UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              ____________________


                                    FORM 10-Q

(Mark One)

/x/            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended March 31, 2003

                                       OR

/ /           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                For the transition period from _______ to _______


                         Commission file number 0-21874

                          London Pacific Group Limited

             (Exact name of registrant as specified in its charter)
                             ______________________


Jersey, Channel Islands                               Not applicable
(State or other jurisdiction                (I.R.S. Employer Identification No.)
  of incorporation or organization)

                          Minden House, 6 Minden Place
                           St. Helier, Jersey JE2 4WQ
                                 Channel Islands
                    (Address of principal executive offices)
                                   (Zip Code)

                              011 44 (1534) 607700
              (Registrant's telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes ____ No |X|

     As of May 15, 2003,  the  registrant had  outstanding  64,439,073  Ordinary
Shares, par value $0.05 per share.
<PAGE>
<TABLE>
<CAPTION>


                                TABLE OF CONTENTS


                                     PART I

                              FINANCIAL INFORMATION

                                                                            Page
<S>                                                                         <C>
Item 1.    Financial Statements (unaudited):

           Condensed Consolidated Balance Sheets as of March 31, 2003
             and December 31, 2002 ........................................    3

           Condensed Consolidated Statements of Income for the three
             months ended March 31, 2003 and 2002..........................    4

           Condensed Consolidated Statements of Cash Flows for the three
             months ended March 31, 2003 and 2002..........................    6

           Consolidated Statement of Changes in Shareholders' Equity
             for the three months ended March 31, 2003 ....................    7

           Consolidated Statements of Comprehensive Income for the
             three months ended March 31, 2003 and 2002....................    8

           Notes to Interim Consolidated Financial Statements..............    9

Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations ..........................   22

Item 3.    Quantitative and Qualitative Disclosures About Market Risk .....   33

Item 4.    Controls and Procedures ........................................   34



                                     PART II

                                OTHER INFORMATION

Item 1.    Legal Proceedings ..............................................   35

Item 2.    Changes in Securities and Use of Proceeds ......................   35

Item 3.    Defaults Upon Senior Securities ................................   35

Item 5.    Other Information ..............................................   36

Item 6.    Exhibits and Reports on Form 8-K ...............................   40

Signature  ................................................................   42

Certifications ............................................................   43

Exhibit Index .............................................................   45
</TABLE>
                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION
                         Item 1 - Financial Statements
<TABLE>
<CAPTION>

                                             LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                                                 CONDENSED CONSOLIDATED BALANCE SHEETS
                                                              (Unaudited)
                                                 (In thousands, except share amounts)
                                                                                       March 31,       December 31,
                                                                                         2003             2002 (1)
                                                                                     ------------      ------------
                                            ASSETS

<S>                                                                                  <C>               <C>
Investments (principally of life insurance subsidiary):
   Fixed maturities:
     Available-for-sale, at fair value (amortized cost: $26,975 and $30,481
         as of March 31, 2003 and December 31, 2002, respectively)................    $    26,963       $    30,335
   Equity securities:
     Trading, at fair value (cost: $14,738 and $26,785 as of March 31, 2003
       and December 31, 2002, respectively) ......................................         12,772            16,505
     Available-for-sale, at fair value (cost: $6,437 and $8,983 as of
       March 31, 2003 and December 31, 2002, respectively) .......................          5,687             7,233
                                                                                     ------------      ------------
Total investments ................................................................         45,422            54,073

Cash and cash equivalents ........................................................         19,025            15,871
Accrued investment income ........................................................            735               900
Property and equipment, net.......................................................          2,928             3,176
Goodwill..........................................................................          1,301             1,301
Other assets .....................................................................          2,044             2,894
Total assets held for sale........................................................          2,022             2,002
                                                                                     ------------      ------------
Total assets .....................................................................    $    73,477       $    80,217
                                                                                     ------------      ------------
                                                                                     ------------      ------------

                        LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Life insurance policy liabilities ................................................    $    34,336       $    35,441
Notes payable ....................................................................          4,370             9,314
Accounts payable and accruals ....................................................          3,014             2,973
Guarantees under bank facility....................................................         10,590            10,590
Total liabilities held for sale...................................................            369               413
                                                                                     ------------      ------------
Total liabilities ................................................................         52,679            58,731
                                                                                     ------------      ------------
Commitments and contingencies (see Notes 7 and 8)

Shareholders' equity:
Ordinary shares, $0.05 par value per share: 86,400,000 shares authorized;
   64,439,073 shares issued and outstanding as of March 31, 2003 and
   December 31, 2002..............................................................          3,222             3,222
Additional paid-in capital .......................................................         68,450            68,394
Retained earnings ................................................................         14,200            16,054
Employee benefit trusts, at cost (13,684,881 shares as of March 31, 2003
   and December 31, 2002) ........................................................        (63,571)          (63,571)
Accumulated other comprehensive loss .............................................         (1,503)           (2,613)
                                                                                     ------------      ------------
Total shareholders' equity .......................................................         20,798            21,486
                                                                                     ------------      ------------
Total liabilities and shareholders' equity .......................................    $    73,477       $    80,217
                                                                                     ------------      ------------
                                                                                     ------------      ------------
<FN>
(1)  Reclassifications have been made related to discontinued operations - see Note 4.
</FN>
</TABLE>

  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                (In thousands, except per share and ADS amounts)

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                         2003             2002 (1)
                                                                                     ------------      ------------
Continuing operations:

Revenues:
<S>                                                                                   <C>               <C>
Investment income.................................................................     $      534        $    2,381
Insurance policy charges..........................................................              4                 1
Financial advisory services and other fee income (2)..............................          3,564             7,006
Net realized investment gains (losses)............................................         (7,324)            3,722
Change in net unrealized investment gains and losses on trading securities........          8,313           (12,883)
                                                                                     ------------      ------------
                                                                                            5,091               227
Expenses:
Amounts credited on insurance policyholder accounts...............................            519             1,980
Amortization of deferred policy acquisition costs.................................              -               294
Operating expenses................................................................          6,292             8,500
Interest expense..................................................................            142               304
                                                                                     ------------      ------------
                                                                                            6,953            11,078
                                                                                     ------------      ------------
Loss from continuing operations before income taxes...............................         (1,862)          (10,851)

Income tax expense ...............................................................             11               752
                                                                                     ------------      ------------
Loss from continuing operations...................................................         (1,873)          (11,603)

Discontinued operations:
Income (loss) from discontinued operations, net of income
   tax expense (benefit) of $1 and $(10,169), respectively........................             19           (18,702)
                                                                                     ------------      ------------
Income (loss) on discontinued operations..........................................             19           (18,702)
                                                                                     ------------      ------------
Net loss..........................................................................     $   (1,854)       $  (30,305)
                                                                                     ------------      ------------
                                                                                     ------------      ------------

<FN>
(1)    Reclassifications have been made related to discontinued operations - see
       Note 4.

(2)    Includes  amounts of $0 and  $2,573 for  revenues  earned  from  entities
       included in discontinued  operations for the three months ended March 31,
       2003 and 2002, respectively.
</FN>
</TABLE>
  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       4

<PAGE>
<TABLE>
<CAPTION>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)
                                   (Unaudited)
                (In thousands, except per share and ADS amounts)

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                           2003           2002 (1)
                                                                                     ------------      ------------
Basic and diluted loss per share and ADS: (2)

<S>                                                                                  <C>               <C>
Basic and diluted loss per share:
Continuing operations.............................................................    $     (0.04)      $     (0.23)
Discontinued operations...........................................................              -             (0.37)
                                                                                     ------------      ------------
                                                                                      $     (0.04)      $     (0.60)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
Basic and diluted loss per ADS: (2)
Continuing operations.............................................................    $     (0.37)      $     (2.29)
Discontinued operations...........................................................              -             (3.68)
                                                                                     ------------      ------------
                                                                                      $     (0.37)      $     (5.97)
                                                                                     ------------      ------------
                                                                                     ------------      ------------

<FN>
(1)    Reclassifications have been made related to discontinued operations - see
       Note 4.

(2)    ADS amounts have been restated to reflect the  one-for-ten  reverse split
       in June 2002.
</FN>
</TABLE>



  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       5

<PAGE>
<TABLE>
<CAPTION>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                         2003              2002
                                                                                     ------------      ------------

<S>                                                                                  <C>               <C>
Net cash provided by continuing operations........................................    $     6,527       $    19,567

Net cash used in discontinued operations .........................................            (45)          (19,874)
                                                                                     ------------      ------------
Net cash provided by (used in) operating activities ..............................          6,482              (307)
                                                                                     ------------      ------------

Cash flows from investing activities:
Purchases of held-to-maturity fixed maturity securities ..........................              -               (81)
Purchases of available-for-sale fixed maturity securities ........................           (140)           (5,033)
Proceeds from sale of available-for-sale fixed maturity securities................          2,914                 -
Capital expenditures .............................................................            (46)             (402)
                                                                                     ------------      ------------
Net cash provided by (used in) investing activities ..............................          2,728            (5,516)
                                                                                     ------------      ------------

Cash flows from financing activities:
Insurance policyholder contract deposits .........................................              -             3,585
Insurance policyholder benefits paid .............................................           (986)             (811)
Proceeds from disposal of shares by the employee benefit trusts...................              -                43
Repayment of notes payable........................................................         (4,944)                -
                                                                                     ------------      ------------
Net cash provided by (used in) financing activities ..............................         (5,930)            2,817
                                                                                     ------------      ------------

Net increase (decrease) in cash and cash equivalents .............................          3,280            (3,006)
Cash and cash equivalents at beginning of period (1) .............................         15,871            61,212
Foreign currency translation adjustment ..........................................           (126)              (65)
                                                                                     ------------      ------------
Cash and cash equivalents at end of period (1) ...................................    $    19,025       $    58,141
                                                                                     ------------      ------------
                                                                                     ------------      ------------
<FN>
(1)  Amounts reflect continuing operations only.
</FN>
</TABLE>


  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       6

<PAGE>
<TABLE>
<CAPTION>
                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                                   (Unaudited)
                                 (In thousands)

                                                                                            Accumulated
                                                                                               Other
                                   Ordinary Shares    Additional                Employee      Compre-      Total
                                --------------------   Paid-in     Retained      Benefit      hensive   Shareholders'
                                  Number    Amount     Capital     Earnings      Trusts        Loss       Equity
                                ---------  ---------  ----------  ----------   ----------   ----------- ------------

<S>                                <C>     <C>         <C>         <C>           <C>          <C>          <C>
Balance as of
   December 31, 2002............   64,439  $   3,222   $  68,394   $  16,054     $(63,571)    $  (2,613)   $ 21,486

Net loss........................        -          -           -      (1,854)           -             -      (1,854)
Change in net unrealized
   gains and losses on
   available-for-sale securities        -          -           -           -            -         1,134       1,134
Foreign currency translation
   adjustment...................        -          -           -           -            -           (24)        (24)
Warrants issued to bank ........        -          -          56           -            -             -          56

                                ---------  ---------  ----------  ----------   ----------   -----------  ----------
Balance as of March 31, 2003....  64,439   $   3,222   $  68,450   $  14,200     $(63,571)    $  (1,503)   $ 20,798
                                ---------  ---------  ----------  ----------   ----------   -----------  ----------
                                ---------  ---------  ----------  ----------   ----------   -----------  ----------

</TABLE>

  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       7

<PAGE>
<TABLE>
<CAPTION>
                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (Unaudited)
                                 (In thousands)

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                           2003             2002
                                                                                     ------------      ------------

<S>                                                                                  <C>               <C>
Net loss..........................................................................    $    (1,854)      $   (30,305)

Other comprehensive income (loss), net of deferred income taxes:

Foreign currency translation adjustments, net of income taxes of $0...............            (24)              194

Change in net unrealized gains and losses related to continuing operations:
   Unrealized holding gains and losses on available-for-sale securities...........            134               671
   Less: reclassification adjustment for gains and losses included in
     net loss.....................................................................          1,000               119
   Deferred policy acquisition cost amortization adjustments......................              -            (1,428)

Change in net unrealized gains and losses related to discontinued operations:
   Change in net unrealized gains and losses on available-for-sale securities.....              -            (6,897)
   Deferred policy acquisition cost amortization adjustments......................              -             4,173
   Deferred income taxes..........................................................              -               953
                                                                                     ------------      ------------
Other comprehensive income (loss) ................................................          1,110            (2,215)
                                                                                     ------------      ------------
Comprehensive loss ...............................................................    $      (744)      $   (32,520)
                                                                                     ------------      ------------
                                                                                     ------------      ------------


</TABLE>
  See accompanying Notes which are an integral part of these Condensed Interim
                       Consolidated Financial Statements.

