continued - St James's Place

Interim Management ReportFinancial CommentarycontinuedNoted in the table below is the new business margin calculated both as a % of APE and PVNBP.SixMonthsEnded30 June2011SixMonthsEnded30 June2010TwelveMonthsEnded31 December2010Life businessNew business contribution (£m) 91.6 70.1 157.9APE (£m) 253.9 223.3 457.2Margin (%) 36.1 31.4 34.5PVNBP (£m) 2,061.1 1,795.7 3,697.1Margin (%) 4.4 3.9 4.3Unit Trust businessNew business contribution (£m) 36.1 30.8 59.9APE (£m) 81.7 69.3 124.6New business margin (%) 44.1 44.5 48.1PVNBP (£m) 816.9 692.7 1,246.2Margin (%) 4.4 4.5 4.8Total businessNew business contribution (£m) 127.7 100.9 217.8APE (£m) 335.6 292.6 581.8New business margin (%) 38.1 34.5 37.4PVNBP (£m) 2,878.0 2,488.4 4,943.3Margin (%) 4.4 4.1 4.4The PVNBP calculation only includes our manufactured business, as we do not apply these principles to thenon-manufactured business.The life new business margin increased to 4.4% (2010: 3.9%) on a PVNBP basis and to 36.1% (2010: 31.4%)on an APE basis. This reflects strong growth in single premium investment business, careful management ofexpenses and the reduction in the corporation tax rate. In addition, as highlighted in the 2010 full yearfinancial commentary, the level of the initial Partner remuneration on unit linked bond sales was reduced atthe start of the year. This reduction offsets an increase in unit trust remuneration in 2010 that resulted in areduced unit trust margin in that year.The unit trust new business margin was marginally lower on both a PVNBP basis at 4.4% (2010: 4.5%) and onan APE basis at 44.1% (2010: 44.5%).The total new business margin increased from 4.1% to 4.4%, on a PVNBP basis, and from 34.5% to 38.1% onan APE basis.16St. James’s Place plc Registered No. 3183415