Interim Results

Secure Trust Banking Group PLC
24 September 2002

                         SECURE TRUST BANKING GROUP PLC

               Interim results for the six months to 30 June 2002

                                   Key Points


  • Interim dividend increased to 10.0p (2001: 9.5p)

  • Operating income rose to £17.7m (2001: £17.4m)

  • Profit before tax of £4.1m (2001: £4.3m)

  • Profit before taxation 6% higher than in the second half of 2001

  • Proposed subordinated loan note issue of up to £5 million

 Chairman, Henry Angest, commented:

'I am pleased to report an increase in the Group's pre-tax profits for the first
half of 2002 compared to the second half of last year. Secure Trust Bank has
increased by 6% income generated through fees and commissions, contributing to a
rise in its profits. Arbuthnot Latham has increased its loan book by 7% and
customer deposits by 23%, with its profits showing a significant recovery from
the low level seen in the latter part of 2001.

The Group has to date funded its regulatory capital requirements entirely by
shareholders' funds and internal reserves. We are now seeking to increase the
returns to shareholders in future by utilising long-term debt as well as equity.
The Company is today therefore launching an issue of up to £5 million of
Floating Rate Subordinated Loan Notes 2009.

The Board remains positive about the outlook for the Group. The balance sheet is
very healthy with strong cash generation and our continued confidence in the
business is expressed by another increase in the interim dividend.'


Press enquiries for Secure Trust Banking Group PLC:

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

Katie Tzouliadis / Kathryn Burn, Biddicks                  Tel: [phone]



CHAIRMAN'S STATEMENT

I am pleased to report an increase of 6% in the Group's pre-tax profits for the
first half of 2002 when compared with the second half of last year. These
results reflect the progress we are making in improving both business volumes
and margins, despite the continuing deterioration in global financial markets
and the low level of interest rates during the half-year under review.

UK base rates have remained at 4% throughout 2002, compared with an average
level of 5.6% during the first half of 2001. At the same time, the FTSE 100
share index fell a further 11% during the half-year and at the end of June 2002
stood some 17% below its level of a year earlier. Reflecting these factors,
pre-tax profits were slightly behind the first half of last year at £4.1 million
(2001: £4.3 million) and earnings per share were 20.6 pence (2001: 21.4 pence).
The interim dividend, which will be paid on 1 November 2002 to shareholders on
the register at 4 October 2002, is increased from 9.5p to 10p.

Secure Trust Bank

Profits of Secure Trust Bank rose to £3.6 million from the figure of £3.5
million recorded in each of the two half-years in 2001. Over the past 18 months,
we have pursued a number of new initiatives designed to broaden the appeal of
the Secure Homes service. These initiatives have included an increase in our
marketing programme in the North-West and enhancements to both our product and
our customer care programme.

Together with an improvement in sales of insurance products, this helped to
contribute towards a 6% increase in fees and commissions earned by the division.
The impact of lower base rates on interest earnings on free cash balances and
capital meant that net interest income declined by 2%, although more positively,
the volume of new personal lending rose by 4%.

Arbuthnot Latham

Arbuthnot Latham's profitability recovered during the first half from the low
level seen in the latter part of 2001 and profits amounted to £0.5 million
(second half of 2001: £0.3 million; first half of 2001: £0.8 million). The
impact of lower interest rates and stock markets meant that operating income
declined by 2% compared with the first half of 2001, although underlying
business volumes continued to increase, with the loan book 7% higher than a year
ago and customer deposits 23% higher.

Our policy of having a spread of businesses within the division also helped to
cushion the impact of falling markets, with declines in investment management
and financial services being offset by stronger contributions from banking,
insurance broking and corporate finance.

Subordinated Loan Notes

The Group has to date funded its regulatory capital requirements entirely by
shareholders' funds and internal reserves. However, the Directors believe it is
appropriate for the company to raise a limited amount of long-term debt for its
regulatory capital requirements in addition to equity capital. The company is
therefore launching an Invitation to subscribe for up to an initial amount of £5
million of Floating Rate Subordinated Loan Notes 2009 (the 'Offer'). The Offer
will be available to shareholders as well as to other investors and will carry
interest at a rate of 3% over LIBOR. Subject to receiving appropriate regulatory
consents, the proceeds of the Offer are expected to be used to continue the
current programme of purchasing the company's own shares and for general
corporate purposes. The Loan Notes will have a minimum subscription of £30,000
and will be repayable at par on 31 December 2009 unless redeemed or repurchased
earlier by the company (with the prior written consent of the Financial Services
Authority). No application for the listing of the Loan Notes will be made and
the Loan Notes will be fully subordinated to the Group's other existing and
future creditors. An Offering Memorandum containing full details of the terms of
the Offer and of the terms and conditions of the Loan Notes is being posted to
shareholders.

