DISPOSAL OF LONDON SCOTTISH INVOICE FINANCE LIMITED

    LONDON SCOTTISH BANK plc                            

                           ("London Scottish Bank")                            

  PROPOSED DISPOSAL OF LONDON SCOTTISH INVOICE FINANCE LIMITED ("LSIF") (the   
                                  "Disposal")                                  

The board of London Scottish Bank is pleased to announce that it has entered
into an agreement to sell LSIF to Hitachi Capital (UK) PLC ("Hitachi Capital"),
a wholly owned subsidiary of Hitachi Capital Corporation of Japan, for a total
consideration of approximately �28.5 million.

The Disposal is conditional upon, inter alia, shareholder approval to be
obtained at a general meeting of London Scottish Bank's shareholders. A
circular will be sent to London Scottish Bank's shareholders in the coming
weeks, which will include further details on the Disposal and the notice for
the general meeting.

Completion of the Disposal ("Completion") is expected to occur no later than 31
July 2008.

LSIF is the invoice discounting and factoring subsidiary of London Scottish
Bank. LSIF operates from offices in Telford and Goring, near Reading, and
provides invoice finance to small and medium-sized enterprises.

As reported in London Scottish Bank's 2007 Annual Report and Accounts, as at 31
October 2007, LSIF had total assets of �27.2 million, net assets of �3.4m and
contributed �2.5 million of profit to London Scottish Bank's overall loss
before taxation for the year ended 31 October 2007.

Consideration of approximately �9.0 million will be payable in cash at
Completion in respect of the share capital of LSIF, representing a premium of �
5.3 million (143%) to the expected net assets at Completion of �3.7 million. In
addition, Hitachi Capital will pay London Scottish Bank an amount equal to
approximately �19.5 million in respect of certain intra-group loans between
London Scottish Bank and LSIF. Therefore, the total consideration in respect of
the Disposal is expected to be approximately �28.5 million.

Out of the total consideration, approximately �1.1 million will be the subject
of a retention relating to the completion accounts mechanism and certain other
matters associated with the Disposal, further details of which will be set out
in the circular to be sent to London Scottish Bank shareholders.

The Management of LSIF will transfer to Hitachi Capital as a part of the
Disposal, including Steve Smith, Managing Director and Robert Crumbley, Andrew
Norton and David Bond, each of whom are regional sales directors of LSIF.

This Disposal is part of the board's strategy to refocus London Scottish Bank
on Robinson Way's successful debt purchase and debt collection business and to
reduce the capital employed in its lending divisions. The proceeds from the
Disposal will be used to reduce London Scottish Bank's net borrowings.

Commenting on the transaction, Robin Ashton, Chief Executive of London Scottish
Bank, said:

"We are pleased with the outcome of our negotiations and believe that this
transaction represents good value for our shareholders and stakeholders alike
and is a further step towards achieving our stated strategy. The board would
like to thank the management and employees of London Scottish Invoice Finance
for the valuable contribution that they have made to the Group over the past
decade"

Commenting on the transaction, David Anthony, Chief Executive of Hitachi
Capital, said:

"London Scottish Invoice Finance is a proven business with a highly regarded
management team. The business is an excellent fit with our existing operations
and we look forward to working with the team to progress plans for its further
development."

Enquiries:

Citigate Dewe Rogerson (020 7638 9571)

Grant Ringshaw (07534 220 614)

Lindsay Noton (020 7282 1032)

NM Rothschild (0161 827 3800)

Richard Bailey

Greg Cant



END

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