Interim Results

SECURE TRUST BANKING GROUP PLC
21 September 1999


                       SECURE TRUST BANKING GROUP PLC

             Interim results for the six months to 30 June 1999


Key Points

    Interim dividend increased by 6.25% to 8.5p per share
           
    Profit before exceptional goodwill item £4.7 million (1998: £5.4 million)

    Earnings per share before exceptional goodwill item 21.7p (1998: 24.8p)

    Net asset value up 17% to 153p


Chairman, Henry Angest, commented;

'The Group continues to make good progress in many areas, although profits  in
the first half of 1999 have suffered from the combined effects of low interest
rates  and job losses in the West Midlands.  Nevertheless, we are pressing  on
with  planned  investments  to  develop  our  businesses,  including  internet
banking, and the directors are optimistic about the Group's long term future.'

Press enquiries for Secure Trust Banking Group PLC:

Henry Angest, Chairman                             Tel: [phone]
Stephen Lockley, Finance Director                  Tel: [phone]

Zoe Biddick / Katie Tzouliadis, Biddick Associates Tel: [phone]

CHAIRMAN'S STATEMENT

Profits  for  the  six months to 30 June 1999, before an exceptional  goodwill
item,  amounted to £4.7 million (1998: £5.4 million) and, on the  same  basis,
earnings per share were 21.7p (1998: 24.8p).  The interim dividend, which will
be  paid on 5 November 1999 to shareholders on the register at 1 October 1999,
is  increased from 8.0p to 8.5p per share.  During this period, the Group  has
continued  to  make  progress  in  many  areas,  although  profits  have  been
restricted by a combination of external factors which are particularly adverse
for us, notably declining interest rates and job losses in the West Midlands.

Total lending by the Group was 7% higher than in the first half of 1998.  This
had a beneficial effect on net interest income, which would have risen by some
5% had it not been for the negative impact of lower base rates, which were, on
average, 1.83% lower than in the corresponding period last year.

The  loss  of jobs in the West Midlands manufacturing sector, partly  stemming
from  the  prolonged  period of doubt over the future of the  Rover  plant  at
Longbridge, has been well documented and has given rise to increased claims on
the sickness, accident and redundancy insurance scheme offered to customers of
Secure Trust Bank.  Although this scheme is not underwritten by the Group, its
reduced profitability this year has led to a marked decline in the commissions
we earn from it.

Against  this difficult background, the Group has done well to maintain  total
income  at  a level similar to last year.  At the same time, we have continued
to  invest  in  our  future,  with the increased spending  in  areas  such  as
marketing  and  customer service.  We are in the process of launching  several
new  products,  extending  our internet banking  capability  and  planning  an
increase  in  the  geographic spread of our unique Household  Cash  Management
service.  As a result of these initiatives, Group costs, excluding bad  debts,
rose  by  some  8% over last year.  It is pleasing to report  that  bad  debts
reduced from £0.4 million to £0.2 million.

Secure Trust Bank

The  core  Household Cash Management service of Secure Trust Bank achieved  an
increase in management fee income of some 3%.  However, cash balances held  by
the  bank  were  lower as a result of the investment in new premises  and  the
payment of a special dividend to shareholders late in 1998.  Coupled with  the
factors  to  which I have already referred, this meant that both net  interest
income  and  commissions received were reduced compared with last year,  by  a
total of £0.6 million.

Looking forward, there are a number of promising new initiatives in hand.   We
have  recently  introduced for the first time an accidental death  policy  for
Secure  Trust  Bank's  customers  and the early  sales  of  this  product  are
encouraging.  Furthermore, we plan to launch a cash advance service during the
autumn,  at  which  time  we will also begin advertising  the  Household  Cash
Management service in several new geographic areas.

Progress  in  Personal  Lending and Banking has  been  encouraging,  with  new
advances  ahead  by  13%  over  the  first  half  of  1998.   Bad  debts   are
significantly lower than last year and profits from this division were  up  by
26%.

Conditions  for our retail Insurance Consultancy business have  remained  very
competitive.   Although  there has been a welcome, if modest,  rise  in  motor
premium  rates, volumes have fallen as the direct writers continue to be  very
aggressive in the marketplace.  To counter this, we began during the period to
increase our marketing spend, which has left profits below last year's level.

