Dividend policy

The Directors intend to adopt a progressive dividend policy that will reflect the long-term earnings and cash flow potential of the Group as well as the Group’s currently modest investment and regulatory capital requirements.

In circumstances where capital is accumulated in the Group which the Directors believe to be surplus to the Group's requirements, the Directors intend to return surplus capital to shareholders in an appropriate manner, including by way of special dividend.

A large proportion of shares in the Company are held by private individuals. Given the 10% increase to the top rate of tax taking effect in the next tax year and uncertainty brought by the impending election, the Board has resolved that it is appropriate to pay as much dividend as possible prior to the end of the current tax year. In reaching this decision the Board has considered the regulatory capital requirements, cash requirements and profitability of the Group.

The Board is pleased to declare an interim dividend of 8.0 pence per share and a special dividend of 1.6 pence per share, payable on 26 March 2010 to all shareholders on the register at 12 March 2010.

The Board has not changed its overall dividend policy. The size of this dividend should not be used to forecast what the Company profit may be or to make any assumptions about the amount of further dividends in this current year. The Board intends to make a further dividend declaration at the same time as our preliminary results announcement, with the dividend payable on 29 September 2010.