Half Yearly Report

NBNK Investments plc

("NBNK" or "the Company")

Half Yearly Report for the six months to 30 June 2011

NBNK Investments plc (AIM: NBNK) announces its unaudited results for the period ending 30 June 2011.

The following represents the Company's report and accounts which will be posted to shareholders on 23 September 2011.

Company summary

The Company was established because the directors believe that conditions are right for the establishment of a new UK retail and SME bank. The directors' vision is shared by a core group of leading institutional investors each of whom subscribed for ordinary shares when the Company listed on AIM in August 2010.

The directors' strategy is to focus on the UK market, initially in the retail banking and SME areas but, over time, with an intention to expand into retail wealth management. The directors believe that UK domestic banking has historically produced a high return on equity and a relatively low volatility earnings profile. Domestic returns for the larger UK banks at group level have typically been diluted by overseas expansion and involvement in more volatile business areas such as investment and wholesale banking.

The Company is focusing on acquisition as the means of commencing and scaling its banking operations in the UK and intends to acquire high quality banking assets which will be funded by further substantial fundraising.

Chairman's statement

Since the publication of our 2010 annual report and accounts, the Company has been working hard under the leadership of our Chief Executive Gary Hoffman to achieve the strategic objective described above. As widely anticipated and in accordance with our stated aims at listing, the Company was one of those to submit an indicative bid in early July 2011 to acquire those assets that the Lloyds Banking Group plc ("Lloyds") is obliged by the European Union to divest. The Company has entered into "Round 2" of the process, with further detailed work being undertaken on the assets for sale before a decision is made on whether to submit a refined bid. We expect that Lloyds will, in due course, select one bidder and commence exclusive negotiations aimed at finalising a sale and purchase agreement.

As we have stated all along, the Board is prepared to consider one or more acquisitions and it remains open to the Company to pursue other suitable acquisition targets. Recent press speculation concerning a possible acquisition by the Company led to the suspension of the Company's shares on 6 September 2011, until such time as an admission document is published in relation to an acquisition or talks otherwise conclude. There can be no certainty that a transaction will be forthcoming; further announcements will be made in due course.

I should like to thank Gary Hoffman, members of his executive team and the wider team at the Company, together with our external advisers for the immense amount of work that they have done in a short space of time to ensure NBNK is very well placed to take advantage of the opportunity that has been created in UK financial services.

Lord Levene of Portsoken K.B.E.

Chairman

Chief Executive's report

During the period, the focus has been on building the Company's capability and credibility in the market place so that we are seen as a serious bidder for any banking assets that the board might identify for potential acquisition. We have been successful in this and are able to provide assurance to potential targets, regulators and others that NBNK has the necessary management expertise, capital raising capability and technical capability to acquire and manage a substantial UK high street bank.

Our primary focus has been on preparing for and delivering a bid to acquire those assets of Lloyds that it is required to divest under an EU directive. As the Chairman has reported, we are undertaking the due diligence necessary to enable the Board to consider whether or not to submit a Round 2 bid. The Company has a very small executive team of five (including me) but has made extensive use of short term contractors for specific roles. Lead advisers have been appointed including UBS as transaction advisors, RBS and UBS as debt advisors, KPMG for financial due diligence, and Slaughter and May for legal advice. All advisers have been engaged on highly competitive terms including contingent fees payable only in the event of a successful acquisition.

My team and I remain focused on the objective of successfully delivering an acquisition.

Performance

The Company's ordinary shares were trading at 115 pence at 1 January 2011, and at 100 pence on 30 June 2011. This represents a small premium against the Company's asset value of £38.4 million.

Dividend

The directors do not recommend an interim dividend on the ordinary shares for the six months to 30 June 2011.

The Company is seeking to build up its operations during its first two to three years, during which time it is unlikely that the Company will pay dividends. Thereafter, and subject to compliance with the Companies Act 2006 and regulatory capital requirements, it is the intention of the directors to pay dividends on the basis of a progressive dividend policy.

Principal risks and uncertainties

The principal risk for the Company is that its acquisition strategy fails. Should this be the case, the directors will resolve that the Company should be wound up and its remaining assets returned to shareholders.

The directors continue to believe, however, that making a successful acquisition is a realistic possibility. The Board assesses the principal risks that face the Company at each meeting and appropriate controls are in place to manage those risks. The Company has in place the resources necessary to manage acquisition negotiations effectively so that the Company can hit the ground running once an acquisition has been secured.

The principal financial key performance indicator continues to be the rate at which the Company is spending the proceeds generated when it was listed on AIM. The directors monitor closely the management accounts of the Company to ensure that expenditure is proportionate and consistent with the Company's strategy. Suitable controls are in place to enable the directors to respond quickly to changes in the Company's circumstances.

Cost management is a key priority. The directors have resolved that the Company should be wound up and its remaining assets returned to shareholders, should our acquisition strategy fail. Striking the balance between cost control and incurring the expenditure necessary to make a bid credibly has been one of our principal challenges. This balance has been successfully struck.

The principal non-financial KPI is the Company's progress towards an acquisition. This is the primary focus of the board's attention at present.

Events after the balance sheet date

As indicated in the Chairman's statement and in the business review, after the report period end, the Company made a indicative bid in July 2011 for those assets of Lloyds that are subject to a divestment ruling by the EU. The Company has entered into "Round 2" of the process, with further detailed work being undertaken on the assets for sale before a decision is made on whether to submit a refined bid. We expect that Lloyds will, in due course, select one bidder and commence exclusive negotiations aimed at finalising a sale and purchase agreement.