Arbuthnot Latham

Despite  the  impact of falling base rates, profits of the Arbuthnot  division
were  broadly static at £0.6 million.  Overall, net interest income was  ahead
by  14%, with increases in business volumes more than compensating for a  cost
of  £0.1  million attributable to lower rates.  Fees and commissions increased
by  6%, reflecting good performances in each area of business.  Against  this,
costs  rose  by  14% as we continued to invest in growing the private  banking
operations.   We are rapidly becoming a well-recognised force in  this  market
and recently won a national and several regional awards for the quality of our
private client services, in competition with all other institutions active  in
this sector, many of which are considerably larger than ourselves.

Looking  to  the  future, the acquisition in July of  Weinel  &  Partners,  an
investment manager and financial adviser based in the City of London, together
with  the launch last month of our innovative new Peacock Portfolio Management
Service should ensure that we maintain the forward momentum now established.

Internet Banking

We were the first UK bank to begin offering internet banking services in 1995.
We  view  this  as an important area for future development and have  recently
stepped  up  the amount of resources devoted to ensuring that we  continue  to
keep pace with advances in this technology.

Exceptional Goodwill Write-Off

Shareholders  will  be  aware  that, some time ago,  we  suspended  the  motor
insurance underwriting operations of West Yorkshire Insurance Company.   Since
then  we  have  been keeping the future of this activity under  close  review.
Market  conditions for motor insurers continue to be extremely  tough  and  we
have  now  concluded  that it would be wrong for the  Group  to  consider  re-
entering  the  motor insurance underwriting market in the foreseeable  future.
Therefore, in accordance with the requirements of Financial Reporting Standard
10  'Goodwill  and  Intangible Assets', we have made an  accounting  entry  to
reinstate the goodwill relating to West Yorkshire Insurance Company, which had
previously  been  written  off directly against  reserves,  and  instead  have
charged  it  against the current year profit and loss account.  I stress  that
this  is an accounting requirement only which has absolutely no effect on  net
assets,  nor  on distributable reserves, nor on cash balances, nor  on  future
cash flows.

Year 2000

We  stated  in  our  last  Annual  Report  that  work  was  well  advanced  on
preparations  for the impact of the Year 2000 on our computer systems.   I  am
pleased  to  report that we have now reviewed substantially all lines  of  our
computer  program code for Year 2000 compliance, made the required  amendments
or replacements and tested the changes.

In  the  case  of  hardware and third party software products,  in  the  great
majority of instances, we have completed the process of upgrading to certified
Year  2000  compliant  versions  and tested  these  upgrades.   The  very  few
remaining minor upgrades outstanding to be completed are expected to be  ready
well before the end of the year.

Given  the  complexity of the issue, we cannot be certain that  no  Year  2000
problems  will  arise, particularly in view of the number of external  factors
beyond our direct control.  However, the Group has developed contingency plans
to  minimise  the  impact  of  any failure of a  business-critical  system  or
service.   Although  only a relatively small proportion of our  customers  are
dependent  upon computer systems for their survival, we have taken such  steps
as we reasonably can to alert our customers and suppliers to the importance of
preparing for the Year 2000 where this is appropriate.

Outlook

Although  there  has  been  an improvement in the West  Midlands  economy  and
interest  rates appear to be on an upward trend, these factors will take  some
time  to  work  through into our results.  It would be unwise,  therefore,  to
predict  a  significantly better performance in the second half and  it  seems
inevitable that full-year profits will fall short of the record level achieved
by  the Group last year.  Nevertheless, I have referred over many years to the
underlying strength and resilience of the Group's businesses and the directors
continue to have confidence in the longer-term prospects for the Group.

Henry Angest


CONSOLIDATED PROFIT AND LOSS ACCOUNT

                                     6 months   6 months   Year to
                                   to 30.6.99 to 30.6.98  31.12.98
                                  (unaudited)(unaudited) (audited)            
                                         £000       £000      £000  
Interest receivable from loans,                                 
advances and investments                5,312      5,935    12,208
Less: interest payable                (1,408)    (2,009)   (3,837)
                                       ______     ______    ______
Net interest income                     3,904      3,926     8,371
                                                                
Fees and commissions and other                                  
income receivable                      11,293     11,352    23,269
Less: fees and commissions payable      (172)      (135)     (537)
                                       ______     ______    ______
Operating income                       15,025     15,143    31,103
                                                                
Administrative expenses                 9,654      8,887    17,705
Depreciation and amortisation             490        465       884
Provisions for bad and doubtful debts     169        388     1,107
                                       ______     ______    ______
Operating expenses                     10,313      9,740    19,696
                                       ______     ______    ______        
Operating profit before exceptional    
item                                    4,712      5,403    11,407
                                                                
