Acquisition

Secure Trust Banking Group PLC
11 November 2002



                Secure Trust Banking Group PLC  ('Secure Trust')

             Proposed acquisition of Old Mutual Securities ('OMS')

KEY POINTS

  • Secure Trust, the banking and financial services group, announces the
    proposed acquisition of OMS for an initial consideration equal to net assets
    estimated at some £5.4 million, with additional consideration payable
    dependent on the future profitability of OMS, subject to a maximum total
    consideration of £12 million.

  • OMS provides institutional stockbroking and corporate finance services.
    Under its present management team OMS has established a strong market
    position and acts as financial adviser and stockbroker to 96 public
    companies.

  • Secure Trust's present businesses comprise Secure Trust Bank, the UK's
    leading household cash management specialist, and Arbuthnot Latham, a
    private and merchant bank.

  • The acquisition of OMS further broadens the spread of Secure Trust's
    activities in line with its stated policy of providing a wide range of
    banking and financial services.

  • Following completion of the acquisition, OMS will trade under the
    Arbuthnot name. The senior management of OMS will remain with the business
    following the acquisition and its Chief Executive, Chris Airey, will join
    the Board of Secure Trust.

  • Henry Angest, Chairman and Chief Executive of Secure Trust, said:



'OMS provides Secure Trust with an exciting opportunity to enter UK investment
banking at a time when the market offers scope for future recovery. Reflecting
our long-term approach, the Directors believe that this acquisition furthers our
diversification strategy at a realistic price.  We consider that OMS has
considerable potential to develop successfully in the future.'

  • Chris Airey, Chief Executive of OMS, said:

'I am very pleased that becoming part of Secure Trust provides our clients and
staff with a stable platform from which to continue to develop our successful
specialist investment banking business, servicing small and medium-sized
companies and those that invest in them.'


Enquiries:

Secure Trust Banking Group PLC        Henry Angest, Chairman and Chief Executive         0207 374 0417
                                      Stephen Lockley, Finance Director                  0207 600 4022
Beaumont Cornish Limited
 (Financial adviser to Secure         Roland Cornish                                     0207 628 3396
Trust)
Old Mutual Securities                 Chris Airey, Chief Executive                       0207 002 4605
Biddicks                              Katie Tzouliadis                                   0207 448 1000



Introduction

Secure Trust announces that it has conditionally agreed to acquire OMS for an
initial consideration equal to net assets estimated at some £5.4 million, with
additional consideration payable dependent on the future profitability of OMS,
subject to a maximum total consideration of £12 million.

Due to its size relative to Secure Trust, the acquisition is subject to approval
of Shareholders, as well as to relevant regulatory clearances. A Circular to
Shareholders will be posted shortly convening an Extraordinary General Meeting
to seek such approval.  Henry Angest, Chairman of Secure Trust, has provided an
irrevocable undertaking to vote in favour of the acquisition in respect of his
beneficial shareholding amounting to 45.1% of the issued share capital of Secure
Trust.

Secure Trust was advised on the acquisition by Beaumont Cornish Limited.


Background to and reasons for the acquisition

Secure Trust provides a wide range of banking and financial services through two
operating divisions: Secure Trust Bank, the UK's leading household cash
management specialist, and Arbuthnot Latham, a private and merchant bank.  The
Group has successfully developed a wide range of income streams within its
chosen areas of operation. Secure Trust Bank offers its customers a
comprehensive portfolio of lending and insurance products in addition to its
core household cash management product.  Arbuthnot Latham offers high net worth
and business clients a full range of banking, corporate advisory, investment
management, pensions and financial planning, insurance and invoice factoring
services. This diversity of activities underpins the resilience and strength of
the Group, reducing its exposure to fluctuations in particular markets.

In keeping with this philosophy, the Board of Secure Trust believes that the
acquisition of OMS will enable the Group to expand into another related
financial market which is complementary to the Group's existing operations.
Under its present management team, OMS has developed significant institutional
broking and corporate finance activities, with a strong market position and a
long list of corporate brokership clients. OMS therefore offers the Group a
ready-made entry into UK investment banking at a realistic price and at a time
when the market offers good potential for recovery.



Information on OMS

The principal activities of OMS are corporate broking and corporate finance,
institutional sales, market-making and research.  OMS employs some 85 people,
and operates from offices in London, Birmingham, Manchester, Glasgow and
Edinburgh.

