Open Offer

Secure Trust Banking Group PLC
15 December 2004


PRESS ANNOUNCEMENT                 EMBARGOED UNTIL 7:00a.m.
--------------------

15 December 2004

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE
UNITED STATES, CANADA, JAPAN, AUSTRALIA, THE REPUBLIC OF IRELAND OR SOUTH
AFRICA

SECURE TRUST BANKING GROUP PLC ('SECURE TRUST' OR THE 'COMPANY')

PROPOSED OPEN OFFER OF UP TO 1,282,245 NEW ORDINARY SHARES AT 310 PENCE PER
SHARE WITH AN EXCESS APPLICATION FACILITY

AND

PROPOSAL TO ADOPT THE ARBUTHNOT SECURITIES LONG TERM INCENTIVE 
PLAN (AS AMENDED)

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. Introduction

Secure Trust, the banking and financial services group, announces today its
intention to raise up to £4.0 million (before expenses) by way of an Open Offer
of up to 1,282,245 New Ordinary Shares. Qualifying Shareholders will be offered
the opportunity to apply for their pro rata entitlements ('Basic Entitlements')
and Excess Shares. As explained below, the Open Offer is conditional on the
approval of Independent Shareholders.

The purpose of the Open Offer is to provide the Company with the funds to
continue to invest in the businesses of the Group and at the same time to pay
attractive dividends to shareholders.

The Issue Price of 310 pence per New Ordinary Share represents a 1.8 per cent.
premium to the closing middle market price of 304.5 pence per share on 14
December 2004, the last dealing day before the announcement of the Open Offer.
The 1,282,245 New Ordinary Shares will represent 9.9 per cent. of the issued
share capital of the Company immediately prior to their issue.

The Open Offer has not been underwritten. However, the Company's Chairman and
Chief Executive, Henry Angest, has given an irrevocable undertaking to the
Company, subject to there being no material adverse change to the Company's
share price, to apply for the pro rata entitlement in respect of his entire
current beneficial shareholding representing 47.3 per cent. of the issued share
capital of the Company.

As Mr Angest's percentage interest in the Company's issued share capital may
increase as a result of the Open Offer (albeit only to a maximum of 49.6 per
cent. of the enlarged issued share capital) and since he owns between 30 per
cent. and 50 per cent. of the issued share capital of the Company, he would be
obliged to make a mandatory offer for the remaining shares in Secure Trust under
the provisions of Rule 9 of The City Code on Takeovers and Mergers. However, a
waiver from the obligation to make such an offer has been granted by the Panel
on Takeovers and Mergers, subject to approval by Independent Shareholders at an
extraordinary general meeting of the Company.

2. Background to the Company

Secure Trust is a financial services business providing personal financial
services under the Secure Trust brand and private and investment banking under
the Arbuthnot name.

The operations of the personal financial services division encompass household
cash management (Secure Homes), personal lending (Secure Trust Bank) and
insurance services (SecureDirect), serving customers primarily in the West
Midlands and North of England. The companies forming the Arbuthnot Latham
private banking division work together closely to provide commercial and private
clients with a range of financial products and services including relationship
banking, fund management and commercial banking. Arbuthnot Securities provides
investment banking services.

For the 12 months to 31 December 2003, the Company reported operating income of
£42.7 million, profits before tax of £3.9 million and had net assets of £23.5
million at 31 December 2003. For the six months to 30 June 2004, the Company
reported operating income of £24.7 million, profits before tax of £1.9 million
and had net assets of £23.5 million at 30 June 2004.

3. Reasons for the Open Offer

Over the past two years, the Group has developed materially. In January 2003,
the Company purchased Old Mutual Securities (now renamed Arbuthnot Securities)
and has subsequently invested in building its franchise. In August 2003, the
Group acquired new freehold offices in the City of London for a total cost,
including fit-out and moving-in costs, of some £18 million and, during 2004, has
extended the offices of Secure Trust Bank in Birmingham at a cost of £1 million.
At the same time, the Group has invested in developing the Group's private
banking division, Arbuthnot Latham. The initial benefits of these investments
are being realised, with Group revenues increasing by 15 per cent. in the first
half of 2004.

The objective in adding Arbuthnot Securities to the Group was to develop a
complementary and significant stream of earnings by building an investment
banking franchise at a time when poor market conditions made it possible to
enter this market at a relatively low cost. Despite taking longer than planned
to reach profitability, the Board remains confident of the prospects for
Arbuthnot Securities. It believes that there remains an opportunity to build a
high quality investment banking franchise focussing on small and medium-sized
corporates.