Exceptional item (note 2)                                       
Goodwill previously eliminated          
against reserves                        2,472          -         -            
                                       ______     ______   _______   
Profit on ordinary activities before   
tax                                     2,240      5,403    11,407            
Tax on profit on ordinary activities    1,364      1,605     3,445            
  
                                       ______     ______    ______
Profit on ordinary activities after     
tax                                       876      3,798     7,962            
Minority interests                         87         80       107            
                                       ______     ______    ______
                                                  

Profit attributable to shareholders                             
of Secure Trust Banking Group PLC         789      3,718     7,855
Dividends                               1,279      2,709     5,418
                                       ______     ______    ______
(Loss)/profit retained                  (490)      1,009     2,437
                                       ______     ______    ______
Earnings per ordinary share (note 3)                            
Basic                                    5.3p      24.8p     52.3p
Basic before exceptional item           21.7p      24.8p     52.3p
Fully diluted                            5.2p      24.5p     51.9p
Fully diluted before exceptional item   21.6p      24.5p     51.9p
                                       ______     ______    ______
   

CONSOLIDATED BALANCE SHEET

                                30.6.99    30.6.98 31.12.98
                            (unaudited)(unaudited)(audited)
                                   £000       £000     £000
                                 ______     ______   ______
                                                       
Assets                                                    
Cash and balances at central        
banks                               180        167      187
Loans and advances to banks                               
and building societies           36,658     57,241   52,243
Loans and advances to            
customers                        69,443     64,924   65,127
Debt securities                   8,500      4,500    6,500
Intangible assets                   303          -      310
Tangible fixed assets             7,267      3,591    7,519
Other assets                      5,478      7,453    5,656
Prepayments and accrued           
income                            2,696      2,722    3,149                   
                                 ______     ______   ______
Total assets                    130,525    140,598  140,691
                                 ______     ______   ______
                                                          
Liabilities                                               
Deposits by banks                 2,000      6,000    9,479
Customer accounts                86,233     90,612   87,543
Insurance reserves                4,935      6,692    5,508
Other liabilities                12,029     15,296   14,544
Accruals and deferred income      2,140      2,242    2,507
Equity minority interests           141        128       54
                                 ______     ______   ______
                                107,478    120,970  119,635
                                 ______     ______   ______
Called up share capital             150        150      150
Share premium account            13,371     13,362   13,362
Profit and loss account (note 4)  9,526      6,116    7,544
                                 ______     ______   ______
                                                          
Equity shareholders' funds       23,047     19,628   21,056
                                 ______     ______   ______
Total liabilities               130,525    140,598  140,691
                                 ______     ______   ______
                                                          


CONSOLIDATED CASH FLOW STATEMENT

                                  6 months    6 months   Year to
                                to 30.6.99  to 30.6.98  31.12.98  
                               (unaudited) (unaudited) (audited)
                                      £000        £000      £000
                                    ______      ______    ______
                                              
Net cash inflow from operating       
activities                           6,171       9,313    22,022
Dividends paid to minority                                   
shareholders of                          
subsidiary undertaking                   -           -     (101)
Taxation                             (677)       (152)   (2,938)
Capital expenditure and            
financial investment               (2,106)     (2,502)   (8,805)
Acquisitions                             -       (200)     (245)
Equity dividends paid              (2,709)     (2,401)   (5,110)
Financing                          (1,245)     (2,484)   (2,464)
                                    ______      ______    ______
(Decrease)/increase in cash          (566)       1,574     2,359
                                    ______      ______    ______
                                                     

Reconciliation of operating profit to net cash inflow from operations

                                  6 months    6 months  Year to
                                to 30.6.99  to 30.6.98 31.12.98             
                               (unaudited) (unaudited)(audited)
                                      £000        £000     £000
                                    ______      ______   ______
Operating profit                     4,712       5,403   11,407
Profit on sale of tangible           
fixed assets                         (125)         (4)     (34)
Decrease in accrued income and         
prepayments                            453       (548)    (975)
Decrease in accruals and             
deferred income                      (367)         206      472
Provisions for bad and doubtful        
debts                                  169         388    1,107
Depreciation and amortisation          490         465      884
Decrease in insurance reserves       (573)       (883)  (2,067)
                                    ______      ______   ______
Net cash flow from trading           
activities                           4,759       5,027   10,794
Net decrease in loans and                              
advances to banks and customers     10,592     (3,362)    1,829               
Net decrease in deposits by                                    
banks and customer accounts        (8,789)       7,144    7,554
Net decrease in other assets           178       (408)      489
Net decrease in other                
liabilities                          (569)         912    1,356               
                                    ______      ______   ______
Net cash inflow from operating       
activities                           6,171       9,313   22,022               
                                    ______      ______   ______
                                                        