OMS is a member of the London Stock Exchange, a Sponsor registered with the UK
Listing Authority and a Nominated Adviser approved by the London Stock Exchange
under the AIM Rules. OMS acts as stockbroker and financial adviser to some 96
public companies and researches some 200 quoted UK companies across a range of
sectors. The market-making operation covers some 160 stocks, including most of
OMS's corporate clients.


Management of OMS

The current senior management of OMS have considerable experience in the
institutional stockbroking business. Each has worked in a number of roles for a
variety of large investment banks and therefore has the skills and knowledge
required to meet the challenges of the current market.  The key members of the
management team are as follows:


Chris Airey     Chief Executive.  Joined OMS initially as Head of Corporate Finance in July 2001 and became Chief 
Executive
                in September 2001. He was previously Head of UK Equity Capital Markets at Deutsche Bank.

Noel Medici     Deputy Chief Executive and Chief Operating Officer. Performed the chief operating officer role for the
                PanEuropean Equities division of Deutsche Bank until he joined OMS in August 1999.

Graeme Cull     Head of Institutional Broking.  After 13 years with Dresdner Kleinwort Benson, latterly as Head of UK
                Corporate Product, he spent a year as Managing Director, Stockbroking at Granville Baird before joining 
                OMS in December 1999.

Nick Donaldson  Head of Corporate Finance.  Joined OMS in August 2002, having previously been Head of Investment Banking
                at Granville Baird and Head of Corporate Finance at Credit Lyonnais Securities.



The management team will remain with the business in their current roles and
Chris Airey will join the Board of Secure Trust.  Mr Airey has a service
contract with OMS terminable on 6 months' notice at a current salary of £150,000
per annum.



Financial information on OMS

As at 31 December 2001, OMS had net assets of £5.9 million and cash of £6.2
million.  In the year to 31 December 2001, OMS reported a loss before taxation
of £2.2 million on turnover of £13.3 million.

In line with other UK broking firms, OMS has continued to experience a difficult
trading environment throughout 2002 and has incurred a loss for the year to
date.



Principal terms of the acquisition

Secure Trust has agreed to acquire OMS for an initial consideration equal to the
net assets of OMS at completion (estimated to be some £5.4 million), plus
deferred consideration of an amount equal to 4.5 times the average annual
pre-tax profits of OMS over the three financial years ending 31 December 2005,
less the initial consideration, subject to a maximum total consideration of £12
million.


The initial consideration will be satisfied by:

(i)      a payment  of £1 million in cash at completion;
(ii)     the issue of £3 million of Subordinated Loan Notes 2009 ('Loan Notes') at completion;
(iii)    a further payment in cash equal to the balance of the initial consideration after one year, subject to OMS's
         pre-tax profits for the financial year ending 31 December 2003 exceeding £1 million.

If OMS's pre-tax profits for the financial year ending 31 December 2003 are £1
million or less then a payment in cash of £1 million will be made after one
year, and the balance of the initial consideration, if any, will be paid after
two years. In the event that OMS incurs a pre-tax loss for the financial year
ending 31 December 2003, the payment referred to in (iii) above will comprise a
mixture of cash and Loan Notes, with the amount of Loan Notes issued being
limited to the lower of £1 million or the amount of any such pre-tax loss.  Any
payment in excess of £1 million will be paid after two years.

The deferred consideration, if any, will be satisfied in cash following
finalisation of the profit and loss account for the year ending 31 December
2005, save that if the total consideration exceeds £11 million, the excess over
that figure will be satisfied by the issue of subordinated loan notes on
substantially the same terms as the Loan Notes.


Current trading and prospects of Secure Trust

For the six months ended 30 June 2002, Secure Trust announced a profit on
ordinary activities before taxation of £4.1 million.  Although this was slightly
lower than the figure of £4.3 million recorded in the first half of 2001, it
represented an increase of 6% over the more difficult second half of 2001.
Earnings per share were 20.6p (2001: 21.4p) and the interim dividend was
increased from 9.5p to 10p.

During the period, both business volumes and margins improved despite the
continuing deterioration in global financial markets and the low level of
interest rates.  Although background market conditions remain unfavourable at
present, the Board of Secure Trust is optimistic that underlying trading will
continue to progress during the remainder of 2002.



ENDS


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