                                       8
<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1.   Material Events

       During the third quarter of 2002,  London Pacific Life & Annuity  Company
("LPLA"),  the primary  insurance  company of London  Pacific Group Limited (the
"Company"),  was placed under  regulatory  control and  rehabilitation  based on
LPLA's statutory  capital and surplus as of June 30, 2002. On August 6, 2002, on
petition of the  Commissioner  of Insurance of the State of North  Carolina (the
"Commissioner")  with the unanimous  approval of LPLA's board of directors,  the
Superior  Court  of Wake  County  in the  State of North  Carolina  ordered  the
Commissioner  to take  possession and control of all of the property,  books and
accounts,  documents and other records of LPLA.  Based on this court order,  the
Company no longer  exercises  control over LPLA. As a result of this event,  the
Company  deconsolidated  LPLA and  recorded  a charge to  earnings  in the third
quarter of 2002 of $38.5 million for losses  resulting  from the  disposition of
LPLA.

       For further discussion, see Note 4 "Discontinued Operations" below.

       On July 2, 2002, the Company announced that further declines in the value
of LPLA's investment  portfolio due to persistent  negative events in the equity
and bond markets continued to erode  significantly the statutory capital of LPLA
and that the  Company had been  unsuccessful  in  concluding  a  transaction  to
enhance the capital of LPLA. As a consequence, LPLA discontinued the issuance of
new policies as of July 2, 2002. Although the statutory capital of the Company's
Jersey insurance subsidiary,  London Pacific Assurance Limited ("LPAL"), had not
been  affected by the adverse  equity and bond markets to the same extent as the
statutory  capital of LPLA, the Company also announced on July 2, 2002 that LPAL
would discontinue  writing new policies effective  immediately.  The decision to
discontinue  the  issuance of new  policies  through  LPAL was made to avoid the
increased capital requirements created by additional  policyholder  liabilities.
Subsequent to this announcement and other announcements  relating to the Company
and LPLA, LPAL policy surrenders increased  substantially.  Approximately 76% of
LPAL's $140.2 million in  policyholder  liabilities as of June 30, 2002 had been
redeemed as of March 31, 2003.

       On March 7, 2003, the Company entered into a definitive agreement to sell
substantially  all of the assets and operations of Berkeley  Capital  Management
("BCM"), its U.S. based asset management subsidiary.  Consequently,  the Company
deconsolidated  BCM as of March 31, 2003 and BCM's  results of  operations  have
been reported separately in the income statement under discontinued operations.


Note 2.   Subsequent Events

       On May 7, 2003, the Company  completed the sale of  substantially  all of
the assets and operations of BCM to a company  majority-owned by funds under the
management of Putnam Lovell NBF Private Equity  ("Putnam  Lovell").  The Company
received initial proceeds of $8.06 million in cash upon the sale of BCM and will
receive a further  $1.0  million in cash on December 31, 2003 subject to certain
adjustments.  The Company may also  receive up to $1.25  million in cash earnout
payments  ratably  over the four  quarters of 2004 if revenues  received in 2003
from a new  product  planned for launch by BCM in 2003  exceed  certain  defined
targets; however, the Company believes that these earnout payments are unlikely.
As of March 31, 2003,  BCM's assets under  management  were  approximately  $1.1
billion.

       For further discussion, see Note 4 "Discontinued Operations" below.

       On May 9, 2003, the Company  entered into a definitive  agreement to sell
all of the outstanding stock of London Pacific Advisory  Services,  Inc., London
Pacific  Securities,  Inc. and LPA  Insurance  Agency,  Inc.  together  with the
associated   assets  of  the  advisory   business  held  within  London  Pacific
Technologies, Inc. and LP Advisors, Inc. (together, "LPA" or the "LPA business")
for total consideration of up to $16.2 million, to a wholly-owned  subsidiary of
SunGard Data  Systems Inc.  ("SunGard").  The  purchase  price  consists of $8.2
million in


                                        9


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

cash to be paid upon closing of the sale of the LPA business (less $1.25 million
to be held back to cover any shortfall to the agreed minimum  tangible net asset
value of the LPA assets minus the liabilities  acquired in the transaction,  and
to cover any  indemnity  obligations)  and up to a  further  $8.0  million  cash
earnout  payment  that  will be equal in amount to  one-half  of the  cumulative
operating  profits  from the LPA  business in the three year period  immediately
following  closing of the sale to SunGard.  This  earnout  payment  will be paid
within  approximately 60 days following the third  anniversary of the closing of
the  transaction.  There is no guarantee that any portion of the earnout payment
will be received by the  Company.  The  definitive  agreement is binding on both
companies and is subject to customary  corporate and regulatory  approvals.  The
Company  expects  the sale to close on or before  June 9, 2003.  As of March 31,
2003,  LPA's  assets  under  management,   consulting  or  administration   were
approximately $2.3 billion.

       See Part II, Item 5 "Other Information" for unaudited pro forma financial
information.


Note 3.   Basis of Presentation and Principles of Consolidation

       The accompanying  condensed interim consolidated financial statements are
unaudited and have been prepared by the Company in conformity with United States
generally accepted accounting  principles ("U.S. GAAP"). These condensed interim
consolidated  financial  statements  include the  accounts of the  Company,  its
subsidiaries  (with the  exception of LPLA and BCM as discussed  above in Note 1
"Material  Events" and Note 2  "Subsequent  Events") the  Employee  Share Option
Trust ("ESOT") and the Agent Loyalty  Opportunity Trust ("ALOT")  (collectively,
the "Group").  Significant subsidiaries included in the continuing operations of
the Group and  discussed in this  document  include:  London  Pacific  Assurance
Limited, London Pacific Advisors and Berkeley International Capital Corporation.
All intercompany transactions and balances have been eliminated in consolidation
except  for  intercompany   transactions  between  continuing  and  discontinued
operations   principally  related  to  investment   management  fees  from  LPLA
(discontinued  operations) to the continuing  operations  which are disclosed in
Note 4 and Note 9 below.

       Certain  information  and  note  disclosures  normally  included  in  the
Company's  annual  consolidated  financial  statements  have been  condensed  or
omitted.  In the  opinion of  management,  the  condensed  interim  consolidated
financial  statements  reflect all adjustments  (consisting of normal  recurring
accruals)  which are  necessary  for a fair  statement  of the  results  for the
interim periods presented.

       While the Group's management believes that the disclosures  presented are
adequate  to make  the  information  not  misleading,  these  condensed  interim
consolidated financial statements should be read in conjunction with the audited
financial  statements  and related  notes for the year ended  December 31, 2002,
which are contained in the Company's  Annual Report on Form 10-K, filed with the
U.S.  Securities and Exchange Commission ("SEC") on March 19, 2003. The year-end
condensed balance sheet data was derived from audited  financial  statements but
does not include all disclosures required by U.S. GAAP.

       The  preparation  of financial  statements in  conformity  with U.S. GAAP
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities as of the date of these  condensed  interim  consolidated  financial
statements as well as the reported  amount of revenues and expenses  during this
reporting  period.  Actual  results could differ from these  estimates.  Certain
estimates such as fair value and actuarial assumptions have a significant impact
on the gains and losses  recorded on  investments  and balance of life insurance
policy liabilities.

       Because of the events described above in Note 1 "Material  Events" and in
Note 2  "Subsequent  Events,"  as well as other  unknown  events  that may occur
during the next nine months,  the results for the three month period ended March
31, 2003,  are not  indicative of the results to be expected for the full fiscal
year.

                                       10
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       The Company's Ordinary Shares are traded on the London Stock Exchange and
on the  Over-the-Counter  ("OTC")  Bulletin  Board  in the  U.S.  in the form of
American Depositary Shares ("ADSs"),  which are evidenced by American Depositary
Receipts  ("ADRs").  During the second quarter of 2002, the Company  completed a
one-for-ten  reverse  split of its  ADSs.  On June 24,  2002,  every  ten of the
Company's ADSs issued and outstanding were converted and  reclassified  into one
post-split ADS. Consequently, effective from the opening of business on June 24,
2002, each ADS is equal to ten Ordinary Shares. All dividend and earnings (loss)
per ADS amounts  disclosed in these  financial  statements have been restated to
reflect this split.

Share Incentive Plan

       The Group  accounts for stock based  compensation  issued to employees in
accordance  with  Accounting   Principles  Board  Opinion  No.  25  ("APB  25"),
"Accounting  for Stock Issued to Employees," and related  interpretations  which
recognizes  compensation  expense  based upon the  intrinsic  value of the stock
options  as of the date of  grant.  The  Financial  Accounting  Standards  Board
("FASB")  issued  Statement of  Financial  Accounting  Standards  No. 123 ("SFAS
123"), "Accounting for Stock Based Compensation," which encourages, but does not
require, companies to recognize compensation expense for grants of stock options
based on their fair value.  The Group has elected,  as permitted by SFAS 123, to
adopt the  disclosure  requirement  of SFAS 123 and to  continue  to account for
stock based compensation under APB 25.

       Had  compensation  expense for the Group's ESOT activity been  determined
based upon the fair value  method in  accordance  with SFAS 123, the Group's net
loss and loss per  share  and ADS would  have  been  increased  to the pro forma
amounts as reflected below:
<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                         2003              2002
                                                                                     ------------      ------------
                                                                                         (In thousands, except per
                                                                                           share and ADS amount)

<S>                                                                                   <C>              <C>
Net loss as reported..............................................................     $   (1,854)      $   (30,305)
Add: Stock based employee compensation expense included in
    reported income (loss), net of related tax effects............................              -                 -
Deduct: Total stock based employee compensation expense determined
    under fair value based methods for all awards, net of related tax effects.....           (251)             (266)
                                                                                     ------------      ------------

Pro forma net loss................................................................     $   (2,105)      $   (30,571)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
Basic and diluted loss per share:
As reported.......................................................................          (0.04)            (0.60)
Pro forma.........................................................................          (0.04)            (0.60)
Basic and diluted loss per ADS: (1)
As reported.......................................................................          (0.37)            (5.97)
Pro forma.........................................................................          (0.41)            (6.02)

<FN>
(1)    ADS amounts have been restated to reflect the  one-for-ten  split in June
       2002.
</FN>
</TABLE>

                                       11
<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       The pro forma  disclosures  shown above were  calculated  for all options
granted after December 31, 1994 using a Black-Scholes  option pricing model with
the following assumptions:
<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                        2003 (1)           2002
                                                                                     ------------      ------------
<S>                                                                                  <C>               <C>
Expected dividend yield (2).......................................................              -                 -
Expected stock price volatility...................................................              -              125%
Risk-free interest rate...........................................................              -             3.95%
Weighted average expected life (in years).........................................              -                 5
<FN>
(1)    No grants were made in the first quarter of 2003.