Outlook

The Board is encouraged by the progress which the Group has made during the
first half of this year. Whilst profits were lower than in the first half of
2001, they nevertheless represent a good increase on the second half of last
year and, despite market factors not being particularly favourable for our
business at present, I am optimistic that the Group's underlying trading will
continue to progress during the remainder of 2002.

In recognition that the hard work put in by many of our staff has not been
adequately reflected in the Group's share price performance over recent years,
the Board has decided it is appropriate to make a one-off payment to share
option holders to buy-out their outstanding option entitlements. The payment,
which it is estimated will cost around £0.5 million, will be made in the second
half of the year and this will be reflected in the results to 31 December 2002.

The Board remains positive about the outlook for the Group. The balance sheet is
very healthy with strong cash generation and we are expressing our continued
confidence with another increase in the interim dividend.

Henry Angest



CONSOLIDATED PROFIT AND LOSS ACCOUNT
                                                                          Restated          Restated            Restated
                                                     6 months to       6 months to       6 months to             Year to
                                                         30.6.02           30.6.01          31.12.01            31.12.01
                                                            £000              £000              £000                £000
Interest receivable from loans, advances and
investments                                                5,816             6,573             6,198              12,771
Less: interest payable                                   (1,729)           (2,375)           (1,932)             (4,307)

Net interest income                                        4,087             4,198             4,266               8,464
Fees and commissions receivable                           13,973            13,501            13,693              27,194
Less: fees and commissions payable                         (333)             (268)             (533)               (801)

Operating income                                          17,727            17,431            17,426              34,857

Administrative expenses                                   12,482            12,137            12,191              24,328
Depreciation                                                 696               581               658               1,239
Amortisation of goodwill                                      84                85                81                 166
Provisions for bad and doubtful debts                        364               361               613                 974

Operating expenses                                        13,626            13,164            13,543              26,707

Profit on ordinary activities before tax                   4,101             4,267             3,883               8,150

Tax on profit on ordinary activities                     (1,270)           (1,275)           (1,175)             (2,450)

Profit on ordinary activities after tax                    2,831             2,992             2,708               5,700
Minority interests                                           (5)               (7)              (10)                (17)

Profit attributable to shareholders of Secure
Trust Banking Group PLC                                    2,826             2,985             2,698               5,683
Dividends                                                (1,356)           (1,322)           (2,684)             (4,006)

Retained profit                                            1,470             1,663                14               1,677

Earnings per ordinary share (note 2)
Basic and fully diluted                                    20.6p             21.4p             19.4p               40.8p


The profit on ordinary activities before tax and retained profit on a historical
cost basis are not different from the profit on ordinary activities before tax
and retained profit for the periods above.



CONSOLIDATED BALANCE SHEET
                                                                                             Restated           Restated
                                                                           30.6.02            30.6.01           31.12.01
                                                                              £000               £000               £000
Assets
Cash and balances at central banks                                             283                200                155
Loans and advances to banks and building societies                          48,143             39,686             66,053
Loans and advances to customers                                            100,651             97,453             96,286
Debt securities                                                             17,500             13,500             15,500
Intangible fixed assets                                                      2,831              2,996              2,915
Tangible fixed assets                                                        8,522              7,734              8,810
Other assets                                                                 7,441              5,517              5,849
Prepayments and accrued income                                               3,225              3,401              3,130

Total assets                                                               188,596            170,487            198,698

Liabilities
Deposits by banks                                                            5,134              8,822             12,860
Customer accounts                                                          136,699            115,568            138,374
Insurance reserves                                                           2,449              2,016              2,477
Other liabilities                                                           16,536             16,517             16,853
Accruals and deferred income                                                 2,105              2,418              2,674
Equity minority interests                                                       84                 74                 84

                                                                           163,007            145,415            173,322

Called up share capital                                                        136                139                139
Share premium account                                                       13,370             13,370             13,370
Capital redemption reserve                                                      14                 11                 11
Revaluation reserve                                                            511                  -                511
Profit and loss account (note 3)                                            11,558             11,552             11,345

