Cater Allen launches Select UK Banking Plan Issue 2

Cater Allen Private Bank announces the launch of the "Selected UK Banking Plan - Issue 2", an opportunity to participate in the performance of four of the UK's leading banking stocks with 100 per cent capital protection at maturity. This follows the success of the first "Selected UK Banking Plan" in June, which was highly subscribed.

In recent months there has been significant volatility in the share values of many UK banks. This has resulted in banks restructuring to deal with a new economic environment.

Whilst it is not possible to know whether shares will return to their previous levels, current valuations of banking shares could be considered low by historical standards and this in turn may offer attractive prospects for long-term investment in the sector.

The plan offers 100 per cent capital protection at maturity and full participation in any increase in the value of the basket of four shares. The plan also provides the possibility for early maturity at the end of the first four years of the maximum six year term, with outstanding growth potential equivalent to 11 per cent per annum - the growth is not compounded.

The early maturity conditions and returns for each year are:-

a. Year 1: If all four shares are the same level or greater than their initial level, investors receive their initial investment and a 11 per cent return, and the plan redeems

b. Year 2: If all four shares are the same level or greater than their initial level, investors receive their initial investment and a 22 per cent return and the plan redeems

c. Year 3: If all four shares are the same level or greater than their initial level, investors receive their initial investment and a 33 per cent return and the plan redeems

d. Year 4: If all four shares are the same level or greater than their initial level, investors receive their initial investment and a 44 per cent return and the plan redeems

The plan has a minimum investment level of £7,200 and is issued by Abbey National Treasury Services plc, a wholly owned subsidiary of Abbey National, which is rated AA by Standard & Poors.

The proceeds from this product attracts income tax, but can be held in an ISA or a SIPP, both of which should allow you to take the proceeds without further taxation. An 11 per cent return tax free is equivalent to 18.33 per cent for a higher rate tax payer paying income tax on an investment.

Ricardo Marin Bataller, Head of Structured Products and Hedge Funds at Santander Private Banking, commented: "In the banking sector, shares are experiencing volatility and a general downward trend in share prices as a result of the credit crunch. This product therefore offers an attractive and innovative option for investors seeking exposure to any future growth in these important UK banking stocks, while significantly reducing capital risk."