(2)    The deduction to the share price was zero, as future  dividends  have not
       been assumed.
</FN>
</TABLE>


Note 4.   Discontinued Operations

       As  described  above in Note 1  "Material  Events,"  the Group,  with the
unanimous  approval of LPLA's board of  directors,  ceded control of LPLA to the
North Carolina insurance regulators on August 6, 2002. In connection  therewith,
the Group deconsolidated LPLA and recorded a charge to earnings of $38.5 million
during the third  quarter of 2002.  Although  LPLA was placed  under  regulatory
control  and  rehabilitation,  the Group will not regain  control or receive any
benefit  from LPLA in the future.  As such,  in  accordance  with  Statement  of
Financial   Accounting  Standard  No.  144  ("SFAS  144")  "Accounting  for  the
Impairment or Disposal of Long Lived  Assets," the results of operations of LPLA
(pre-rehabilitation)  have been reported in discontinued operations.  Under SFAS
144, the results of operations of a  discontinued  business,  and any impairment
losses related to a discontinued business, are reported separately in the income
statement under discontinued operations for the current and prior periods.

       A summary of LPLA's pre-tax  operating results for the three month period
ended March 31, 2002 is shown below.
<TABLE>
<CAPTION>

                                                                                                       Three Months
                                                                                                           Ended
                                                                                                      March 31, 2002
                                                                                                      --------------
                                                                                                      (In thousands)
Revenues:
<S>                                                                                                    <C>
Investment income before intercompany management fee expense.....................................       $    32,081
Intercompany management fee expense (1)..........................................................            (3,042)
Other income.....................................................................................             1,647
Net realized and change in net unrealized investment gains and losses............................           (25,882)
                                                                                                       ------------
Total revenues and net investment losses.........................................................             4,804

Expenses:
Interest credited on insurance policyholder accounts.............................................            27,921
Amortization of deferred policy acquisition costs................................................             3,882
Other expenses...................................................................................             2,231
                                                                                                       ------------
Total expenses...................................................................................            34,034
                                                                                                       ------------
Loss before income taxes ........................................................................       $   (29,230)
                                                                                                       ------------
                                                                                                       ------------
<FN>
(1)    These  fees were paid to and  included  in the  revenues  of the  venture
       capital  management  business segment of continuing  operations and asset
       management business segment of discontinued operations.
</FN>
</TABLE>
                                       12


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       LPLA had been  included  in the  Group's  life  insurance  and  annuities
business segment.

       As described in Note 1 "Material Events" and Note 2 "Subsequent  Events,"
the Group entered into a definitive  agreement to sell  substantially all of the
assets and  operations of BCM on March 7, 2003,  and on May 7, 2003 the sale was
completed. In connection therewith, the Group deconsolidated BCM as of March 31,
2003 and BCM's  assets and  liabilities  have been shown as held for sale in the
current and prior period  consolidated  balance sheets,  in accordance with SFAS
144.  The Group does not expect to receive any  material  amounts of income from
its  asset  management  segment  in  the  foreseeable  future.  The  results  of
operations of BCM and, in addition for the first quarter of 2002, the results of
Berkeley  International  Limited ("BIL") (the remainder of the asset  management
segment in that period) have been reported in discontinued operations.

       A summary of BCM's pre-tax  operating  results  (including the results of
the remainder of the asset management  segment in the prior period from BIL) for
the three month  periods  ended March 31, 2003 and 2002,  and BCM's total assets
and total  liabilities held for sale as of March 31, 2003 and December 31, 2002,
are shown below.
<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                                March 31,
                                                                                     ------------------------------
                                                                                         2003              2002
                                                                                     ------------      ------------
                                                                                            (In thousands)
Revenues:
<S>                                                                                  <C>               <C>
Asset management fees.............................................................    $     1,028       $     1,164
Intercompany management fee income (1)............................................              4               483
                                                                                     ------------      ------------
Total revenues....................................................................          1,032             1,647

Expenses:
Operating expenses................................................................          1,012             1,288
                                                                                     ------------      ------------
Income before income taxes........................................................    $        20       $       359
                                                                                     ------------      ------------
                                                                                     ------------      ------------

<FN>
(1)    Fees  were  paid  from  and  included  in the net  revenues  of the  life
       insurance and annuities business segment of continuing  operations (LPAL)
       of $4,000 and $15,000 for the three months ended March 31, 2003 and 2002,
       respectively.  For the three months ended March 31, 2002, these fees also
       include $468,000 received from LPLA (discontinued operations).
</FN>
</TABLE>
<TABLE>
<CAPTION>

                                                                                        March 31,      December 31,
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)
Assets held for sale:
<S>                                                                                  <C>               <C>
Cash and investments..............................................................    $       453       $       401
Property and equipment, net.......................................................            112               125
Goodwill, net.....................................................................          1,266             1,267
Other assets......................................................................            191               209
                                                                                     ------------      ------------
Total assets held for sale........................................................    $     2,022       $     2,002
                                                                                     ------------      ------------
                                                                                     ------------      ------------
Liabilities held for sale:
Accounts payable, accruals and other liabilities..................................    $       369       $       413
                                                                                     ------------      ------------
Total liabilities held for sale...................................................    $       369       $       413
                                                                                     ------------      ------------
                                                                                     ------------      ------------
</TABLE>
                                       13


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       BCM had been included in the Group's asset management business segment.

       On May 7,  2003,  the Group  sold  substantially  all of the  assets  and
operations  of  BCM  in an  all  cash  transaction  to a  newly  formed  company
majority-owned  by funds under the management of Putnam Lovell.  The total fixed
consideration  of $9.06  million,  less any required  provisions  for  indemnity
obligations under the purchase and sale agreement;  direct costs relating to the
sale including  taxes;  and the  approximate  $1.1 million book value of the net
assets  being  disposed  of, will be recorded as a gain on sale of  discontinued
operations. The estimated book gain is approximately $7.6 million.


Note 5.   Earnings Per Share and ADS

       The Group  calculates  earnings per share in accordance with Statement of
Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings per Share." This
statement  requires the  presentation  of basic and diluted  earnings per share.
Basic  earnings  per share is  calculated  by dividing net income or loss by the
weighted  average number of Ordinary  Shares  outstanding  during the applicable
period,  excluding  shares  held by the ESOT and the ALOT which are  regarded as
treasury  stock for the  purposes  of this  calculation.  The  Group has  issued
employee share options,  which are considered  potential common stock under SFAS
128. The Company has also issued  Ordinary Share warrants to Bank of Scotland in
connection with the Company's bank facility, which are also considered potential
common  stock  under  SFAS 128.  Diluted  earnings  per share is  calculated  by
dividing  net  income  by  the  weighted   average  number  of  Ordinary  Shares
outstanding  during the  applicable  period as  adjusted  for these  potentially
dilutive  options and warrants which are determined based on the "Treasury Stock
Method." As the Group  recorded a net loss for both of the three  month  periods
ended March 31, 2003 and 2002, the calculation of diluted earnings per share for
these periods do not include  potentially  dilutive  employee  share options and
warrants issued to Bank of Scotland as they are anti-dilutive  and, if included,
would have  resulted in a reduction of the net loss per share.  If the Group had
reported net income for both of the three month periods ended March 31, 2003 and
2002, there would have been an additional zero and 478,921 shares, respectively,
included in the calculations of diluted earnings per share for these periods.


                                       14
<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       A  reconciliation  of the numerators and  denominators  for the basic and
diluted earnings per share calculations is as follows:
<TABLE>
<CAPTION>
                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                     ------------------------------
                                                                                          2003            2002
                                                                                     ------------      ------------
                                                                                      (In thousands, except share,
                                                                                       per share and ADS amounts)

<S>                                                                                  <C>               <C>
Loss from continuing operations...................................................    $    (1,873)      $   (11,603)
Income (loss) on discontinued operations..........................................             19           (18,702)
                                                                                     ------------      ------------
Net loss..........................................................................    $    (1,854)      $   (30,305)
                                                                                     ------------      ------------
                                                                                     ------------      ------------

Basic and diluted loss per share and ADS: (1)
Weighted average number of Ordinary Shares outstanding,
  excluding shares held by the employee benefit trusts............................     50,754,192        50,754,192
                                                                                     ------------      ------------
Basic and diluted loss per share:
Continuing operations.............................................................    $     (0.04)      $     (0.23)
Discontinued operations...........................................................              -             (0.37)
                                                                                     ------------      ------------
                                                                                      $     (0.04)      $     (0.60)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
Basic and diluted loss per ADS: (1)
Continuing operations.............................................................    $     (0.37)      $     (2.29)
Discontinued operations...........................................................              -             (3.68)
                                                                                     ------------      ------------
                                                                                      $     (0.37)      $     (5.97)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
<FN>
(1)  ADS amounts have been restated to reflect the one-for-ten  reverse split in
     June 2002.
</FN>
</TABLE>


Note 6.   Investments

       The Group's  investments consist of fixed maturity and equity securities.
Fixed  maturity  securities  are  classified  as  either  available-for-sale  or
held-to-maturity,  and equity  securities  are  classified as either  trading or
available-for-sale. The investments are accounted for as follows:

       i)     available-for-sale  securities  are  recorded at fair value,  with
              changes in unrealized  gains and losses  excluded from net income,
              but reported net of  applicable  income taxes and  adjustments  to
              deferred  policy  acquisition  cost  amortization  as  a  separate
              component of accumulated other comprehensive income;

       ii)    held-to-maturity  securities are recorded at amortized cost unless
              these securities become other-than-temporarily impaired; and

       iii)   trading securities are  recorded  at fair  value  with changes  in
              unrealized gains and losses included in net income.

       When a quoted  market price is available  for a security,  the Group uses
this price in the  determination  of fair value. If a quoted market price is not
available for a security,  management  estimates the security's fair value based
on  appropriate  valuation  methodologies.

                                       15

<PAGE>

                 LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       For a discussion of the Group's  accounting  policies with respect to the
determination of fair value of investments and other-than-temporary impairments,
see the  section  entitled  "Critical  Accounting  Policies"  in Part I,  Item 2
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"   below.  The  Group's  private   securities  consist  primarily  of
convertible  preferred  stock  holdings  in  technology   companies.   Financial
information  with respect to the issuers of these equity  securities is received
and reviewed  periodically by the Group's management.  In addition,  the Group's
management  maintains  contact  with the  management  of these  issuers  through
ongoing dialogue to examine the issuers' future plans and prospects.

       The Group's fixed maturity  securities are principally  comprised of U.S.
and non-U.S.  corporate debt. Generally,  quoted market prices are available for
these securities.

