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Charter Court Financial Services Group plc

Charter Court Financial Services Group plc Possible Offer

The Boards of Charter Court Financial Services Group plc (LON:CCFS) and OneSavings Bank plc (LON: OSB) note recent speculation in relation to Charter Court and OSB and confirm that they are in advanced discussions regarding a possible all-share combination of the two companies.

Under the proposed terms, OSB would acquire all the issued and to be issued ordinary share capital of Charter Court on the basis of an exchange ratio of 0.8253 new OSB shares for each Charter Court share. On this basis, on completion of the Possible Combination, OSB shareholders would hold approximately 55% and Charter Court shareholders would hold approximately 45%1 of the combined group.

It is proposed that Andy Golding, currently CEO of OSB, will become CEO of the combined group.

The Boards of Charter Court and OSB believe that the Possible Combination has the potential to create material shareholder value and has a compelling strategic and financial rationale. In particular, the Boards of Charter Court and OSB believe that the Possible Combination would create a highly compelling opportunity to:

· create a leading specialist mortgage lender in the UK with greater scale and resources to deploy on growth opportunities;

· leverage complementary strengths to create a comprehensive and diversified platform across product capabilities, brands and team cultures;

· leverage complementary underwriting capabilities to enhance the customer proposition;

· establish a well-balanced, resilient and diversified retail-wholesale funding platform;

· maintain two leading, independent broker distribution platforms to create an enhanced proposition to the broker community; and

· maintain operational centres of excellence to drive service levels and platform efficiency.

Subject to the successful outcome of ongoing discussions, the Boards of OSB and Charter Court expect to recommend the Possible Combination to their respective shareholders.

An announcement of a firm intention to make an offer on a recommended basis by OSB under Rule 2.7 of the Code remains conditional on, inter alia, agreement on the terms and conditions of the Possible Combination, satisfactory completion of customary mutual due diligence, final approval by the Boards of OSB and Charter Court, and the unanimous and unconditional recommendation of the Possible Combination by the Board of Charter Court. Each of OSB and Charter Court reserves the right to waive any or all of their respective pre-conditions, in whole or in part.

A further announcement will be made as and when appropriate.