Equity shareholders' funds                                                  25,589             25,072             25,376

Total liabilities                                                          188,596            170,487            198,698



NOTES TO THE FINANCIAL STATEMENTS

 1. Segmental analysis of profits

                                                        6 months to       6 months to       6 months to          Year to
                                                            30.6.02           30.6.01          31.12.01         31.12.01
                                                               £000              £000              £000             £000
                                                             
    Personal Financial Services                               3,586             3,483             3,540            7,023
                                                               
    Private and Merchant Banking                                515               784               343            1,127

                                                              4,101             4,267             3,883            8,150


 2. Earnings per ordinary share

    Basic and fully diluted

    Earnings per ordinary share are calculated on the net basis by dividing the
    profit attributable to shareholders of £2,826,000 (30.6.01: £2,985,000;
    31.12.01: £5,683,000) by the weighted average number of ordinary shares
    13,706,067 (30.6.01: 13,917,974; 31.12.01: 13,916,207) in issue during the
    period.

 3. Profit and loss account

                                                                                              Restated          Restated
                                                                       6 months to         6 months to           Year to
                                                                           30.6.02             30.6.01          31.12.01
                                                                              £000                £000              £000
    Retained profit
                                                                            
    Opening balance                                                         33,021              31,456            31,456
                                                                               
    Prior year adjustment - FRS 19 (note 4)                                    254                 363               363
                                                                            
    Restated opening balance                                                33,275              31,819            31,819
                                                                           
    Cost of shares repurchased                                             (1,257)                   -             (221)
                                                                             
    Profit for the period                                                    1,470               1,663             1,677
                                                                            
    Closing balance                                                         33,488              33,482            33,275
                                                                          
    Premiums on acquisitions written off                                  (21,930)            (21,930)          (21,930)

                                                                            11,558              11,552            11,345




 4. Prior year adjustment


    Financial Reporting Standard No.19 'Deferred Tax' (FRS 19) has been adopted
    by the Group for the first time in this Interim Report. In previous years
    the Group has complied with Statement of Standard Accounting Practice 15 '
    Deferred Taxation' (SSAP 15) which has been superseded by FRS 19. SSAP 15
    required provision for deferred taxation to be made to the extent that a
    deferred tax liability or asset would crystallise in the foreseeable future.
    At 31 December 2000 the Group had no potential deferred tax liability and
    had an unrecognised deferred tax asset in respect of accelerated capital
    allowances, unutilised losses and general provisions totalling £363,000. In
    accordance with the requirements of FRS 19 this asset has now been
    recognised and the resultant credit to the profit and loss account has been
    treated as a prior year adjustment in compliance with FRS 3, by restating
    the opening balance as at 1 January 2001. The prior period comparatives have
    been restated to comply with FRS 19. The impact of the new policy is to
    reduce the profit after tax for the six months ended 30 June 2001 by
    £149,000, to increase the profit after tax for the six months ended 31
    December 2001 by £40,000 and to reduce the profit after tax for the year
    ended 31 December 2001 by £109,000. The effective rate of taxation for the
    year ended 31 December 2001 has been restated from 28.5% to 29.9%.

    Earnings per share have been restated from 22.5p to 21.4p for the six months
    ended 30 June 2001, from 19.1p to 19.4p for the six months ended 31 December
    2001 and from 41.6p to 40.8p for the year ended 31 December 2001.


 5. Basis of reporting

    With the exception of deferred tax as described in Note 4 above, the interim
    financial statements have been prepared on the basis of the accounting
    policies set out in the Group's 2001 statutory accounts. The statements were
    approved by the Board of Directors on 23 September 2002 and are unaudited.
    The auditors have not carried out a review of the interim financial
    statements.

 6. Results for the year ended 31 December 2001


    The figures for the year ended 31 December 2001 are derived from the Group
    Accounts for the year, restated to take into account the change of
    accounting policy in respect of deferred tax set out in Note 4 above. A copy
    of the Group Accounts for that year, on which the auditors gave an
    unqualified opinion, has been delivered to the Registrar of Companies.

    7     Copies of this interim report will be posted to all shareholders and
    further copies are available from the company's registered offices: Secure
    Trust Banking Group PLC, Paston House, Arleston Way, Solihull B90 4LH.



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