Fixed Maturity Securities

       An analysis of fixed maturity securities is as follows:
<TABLE>
<CAPTION>
                                                  March 31, 2003                              December 31, 2002
                                  -------------------------------------------    -------------------------------------------
                                                Gross     Gross    Estimated                  Gross      Gross     Estimated
                                  Amortized  Unrealized Unrealized   Fair        Amortized  Unrealized Unrealized    Fair
                                    Cost       Gains      Losses     Value         Cost       Gains      Losses      Value
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
                                                                         (In thousands)
<S>                               <C>        <C>        <C>        <C>           <C>        <C>        <C>        <C>
Available-for-Sale:
Non-U.S. corporate
  debt securities..........        $   9,534  $      67  $       -  $   9,601     $  12,709  $     115  $      (9) $  12,815
Corporate debt securities .           17,441         90       (169)    17,362        17,772         90       (342)    17,520
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
Total fixed maturity securities    $  26,975  $     157  $    (169) $  26,963     $  30,481  $     205  $    (351) $  30,335
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------

Equity Securities

       Equity  securities  are  comprised  of  available-for-sale   and  trading
securities. An analysis of equity securities is as follows:


                                                  March 31, 2003                              December 31, 2002
                                  -------------------------------------------    -------------------------------------------
                                                Gross     Gross    Estimated                  Gross      Gross     Estimated
                                  Amortized  Unrealized Unrealized   Fair        Amortized  Unrealized Unrealized    Fair
                                    Cost       Gains      Losses     Value         Cost       Gains      Losses      Value
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
                                                                         (In thousands)
Private corporate equity
  securities...............        $   6,437  $       -  $    (750) $   5,687     $   8,983  $       -  $  (1,750) $   7,233
                                  ---------- ---------- ---------- -----------   ---------- ---------- ---------- ----------

Total available-for-sale
  equity securities........            6,437          -       (750)     5,687         8,983          -     (1,750)     7,233

Trading securities.........           14,738      7,396     (9,362)    12,772        26,785      5,236    (15,516)    16,505
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
Total equity securities....        $  21,175  $   7,396  $ (10,112) $  18,459     $  35,768  $   5,236  $ (17,266) $  23,738
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------    ---------- ---------- ---------- ----------

       Trading securities  are  carried  at  fair  value  with  changes  in  net
unrealized  gains and losses of  $8,313,000  and  $(12,883,000)  included in the
losses for the three month periods ended March 31, 2003 and 2002, respectively.
</TABLE>
                                       16


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Investment Concentration and Risk

       As of  March  31,  2003,  fixed  maturity  securities  held by the  Group
included  investments  in  General  Motors of  $7,968,000,  British  Telecom  of
$3,199,000,  Daimler  Chrysler of  $3,193,000,  Ford Motor Credit of $3,195,000,
North  American  Capital  of  $2,714,000  and  Clarica  of  $2,720,000.   Equity
securities  held  by  the  Group  primarily  included   investments  in  Agility
Communications,   Inc.  of  $3,375,000,   Alacritech,  Inc.  of  $2,250,000  and
Packeteer,  Inc. of $12,368,000.  These nine corporate  issuers each represented
more than ten percent of shareholders' equity as of March 31, 2003.

       As of March 31, 2003, 100% of the Group's $27.0 million in fixed maturity
securities, 99% of the Group's $5.7 million in available-for-sale private equity
securities,  and 62% of the Group's  $12.8  million in trading  securities  were
owned by the  Group's  Jersey  based life  insurance  subsidiary,  LPAL.  LPAL's
investments are not currently available to fund the operations or commitments of
any other Group company.

Net Unrealized Gains (Losses) on Available-for-Sale Securities

       Net  unrealized  losses  on  fixed  maturity  securities   classified  as
available-for-sale  as of March 31, 2003 and December  31, 2002 totaled  $12,000
and $146,000,  respectively.  There were no related deferred policy  acquisition
cost adjustments or income taxes.

       Net   unrealized    losses   on   equity    securities    classified   as
available-for-sale  as of March 31, 2003 and December 31, 2002 totaled  $750,000
and $1,750,000, respectively. There were no related income taxes.

       Changes  in  net  unrealized  gains  and  losses  on   available-for-sale
securities included in other comprehensive income for the period ended March 31,
2003 were as follows:
<TABLE>
<CAPTION>
                                                                                           Net Unrealized Gains (Losses)
                                                                                       ------------------------------------
                                                                                         Fixed
                                                                                        Maturity      Equity
                                                                                       Securities   Securities      Total
                                                                                       ----------   ----------   -----------
                                                                                                  (In thousands)

<S>                                                                                    <C>          <C>          <C>
Net unrealized losses on available-for-sale securities as of
   December 31, 2002.................................................................   $    (146)   $  (1,750)   $   (1,896)

Changes during the three month period ended March 31, 2003 for continuing operations:
   Unrealized holding gains and losses on available-for-sale securities..............         134            -           134
   Reclassification adjustment for gains and losses included in net income (loss)....           -        1,000         1,000
                                                                                       ----------   ----------   -----------
Net unrealized losses on available-for-sale securities as of
   March 31, 2003....................................................................   $     (12)   $    (750)   $     (762)
                                                                                       ----------   ----------   -----------
                                                                                       ----------   ----------   -----------
</TABLE>

                                       17
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Realized Gains and Losses

       Information  about gross and net realized  gains and losses on securities
transactions is as follows:
<TABLE>
<CAPTION>
                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                     ------------------------------
                                                                                           2003             2002
                                                                                     ------------      ------------
                                                                                              (In thousands)
<S>                                                                                  <C>               <C>
Realized gains (losses) on securities transactions:
Fixed maturities, available-for-sale:
    Gross losses..................................................................    $      (178)      $         -
                                                                                     ------------      ------------
Equity securities, trading:
    Gross gains...................................................................          1,623             3,841
    Gross losses..................................................................         (6,222)                -
                                                                                     ------------      ------------
Net realized gains on equity securities, trading..................................         (4,599)            3,841
                                                                                     ------------      ------------
Equity securities, available-for-sale:
    Gross losses..................................................................         (2,547)             (119)
                                                                                     ------------      ------------

Net realized investment gains (losses) on securities transactions.................    $    (7,324)      $     3,722
                                                                                     ------------      ------------
                                                                                     ------------      ------------
</TABLE>

       During  the  three  month  period  ended  March  31,  2003,  the  Group's
management determined that one private equity investment in a technology company
was other-than-temporarily impaired and consequently recorded a realized loss of
$2.5 million in the condensed interim consolidated income statement.


Note 7.    Notes Payable

       On December  20,  2002,  the  Company and Bank of Scotland  agreed to the
terms and conditions of an amended credit facility. The new facility provided up
to $23.0  million of  borrowings,  with an interest rate of 3.5% above the LIBOR
rate on  borrowings  up to  $10.0  million  and 4.5%  above  the  LIBOR  rate on
borrowings  between $10.0 million and $23.0 million (the one month LIBOR rate on
March 31,  2003 was  1.3%).  The  facility  limit  decreases  at the end of each
quarter,  such that the facility  must be repaid in full no later than  December
31,  2003;  however,  the bank has agreed to consider an  extension of the final
facility expiration date in light of the overall circumstances prevailing at the
time of any such request by the Company.  In addition to providing the bank with
security interest over certain of the Group's listed equity securities having an
aggregate  market value of $6.6  million as of April 30,  2003,  the Company has
given the bank other  guarantees,  pledges and security  interests  over certain
other Group assets. The Company agreed to pay the bank a one-time  restructuring
fee of  (pound)180,000,  monthly  management fees of (pound)10,000 and quarterly
facility fees which begin at 0.5% per annum and increase each quarter until they
reach 2.5% per annum in the third quarter of 2003 based on the average  facility
usage  during the  quarter.  The Company  also  granted to the bank  warrants to
subscribe  for  1,933,172  Ordinary  Shares of the Company.  The warrants have a
subscription price of (pound)0.1143 ($0.184 using an exchange rate of (pound)1 =
$1.61) and may be exercised  at any time prior to February  14,  2010.  The fair
value of these  warrants  was  determined  by the  Company to be $251,125 on the
grant date and this amount is being  amortized  to expense  over the term of the
bank facility, with the corresponding entries to additional paid-in capital. The
Company agreed to new financial  covenants  under this reducing  credit facility
and must formally meet such covenants as of the end of each quarter. The Group's
consolidated  results for the quarter  ended March 31, 2003 resulted in a breach
of the core operating profit financial covenant under the facility.  The Company
has been granted a written waiver of this breach by Bank of Scotland.

                                       18
<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       During  December  2002, the Group repaid $3.0 million to Bank of Scotland
in  permanent  reduction of the  facility to $20.0  million.  As of December 31,
2002,  $9.3 million was  outstanding  under the  facility.  In  addition,  $10.6
million of the  remaining  $10.7  million under the facility was utilized in the
form of  guarantees  provided on behalf of certain  former  investee  companies.
During February 2003, the Group sold certain of its listed equity securities for
$4.7 million and the proceeds were used to reduce the Group's borrowings to $4.4
million and the facility to $15.0 million.

       The  Group's  management  believes  that it is  unlikely  that the former
investee  companies  will  have the  ability  to repay  any of their  borrowings
totaling  $10.6 million  according to the bank's  quarterly  repayment  schedule
during  2003,  and thus the Group will be  obligated to pay this amount on their
behalf. The Group has recorded the maximum guarantee obligation of $10.6 million
at March 31, 2003 and December 31, 2002 on its  consolidated  balance sheets and
has taken  other-than-temporary  impairment losses on the related investments in
its consolidated income statement for 2002.

       As discussed in Note 2 "Subsequent  Events," on May 7, 2003,  the sale of
BCM was completed and the Group received initial sale proceeds of $8.06 million.
On May 8, 2003, the Company paid $7.75 million to Bank of Scotland which reduced
the  Group's  borrowings  to zero  and  the  amounts  due  under  its  guarantee
obligations to $7.25 million.

       In June 2003,  the Group will use the initial  proceeds  from the sale of
LPA to  SunGard  (see  Note 2  "Subsequent  Events"  above)  and its cash or the
proceeds from the sale of its listed  equity  securities in order to pay off the
remaining  $7.25  million  in  guarantee  obligations  under  the bank  facility
described above. In the event that the sale of LPA is not completed, in order to
meet its  obligations to the bank as of the end of the third and fourth quarters
of 2003,  the Company will be required to identify  other  sources of liquidity.
The Group's management believes that it will still be able to meet its near-term
obligations  through the sale of LPA to another  party or the sale of its listed
equity securities.


Note 8.  Commitments and Contingencies

       In the course of the administration of LPLA in rehabilitation,  the NCDOI
requested information  concerning the history of a limited number of investments
in securities of portfolio  companies  during  November  2002.  These  portfolio
investments  have  been  associated  with LPLA for more than  seven  years,  and
involve intercompany transfers.  The history of their investment performance and
ownership is complex. The Company has complied with these requests.  The Company
is not able at this time to predict what  conclusions the NCDOI will reach after
evaluation of this information.

       The Group is involved in various legal proceedings,  including claims for
damages  from  clients  of a nature  the Group  considers  to be normal  for its
business.  The Group believes the ultimate settlement or other resolution of the
claims will not materially affect its consolidated  financial position,  results
of operations or cash flows.

