INVESTOR RELATIONS

STM Group Plc (AIM: STM), the cross border financial services provider, is pleased to announce a pre-close trading update and notice of final results.

Trading Update

The Board is pleased to announce that the Group has traded in line with market expectations of profit before tax of £2.7 million for 2016 (2015 actual: £2.7 million). As was anticipated, the pricing initiative taken by the Board in the earlier part of the year has significantly increased the take-on of new business for its QROPS international pensions product with new policies for the second half of the year up by circa 50 per cent on the first half of the year and 27 per cent on the second half of 2015. As previously indicated, whilst this strategy resulted in a reduction in first year profitability, it does result in an increased level of recurring revenue for future years. This leaves STM well placed to deliver significant growth in revenue and profit in 2017.

Update on integration of London & Colonial acquisition

The Board is please to confirm that the integration of the acquisition of London & Colonial made in October 2016 into the STM Group continues to run smoothly, with the anticipated integration gains and contribution to profits expected for 2017 starting to come to fruition.

Appointment of Head of Enterprise Risk Management

In addition to the appointment of Robin Ellison as a non-executive director on 22 December 2016, the Board is pleased to announce a further strengthening of STM's corporate governance structure with the creation of the senior management position of Head of Enterprise Risk Management. This role will be carried out by Marina Dominguez Steglich who will be joining the STM team in March 2017. Marina has held senior operational and regulatory roles within the banking industry for over 20 years, and will bring a further level of oversight and governance to STM's operations.

Commenting on the achievements of 2016 and prospects for the Group, Alan Kentish, CEO of STM said:

"STM has made some significant strategic and operational decisions during 2016 to pursue the London & Colonial acquisition as well as to implement the market leading pricing initiative in its international pensions businesses; both of which have proved beneficial to the Group and strengthen growth prospects.

"With the recently announced appointment of Robin Ellison as a further non-executive director to the Board, as well as Marina joining as Head of Enterprise Risk Management, we continue to build on our governance and reporting structure.

"We head in to 2017 knowing that recurring revenue streams from our highly profitable pensions and life businesses have never been higher, giving us cause for optimism for the year ahead."

Notice of Final results

STM will announce its Final results for the 12 months to 31 December 2016 on 14 March 2017.

The information communicated in this announcement includes inside information for the purposes of Article 7 Regulation 596/2014.

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Notes to editors:

STM is a multi-jurisdictional financial services group listed on the Alternative Investment Market of the London Stock Exchange. The Group specialises in the delivery of a wide range of financial service products to professional intermediaries and in the administration of assets for international clients in relation to retirement, estate and succession planning, and wealth structuring.

Today, STM has trading operations in Gibraltar, Malta, Jersey, and Spain. It has also recently opened satellite offices in South East Asia, the Middle East, and South Africa. The Group continues to expand through the development of additional products and services that its ever-more sophisticated clients demand.

STM has, for example, a dedicated international pensions division which specialises in Qualifying Recognised Overseas Pension Schemes (QROPS) and Qualifying Non-UK Pension Schemes (QNUPS); it also has a Gibraltar Life Insurance Company, STM Life Assurance PCC PLC, which provides life insurance bonds - wrappers in which a variety of investments, including investment funds, can be held.

Further information on STM Group can be found at www.stmgroupplc.com