01/11/2004

Bradford & Bingley plc and Legal & General plc are delighted to announce a new business partnership subject to final agreement. Under the arrangement, Bradford & Bingley will offer to its customers a range of Legal & General investment and protection products.

This is an important step in the refocus and growth of Bradford & Bingley's branch-based retail business and will enable Bradford & Bingley to take full advantage of expected changes in the regulatory regime.

It is anticipated that around 200 of Bradford & Bingley's Wealth advisers and other staff will transfer to Legal & General from 3 December 2004. The advisers, who will continue to be based in Bradford & Bingley's branches, will offer advice to customers on investment, pension and protection products as Legal & General advisers from 17th January 2005.

Legal & General will offer its own range of investment and pension products and, with the advent of depolarisation, an increased choice of investment products from a wide range of leading fund managers through its own brand open-architecture platform.

The agreement will give Bradford & Bingley customers access to an extended range of wealth services including greater expertise in inheritance tax and retirement planning.

Bradford & Bingley will receive commission on products sold by the Legal & General advisers. The new arrangement will enable Bradford & Bingley to reduce direct and support costs in its Retail business by about £10 million per year. This reduction is over and above the cost savings announced in May of this year.

Bradford & Bingley transacted investment and protection equivalent business of about £20 million annual premium equivalent* in the first half of 2004 in its core Retail business.

Bradford & Bingley's Retail business offers one of the widest ranges of financial services products and providers on the High Street. Product lines include: Bradford & Bingley savings products; "multi-tie" broking of general insurance, personal loans and motor insurance;
Legal & General retirement, IHT and protection products; and, following depolarisation, a "multi-fund" range of investment products arranged through Legal & General. Bradford & Bingley will monitor the mortgage broking market following "M-Day" with a view to move to a "multi-tie" proposition by early 2005.

* Annual Premium Income = ten per cent of single premiums plus annual premiums

Commenting on the announcement Steven Crawshaw, Group Chief Executive of Bradford & Bingley, said:

"A partnership with Legal & General will give us access to their world class sales management and product suite. It will enable us to deliver a strong range of investment and protection products with extremely high service standards and swift processing. It will be another important step in the simplification of our Retail business and will further reduce costs. We are making this announcement now to provide our Wealth advisers and customers with clarity following our statement in May that we intended to take full advantage of forthcoming regulatory change as quickly as possible. This change will give rise to a better retail proposition for our customers and for Bradford & Bingley."

David Prosser, Group Chief Executive of Legal & General, said:

"In the run-up to depolarisation we are pleased that Bradford & Bingley has been attracted to Legal & General's value for money product proposition and our core skill and expertise in managing large partnership arrangements.

"Legal & General is committed to providing good value, competitively priced products for the customers of our partners, both in protection and investment products. Through the use of technology we see the opportunity for continuing to improve investment choice via cost efficient open architecture and process simplification in selling life assurance. We believe Legal & General is well placed to grow its market share in a depolarised world."

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