Guarantees

       In November 2002, the FASB issued FASB  Interpretation  No. 45 ("FIN 45")
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of Others -- an  interpretation  of FASB
Statements No. 5, 57 and 107 and rescission of FASB  Interpretation No. 34." The
following  is a  summary  of the  Company's  agreements  that  the  Company  has
determined are within the scope of FIN 45.

       Under its Memorandum and Articles of Association,  the Company has agreed
to indemnify  its  officers  and  directors  for certain  events or  occurrences
arising as a result of the officer or director  serving in such

                                       19


<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

capacity.  The maximum  potential amount of future payments the Company could be
required to make under these indemnification  agreements is unlimited.  However,
the Company maintains directors and officers liability insurance that limits the
Company's  exposure  and  enables it to recover a portion of any future  amounts
paid. As a result of its insurance coverage,  the Company believes the estimated
fair value of these indemnification agreements is minimal and has no liabilities
recorded for these agreements as of March 31, 2003.

       The Company enters into  indemnification  provisions under its agreements
with other companies in its ordinary course of business, typically with business
partners, clients and landlords.  Under these provisions, the Company  generally
indemnifies  and holds  harmless the  indemnified  party for losses  suffered or
incurred by the indemnified party as a result of the Company's  activities under
the   agreement.    These    indemnification    provisions   sometimes   include
indemnifications  relating to representations made by the Company with regard to
intellectual property rights. These indemnification provisions generally survive
termination of the underlying agreement.  The maximum potential amount of future
payments  the Company  could be  required  to make under  these  indemnification
provisions is unlimited.  The Company believes the estimated fair value of these
agreements is minimal.  Accordingly, the Company has no liabilities recorded for
these agreements as of March 31, 2003.

       For disclosure of guarantee  obligations under the Group's bank facility,
see Note 7 above.


Note 9.   Business Segment and Geographical Information

       The Group's reportable operating segments are classified according to its
principal  businesses  of  life  insurance  and  annuities,  financial  advisory
services and venture capital management.

       Due to the  sale  of  BCM  (see  Note 1 and  Note  2  above),  the  asset
management  segment has been classified as  discontinued  operations as of March
31, 2003.

       Intercompany   transfers  between   reportable   operating  segments  are
accounted for at prices which are designed to be  representative of unaffiliated
third party transactions.

       During the three month periods ended March 31, 2003 and 2002, the venture
capital  management  segment  generated  portfolio  management  fees  from  LPLA
(discontinued  operations) of $0 and $2,573,000,  respectively.  These portfolio
management  fees are included in the revenues of continuing  operations and have
not been eliminated in the condensed interim consolidated financial statements.

       Net realized investment losses in the amount of $31,368,000 were recorded
during the first three months of 2002 by the venture capital management segment,
related to  intersegmental  investment sales to the life insurance and annuities
segment.  These net realized  investment  losses were offset by a  corresponding
reclassification adjustment in unrealized investment gains and losses on trading
securities for the same amount.  These gains and losses have been  eliminated in
the Group's condensed interim consolidated financial statements.

       Summary  revenue and  investment  gain (loss)  information  by geographic
segment,  based on the domicile of the Group company  generating those revenues,
is as follows:

                                       20

<PAGE>

                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)
<TABLE>
<CAPTION>

                                                                                          Three Months Ended
                                                                                               March 31,
                                                                                     ------------------------------
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)

<S>                                                                                  <C>               <C>
Jersey............................................................................    $      (562)      $    (3,118)
Guernsey..........................................................................          2,008            (3,433)
United States.....................................................................          3,645             6,778
                                                                                     ------------      ------------
Consolidated revenues and net investment gains (losses)
    from continuing operations....................................................     $    5,091       $       227
                                                                                     ------------      ------------
                                                                                     ------------      ------------
</TABLE>

       Revenues  and  income  (loss)  before  taxes for the  Group's  reportable
operating  segments  included in continuing  operations,  based on  management's
internal reporting structure, were as follows:
<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                                March 31,
                                                                                     ------------------------------
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)

Revenues:
<S>                                                                                  <C>               <C>
Life insurance and annuities (1)..................................................    $      (360)      $    (1,630)
Financial advisory services.......................................................          3,564             4,433
Venture capital management (2) ...................................................          1,867            (2,903)
                                                                                     ------------      ------------
                                                                                            5,071              (100)
Reconciliation of segment amounts to consolidated amounts:
Interest income ..................................................................             20               327
                                                                                     ------------      ------------
Consolidated revenues and net investment gains (losses)
    for continuing operations.....................................................    $     5,091       $       227
                                                                                      -----------      ------------
                                                                                     ------------      ------------
Income (loss) from continuing operations before income taxes:
Life insurance and annuities (1)..................................................    $    (1,123)      $    (4,133)
Financial advisory services.......................................................           (994)             (948)
Venture capital management (2) ...................................................          1,669            (3,981)
                                                                                     ------------      ------------
                                                                                             (448)           (9,062)
Reconciliation of segment amounts to consolidated amounts:
Interest income...................................................................             20               327
Corporate expenses................................................................         (1,292)           (1,812)
Interest expense (3)..............................................................           (142)             (304)
                                                                                     ------------      ------------
Consolidated loss from continuing operations
    before income taxes ..........................................................    $    (1,862)      $   (10,851)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
<FN>
(1)    Netted against the revenues (investment income) of the life insurance and
       annuities   segment  are  management  fees  paid  to  BCM   (discontinued
       operations) of $4,000 and $15,000 in the first quarters of 2003 and 2002,
       respectively.

(2)    Included in the revenues of the venture  capital  management  segment are
       management fees from LPLA (discontinued  operations) of $0 and $2,573,000
       in the first quarters of 2003 and 2002, respectively.

(3)    Included  in  interest  expense is  interest  paid to LPLA  (discontinued
       operations)  of $0 and  $15,000 in the first  quarters  of 2003 and 2002,
       respectively.
</FN>
</TABLE>

                                       21
<PAGE>
                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

   NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

       Material changes in segmental assets of continuing  operations during the
first quarter of 2003 occurred in: (a) the venture capital  management  segment,
where assets  decreased by $2,752,000 from  $7,710,000 to $4,958,000,  primarily
due to the sale of  $4,739,000  of trading  securities,  the proceeds from which
were used to repay  part of the bank loan,  partially  offset by a gain from the
change in net  unrealized  gains and losses on listed  equity  securities in the
trading account; and (b) the corporate and other segment, where assets decreased
by $2,479,000 from $6,355,000 to $3,876,000, primarily due to the use of cash to
fund  LPA's  operations  ($0.9  million)  and  to  pay  for  corporate  expenses
(primarily  professional  fees and payments related to the bank facility) during
the first quarter of 2003.


Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

       As used herein, the terms  "registrant,"  "Company," "we," "us" and "our"
refer to London Pacific Group Limited. Except as the context otherwise requires,
the term "Group" refers collectively to the registrant and its subsidiaries.

       This  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations should be read in conjunction with the unaudited condensed
interim  consolidated  financial  statements,  and the  notes  thereto,  and the
December  31, 2002  audited  consolidated  financial  statements,  and the notes
thereto,  included  in our  recent  Annual  Report on Form 10-K.  The  condensed
interim  consolidated  financial statements are prepared in accordance with U.S.
GAAP.  This item should also be read in  conjunction  with the  "Forward-Looking
Statements and Factors That May Affect Future Results" which are set forth below
and in our other filings with the SEC.

Forward-Looking Statements and Factors That May Affect Future Results

       This  Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations and other sections of this report contain  forward-looking
statements  within the meaning of Section 21E of the Securities  Exchange Act of
1934,  as  amended.  Such  forward-looking   statements  are  based  on  current
expectations, estimates, forecasts and projections about the industries in which
we operate,  management's  current beliefs and  assumptions  made by management.
Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates,"  "goals,"  variations  of such words and  similar  expressions  are
intended to identify such forward-looking  statements.  These statements are not
guarantees of future  performance and involve certain risks,  uncertainties  and
assumptions  that are  difficult  to predict.  Future  outcomes  and results may
differ  materially  from what is expressed  or forecast in such  forward-looking
statements. We undertake no obligation to update any forward-looking statements,
whether as a result of new information, future developments or otherwise.

       Factors  that  could  cause  or  contribute   to   deviations   from  the
forward-looking statements include those discussed in this section, elsewhere in
this report and in our other filings with the SEC. The factors include,  but are
not limited to, (i) the risks described in Item 3 "Quantitative  and Qualitative
Disclosures  About Market Risk," (ii)  variations in demand for our products and
services,  (iii) the success of our new products and services  (iv)  significant
changes in net cash flows in or out of our  businesses,  (v) our ability to meet
our debt  obligations,  (vi)  fluctuations in the performance of debt and equity
markets  worldwide,  (vii) the  enactment of adverse  state,  federal or foreign
regulation or changes in government policy or regulation  (including  accounting
standards)  affecting our operations,  (viii) the effect of economic  conditions
and interest rates in the U.S., the U.K. or internationally, (ix) the ability of
our subsidiaries to compete in their respective  businesses,  (x) our ability to
attract and retain key personnel,  and (xi) actions by governmental  authorities
that regulate our businesses, including insurance commissions.

                                       22
<PAGE>


RESULTS OF OPERATIONS BY BUSINESS SEGMENT

Life Insurance and Annuities

       Certain information  regarding our life insurance and annuities segment's
results of operations (continuing operations only) is as follows:
<TABLE>
<CAPTION>

                                                                                           Three Months Ended
                                                                                                March 31,
                                                                                     ------------------------------
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)


Revenues:
<S>                                                                                  <C>               <C>
Investment income.................................................................    $       514       $     2,054
Insurance policy charges .........................................................              4                 1
Net realized investment gains (losses)............................................        (23,405)            3,841
Change in net unrealized investment gains and losses on trading securities .......         22,527            (7,526)
                                                                                     ------------      ------------
Total revenues and net investment losses..........................................           (360)           (1,630)

Expenses:
Amounts credited on insurance policyholder accounts ..............................            519             1,980
Amortization of deferred policy acquisition costs.................................              -               294
General and administrative expenses ..............................................            244               229
                                                                                     ------------      ------------
Total expenses related to operations..............................................            763             2,503
                                                                                     ------------      ------------
Loss from continuing operations before income taxes ..............................    $    (1,123)      $    (4,133)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
</TABLE>

       As previously  disclosed in our 2002 Annual  Report on Form 10-K,  during
2002, our primary insurance  company,  LPLA, was placed under regulatory control
and rehabilitation  based on LPLA's statutory capital and surplus as of June 30,
2002.  On August 6, 2002,  on petition of the  Commissioner  with the consent of
LPLA and  unanimous  approval of its board of directors,  the Superior  Court of
Wake  County in the State of North  Carolina  ordered the  Commissioner  to take
possession and control of all of the property, books and accounts, documents and
other records of LPLA.  As a result of this event,  we  deconsolidated  LPLA and
recorded a charge to earnings in 2002 of $38.5 million for losses resulting from
this disposition.

       For further discussion, see the "Liquidity and Capital Resources" section
below  and  Note  4  "Discontinued  Operations"  to the  Consolidated  Financial
Statements in Part I, Item 2.

