Proposed placing

Arbuthnot Banking Group PLC
21 March 2006



Not for release, distribution or publication in whole or in part in or into the
United States, Canada, Japan, Australia or South Africa



Arbuthnot Banking Group PLC
('Arbuthnot Banking Group', the 'Group' or the 'Company')


Proposed placing and offer of new ordinary shares to raise approximately £4
million (the 'fundraising')


1.         Introduction

Arbuthnot Banking Group announces its intention shortly to raise approximately
£4 million (after expenses) by the allotment and issue of 710,000 new ordinary
shares expected to be at 600 pence per share (the 'Issue Price'), subject to the
conditions referred to below, and on the terms to be set out in a circular to be
despatched to the Company's shareholders concerning the proposed Fundraising.
It is currently envisaged that the Fundraising will be effected by offering
existing Arbuthnot Banking Group shareholders the opportunity to subscribe for
new ordinary shares on the basis of 1 new ordinary share for every 20 existing
ordinary shares.

The proposed Issue Price represents a 11.6 per cent premium to the closing
middle market price of 537.5 pence per ordinary share on Monday, 20 March 2006,
the last dealing day before this announcement.  The 710,000 new ordinary shares
proposed to be issued would represent approximately 5.0 per cent of the current
issued share capital of the Company.


2.         Background to and reasons for the proposed Fundraising

The net proceeds of the proposed Fundraising will be used to fund the
development of a high-quality, full-service, off-shore banking facility in
Switzerland.

In recent years, the Group has focused on improving its portfolio of businesses.
However, the Board recognises that the Group's lack of an off-shore banking
facility significantly constrains the services that can be offered, the range of
clients it can attract and the Group's ability to recruit suitable employees.
The Board believes the addition of such a facility would greatly improve the
ability to further develop the performance of the Group's banking operations.

Research has been undertaken by the Group to determine the best way of providing
an off-shore banking capability, including a review of different jurisdictions
and structures.  Based on this research, the Board has concluded that the
establishment of a full-service banking operation in Switzerland is most
appropriate.  In the light of this, the Group, working with advisers in Zurich,
has developed a detailed plan for the establishment of a Swiss based banking
operation.

A significant investment will be required in applying for a Swiss banking
licence and establishing the operation.


3.         Further details of the proposed Fundraising

The Company's Chairman, Mr Henry Angest, who owns beneficially approximately
49.0 per cent of the current issued share capital of the Company, has indicated
his intention to subscribe for his pro rata entitlement to new ordinary shares
to be issued pursuant to the proposed Fundraising.  He also intends to
underwrite at the Issue Price the issue of all other shares proposed to be
issued as part of the Fundraising.

Unless all shareholders apply for their pro rata entitlements to new ordinary
shares proposed to be issued pursuant to the Fundraising, the percentage
interest of Mr Angest in the enlarged share capital of the Group would increase.
Depending upon the extent to which shareholders (other than Mr Angest) decide
to subscribe for new ordinary shares, Mr Angest's shareholding in the Company
would increase to between 49.0 per cent and 51.5 per cent in consequence of the
Fundraising.  If, following the Fundraising, Mr Angest's holding exceeds 50 per
cent., he will be able to buy more shares in the Company without making a
general offer.  Mr Angest has confirmed that he has no intention of subsequently
taking the Company private.

Mr Angest's beneficial holding represents more than 30 per cent and less than 50
per cent of the Group's issued share capital at the date of this document.
Under Rule 9 of the City Code on Takeover and Mergers, unless a specific waiver
is obtained from the Panel on Takeover and Mergers (the 'Panel') and approved by
independent shareholders of the Company, Mr Angest would be obliged to make a
mandatory offer for the Company if his percentage interest in the Company
increased.  As this could occur as a consequence of the Fundraising, a specific
waiver from Mr Angest's obligation to make such an offer will be sought from the
Panel in connection with the Fundraising.  This waiver, if and when granted,
will be subject to approval by independent shareholders at an extraordinary
general meeting of the Company.

The proposed Fundraising will be conditional, inter alia, on receiving the
waiver from the Panel as referred to above, approval of the Fundraising by
independent shareholders and there being no material adverse change in the share
price of the Company between the date of this announcement and Admission.


4.         Timetable

Following receipt of the waiver from the Panel a further announcement will be
made by the Company setting out details of the timetable for the Fundraising.


5.         Despatch of circular to shareholders

A circular setting out the terms of the proposed Fundraising and giving notice
of an extraordinary general meeting of the Company is expected to be despatched
to Arbuthnot Banking Group PLC shareholders once the details have been
finalised.


                                                                   21 March 2006



Enquiries:
Arbuthnot Banking Group PLC              Henry Angest              020 7012 2400
                                         Stephen Lockley
                                         Andrew Salmon

Hawkpoint Partners Limited               Paul Baines               020 7665 4500
                                         Lawrence Guthrie

College Hill                             Tony Friend               020 7457 2020
                                         Richard Pearson



The Directors of Arbuthnot Banking Group 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 Arbuthnot
Banking Group in connection with the Fundraising and no-one else.  Neither
Hawkpoint Partners Limited nor Arbuthnot Securities Limited, broker to Arbuthnot
Banking Group, will be responsible to anyone other than Arbuthnot Banking Group
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 Fundraising 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.


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