Interim Results

Secure Trust Banking Group PLC
21 September 2004


21 September 2004

                         SECURE TRUST BANKING GROUP PLC

               Interim results for the six months to 30 June 2004


                                   Key Points

   •Underlying operating profit up 4% to £2.4 million

   •Earnings per share 12.5 pence (2003 underlying EPS: 11.8 pence)

   •Interim dividend 10.5 pence (2003: 10.5 pence)

Chairman, Henry Angest, commented:

'We have continued to invest in our people and products across each of the
Group's businesses. I am pleased that this investment has been reflected in a
15% growth in revenues in the first half year, although the summer months have
been slower. Looking forward, the volatility of our income streams, especially
corporate finance fees, makes the outlook for the remainder of the year
particularly difficult to predict.'

__________________________________________________________________________


Press enquiries for Secure Trust Banking Group PLC:

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





CHAIRMAN'S STATEMENT

Secure Trust Banking Group achieved a profit before tax and exceptional items in
the six months ended 30 June 2004 of £2.4 million. This represents an
improvement of 27% over the depressed second half of 2003 and a 4% increase over
the comparable underlying profits for the six months to 30 June 2003.

Reported profits before tax and exceptional items for the first half of 2003 of
£3.9 million reflected the effect of a cash contribution of £1 million to
expenses from the vendor of Old Mutual Securities, the investment banking
business we acquired in January 2003. Last year's results also benefited from
the provision of premises and information technology support by Old Mutual Group
free of charge, which was worth a further £0.65 million in the period. Adjusting
for these non-recurring items, the underlying profit before tax and exceptional
items in the first half of 2003 was £2.3 million.

Earnings per share before exceptional items were 12.5p (2003: 20.6p, equivalent
to 11.8p as adjusted for the non-recurring items referred to above).

After exceptional charges of some £0.4 million, relating to a rationalisation of
the Group's premises, profit before tax for the six months to 30 June 2004 was
£1.9 million (2003: £3.1 million, equivalent to £1.4 million as adjusted for the
non-recurring items referred to above). The interim dividend, which will be paid
on 29 October 2004 to shareholders on the register at 1 October 2004 is
maintained at last year's level of 10.5p.

Secure Trust Bank

Total operating income of Secure Trust Bank rose by 5%, mainly reflecting a good
performance in the insurance activities. However, rising costs resulted in
profit before exceptional items falling by 13% to £3.0 million.

Fees and commissions of the division rose by 6% as SecureDirect achieved a 7%
increase in motor insurance policies sold, reflecting a successful marketing
programme. Reduced personal lending volumes meant that net interest income
declined by 2%.

Arbuthnot Latham

Throughout the private banking division, business volumes continued to grow. The
loan book increased 11% on the first half of 2003 and customer deposits rose by
12%. The increases in base rates during the period enabled us to improve net
interest earnings and total operating income of the division grew by 6%.

As indicated in my statement accompanying the 2003 Annual Report, we have
invested significantly in the private banking business during 2004 by broadening
the product offer and enhancing the team with a recruitment programme. As a
result costs rose by 11% and profit before tax and exceptional items accordingly
declined to £0.5 million. However, this represents a significant improvement on
the breakeven position achieved in the second half of last year and is in line
with our plans.

Arbuthnot Securities

Total operating income in Arbuthnot Securities rose by 71% compared with the
first half of 2003. This reflects solid progress in all areas of the business,
with significantly improved dealing volumes in the secondary market, improved
research ratings and a healthy increase in corporate finance fees. As we have
continued to build the team, overheads rose by 31% on an underlying basis
(excluding the contributions from Old Mutual Group). Operating losses on the
same basis were halved to £0.8 million. The pipeline of corporate finance work
in progress is now stronger than it has been at any time since we acquired the
business. However, the full year result will be heavily dependent upon the
timing and eventual outcome of corporate deals, which are always difficult to
predict.

Mark Brown joined as Chief Executive on 1 September and the necessary measures
are being taken to ensure that our securities business returns to profitability.

Outlook

After a positive start to the year, business eased during the summer months. We
have seen some pick-up in activity more recently but the result for the full
year will be significantly dependent upon the performance of Arbuthnot
Securities in the remaining months. Nevertheless, we continue to believe that
our business model is robust and that the Group will progress successfully over
the medium term.