       On July 2, 2002,  we  announced  that  further  declines  in the value of
LPLA's investment portfolio, due to persistent negative events in the equity and
bond markets, continued to erode significantly the statutory capital of LPLA and
that we had been unsuccessful in concluding a transaction to enhance the capital
of LPLA. As a consequence,  LPLA discontinued the issuance of new policies as of
July 2, 2002. Although the statutory capital of our Jersey insurance subsidiary,
LPAL,  had not been affected by the adverse  equity and bond markets to the same
extent as the statutory  capital of LPLA, we also announced on July 2, 2002 that
LPAL would discontinue writing new policies effective immediately.  The decision
to discontinue  the issuance of new policies  through LPAL was made to avoid the
increased capital requirements created by additional  policyholder  liabilities.
Subsequent to this  announcement and other  announcements  relating to the Group
and LPLA, LPAL policy surrenders increased  substantially.  Approximately 76% of
LPAL's  policyholder  liabilities  as of June 30,  2002 had been  redeemed as of
March 31, 2003.

       Due to the events referred to above,  LPAL plans to focus on managing the
remaining  block of  policyholder  liabilities.  There are no plans currently to
write new policies before conditions improve.

                                       23
<PAGE>

First quarter of 2003 compared to first quarter of 2002

       In the first quarter of 2003, LPAL contributed a loss before income taxes
of $1.1  million to our overall  loss before  income  taxes,  compared to a loss
before income taxes of $4.1 million in the first  quarter of 2002.  Net realized
investment  losses in the first quarter of 2003 were $23.4  million  compared to
net realized  investment gains of $3.8 million in the first quarter of 2002. The
gain from the  change in net  unrealized  investment  gains and losses was $22.5
million in the first quarter of 2003,  compared to a loss of $7.5 million in the
first  quarter  of 2002.  In the  first  quarter  of 2003,  the  spread  between
investment  income and  interest  credited to  policyholders  decreased  by $0.1
million; amortization of deferred policy acquisition costs ("DPAC") decreased by
$0.3 million;  and general and  administration  expenses  remained flat, each as
compared to the first quarter of 2002.

       LPAL did not  generate  any  premiums  during the first  quarter of 2003,
during the first quarter of 2002,  $3.6 million of premiums were received.  LPAL
discontinued  selling  new  policies  on July 2, 2002 as a result of the  events
described above.

       Interest and dividend income on investments was $0.5 million in the first
quarter of 2003,  compared with $2.1 million in the first quarter of 2002.  This
$1.6 million  decrease  was due  primarily to a decline in the level of invested
bonds and cash.

       During the first quarter of 2003,  $1.0 million of bond proceeds and cash
were used to meet policy  redemptions.  Following  this  reduction,  and further
expected bond  realizations  and maturities  required to meet policy  maturities
during the remaining nine months of 2003, interest income is expected to decline
to approximately $1.6 million for the full year 2003.

       Policyholder liabilities as of March 31, 2003 were $34.3 million of which
$9.9 million is scheduled to mature  during the  remaining  nine months of 2003.
These   maturities  are  expected  to  be  met  by  a  combination  of  cash  of
approximately  $9.2  million  held at the  beginning  of  April  2003  and  bond
maturities of  approximately  $13.0 million  during the remaining nine months of
2003. Excess cash will be reinvested in bonds to meet future policy  redemptions
and  expenses  as  appropriate.   If  there  are  no  significant   redemptions,
policyholder  liabilities are projected to be approximately $25.9 million at the
end of 2003.  Assuming  the  reinvestment  of excess  cash in bonds,  investment
income should  approximately equal the amount credited to policies and operating
expenses are  expected to be  approximately  $0.9  million  during the full year
2003.  Unrealized  investment gains on LPAL's listed equity securities were $2.6
million for the month of April 2003.

       Net investment  losses totaled $0.9 million in the first quarter of 2003,
compared to net investment  losses of $3.7 million in the first quarter of 2002.
Net  investment  losses  in the first  quarter  of 2003  were  comprised  of net
realized  investment losses of $23.4 million and $22.5 million in gains from the
change in net realized gains and losses on the listed equity  securities held in
the trading portfolio.  The trading portfolio  decreased from $8.9 million as of
December  31,  2002 to $7.9  million  as of March 31,  2003.  LPAL sold  certain
trading  positions  during the first  quarter  of 2003,  which  resulted  in net
realized  losses of $20.8 million  based on an aggregate  original cost of $23.7
million. These disposals represented shares held in companies that had completed
initial  public  offerings  of their  securities.  These  realized  losses  were
increased by an  other-than-temporary  impairment  charge on one private  equity
security holding of $2.5 million.

       Total invested assets  (defined as total assets  excluding DPAC and other
assets)  decreased  to $50.4  million as of March 31,  2003,  compared  to $51.6
million as of December 31, 2002. On total average  invested  assets in the first
quarter of 2003, the average annualized net return,  including both realized and
unrealized  investment gains and losses,  was -2.9%,  compared with -4.2% in the
first quarter of 2002.

       Interest credited on policyholder  accounts  decreased by $1.5 million in
the first  quarter of 2003 to $0.5  million,  compared  with $2.0 million in the
first quarter of 2002. The decrease was due primarily to  substantial  increases
in policyholder surrenders in the second half of 2002. The average rate credited
to  policyholders  was 5.8% in the first quarter of 2003,  compared with 5.9% in
the first quarter of 2002.

                                       24
<PAGE>

       Amortization  of DPAC was zero in the first quarter of 2003,  compared to
$0.3 million in the first quarter of 2002.  This was due to the  acceleration of
DPAC  amortization  to fully write-off DPAC as of September 30, 2002. The reason
for the  write-off  was the  discontinuance  of new business at the start of the
third quarter of 2002 and the lack of interest  spread on the remaining block of
business.

       General and administrative expenses remained at $0.2 million in the first
quarter of 2003, compared with the first quarter of 2002.

Financial Advisory Services

       On May 9, 2003,  we entered into a  definitive  agreement to sell the LPA
business.  See Note 2 "Subsequent Events" to the condensed interim  consolidated
financial statements in Part I, Item 1.

       Certain  information  regarding our financial advisory services segment's
results of operations is as follows:
<TABLE>
<CAPTION>

                                                                                           Three Months Ended
                                                                                                March 31,
                                                                                     ------------------------------
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)

<S>                                                                                  <C>               <C>
Gross financial advisory services fees............................................    $     3,564       $     4,433
Payments due to independent advisors..............................................         (2,176)           (2,864)
                                                                                     ------------      ------------
                                                                                            1,388             1,569
Operating expenses................................................................          2,382             2,517
                                                                                     ------------      ------------
Loss before income taxes .........................................................    $      (994)      $      (948)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
</TABLE>

First quarter of 2003 compared to first quarter of 2002

       Net revenues in the financial  advisory  services segment  decreased from
$1.6 million in the first  quarter of 2002 to $1.4 million in the first  quarter
of 2003. Net asset  management and consulting fees decreased from the prior year
period as a result of an overall  decrease in assets under management upon which
these fees are based.  Net revenues from brokerage and commission  product sales
also decreased. Assets under management,  consulting or administration decreased
from $2.5 billion as of March 31, 2002 to $2.3 billion as of March 31, 2003. The
addition of assets from new  institutional  clients helped to offset the decline
in managed assets resulting from continued negative market conditions.  The fees
associated  with these  institutional  back office services are at lower overall
rates than full asset management and consulting services.

       Operating  expenses  decreased  to $2.4  million in the first  quarter of
2003,  compared  with $2.5  million  in the first  quarter  of 2002.  Before the
capitalization and amortization of web development costs,  expenses totaled $2.5
million in the first  quarter of 2003,  compared  with $2.8 million in the first
quarter of 2002.  Segment-wide  operating expense  reductions were made over the
course of the last year in response to negative market conditions resulting in a
$0.3  million  decrease in first  quarter  expenses  over the same period in the
prior year.

       In late 1999, we decided to make the LPA business the  foundation  for an
Internet based  initiative that could then be migrated to other vertical markets
in which  the Group  had  expertise.  This  initiative  aimed to  deliver a full
complement of consulting and back office services to institutions  and financial
advisors through the Internet.

       The total investment in the Internet based project through March 31, 2003
was $3.6  million,  including  $150,000  in the first  quarter of 2002.  Of this
total, $2.9 million has been capitalized as software development costs, although
no additional costs were capitalized in the first quarter of 2003. The costs are
being  amortized

                                       25
<PAGE>

(as a component of operating  expenses) over five years;  amortization  of these
costs began in May 2001. The amount amortized during first quarter 2003 and 2002
was $0.1 million in each period.

       The  Internet  based  initiative  has  opened the door for  marketing  of
financial  advisory  services to institutions  and large groups of advisors.  To
date,  service  contracts have been signed with eleven major  institutions,  and
additional  contracts are currently  under  negotiation.  The revenue  impact of
these contracts increased during 2003 as newly contracted business came on line.
Net asset management and consulting fees are expected to increase  significantly
during the second half of 2003 as new business from institutional  clients comes
onto the myOfficeOnlineSM platform. However, this will be for the benefit of the
purchaser of the LPA business.  See Note 2 "Subsequent  Events" to the condensed
interim consolidated financial statements in Part I, Item 1.

Venture Capital Management

       Certain  information  regarding our venture capital management  segment's
results of operations is as follows:
<TABLE>
<CAPTION>

                                                                                          Three Months Ended
                                                                                                March 31,
                                                                                     ------------------------------
                                                                                          2003             2002
                                                                                     ------------      ------------
                                                                                             (In thousands)
Revenues:
<S>                                                                                  <C>               <C>
Management fees...................................................................    $         -       $     2,573
Net realized investment gains (losses) (1)........................................         (5,249)          (31,487)
Change in net unrealized investment gains and losses on trading securities (1)....          7,116            26,011
                                                                                     ------------      ------------
Total revenues and net investment gains (losses)..................................          1,867            (2,903)
Operating expenses................................................................            198             1,078
                                                                                     ------------      ------------
Income (loss) before income taxes.................................................    $     1,669       $    (3,981)
                                                                                     ------------      ------------
                                                                                     ------------      ------------
<FN>
(1)    Net realized  investment losses in the amounts of $0 and $31,368,000 were
       recorded  in the first  quarters of 2003 and 2002,  respectively,  by the
       venture capital management segment, related to intersegmental  investment
       sales to the life  insurance  and annuities  segment.  These net realized
       investment  losses  were  offset  by  a  corresponding   reclassification
       adjustment  in  unrealized   investment   gains  and  losses  on  trading
       securities  for the  same  amount.  These  gains  and  losses  have  been
       eliminated in our condensed interim consolidated financial statements.
</FN>
</TABLE>

First quarter of 2003 compared to first quarter of 2002

       In the first  quarter of 2003,  the venture  capital  management  segment
contributed  income  before  income  taxes of $1.7  million,  compared to a loss
before income taxes of $4.0 million in the first quarter of 2002. The income and
loss in those periods,  respectively, was attributable primarily to net realized
and unrealized  investment gains and losses on listed equity  securities.  These
positions in listed equity  securities  resulted from privately held  technology
companies,  in which  the  venture  capital  management  segment  had an  equity
interest,  completing  initial  public  offerings or being  acquired by publicly
traded companies in stock-for-stock acquisitions.

