ARBUTHNOT BANKING GROUP PLC

Capital/Financing Update • Dec 18, 2014

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RNS Number : 2201A

Arbuthnot Banking Group PLC

18 December 2014

PRESS RELEASE

For Immediate Release

18 December 2014

ARBUTHNOT BANKING GROUP PLC

Mortgage Portfolio Acquisition

Arbuthnot Banking Group PLC ("Arbuthnot" or the "Group") today announces that its subsidiary Arbuthnot Latham ("AL" or "the Bank") has completed the purchase of a residential mortgage portfolio.

The mortgages are being acquired from the administrators of the Dunfermline Building Society ("DBS"). The portfolio has been in run off since 2009 and was previously acquired by DBS from other originators principally GMAC with the balances being geographically distributed around the UK.

Based on balances at 31 October 2014, the portfolio consists of loans totalling £117.6 MN of which 58 per cent are residential buy to let and the remaining are owner occupied. The average loan to value is 72 per cent with a current expected yield of approximately 4 per cent.

The consideration of £106.3 MN has been satisfied by cash from the Group's resources.

Having regard to the recent developments in the Sterling Monetary Framework, including the Funding for Lending Scheme ("FLS"), this transaction will further diversify AL's asset base which may be offered as collateral. This should enable the Bank to use more sophisticated and stable mechanisms, with which to manage its liquidity.

Enquiries:

Arbuthnot Banking Group Henry Angest, Chairman and Chief Executive Andrew Salmon, Group Chief Operating Officer James Cobb, Group Finance Director David Marshall, Director of Communications	020 7012 2400
Canaccord Genuity Ltd (Nominated Advisor) Sunil Duggal	020 7665 4500
Numis Securities Ltd (Broker) Chris Wilkinson Mark Lander	020 7260 1000
Bell Pottinger (Financial PR) Ben Woodford Zoë Pocock	020 3772 2500

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