Henry Angest



CONSOLIDATED PROFIT AND LOSS ACCOUNT

                Profit before            6 months to    6 months to   6 months to   Year to
                                             30.6.04        30.6.03     31.12.03   31.12.03 
                  exceptional  Exceptional     Total                                 
                         item         item                                        
                         £000         £000      £000           £000        £000        £000

Interest
receivable
from loans,
advances and
investments             6,860            -     6,860          6,362       6,537      12,899

Less: interest         
payable                (2,582)           -    (2,582)        (2,344)     (2,395)     (4,739)
                      ---------    ---------  --------       --------    --------     -------

Net interest            4,278            -     4,278          4,018       4,142       8,160
income

Fees and               20,597            -    20,597         17,566      17,365      34,931
commissions           
receivable

Less: fees and
commissions
payable                  (189)           -      (189)          (169)       (236)       (405)
                        
                      ---------    ---------  --------       --------    --------     -------

Operating              24,686            -    24,686         21,415      21,271      42,686
income                
                      ---------    ---------  --------       --------    --------     -------


Administrative         20,757            -    20,757         16,280      18 051      34,331
expenses

Exceptional
administrative
expenses                    -          441       441            838         418       1,256

Depreciation              933            -       933            699         768       1,467

Amortisation              106            -       106            109          90         199
of goodwill

Exceptional                 -            -         -              -         655         655
goodwill              
write-off

Provisions for
bad and
doubtful
debts                     520            -       520            408         492         900
                         
                      ---------    ---------  --------       --------    --------     -------

Operating              22,316          441    22,757         18,334      20,474      38,808
expenses              ---------    ---------  --------       --------    --------     -------


Profit on
ordinary
activities
before tax              2,370         (441)    1,929          3,081         797       3,878

Tax on profit
on ordinary
activities               (743)         132      (611)          (961)       (289)     (1,250)
                        
                      ---------    ---------  --------       --------    --------     -------
Profit on
ordinary
activities
after tax               1,627         (309)    1,318          2,120         508       2,628

Minority                   (4)           -        (4)            (3)         (7)        (10)
interests             
                      ---------    ---------  --------       --------    --------     -------

Profit
attributable
to
shareholders
of Secure
Trust Banking
Group PLC               1,623         (309)    1,314          2,117         501       2,618

Dividends              (1,295)           -    (1,295)        (1,360)     (2,655)     (4,015)
                      ---------    ---------  --------       --------    --------     -------

Retained                  328         (309)       19            757      (2,154)      1,397
profit                
                      ---------    ---------  --------       --------    --------     -------

Earnings per
ordinary share
(note 2)

Basic and                12.5p                  10.1p          16.1p        4.0p       20.1p
fully
diluted



CONSOLIDATED BALANCE SHEET

                                       30.6.04     30.6.03    31.12.03
                                          £000        £000        £000

Assets

Cash and balances at central               226         328         235
banks

Loans and advances to banks and
building societies                      50,478      65,334      74,346

Loans and advances to customers        117,939     109,055     110,268

Debt securities                         35,500      24,500      28,500

Intangible fixed assets                  2,508       3,300       2,560

Tangible fixed assets                   31,549       8,872      28,542

Other assets                            26,962      12,589       9,302

Prepayments and accrued income           4,733       4,554       3,069
                                     -----------  ----------   ---------

Total assets                           269,895     228,532     256,822
                                     -----------  ----------   ---------


Liabilities

Deposits by banks                       14,576       1,200      15,154

Customer accounts                      184,741     170,084     187,295

Other liabilities                       34,900      21,520      18,874

Accruals and deferred income             4,274       4,125       4,113

Subordinated loan notes                  7,817       7,817       7,817

Equity minority interests                   76          71          77
                                     -----------  ----------   ---------

                                       246,384     204,817     233,330
                                     -----------  ----------   ---------

Called up share capital                    130         130         130

Share premium account                   13,370      13,370      13,370

Capital redemption reserve                  20          20          20

Revaluation reserve                      2,442         511       2,442

Profit and loss account (note 3)         7,549       9,684       7,530
                                     -----------  ----------   ---------

Equity shareholders' funds              23,511      23,715      23,492
                                     -----------  ----------   ---------

Total liabilities                      269,895     228,532     256,822
                                     -----------  ----------   ---------


NOTES TO THE FINANCIAL STATEMENTS

 1. Segmental analysis of profits

                            6 months to 30.06.04

                                                     Subordi-
                Personal                                nated
                 financial  Private    Investment        loan    Group
                services    banking       banking       stock    total
                    £000       £000          £000        £000     £000
Segment
profit             2,967        628          (839)          -    2,756