       The  change in net  unrealized  gains and  losses  in the  listed  equity
trading  portfolio  during the first quarter of 2003 was a gain of $7.1 million,
which was partially  offset by net realized losses of $5.2 million.  The trading
portfolio decreased from $7.6 million as of December 31, 2002 to $4.9 million as
of March 31, 2003. We sold certain trading positions during the first quarter of
2003,  which  resulted  in net  realized  losses  of $5.1  million  based  on an
aggregate original cost of $9.8 million. These realized losses were increased by
an  other-than-temporary  impairment  write-down  of $0.1 million on one private
investment  relating to the  guarantees  as discussed in Note 7 to the condensed
interim consolidated financial statements.  All intersegmental  investment gains
and  losses,   other  than  those  arising  from  sales  to  LPLA  (discontinued
operations),   have  been  eliminated  in  our  condensed  interim  consolidated
statements of income.

                                       26
<PAGE>

       We expect significant  fluctuations in net unrealized gains and losses in
the listed equity  trading  portfolio in future  periods,  reflecting  continued
equity market volatility, especially in the technology sector.

       The venture capital management  segment earned portfolio  management fees
from LPLA of $2.6  million in the first  quarter of 2002,  and none in the first
quarter of 2003.  Due to the events  described  in the  section  entitled  "Life
Insurance and Annuities,"  Berkeley  International  Capital Corporation ("BICC")
has not received fees from the management of LPLA's  investment  portfolio since
the second quarter of 2002.

       Operating  expenses  in the first  quarter  of 2003  were  $0.2  million,
compared to $1.1 million in the first quarter of 2002. The $0.9 million decrease
was  attributable  primarily to lower staff costs,  reflecting  the reduction in
business and staffing during the latter half of 2002.

       BICC is  seeking  to  redevelop  its  venture  capital  business.  BICC's
business  relationships  are extensive  among Silicon Valley  companies  seeking
later stage capital and in the investor community globally.  There has continued
to be a difficult  operating  environment in early 2003 for the venture  capital
industry.  The operating results for this business segment, and for the Group as
a  whole,  for  the  remainder  of 2003  will be  largely  driven  by  portfolio
performance in uncertain market conditions.

Corporate and Other

First quarter of 2003 compared to first quarter of 2002

       Corporate expenses decreased by $0.5 million to $1.3 million in the first
quarter of 2003, as compared to $1.8 million for the first quarter of 2002. This
decrease was  primarily  due to decreases in staff  compensation  and audit fees
partially offset by higher bank facility costs.

       Interest  income earned by us and our  subsidiaries  (excluding  the life
insurance  and  annuities  segment)  decreased by $0.3 million to $20,000 in the
first quarter of 2003 as compared with the first quarter of 2002,  primarily due
to the  decrease  in cash  and cash  equivalents  held by us.  Interest  expense
incurred by us and our subsidiaries  (excluding the life insurance and annuities
segment)  decreased by $0.2 million to $0.1 million in the first quarter of 2003
as  compared  with the  first  quarter  of 2002,  primarily  due to the  partial
repayment of bank  borrowings.  A discussion  of our sources and uses of cash is
discussed in "Liquidity and Capital Resources" below.

Consolidated Income (Loss) from Continuing Operations Before Income Taxes

First quarter of 2003 compared to first quarter of 2002

       The  consolidated  loss from  continuing  operations  before income taxes
decreased from $10.9 million in the first quarter of 2002 to $1.9 million in the
first quarter of 2003. Net realized and unrealized  investment  losses were $8.2
million  higher in the first  quarter of 2002  compared to the first  quarter of
2003.

       Consolidated  income  before  income taxes for the  remainder of 2003 and
future  years may be volatile due to our  holdings of listed  equity  securities
primarily in the technology  sector,  which are marked to market with changes in
their  market  value  recognized  in  the  income  statement  for  each  period.
Other-than-temporary  impairments of our private equity securities  primarily in
the technology  sector could also affect our  consolidated  income before income
taxes in  future  periods.  For more  information  on the  possible  effects  of
volatility  in the prices of equity  securities,  see Item 3  "Quantitative  and
Qualitative Disclosures About Market Risk" below.

       See  discussion  of events  relating  to LPLA,  LPAL,  BCM and LPA in the
"Liquidity and Capital Resources" section below.

       After completion of the sale of the LPA business,  the Group's focus will
be on its venture capital placement business. The market environment for venture
capital   continues  to  be  very  weak  but  we  believe  that  there  will  be
opportunities  in the future.  However,  there is no  guarantee  that we will be
successful in redeveloping our venture capital operations.


                                       27
<PAGE>

Income Taxes

       We are  subject to taxation  on our income in all  countries  in which we
operate based upon the taxable income arising in each country. However, realized
gains on certain  investments are exempt from Jersey and Guernsey  taxation.  We
are subject to income tax in Jersey at a rate of 20%. In the United  States,  we
are subject to both federal and California taxes at 34% and 8.84%, respectively.

First quarter of 2003 (continuing operations)

       Although the loss from continuing operations before income taxes was $1.9
million for the first quarter of 2003, an income tax expense of $11,000 resulted
for the period.  No tax  benefits  were  provided for the $1.4 million in losses
attributable  to our U.S.  subsidiaries  as full valuation  allowances have been
taken  against  all net  deferred  tax assets due to doubt  about our ability to
utilize  operating  loss  carryovers.  In addition,  $0.4 million of losses were
contributed by our Jersey and Guernsey  operations  during the quarter for which
no tax benefits will be realized.

Discontinued Operations

       In the  first  three  months  of 2002,  prior  to the loss of  management
control over LPLA,  we recorded an  after-tax  loss from  operations  of LPLA of
$19.1  million.  The loss in the first  quarter of 2002 was primarily due to net
realized investment losses and the change in net unrealized investment gains and
losses  totaling  $25.9  million.  For  further  information  see  Note 4 to the
condensed interim consolidated financial statements in Part I, Item 1.

       As we entered into a definitive  agreement to sell  substantially  all of
the assets and operations of BCM on March 7, 2003, we  deconsolidated  BCM as of
March 31, 2003 and BCM's  results of  operations  (together  with the  remaining
asset management  segment for 2002) have been reported  separately in the income
statement under discontinued operations. In the first quarter of 2003, the asset
management  segment  (comprised  of BCM only)  reported  income  before taxes of
$20,000,  as  compared  to  $359,000  for the first  quarter of 2002 (which also
included  the  results  of BIL of  $247,000).  The  reduction  in net income was
primarily due to the loss of management  contracts relating to LPLA's investment
portfolios during the third quarter of 2002. For further  information see Note 4
to the condensed interim consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

       Management  has  identified  those  accounting  policies  that  are  most
important to the accurate  portrayal of our  financial  condition and results of
operations and that require  management's most complex or subjective  judgments,
often as a result of the need to make estimates about the effect of matters that
are inherently uncertain. These most critical accounting policies pertain to our
investments  and to the  accounting for life insurance  policy  liabilities.  In
addition,  for 2002 and for the first quarter of 2003, our  accounting  policies
relating to  consolidation,  deconsolidation  and the reporting of  discontinued
operations became very important to the portrayal of our financial condition and
results of operations. These critical accounting policies are described below.

Determination of Fair Values of Investments

       When a quoted market price is available for a security, we use this price
in the  determination  of fair value.  If a quoted market price is not available
for a  security,  management  estimates  the  security's  fair  value  based  on
valuation methodologies as described below.

       We hold  investments  in  privately  held  equity  securities,  primarily
convertible  preferred  stock in venture  capital  companies  doing  business in
various segments of technology  industries.  Venture capital  investing  entails
making  investments in companies  that are  developing  products or services for
large  emerging  markets  with the  belief  that  these  investments  will yield
superior  returns if these  companies  are  successful.  These  investments  are
normally held for a number of years. When we make these investments, most of the
companies  are still  developing  the products they intend to bring to market or
are in the early stages of product

                                       28
<PAGE>

sales.  Venture capital  companies are net consumers of cash and often dependent
upon  additional  financing to execute their business plans.  These  investments
involve substantial risk and the companies generally lack meaningful  historical
financial results used in traditional  valuation models.  The process of pricing
these  securities  range  from  fierce  competitive  bidding  between  financial
institutions to existing  investors  negotiating prices with the company without
outside  investor  validation.  Investments in convertible  preferred stock come
with  rights  that vary  dramatically  both from  company to company and between
rounds  of  financing   within  the  same  company.   These   rights,   such  as
anti-dilution,  redemption,  liquidation  preferences  and  participation,  bear
directly on the price an investor is willing to pay for a security.  The returns
on these  investments are generally  realized through an initial public offering
of the company's shares or, more commonly,  through the company's acquisition by
a public company.

       One of the  factors  affecting  fair value is the amount of time before a
company  requires  additional  financing to support its  operations.  Management
believes that companies that are financed to the estimated  point of operational
profitability  or for a period  greater  than one year will most  likely  return
value to the investor through an acquisition between a willing buyer and seller,
as the company does not need to seek financing from an opportunistic investor or
insider in an adverse  investment  environment.  If a particular  company  needs
capital in the near term,  management  considers  a range of factors in its fair
value  analysis,  including  our  ability  to  recover  our  investment  through
surviving liquidation  preferences.  Management's  valuation  methodologies also
include  fundamental  analysis that evaluates the investee company's progress in
developing  products,  building  intellectual  property  portfolios and securing
customer  relationships,  as well as overall industry conditions,  conditions in
and prospects for the investee's  geographic  region,  and overall equity market
conditions.   This  is  combined  with   analysis  of   comparable   acquisition
transactions and values to determine if the security's  liquidation  preferences
will ensure full recovery of our investment in a likely acquisition  outcome. In
its valuation analysis, management also considers the most recent transaction in
a company's shares.

       The determination of fair values of investments  requires the application
of significant judgment. It is possible that the factors evaluated by management
and fair values will change in subsequent  periods,  especially  with respect to
our  privately  held equity  securities in  technology  companies,  resulting in
material impairment charges in future periods.

Other-than-Temporary Impairments

       Management performs an ongoing review of all investments in the portfolio
to   determine   if   there   are  any   declines   in  fair   value   that  are
other-than-temporary.

       As our listed equity  securities  are  classified as trading  securities,
impairment  adjustments  are not  required as any change in the market  value of
these securities between reporting periods is included in earnings.

       In  relation  to  our  equity  securities  that  do not  have  a  readily
determinable  fair  value  and are  classified  as  available-for-sale,  factors
considered in impairment  reviews include:  (i) the length of time and extent to
which  estimated  fair  values  have been  below  cost and the  reasons  for the
decline,  (ii)  the  investee's  recent  financial  performance  and  condition,
earnings trends and future  prospects,  (iii) the market condition of either the
investee's  geographic area or industry as a whole, and (iv) concerns  regarding
the investee's  ability to continue as a going concern (such as the inability to
obtain  additional  financing).  If the evidence supports that a decline in fair
value is  other-than-temporary,  then the investment is reduced to its estimated
fair value,  which becomes its new cost basis,  and a realized loss is reflected
in earnings.