NOTES

1. Segmental analysis of profits
 
                          6 months   6 months    Year to     
                        to 30.6.99 to 30.6.98   31.12.98
                       (unaudited)(unaudited)  (audited)       
                              £000       £000       £000
Personal Financial                          
Services before              
exceptional item             4,098      4,785     10,327           
Exceptional item (note 2)    2,472          -          -                      
                            ______     ______      ______

Personal Financial                                     
Services after               
exceptional item             1,626      4,785      10,327            
Private and Merchant        
Banking                        614        618       1,080                     
                            ______     ______      ______                     
                             2,240      5,403      11,407
                            ______     ______      ______
2. Exceptional item 

In  accordance with FRS 10, goodwill of £2,472,000 arising on the  acquisition
of  West  Yorkshire Insurance Company Limited, previously written off directly
against  reserves,  has been reinstated and charged in  the  profit  and  loss
account  as  the Group has no plans to resume motor insurance underwriting  in
the  foreseeable future.  There is no taxation charge or credit applicable  to
this item.

3. Earnings per ordinary share

(a)  Basic
  Earnings per ordinary share are calculated on the net basis by dividing  the
  profit  attributable  to the shareholders of £789,000 (30.6.98:  £3,718,000,
  31.12.98:  £7,855,000)  by the weighted average number  of  ordinary  shares
  15,048,893  (30.6.98: 15,019,768, 31.12.98: 15,034,295) in issue during  the
  year.

(b)  Diluted
  Diluted earnings per ordinary share have been calculated in accordance  with
  FRS  14  by  dividing  the profit attributable to shareholders  of  £789,000
  (30.6.98:  £3,718,000, 31.12.98: £7,855,000) by the weighted average  number
  of  ordinary  shares 15,070,721 (30.6.98: 15,147,630, 31.12.98:  15,141,528)
  in  issue  during  the year, adjusted to reflect the effect  of  outstanding
  share options.
    
(c)  Adjusted
  The  exceptional  item charged against profit on ordinary activities  before
  tax  does not relate to the profitability of the Group on an ongoing  basis.
  Therefore, an adjusted basic earnings per share is presented, as follows:
  
                  6 months to   6 months to     Year to
                    30.6.99       30.6.98      31.12.98
                  (unaudited)   (unaudited)    (audited)
                   £000  pence   £000  pence   £000  pence
   Basic            789    5.3  3,718   24.8  7,855   52.3
   Exceptional    
   item           2,472   16.4      -      -      -      -                    
                  _____  _____  _____  _____  _____  _____
   Earnings                                               
   excluding                                              
   exceptional                                            
   item and       
   adjusted       
   earnings per
   share          3,261   21.7  3,718   24.8  7,855   52.3                    
                  _____  _____  _____  _____  _____  _____


4. Profit and loss account

                                                        
                        6 months    6 months     Year to
                      to 30.6.99  to 30.6.98    31.12.98
                     (unaudited) (unaudited)   (audited)
                            £000        £000        £000                  
  Retained profit         31,456      30,518      31,946
  Premiums on           
  acquisitions           
  written off           (21,930)    (24,402)    (24,402)                      
                         _______     _______     _______
                           9,526       6,116       7,544
                         _______     _______     _______

5. Basis of reporting

 The  interim  financial statements have been prepared on  the  basis  of  the
 accounting  policies  set  out in the Group's 1998 statutory  accounts.   The
 statements were approved by the Board of Directors on 20 September  1999  and
 are  unaudited.   The auditors have not carried out a review of  the  interim
 financial statements.

6. Results for the year ended 31 December 1998

 The  figures for the year ended 31 December 1998 are extracted from the  full
 Group  Accounts  for the year which have been delivered to the  Registrar  of
 Companies and on which the auditors gave an unqualified report.
 
7.   Copies  of  this  interim report will be posted to all  shareholders  and
 further  copies  are available from the Company's registered  office:  Secure
 Trust Banking Group PLC, Paston House, Arleston Way, Solihull B90 4LH.