Subordinated
loan note
interest               -          -             -        (280)    (280)

Amortisation
of goodwill            -       (106)            -           -     (106)
                       
                  --------  ---------   -----------   ---------  -------
Profit before
exceptional        2,967        522          (839)       (280)   2,370
items

Exceptional         (206)      (235)            -           -     (441)
items            
                  --------  ---------   -----------   ---------  -------
Profit before
tax                2,761        287          (839)       (280)   1,929
                  --------  ---------   -----------   ---------  -------



                            6 months to 30.06.03

                                                     Subordi-
                Personal                                nated
               financial    Private    Investment        loan    Group
                services    banking       banking       stock    total
                    £000       £000          £000        £000     £000
Segment
profit             3,411        868             -           -    4,279

Subordinated
loan note
interest               -          -             -        (251)    (251)
                       
Amortisation
of goodwill            -       (109)            -           -     (109)
                       
                  --------  ---------    ----------  ----------  -------
Profit before
exceptional        3,411        759             -        (251)   3,919
items

Exceptional            -       (267)         (571)          -     (838)
items             --------  ---------    ----------  ----------  -------

Profit before
tax                3,411        492          (571)       (251)   3,081
                  --------  ---------    ----------  ----------  -------


1 Segmental analysis of profits (continued)

                           Year to 31.12.03

                                                    Subordi-
               Personal                                nated
              financial    Private    Investment        loan     Group
               services    banking       banking       stock     total
                   £000       £000          £000        £000      £000
Segment
profit            7,110        921        (1,528)          -     6,503

Subordinated
loan note
interest              -          -             -        (515)     (515)

Amortisation
of
goodwill              -       (199)            -           -      (199)
                      
                 --------  ---------    ----------  ----------   -------
Profit
before            7,110        722        (1,528)       (515)    5,789
exceptional
items

Exceptional           -       (496)       (1,415)          -    (1,911)
items            --------  ---------    ----------  ----------   -------

Profit
before tax        7,110        226        (2,943)       (515)    3,878
                 --------  ---------    ----------  ----------   -------

 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 £1,314,000 (30.6.03: £2,117,000;
    31.12.03: £2,618,000) by the weighted average number of ordinary shares
    12,951,974 (30.6.03: 13,103,852; 31.12.03: 13,027,289) in issue during the
    period.

    Adjusted

    The exceptional items included in administrative expenses do not relate to
    the profitability of the Group on an ongoing basis. Therefore, an adjusted
    basic and fully diluted earnings per share is presented as follows:

                      6 months to       6 months to       6 months to
                        30.6.04           30.6.03          31.12.03

                                                                                Year to
                                                                             31.12.03

                  £000    pence     £000    pence     £000    pence     £000    pence
                  ------  -------  -------   ------   ------  -------   ------  -------

    Basic and    1,314     10.1    2,117     16.1      501      4.0    2,618     20.1
    fully

    Diluted

    Exceptional    309      2.4      587      4.5      947      7.3    1,534     11.8
    items         ------  -------  -------   ------   ------  -------   ------  -------

    Earnings
    excluding
    exceptional
    items and

    Adjusted
    earnings
    per share    1,623     12.5    2,704     20.6    1,448     11.3    4,152     31.9
                 
                  ------  -------  -------   ------   ------  -------   ------  -------


 3. Profit and loss account



                                  6 months to  6 months to     Year to
                                      30.6.04      30.6.03    31.12.03
                                         £000         £000        £000

    Opening balance                    29,460       32,823      32,823

    Cost of shares repurchased              -       (1,966)     (1,966)

    Profit for the period                  19          757      (1,397)
                                     ----------   ----------   ---------

    Closing balance                    29,479       31,614      29,460
                                     ----------   ----------   ---------

    Premiums on acquisitions          (21,930)     (21,930)    (21,930)
    written off                      ----------   ----------   ---------

                                        7,549        9,684       7,530
                                     ----------   ----------   ---------

  4 Basis of Reporting

    The interim financial statements have been prepared on the basis of the
    accounting policies set out in the Group's 2003 statutory accounts. The
    statements were approved by the Board of Directors on 20 September 2004 and
    are unaudited. The auditors have not carried out a review of the interim
    financial statements.

 5. Results for the year ended 31 December 2003

    The figures for the year ended 31 December 2003 are derived from the Group
    Accounts for the year. 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.

 6. 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, One Arleston Way, Solihull B90 4LH.



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