Stabilisation Notice

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT

TSB Banking Group plc

Post Stabilisation Notice

18 July 2014

Pursuant to Article 9(3) of the Commission Regulation (EC) No.2273/2003 implementing the Market Abuse Directive (2003/6/EC) and MAR 2.3.5(3) of the Financial Conduct Authority's Code of Market Conduct, J.P. Morgan Securities plc (contact: Charles Pretzlik; telephone: +44 (0)20 7742 4000) in its capacity as Stabilisation Manager hereby gives notice that no stabilisation was undertaken by it in relation to the following securities.

The securities:

Issuer: TSB Banking Group plc

Securities: Ordinary Shares of TSB Banking Group plc (ISIN:GB00BMQX2Q65)

Offering base size: 175,000,000 Shares

Offer price: 260 pence per Share

Offering Over-allotmentShares 17,500,000 Shares

Stabilisation:

Stabilising Manager: J.P. Morgan Securities plc

Stabilisation period: From 20 June 2014 to 18 July 2014

Stabilisation started: N/A (no stabilisation occurred)

Stabilisation last occurred: N/A (no stabilisation occurred)

Associated securities: There are no associated instruments that are subject to stabilisation

This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase, underwrite, subscribe for or otherwise acquire or dispose of any securities of the Company..

This announcement is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the "United States"), Australia, Canada, Japan, South Africa or any other jurisdiction where distribution would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or South Africa or to any national, resident or citizen of Australia, Canada, Japan or South Africa. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions.

In addition, if and to the extent that this announcement is communicated in, or the offer of the securities to which it relates is made in, any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") before the publication of a prospectus in relation to the securities which has been approved by the competent authority in that Member State in accordance with the Prospectus Directive (or which has been approved by a competent authority in another Member State and notified to the competent authority in that Member State in accordance with the Prospectus Directive), this announcement and the offer are only addressed to and directed at persons in that Member State who are "qualified investors" within the meaning of the Prospectus Directive (or who are other persons to whom the offer may lawfully be made) and must not be acted on or relied on by other persons in that Member State.