Acquisition of Property

Secure Trust Banking Group PLC
08 August 2003


For Immediate Release

8 August 2003

SECURE TRUST BANKING GROUP PLC

Acquisition of Freehold Property

KEY POINTS

  • Acquisition of freehold commercial premises in the City of London for a
    consideration of £15.7 million.

  • The property comprises approximately 42,000 sq ft of modern office space
    in Ropemaker Street, London EC2.

  • The property is to become the new London base of Secure Trust and its
    investment banking and private banking activities, respectively Arbuthnot
    Securities and Arbuthnot Latham.

  • The acquisition is to be financed through a bank facility of £12.6 million
    and the balance from the Group's own resources.

Henry Angest, Group Chairman & Chief Executive, said:

'The acquisition of new London premises in Ropemaker Street, EC2 enables us to
obtain the benefits of bringing the Arbuthnot companies together in one
building.  I am delighted that we have been able to purchase a freehold property
as this provides the Group with much greater control and flexibility as well as
long term security over its premises and operations.'


ENQUIRIES

Secure Trust Banking Group PLC

Henry Angest, Chairman and Chief Executive 020 7374 0417
Stephen Lockley, Finance Director          020 7002 4686

Teather & Greenwood Limited
Jeff Keating/David Galan                   020 7426 9000

Biddicks
Katie Tzouliadis/Kathryn Burn              020 7448 1000


SECURE TRUST BANKING GROUP PLC
('Secure Trust' or the 'Company')

Acquisition of Freehold Property

Certain definitions apply throughout the following announcement and your
attention is drawn to the table at the end of this announcement where these
definitions are set out in full.

The Company is pleased to announce that it has conditionally agreed to acquire
the freehold of 19/24 Ropemaker Street, London EC2 for a consideration of
approximately £15.7 million. The Acquisition will be financed principally
through a bank facility of approximately £12.6 million which is being provided
by Barclays with the balance of the Consideration to be funded from the Group's
own resources.

The Acquisition is subject, inter alia, to the approval of Shareholders which
will be sought at an Extraordinary General Meeting to be held at Royex House,
Aldermanbury Square, London EC2V 7NU at 11.30 am on 28 August 2003.

Background to and reasons for the Acquisition

The Group currently operates from three locations in London.
     
(1)  Secure Trust, Arbuthnot Latham and Arbuthnot Fund Managers operate from 
     leasehold premises in Royex House, Aldermanbury Square, EC2;

(2)  Arbuthnot Securities operates from leasehold premises in Lambeth Hill, EC4; 
     and

(3)  the London operation of Arbuthnot Pensions and Investments operates from 
     leasehold premises in Rosebery Avenue, EC1.

From a commercial and operational point of view, it would be preferable to bring
these businesses together in one location, which would enable them to interact
more effectively and many facilities such as IT services, client meeting rooms
and reception areas could be used more efficiently. In addition, it is likely
that Secure Trust, Arbuthnot Latham and Arbuthnot Fund Managers will have to
move out of Royex House during 2004 and the cost of Arbuthnot Securities
remaining in Lambeth Hill beyond the end of 2003 is set to rise substantially.
There is currently a large amount of vacant City office space and, as a result,
the Board believes that it is a good time to look for new premises.

In reviewing the Group's long term objectives, the Board concluded that, if it
were available, it would be beneficial for the Group to acquire a freehold
property while the City property market is depressed, rather than enter into a
long term lease. The acquisition of a freehold at this time fits with the
Group's corporate philosophy of taking a long term view and acting in an
entrepreneurial manner. The Board believes that the acquisition of a freehold
property will enable the Group to avoid the disadvantage of upward only rent
reviews, that it will offer the potential to create a capital gain (subject
always to fluctuations in the City property market) over the longer term and
will allow the Group much greater control over its premises. The Board has now
located a building at 19/24 Ropemaker Street, London EC2 which it believes will
provide good accommodation and which should serve the Group's needs for the next
few years.

The Acquisition is being financed by a secured loan of approximately £12.6
million from Barclays and approximately £3.1 million from the Group's existing
cash resources. The Acquisition will therefore increase the Group's total assets
by some £12.6 million but there will be no change in the Group's net assets.

Information on the Property

The Property is located on the northern side of the City. The building is
adjacent to the tower landmark of City Point, formerly BP's head office
building. The building was constructed in 1987 and renovated in 2001 and
provides 41,914 sq ft of offices on the basement, ground and six upper floors.

The property is freehold and is currently owned by CIS and let to BP. The price
agreed for the Acquisition is approximately £15.7 million on the basis that BP
will immediately prior to Completion surrender its lease. The building is not
elected for VAT and on the basis of legislation and Treasury Regulations in
force as at today's date no stamp duty is payable on the Acquisition.

CBRE has valued the Property at £15.8 million on the basis of vacant possession.
In addition, CBRE has valued the Property at £20 million assuming the Property
to be subject to a full repairing and insuring lease to the Company of 15 years
at a market rent. The Group requested the additional valuation as the Group
intends to occupy the Property and therefore a valuation based on the Property
with the benefit of a lease is appropriate.

