transferred to Rathbones.

The maximum total consideration for the investment management part of the
Business will therefore not exceed £14 million and the deferred consideration
period will be no longer than 13 months after closing.

The Business will be transferred to Rathbone Investment Management Limited by
way of a Court order sanctioning a banking business transfer scheme pursuant to
Part VII of the Financial Services and Markets Act 2000.  The acquisition is
subject to regulatory and Court approval but it is expected that completion will
take place by the end of April 2006. Clients of the Business will be receiving
letters from Dexia BIL in the near future.


Reasons for and benefits of the acquisition

The Business will be integrated into Rathbone Investment Management Limited
which is responsible, within Rathbones, for the bespoke management of £8.3
billion in discretionary investment portfolios for individuals, their trusts,
charities and pension funds (as at 31 December 2005). Rathbone Investment
Management Limited also holds a banking licence.

The acquisition will expand Rathbones' role as a manager of investment
portfolios for charities and increase its business in the management of pension
accounts for private individuals. In addition, it is expected that economies of
scale will be generated for the discretionary managed portfolio being acquired
through the use of Rathbones' operations platform.  Overall, the acquisition is
expected to be earnings-enhancing in 2007.

Charles Good, managing director of Dexia Private Banking UK, commented:

'Following Dexia's decision to exit from private banking activities in the UK, I
am pleased to say that we have found in Rathbones a good home for our business.
Their culture is right for us and they are at one with our belief in delivering
the best possible investment and banking services to clients, where we believe
there continue to be significant opportunities for growth.'


                                      Ends


Enquiries:

Rathbone Brothers Plc                                      www.rathbones.com
Mark Powell, Chairman                                          020 7399 0000
Andy Pomfret, Chief Executive
Emily Morris, Marketing Director


Smithfield

Reg Hoare/Katie Hunt                                           020 7360 4900




Notes for editors:


Rathbones

Rathbone Brothers Plc specialises in providing, through its subsidiaries,
personalised investment management and wealth management services for private
clients and trustees, including discretionary asset management, tax planning,
trust and company management, and banking services. It manages £9.5 billion of
funds, including £1.2 billion managed by Rathbone Unit Trust Management Limited
(as at 31 December 2005).


Dexia Private Banking UK

Dexia Private Banking UK is the product of the integration of the personal
banking activities of Dexia-BIL's branch in London and Ely Fund Managers, which
was established in 1983 and acquired by Dexia-BIL in 2001.

Ely Fund Managers acquired Pembroke Asset Management (a multi manager operation)
in 1995 and Independent Investment Management (a charity fund management
business) in 2000.

Dexia Banque Internationale a Luxembourg is one of the major subsidiaries of the
Dexia Group, one of the top-15 banking groups in Europe.  Founded in 1856,
Dexia-BIL is specialised in private banking, asset management and fund
administration, and it operates in several countries worldwide.


                      This information is provided by RNS
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