For Immediate Release 11 February 2003

                       Acquisition of Pacific Home Loans                       

London Scottish Bank plc ("LSB") is pleased to announce the acquisition of
Pacific Home Loans ("Pacific"), a secured lending broker, based in Leigh on
Sea, Essex. The acquisition will enable LSB to further develop its broking
activities and provide another source of business for the Group's lending
operations.

Transaction highlights:

  * Initial consideration of �3.2m comprising �0.5m cash and the remainder
    payable in new LSB shares
   
  * An additional consideration of up to �2.0m, subject to the achievement of
    pre-defined financial targets over the two years following completion.
   
  * The Pacific business will be integrated into LSB's consumer credit division
   
  * Trevor Stone, the MD of Pacific, will remain with the business going
    forward
   
Pacific sources mortgage and secured lending business through a number of sales
channels and has an established lending panel from which it derives its
introduction commission. Business written covers both status and non-status
lending and the company will become part of LSB's consumer credit division,
which already specialises in non-status secured and unsecured lending. Pacific
has an established relationship with Sterling Direct, London Scottish's
existing secured lending broker. The Board anticipates building on this
relationship to deliver future benefits to the Group while Pacific will also
work closely with LSB's other broking operation, the Personal Loan Centre, to
support the Group's growth plans.

Under the terms of the acquisition agreement, LSB will pay an initial
consideration of �3.218m comprising �0.5m in cash and 2,564,102 new LSB shares.
Application will be made to the UK Listing Authority for the new LSB shares to
be admitted to the Official List and to the London Stock Exchange for the new
LSB shares to be admitted to trading on the London Stock Exchange's market for
listed securities. The new LSB shares will rank pari passu with existing LSB
shares, save that the Sellers have irrevocably waived their right to the 3.87p
final dividend proposed in respect of the financial year ended 31 October 2002.

Further consideration of up to �2.0m may become payable subject to the
achievement of pre-defined financial targets over the two years following
completion. The additional consideration will be satisfied by cash, loan notes
or LSB shares at LSB's discretion.

The unaudited profits before tax of the business of Pacific for the 11 months
ending 31 January 2003 are estimated to have been �0.8m. The consideration
payable represents goodwill.

Pacific is being acquired from Trevor and Fiona Stone, the founders of the
business and they have agreed to retain all LSB shares received as
consideration for a minimum period of 12 months following their issue. Trevor
Stone will be remaining with the business.

Chief Executive, Roy Reece, commented:

"The acquisition of Pacific will enable LSB to further develop its broking
activities and will provide another source of business for the Group's lending
operations. I am very pleased that Trevor Stone, one of the founders of
Pacific, along with his staff are joining the LSB Group. The established
working relationship between Pacific and Sterling Direct, and the close
geographical proximity of the businesses, will provide the opportunity to
deliver additional operational and business benefits."

MD of Pacific, Trevor Stone, commented :

"London Scottish will provide Pacific with new opportunities to successfully
develop the business. I look forward to being part of the London Scottish Bank
Group."

Enquiries

London Scottish Bank

Roy Reece - 0161 830 2306

Citigate Dewe Rogerson

Patrick Toyne-Sewell/Sarah Gestetner - 020 7638 9571



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