Measures have recently been taken to reduce the cost base of Arbuthnot
Securities and, at the same time, commissions and trading income have improved.
Moreover, Arbuthnot Securities has advised on some 20 corporate finance
transactions during 2004 and the pipeline of transactions for the first half of
2005 is healthy. The Board is also taking measures to ensure the retention and
motivation of key staff in Arbuthnot Securities through the introduction of a
Long Term Incentive Plan. This will enable employees to acquire up to 40 per
cent. of the equity of Arbuthnot Securities, as described in paragraph 9
below.

Over the last 18 months, the Group has also invested significantly in the
private banking business of Arbuthnot Latham by broadening the wealth management
product offering and enhancing the team with a recruitment programme. The
benefits of these initiatives are now beginning to be realised with strong
growth in new clients during 2004. The Board believes that Arbuthnot Latham will
see increasing opportunities going forward and wishes to be in a position to
continue to support its ongoing development.

The purpose of the Open Offer is to provide the Company with the funds to
continue to invest in the business and at the same time to pay attractive
dividends to shareholders.

4. Current trading

The Company reported its interim results on 20 September 2004 for the six months
to 30 June 2004.

After a positive start to the year, the performance of the Group slowed during
the summer. However, there has been some increase in activity since the summer
across the Group's businesses and the Board is optimistic that underlying
trading will continue to progress during the remainder of 2004.

The Directors believe that, as a result of continued investment in products and
people and the acquisition of the securities business, with the net proceeds of
the Open Offer, the Group will be well-positioned for the medium and long
term.

5. Principal terms of the proposed Open Offer

The Company proposes to raise up to £4.0 million (before expenses) by the
allotment and issue of up to 1,282,245 New Ordinary Shares to Qualifying
Shareholders at 310 pence per New Ordinary Share pursuant to the terms of the
Open Offer.

Arrangements have been made with Hawkpoint to invite, as agent for and on behalf
of the Company, Qualifying Shareholders to apply on a pre-emptive basis under
the proposed Open Offer for, in aggregate, up to 1,282,245 New Ordinary Shares
at the Issue Price, on the basis of:

99 New Ordinary Shares for every 1,000 Existing Ordinary Shares

registered in their names on the Record Date. Where appropriate, entitlements of
Qualifying Shareholders will be rounded down to the nearest whole number of New
Ordinary Shares.

Qualifying Shareholders may apply for any number of shares up to their Basic
Entitlements.

An Excess Application Facility is also available for Qualifying Shareholders
under which they can apply for New Ordinary Shares in excess of their Basic
Entitlements in multiples of 100 New Ordinary Shares. Such applications will be
satisfied pro rata to the applicant's holding of Existing Ordinary Shares. To
the extent that further Excess Shares remain unallocated, such Excess Shares
shall be allocated on a pro rata basis amongst those Qualifying Shareholders who
have capacity within their applications for Excess Shares.

The Open Offer is not a 'rights issue' and the application form is not a
negotiable document and cannot be traded. Any New Ordinary Shares for which
applications are not received or which the Company determines not to allocate in
accordance with the terms of the proposed Open Offer will not be issued by the
Company.

6. Further information on the Open Offer

The Open Offer is conditional upon:

(i) Approval by the Independent Shareholders of the Rule 9 waiver at an
extraordinary general meeting; and
Admission to the Official List and to trading on the London Stock Exchange.

If either of these conditions is not satisfied, the Open Offer will not
proceed.

Applications will be made to the UKLA and to the London Stock Exchange for the
New Ordinary Shares to be admitted to the Official List and to trading on the
London Stock Exchange's market for listed securities. It is expected that
Admission will become effective and that dealings in the New Ordinary Shares
will commence at 8.00am on 21 January 2005. The New Ordinary Shares will be
issued fully paid and will be identical to and rank pari passu in all respects
with the Existing Ordinary Shares and will rank in full for all dividends and
other distributions declared, made or paid on or after Admission in respect of
the ordinary share capital of the Company.

7. Intentions of Mr Angest

The Open Offer has not been underwritten. However, Mr Angest has given an
irrevocable undertaking to the Company, subject to there being no material
adverse change to the Company's share price, to apply (or procure the
applications) for the Basic Entitlement in respect of his entire current
beneficial shareholding representing 47.3 per cent. of the issued share capital
at the date of this announcement. He may also apply for Excess Shares pursuant
to the terms of the Open Offer.

