IFRS update

Arbuthnot Banking Group PLC
14 July 2005


ARBUTHNOT BANKING GROUP PLC
('Arbuthnot' or 'the Group')


UPDATE ON THE ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')


As disclosed in the 2004 Annual Report, Arbuthnot's consolidated accounts for
the reporting period ending 31 December 2005, including relevant comparative
information, will be prepared under IFRS.

The Group has conducted a detailed review of the implications of the
introduction of IFRS for its consolidated accounts, based on those International
Accounting Standards and IFRS which are presently in force.

The overall impact of adopting IFRS will not have a material effect on the
Group's financial position.  Details of the areas impacted by the adoption of
IFRS are as follows:

•    The timing of recognition of some types of income differs between IFRS and 
     UK Generally Accepted Accounting Policies ('UK GAAP').  In the year ended 
     31 December 2004, these timing differences would have reduced profit before 
     tax by £100,000 and net assets by £500,000.  This represents a deferral of 
     income which, under IFRS, will be recognised in future periods.

•    The basis for calculating specific loan loss provisions differs between 
     IFRS and UK GAAP.  The impact in 2004 would have reduced profit before tax 
     by £50,000 and net assets by £150,000.

•    Goodwill arising on past acquisitions is not amortised under IFRS but is 
     subject to annual impairment reviews.  Profit before tax and net assets 
     under IFRS would both have increased by £200,000 in 2004.

•    The release of general bad debt provisions disclosed in the 2004 results 
     amounting to £585,000 would have been reclassified as a movement on
     reserves under IFRS.  This was a one-off item which will not recur and 
     would have had no impact on the Group's net assets.

•    Under IFRS, provision is made for deferred taxation in respect of the
     unrealised surplus on revaluation of the Group's freehold properties.  The
     provision at 31 December 2004 would have amounted to £1.4 million.  This 
     would have been dealt with as an adjustment to the revaluation reserve and 
     would have had no effect on reported profits for the year.

•    Dividends payable are not recognised as a liability under IFRS until they 
     are approved by shareholders.  This would have had the effect of increasing
     the Group's net assets at 31 December 2004 by £3.0 million.

                                                                    14 July 2005

Enquiries:

Arbuthnot Banking Group PLC                           020 7012 2400
Henry Angest           Chairman & CEO
Stephen Lockley        Group Finance Director

College Hill                                          020 7457 2020
Tony Friend
Richard Pearson



                      This information is provided by RNS
            The company news service from the London Stock Exchange