As also reported in the Chairman's statement, recent press speculation concerning a possible acquisition by the Company led to the suspension of the Company's shares on 6 September 2011, until such time as an admission document is published in relation to an acquisition or talks otherwise conclude. There can be no certainty that a transaction will be forthcoming; further announcements will be made in due course.

Related party transactions

In the opinion of the Board, the related parties are the directors. There were no related party transactions during the period, other than directors' remuneration and share based payments as outlined in notes 3 and 4 to the accounts.

On behalf of the Board

Gary Hoffman

22 September 2011

Notes

1. The financial information presented herein does not amount to full statutory accounts within the meaning of Section 435 of the Companies Act 2006 and they have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The annual report and financial statements for 2010 have been filed with the Registrar of Companies. The independent auditors' report on the annual report and financial statements for 2010 was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under 498(2) or (3) of the Companies Act 2006.

Income statement

for the six month period ended 30 June 2011 (unaudited)

Statement of comprehensive income

for the six month period ended 30 June 2011 (unaudited)

Statement of financial position

as at 30 June 2011 (unaudited)

Statement of changes in equity

for the six month period ended 30 June 2011 (unaudited)

Statement of cash flows

for the six months ended 30 June 2011 (unaudited)

Notes to the half yearly report

for the six month period ended 30 June 2011 (unaudited)

1 - Summary of significant accounting policies

General Information

NBNK Investments plc is a public company incorporated in the United Kingdom. The Company's operations and its principal activities are to establish a new UK retail and SME banking and savings operation. The financial statements are presented in pounds sterling thousands because that is the currency of the primary economic environment in which the Company operates.

Basis of preparation

The financial statements of NBNK Investments plc have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.

The financial statements have been prepared under the historical cost convention as amended for use of fair value for derivative financial instruments and share based payments. Historical cost is based upon the fair value of consideration given in exchange for assets.

Application of IFRS

NBNK Investments plc was incorporated during 2010 with the intention of building (primarily through acquisition) a new and substantial UK bank. The Company has not made an acquisition to date. Until the Company commences operation as a UK bank it is not appropriate to set out the accounting policies which will be applicable to that business.

New IFRSs, interpretations and amendments not yet effective

Whilst the Company continues not to operate as a bank, none of the new standards, interpretations or amendments but not yet effective are expected to have a material impact on the Company's future financial statements. However, given the current status of the Company, it cannot be stated with any degree of certainty which new standards, interpretations or amendments but not yet effective may ultimately have a material impact on the Company's future financial statements.

Accounting policies

The accounting policies applied by the Company in these half-yearly results are the same as those applied by the Company in its audited financial statements for the period ended 31 December 2010 and will form the basis of the 2011 Annual Report and Accounts. As the Company was incorporated on 2 July 2010, no comparatives have been provided for the period ended 30 June 2010.

2 - Loss per share from operations

Loss per share from operations for the period is based upon the attributable loss of £7,704,000 (£1,813,000 for the period ended 31 December 2010) and 50,050,000 shares (36,662,022 shares for the period ended 31 December 2010), being the weighted average number of shares in issue during the period. The diluted weighted average number of shares in issue assuming exercise of options at less than fair value was 50,606,099 (37,199,862 for the period ended 31 December 2010). No diluted loss per share is provided as it would reduce the basic loss per share.

3 - Share based payments - options

On 3 May 2011, the Company granted Gary Hoffman a share option over 11.5 million shares at an exercise price of 130 pence per share. This will be exercisable as to one-third after 3 years from grant, one-third after 5 years of grant and the final third after 6 years and, subject to normal good leaver provisions, is contingent on his continued employment to those dates. The option will be subject to claw-back provisions in the event that the Remuneration Committee considers that the share price is impacted by information which resulted in the share price being misleading. The option is also contingent on a substantial fundraising and acquisition having been completed within 18 months of his joining on 1 May 2011.

4 - Share based payments - founder warrants

On 3 May 2011, Lord Levene was granted founder warrants, entitling him to subscribe for 0.7278% of the Company's fully diluted share capital at 130 pence per ordinary share. The founder warrants will expire on 31 August 2020 unless previously exercised or lapsed. In addition, Lord Levene has indicated that he would undertake only to exercise the warrants (i) on successful completion of a substantial acquisition by the Company and the listing of the Company's shares on the Official List and (ii) only in respect of up to 5.75 million shares (or 0.7278%. of the fully diluted share capital, if resulting in a lower number of shares). Further, Lord Levene has indicated that he would undertake (i) not to dispose of any shares issued on exercise of such warrants for a period of 3 years from such listing and (ii) that he would retain at least 500,000 of such shares for so long as he remains chairman.

5 - Events after the balance sheet date

In July 2011, the Company made a indicative bid for those assets of Lloyds that are subject to a divestment ruling by the EU. The Company has entered into "Round 2" of the process, with further detailed work being undertaken on the assets for sale before a decision is made on whether to submit a refined bid. We expect that Lloyds will, in due course, select one bidder and commence exclusive negotiations aimed at finalising a sale and purchase agreement.

Recent press speculation concerning a possible acquisition by the Company led to the suspension of the Company's shares on 6 September 2011, until such time as an admission document is published in relation to an acquisition or talks otherwise conclude. There can be no certainty that a transaction will be forthcoming; further announcements will be made in due course.

6 - Related party transactions

In the opinion of the Board, the related parties are the directors. There were no related party transactions during the period, other than directors' remuneration and share based payments as outlined in notes 3 and 4 to the accounts. On 3 May 2011, the Company paid Gary Hoffman £1.85m in reflection of him leaving his previous employer. The net of tax amount will be fully repayable if he leaves within two years of joining.

- Ends -

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