If and to the extent that applications by Qualifying Shareholders for New
Ordinary Shares are such that Mr Angest would have a beneficial interest in more
than 49.6 per cent. of the enlarged share capital of the Company following the
Open Offer, Mr Angest's allocation of Excess Shares will be scaled back in
accordance with the terms of the Open Offer. Any Excess Shares that result from
this scaling back process will be allocated to other Qualifying Shareholders
(save in respect of fractional entitlements which will be ignored), to the
extent they have capacity within their applications for Excess Shares, or
otherwise not issued by the Company.

Depending on the number of applications for New Ordinary Shares, the size of the
Open Offer will be between 1,282,245 and 605,883 New Ordinary Shares and Mr
Angest's beneficial interest in the enlarged share capital of the Company will
be between 47.3 per cent. and 49.6 per cent.

8. Requirement for a waiver from obligations under Rule 9 of the City Code on
Takeovers and Mergers

It is possible that, as a result of the Open Offer, Mr Angest's percentage
interest in the Company's issued share capital will increase. In this
circumstance, because Mr Angest currently owns between 30 per cent. and 50 per
cent. of the issued share capital of the Company, he would be obliged, in the
absence of the consent of the Panel and the approval of the Independent
Shareholders (i.e. excluding Mr Angest), to make an offer for the Ordinary
Shares not beneficially owned by him, under Rule 9 of the City Code on Takeovers
and Mergers.

Unless all Qualifying Shareholders apply for their Basic Entitlements, Mr
Angest's percentage interest in the share capital of Secure Trust will
increase.

Mr Angest is prepared to support the Open Offer to ensure that the Company
receives a significant part of the new capital that it is seeking to raise.
However, he would not do so if he might be obliged to make an offer under Rule

9. The Board has accordingly consulted the Panel which has agreed, subject to
the approval of the Independent Shareholders, to waive the obligation that would
otherwise arise under Rule 9 for Mr Angest to make a general offer for the
Ordinary Shares which Mr Angest does not already beneficially hold.
The eventual percentage interest of Mr Angest in the enlarged share capital of
the Company will depend on the number of New Ordinary Shares for which valid
applications are received from Qualifying Shareholders. However, under the terms
of the Open Offer, this percentage interest will not increase to more than 49.6
per cent.

Adoption of the Arbuthnot Securities Long Term Incentive Plan (as amended)
The Plan was established by the Board on 22 March 2004 in order to encourage the
holding of shares in Arbuthnot Securities by selected key employees, and
therefore to aid in the recruitment and retention of those employees. The Plan
has not previously been offered for shareholder approval because Directors were
not eligible to participate in it.

Under the Plan, Secure Trust offers selected employees of Arbuthnot Securities
the opportunity to acquire Plan Shares from the EBT on a date chosen by a duly
appointed committee of the board of directors of Arbuthnot Securities. Legal
title to the Plan Shares is held by the EBT and may not be transferred for a
three year period, with certain limited exceptions. The Plan does not involve
the issue of new shares. All Plan Shares are issued ordinary shares in Arbuthnot
Securities purchased by the EBT from the Company.

It is now proposed to make certain amendments to the rules of the Plan, which
include the removal of a provision under which Directors, who are also employees
of Arbuthnot Securities, are not eligible to participate. The Board is seeking
shareholder approval for the adoption of the Plan, as amended, at the
extraordinary general meeting.

10. Despatch of circular to Secure Trust shareholders
A circular setting out details of the Open Offer and the Arbuthnot Securities
Long Term Incentive Plan is expected to be despatched to Secure Trust
shareholders today.

Enquiries:
Secure Trust Banking Group PLC      Henry Angest            0207 012 2400
                                    Stephen Lockley

Hawkpoint Partners Limited          Paul Baines             0207 665 4500
                                    Lawrence Guthrie

                                   Appendix I
                     EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Record Date for the proposed Open Offer                          Close of
                                                                 business on
                                                                 10 December
                                                                 2004

Latest time and date for splitting Application Forms             3.00pm on 18
                                                                 January 2005

Latest time and date for receipt of Proxy Forms                  11.00am on 18
                                                                 January 2005

Extraordinary General Meeting                                    11.00am on 20
                                                                 January 2005

Latest time and date for receipt of Application Forms and        3.00pm on 20
payment in full under the Open Offer                             January 2005

Admission and commencement of dealings in the New Ordinary       8.00am on 21
Shares                                                           January 2005

Expected date for crediting New Ordinary Shares to CREST stock   25 January 2005
accounts in uncertificated (paperless) form

Despatch of definitive share certificates in respect of the New  by 28 January
Ordinary Shares (where applicable)                                        2005

The Directors accept responsibility for the information contained in this
announcement. To the best of the knowledge and belief of the Directors (who have
taken all reasonable care to ensure that such is the case) the information
contained in this announcement is in accordance with the facts and does not omit
anything likely to affect the import of such information.