Summary of principal terms of the Acquisition

The Acquisition Agreement was entered into on 8 August 2003 between CIS and
Arbuthnot Latham. The Acquisition Agreement is conditional on (i) CIS providing
vacant possession on completion (which will mean CIS securing the surrender of
the current lease of the Property from BP) and (ii) the approval of the
Acquisition by Shareholders.

The Consideration for the Property is £15,728,750, provided that Completion
takes place on or before 29 August 2003.

If Completion takes place on or after 30 August 2003, the Consideration will
increase by a daily rate of £3,545 to a maximum of £15,842,190. If Completion
does not take place on or before 30 September 2003 the Acquisition Agreement
automatically terminates at midnight on 30 September 2003.

A deposit of £1,572,875 (10 per cent. of £15,728,750) was paid by Arbuthnot
Latham on execution of the Acquisition Agreement and is held by CIS's solicitors
with interest accruing to Arbuthnot Latham. The deposit will be refunded
(together with accrued interest) to Arbuthnot Latham if Completion does not take
place on or before 30 September (save in circumstances of default by Arbuthnot
Latham).

Financing of the Acquisition

The Acquisition will be financed principally through a facility of approximately
£12.6 million which is being provided by Barclays to Arbuthnot Latham.  The
balance of the Consideration will be funded from the Group's own resources.

Current trading

As foreshadowed in the Chairman's statement accompanying the Annual Report
issued in April of this year, the Group has continued to face challenging
trading conditions in the year to date. Although equity markets have shown some
recovery, the FTSE 100 index remains over 10 per cent. below its level at June
2002. At the same time, interest rates have continued to fall, which adversely
affects net interest earnings, and the wider economic environment has remained
uncertain. Despite these factors, however, the Directors remain generally
satisfied with the Group's trading to date. Looking ahead, whilst the Directors
remain generally satisfied with the Group's prospects (including the
Acquisition), the outcome for the current year will be dependent on the extent
of any continued recovery in the financial markets. The Group is due to report
its interim results for the period ended 30 June 2003 on 23 September 2003 and
the Directors will provide a further update on current trading at that time.

Extraordinary General Meeting

The proposed Acquisition will require the approval of Shareholders. An
Extraordinary General Meeting of the Company will be held at Royex House,
Aldermanbury Square, London EC2V 7NU at 11.30 am on 28 August 2003.

A Circular to shareholders convening the EGM and setting out details of the
Acquisition will be posted later today. A copy of the circular to Shareholders
dated 8 August 2003 will be submitted to the UK Listing Authority, and will
shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility, which is situated at:

Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS

Telephone: [phone]


DEFINITIONS

The following definitions apply throughout this announcement unless the context
otherwise requires:

'Acquisition''                    proposed acquisition of the Property by Arbuthnot Latham, subject to the
                                  terms and conditions set out in the Acquisition Agreement;

'Acquisition Agreement''          conditional sale and purchase agreement entered into between CIS (1) and
                                  Arbuthnot Latham (2) and dated 8 August 2003;

'Arbuthnot Fund Managers''        Arbuthnot Fund Managers Limited, a wholly owned subsidiary of Arbuthnot
                                  Latham;

'Arbuthnot Latham''               Arbuthnot Latham Co., Limited, a wholly owned subsidiary of Secure
                                  Trust;

'Arbuthnot Pensions and           Arbuthnot Pensions and Investments Limited, a wholly owned subsidiary of
Investments''                     Arbuthnot Latham;

'Arbuthnot Securities'' or 'OMS'' Arbuthnot Securities Limited (formerly Old Mutual Securities Limited), a
                                  wholly owned subsidiary of Secure Trust;

'Barclays''                       Barclays Bank PLC;

'BP''                             BP Properties Limited;

'CBRE''                           CB Richard Ellis Limited;

'CIS''                            Co-Operative Insurance Society Limited;

'City''                           City of London;

'Completion''                     completion of the Acquisition in accordance with the terms and subject
                                  to the conditions of the Acquisition Agreement;

'Completion Date''                date of Completion, expected to be on or around 29 August 2003;

'Consideration''                  consideration payable for the Acquisition, in accordance with the terms
                                  and subject to the conditions of the Acquisition Agreement;

'Directors'' or 'Board''          board of directors of Secure Trust;

'Extraordinary General Meeting''  Extraordinary General Meeting of the Company convened for 11.30 am on 28
or 'EGM''                         August 2003;

'Group''                          Secure Trust and its subsidiaries;

'Ordinary Shares''                ordinary shares of 1p each in the capital of the Company;

'Property'' or 'Freehold          freehold property known as Finance House, 19/24 Ropemaker Street, London
building''                        EC2;

'Shareholders''                   holders of Ordinary Shares;

'Secure Trust'' or  'the          Secure Trust Banking Group PLC;
Company''

'United Kingdom'' or 'UK''        United Kingdom of Great Britain and Northern Ireland;

'£''                              United Kingdom pounds sterling.



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