Sale of offshore business

RNS Number:3871S
Portman Building Society
06 March 2007

Press Release
For Immediate Release
6 March 2007


  SCARBOROUGH BUILDING SOCIETY TO BUY PORTMAN'S GUERNSEY BASED DEPOSIT-TAKING
                                    BUSINESS

Portman Building Society ('Portman') and Scarborough Building Society 
('Scarborough') today announce that Scarborough has agreed to acquire the entire
issued share capital of Portman's Guernsey based offshore deposit-taking
business Portman Channel Islands Limited ('PCIL'). PCIL has a geographically
diverse deposit book of circa #600 million and approximately 8,000 customers.

The transaction is expected to be completed by the end of April 2007, subject to
the necessary regulatory approvals.

Following a strategic review of Portman's approach to retail deposit-taking,
which was announced in November of last year, it was concluded that PCIL was no
longer core to the Portman Group's activities.

Following completion of the transaction, PCIL will be rebranded and will,
subject to approval, continue trading as Scarborough Channel Islands Ltd ('
SCIL').  Scarborough has confirmed that PCIL's existing management team and
staff will continue in their roles and will be instrumental in the development
and expansion of the business.

As there is no investor protection scheme in Guernsey, Scarborough is providing
a parental guarantee in respect of PCIL's liabilities, similar to that provided
by Portman Building Society up until completion of the transaction. This
parental guarantee from Scarborough will replace the parental guarantee from
Portman Building Society from the date of completion of the transaction, meaning
that customers will continue to benefit from the security offered by a top 20 UK
building society.

PCIL customers will be written to by PCIL in the next few days and again by
Scarborough on completion of the transaction. Scarborough has confirmed that
there will be no changes to the terms or conditions of existing PCIL accounts on
completion of the transaction.

Robert Sharpe, Chief Executive of Portman Building Society said: 'PCIL has
served the Portman Group exceptionally well and I am delighted that we have
found a new and committed owner in Scarborough. It is good news not only for
Scarborough, but also for PCIL customers, as we have managed to agree a deal
that allows Scarborough to enter this exciting market whilst providing PCIL
customers with the security offered by another leading UK building society.'



John Carrier, Chief Executive of Scarborough Building Society said: 'I am very
pleased to announce this agreement to acquire PCIL, which represents a
significant strategic investment for the Scarborough Group. The acquisition will
be complementary to our existing subsidiaries and the fact that the business
will remain within the building society sector is excellent news for the staff
and customers of PCIL. The transaction also demonstrates the confidence we have
in relation to our future as a successful independent mutual organization.'

-ENDS-

Editors' notes:

About Portman Building Society

Portman Building Society is the third largest UK building society and 13th
largest UK mortgage lender. In the period 2000 to 2005, Portman was the fastest
growing top ten building society in terms of total assets.

The Portman Group employs over 2,500 people, serves 1.8 million members and, as
at 31 December 2006, had total assets of #21.3 billion. In 2006, Portman
achieved net retail inflows of #886 million and had savings balances of #13.4
billion, up 18% on 2005.

On 12 September 2006, the Boards of Nationwide and Portman Building Societies
announced that they had agreed to merge. The proposed merger is expected to
become effective by the end of August 2007, subject to approval being given by
Portman members and to confirmation by the Financial Services Authority.



About Portman Channel Islands Limited

Portman Channel Islands Limited is based in the Bailiwick of Guernsey and is the
offshore deposit-taking arm of Portman Building Society. PCIL is a wholly owned
subsidiary of Portman and is regulated by the Guernsey Financial Services
Commission.

PCIL employs 10 people and operates largely as a standalone business, with high
level strategic objectives set by the Portman Board and the day-to-day operation
of the business managed by the PCIL Board.

In the year ended 31 December 2006, PCIL delivered pre-tax profit of #2.1
million.



About Scarborough Building Society

Scarborough Building Society is the 18th largest building society in the UK,
with assets under management of over #3 billion. The Scarborough Building
Society Group is made up of Scarborough Building Society (SBS), Scarborough
Mortgage Services (SMS), which administers mortgages for major clients and North
Yorkshire Mortgages (NYM). NYM is the Group's mortgage asset trading company and
includes the Scarborough Specialist Mortgages (SSM) brand, which offers
non-conforming and specialist mortgages.

SBS has a network of 9 branches in Yorkshire, Lincolnshire, the East Midlands
and the North East. Its contact centre, Scarborough Direct, offers telephone and
postal account services throughout the UK. The Society has 160,000 customers.

The SBS Group employs over 300 people and has modern, purpose built offices on
the outskirts of Scarborough, North Yorkshire. SSM also has an administrative
office in the centre of Leeds, West Yorkshire.



For further information please contact:

Portman Building Society


Robert Sharpe, Chief Executive
[phone]

Gleacher Shacklock LLP, advisers to Portman Building Society
John Williams
[phone]

Lynsey Hallam, Group Press Officer

[phone]



Scarborough Building Society


John Carrier, Chief Executive

[phone]

Tracy Fletcher, Group Press and Public Relations Manager
[phone] (Mobile: [phone])




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