Hawkpoint Partners Limited, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Secure
Trust in connection with the Open Offer and no-one else. Neither Hawkpoint
Partners Limited nor Arbuthnot Securities Limited, broker to Secure Trust, will
be responsible to anyone other than Secure Trust for providing the protections
afforded to customers of Hawkpoint Partners Limited or Arbuthnot Securities
Limited and will not be responsible for providing advice to any such person in
relation to the Open Offer or the contents of this announcement or any other
matter referred to herein.

THE PROPOSED OPEN OFFER DESCRIBED IN THIS ANNOUNCEMENT IS NOT BEING MADE TO
SHAREHOLDERS WITH A REGISTERED ADDRESS IN, OR WHO ARE LOCATED IN ANY EXCLUDED
TERRITORY. The New Ordinary Shares have not been, nor will they be, registered
under the United States Securities Act of 1933 (as amended), or under the
securities laws of any state of the United States or under the applicable
securities laws of any other Excluded Territory. The New Ordinary Shares may not
be offered or sold, directly or indirectly, in or into the United States or any
other Excluded Territory, or to or for the benefit of any national, resident or
citizen of any other Excluded Territory. There will be no public offer of
securities in the United States or any other Excluded Territory
This announcement does not constitute an offer of, or the solicitation of any
offer to subscribe for or buy, any of the New Ordinary Shares to any person in
any jurisdiction to whom or in which such offer or solicitation is unlawful. The
distribution of this announcement in certain jurisdictions may be restricted by
law and therefore persons into whose possession this announcement comes should
inform themselves about and observe any such restrictions. Any failure to comply
with these restrictions may constitute a violation of the securities laws of
such jurisdiction.


Appendix II

DEFINITIONS

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

'Basic          the basic entitlement of each Qualifying Shareholder to
Entitlement'    subscribe for New Ordinary Shares pursuant to the Open Offer on
                the basis of 99 New Ordinary Shares for every 1,000 Existing
                Ordinary Shares held on the Record Date
'Directors' or  the directors of the Company whose names are set out on page 2
'Board'         of the Circular together with, where the context so requires,
                their families and persons connected with them (within the
                meaning of section 346 of the Companies Act 1985 (as amended))
'EBT'           Secure Trust No. 2 ESOP Trust, a discretionary trust established
                in Jersey for the benefit of Arbuthnot Securities' directors and
                employees, and their dependants
'Excess         the arrangement being made available to Qualifying Shareholders
Application     pursuant to which Qualifying Shareholders may apply for
Facility'       additional New Ordinary Shares in excess of their Basic
                Entitlements
'Excess         the New Ordinary Shares to which Qualifying Shareholders, are
Shares'         entitled under their Basic Entitlements which are not taken up
                and which are available to Qualifying Shareholders under the
                Excess Application Facility
'Excluded       The United States, Canada, Japan, Australia, the Republic of
Territories'    Ireland and South Africa
'Existing       the 12,951,974 ordinary shares currently in issue
Ordinary
Shares'
'Group'         the Company, its subsidiaries and associated undertakings
'Hawkpoint'     Hawkpoint Partners Limited
'Independent    Shareholders in the Company other than Mr Angest and his
Shareholders'   Associates
'Issue Price'   310 pence per New Ordinary Share
'New Ordinary   up to 1,282,245 Ordinary Shares to be issued pursuant to the
Shares'         Open Offer
'Open Offer'    the invitation to subscribe for New Ordinary Shares at the Issue
                Price made by Hawkpoint, acting as agent on behalf of the
                Company, to Qualifying Shareholders on the terms and subject to
                the conditions set out or referred to in Part II of the Circular
                and in the Application Form
'Ordinary       ordinary shares of 1 pence each in the capital of the Company
Shares'
'Panel'         the Panel on Takeovers and Mergers
'Plan'          Arbuthnot Securities Long Term Incentive Plan
'Plan Shares'   ordinary shares in Arbuthnot Securities offered to selected key
                employees of Arbuthnot Securities under the Plan
'Qualifying     Shareholders on the register of members of the Company on the
Shareholders'   Record Date other than shareholders with a registered address in
                any of the Excluded Territories
'Record Date'   the close of business on 10 December 2004




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