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Friends Life Group Limited

("Friends Life")

Friends Life announces the completion of Lombard disposal

Friends Life confirms that the disposal of Lombard International Assurance S.A. and Insurance Development Holdings AG to funds managed by Blackstone⁽¹⁾ completed today.

The total consideration of £316 million (€398 million⁽²⁾) comprises £254 million (€320 million⁽²⁾) upfront consideration, £6 million (€8 million⁽²⁾) interest equivalent⁽³⁾, both paid in cash, and £56 million (€70 million⁽²⁾) deferred payment in the form of a vendor loan note (subject to adjustment).

As expected, the share buy-back programme of £317 million will commence on 31 October 2014.

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Enquiries

Notes

1. Blackstone means The Blackstone Group L.P. and its affiliates. The Blackstone entity that will acquire Lombard is BTO Monarch Luxembourg Holdings S.A.R.L., a company incorporated in Luxembourg.

2. GBP:Euro exchange rate of 1.2602 has been applied to the consideration amounts. It represents the forward rate as at 10 July 2014 to the completion date.

3. The interest equivalent was originally estimated to be £7 million (€9 million) in the sale announcement RNS on the 11 July 2014. At completion the actual interest equivalent is £6 million (€8 million).

This announcement includes statements that are, or may be deemed to be, "forward-looking statements" with respect to Friends Life Group Limited, its subsidiary undertakings and their outlook, plans and current goals. In some cases, these forward-looking statements can be identified by the use of forward looking terminology, including the terms "targets", "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend upon circumstances that may or may not occur in the future. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Forward-looking statements are not guarantees of future performance. Friends Life Group Limited's actual performance, results of operations, internal rate of return, financial condition, liquidity, distributions to shareholders and the development of its acquisition, financing and restructuring and consolidation strategies may differ materially from the impression created by the forward-looking statements contained in this announcement. Forward-looking statements in this announcement are current only as of the date of this announcement. Friends Life Group Limited undertakes no obligation to update the forward-looking statement it may make. Nothing in this announcement should be construed as a profit forecast. As a result, you are cautioned not to place any undue reliance on such forward-looking statements.