       A  fixed  maturity  security  is  deemed  to be  impaired  by us  when we
determine that it is probable that amounts due (principal and interest) will not
be  fully  collected  according  to  the  security's   contractual  terms.  This
determination  is made by  considering  all available  facts and  circumstances,
including our intent and ability to continue to hold the investment to maturity.
Factors  considered  include:  (i) the  length  of time and  extent to which the
market  values have been below  amortized  cost and the reasons for the decline,
(ii) the issuer's recent  financial  performance and condition,  earnings trends
and future prospects in the near to mid-term, (iii) changes in the issuer's debt
rating  and/or  regulatory  actions or other events that may effect the issuer's
operations,  (iv) the market condition of either the issuer's geographic area or
industry as a whole, and (v) factors that raise doubt about the issuer's ability
to continue as a going concern. If the evidence supports that

                                       29
<PAGE>

a  decline  in fair  value  is  other-than-temporary,  then the  fixed  maturity
security  is  written  down to its  quoted  market  value,  if  such a value  is
available.  If a readily  determinable fair value does not exist, then the fixed
maturity  security is written down to  management's  estimate of its fair value,
which is based on the valuation methodologies  described above.  Write-downs are
recorded as realized losses and included in earnings.

       The  evaluations  for   other-than-temporary   impairments   require  the
application of significant  judgment. It is possible that the impairment factors
evaluated  by  management  and fair values will  change in  subsequent  periods,
especially  with  respect to  privately  held equity  securities  in  technology
companies, resulting in material impairment charges in future periods.

Life Insurance Policy Liabilities

       Life insurance  policy  liabilities  are accounted for in accordance with
Statement of Financial Accounting Standards No. 97, "Accounting and Reporting by
Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains
and Losses from the Sale of Investments."  Life insurance policy liabilities for
deferred annuities are accounted for as  investment-type  insurance products and
are recorded at accumulated value (premiums  received,  plus accrued interest to
the balance sheet date, less withdrawals and assessed fees).

Consolidation, Deconsolidation and Reporting of Discontinued Operations

       Our  condensed  interim  consolidated  financial  statements  include the
accounts of the Company,  its  subsidiaries  (with the exception of LPLA and BCM
which were  deconsolidated  during  2002 and 2003,  respectively,  as  discussed
below), the Employee Share Option Trust and the Agent Loyalty  Opportunity Trust
(collectively, the "Group"). Significant subsidiaries included in the continuing
operations of the Group and  discussed in this report  include:  London  Pacific
Assurance Limited,  London Pacific Advisors and Berkeley  International  Capital
Corporation.  All  intercompany  transactions  and  balances are  eliminated  in
consolidation  except  for  intercompany  transactions  between  continuing  and
discontinued  operations  principally related to investment management fees from
LPLA (the discontinued  operations) to the continuing operations.  Our condensed
interim consolidated balance sheet is presented in an unclassified format as the
majority of the Group's  assets  relate to its  continuing  life  insurance  and
annuities business.

       In  accordance  with SFAS 144, if a long-lived  asset or "component of an
entity" (a  reportable  segment,  an  operating  segment,  a reporting  unit,  a
subsidiary or an asset group) is disposed of by sale or by abandonment, then the
results of  operations  of that  component  of an entity  shall be  reported  in
discontinued  operations  if both of the following  conditions  are met: (i) the
operations and cash flows of the component have been eliminated from the ongoing
operations  of the  entity  and (ii) the  entity  will not have any  significant
continuing involvement in the operations of the component.

       During the third quarter of 2002, our U.S. life insurance company,  LPLA,
was placed under  regulatory  control and  rehabilitation  by the North Carolina
insurance   regulators.   As  we  no  longer  exercise  control  over  LPLA,  we
deconsolidated  LPLA and  recorded a charge to earnings in the third  quarter of
2002 of approximately $38.5 million for losses resulting from the disposition of
LPLA. We will not regain control or receive any benefit from LPLA in the future.
As such,  in  accordance  with SFAS  144,  the  results  of  operations  of LPLA
(pre-rehabilitation)  have been reported in discontinued operations.  Under SFAS
144, the results of operations of a  discontinued  business,  and any impairment
losses related to a discontinued business, are reported separately in the income
statement under discontinued  operations for the current and prior periods,  and
in the prior period balance sheet as total assets of discontinued operations and
total liabilities of discontinued operations.

       As we entered into a definitive  agreement to sell  substantially  all of
the assets and operations of BCM on March 7, 2003, we  deconsolidated  BCM as of
March 31, 2003 and BCM's results of operations have been reported  separately in
the income  statement  under  discontinued  operations for the current and prior
period.  BCM's assets and  liabilities  have been  classified as assets held for
sale and liabilities held for sale in the current and prior period  consolidated
balance sheets. Due to the loss of the management contracts related to

                                       30
<PAGE>

LPLA's investment  portfolios during the third quarter of 2002, both BCM and BIL
will no longer  receive  fees from LPLA in future  periods.  We do not expect to
receive any material amounts of income from our asset management  segment in the
foreseeable future.


LIQUIDITY AND CAPITAL RESOURCES

       Our cash and cash equivalents  increased during the first quarter of 2003
by $3.2 million to $19.0 million.  This increase  resulted from $6.5 million and
$2.7  million  provided by operating  and  investing  activities,  respectively,
partially  offset by $5.9  million of cash used in  financing  activities.  Cash
provided by operating  activities  primarily  related to the  proceeds  from the
sales of trading  securities  by the life  insurance  and  annuities and venture
capital management  segments.  The cash used in financing  activities related to
the partial  repayment  of the bank  facility  together  with  policy  surrender
benefits paid by the life insurance and annuities segment. As of March 31, 2003,
our cash and cash  equivalents,  excluding  the  life  insurance  and  annuities
segment, amounted to $10.3 million, a decrease of $2.1 million from December 31,
2002.  Excluding the life  insurance and  annuities  segment,  we also held $4.9
million of listed equity securities which could be sold within a short period of
time as of March 31, 2003, compared to $7.7 million as of December 31, 2002.

       Shareholders'  equity  decreased during the first quarter of 2003 by $0.7
million from $21.5  million at December  31, 2002 to $20.8  million at March 31,
2003, primarily due to a net loss for the period of $1.9 million,  offset by the
change in unrealized gains and losses on  available-for-sale  securities of $1.3
million included in accumulated other  comprehensive  income (loss). As of March
31, 2003 and December 31, 2002, $63.6 million of our Ordinary  Shares,  at cost,
held by the  employee  benefit  trusts  have been netted  against  shareholders'
equity.

       As more  fully  disclosed  in our 2002  Annual  Report on Form  10-K,  on
December  20,  2002,  we and the  Bank  of  Scotland  agreed  to the  terms  and
conditions of an amended credit facility.  The new facility provided up to $23.0
million of  borrowings,  with an  interest  rate of 3.5% above the LIBOR rate on
borrowings  up to $10.0  million  and 4.5%  above the LIBOR  rate on  borrowings
between  $10.0  million and $23.0 million (the one month LIBOR rate on March 31,
2003 was 1.3%).  The facility limit  decreases at the end of each quarter,  such
that the  facility  must be  repaid in full no later  than  December  31,  2003;
however,  the bank has agreed to consider  an  extension  of the final  facility
expiration date in light of the overall circumstances  prevailing at the time of
any such request by us. In addition to providing the bank with security interest
over certain of our listed equity securities having an aggregate market value of
$6.6 million as of April 30, 2003,  we gave the bank other  guarantees,  pledges
and security  interests  over certain other Group  assets.  We agreed to pay the
bank a one-time restructuring fee of (pound)180,000,  monthly management fees of
(pound)10,000  and  quarterly  facility  fees which  begin at 0.5% per annum and
increase  each quarter  until they reach 2.5% per annum in the third  quarter of
2003 based on the average facility usage during the quarter.  We also granted to
the bank warrants to subscribe for 1,933,172 Ordinary Shares of the Company. The
warrants have a subscription  price of  (pound)0.1143  ($0.184 using an exchange
rate of (pound)1 = $1.61) and may be exercised at any time prior to February 14,
2010. We agreed to new financial  covenants  under this reducing credit facility
and  must  formally  meet  such  covenants  as of the end of each  quarter.  Our
consolidated  results for the quarter  ended March 31, 2003 resulted in a breach
of the core operating profit financial covenant under the facility. We have been
granted a written  waiver of this  breach by Bank of  Scotland.  See  additional
disclosure below.

       As of December 31,  2002,  $9.3  million was  outstanding  under the bank
facility.  In addition,  $10.6 million of the remaining  $10.7 million under the
facility  was utilized in the form of  guarantees  provided on behalf of certain
former investee  companies.  During February 2003, we sold certain of our listed
equity  securities  for $4.7  million and the  proceeds  were used to reduce our
borrowings to $4.4 million and the facility to $15.0 million.

       We believe that it is unlikely that the former  investee  companies  will
have  the  ability  to repay  any of their  borrowings  totaling  $10.6  million
according to the bank's  quarterly  repayment  schedule during 2003, and thus we
will be  obligated  to pay this amount on their  behalf.  We have  recorded  the
maximum guarantee obligation of $10.6 million at March 31, 2003 and December 31,
2002 on our consolidated balance sheets and have been

                                       31

<PAGE>

taken  other-than-temporary  impairment losses on the related investments in our
consolidated income statement for 2002.

       On May 7, 2003, we sold substantially all of the assets and operations of
BCM to a newly formed  company  majority-owned  by funds under the management of
Putnam  Lovell.  The purchase price consists of: (1) $8.06 million in cash which
we received at closing,  (2) a further $1.0 million cash  installment to be paid
on December 31,  2003,  less up to one quarter of  management  fees the acquiror
would  have  received  from  subadvising  certain  products  of LPA  should  LPA
terminate before December 31, 2003 a new subadvisory agreement which LPA and the
acquiror will enter into at closing; and (3) up to $1.25 million in cash earnout
payments to be paid by the buyer  ratably  over the four  quarters  of 2004,  if
revenues  received in 2003 from a new product  planned for launch by BCM in 2003
exceed certain defined targets. We currently believe that these earnout payments
are unlikely.  As part of the agreement,  BCM and its  shareholder  made certain
representations  and warranties,  and related  indemnities,  and these and other
customary obligations are guaranteed by the Company. As of March 31, 2003, BCM's
assets under management were approximately $1.1 billion, including approximately
$0.2 billion of assets under a subadvisory agreement with LPA.

       On May 8, 2003, we paid $7.75  million to Bank of Scotland  which reduced
our  borrowings to zero and the amounts due under our guarantee  obligations  to
$7.25 million.

       On May 9, 2003, we entered into a definitive  agreement to sell the stock
of London Pacific Advisory Services,  Inc., London Pacific Securities,  Inc. and
LPA Insurance Agency,  Inc., together with the associated assets of the advisory
business held within London  Pacific  Technologies,  Inc. and LP Advisors,  Inc.
(together,  the "LPA business") for total  consideration of up to $16.2 million,
to SunGard.  The purchase  price  consists of $8.2 million in cash to be paid at
closing (less $1.25 million to be held back to cover any shortfall to the agreed
minimum  tangible  net  asset  value of the LPA  assets  minus  the  liabilities
acquired in the transaction, and to cover any indemnity obligations) and up to a
further  $8.0  million  cash  earnout  payment  that  will be equal in amount to
one-half of the cumulative  operating profits from the LPA business in the three
year period immediately  following closing of the sale to SunGard.  This earnout
payment  will  be  paid  within   approximately  60  days  following  the  third
anniversary  of the closing of the  transaction.  There is no guarantee  that we
will  receive  any  portion  of  the  earnout   payment.   LPA's  net  liability
(approximately  $10.3  million as of March 31, 2003) to BICC will not be assumed
by SunGard. The definitive agreement is binding on both companies and is subject
to customary corporate and regulatory approvals.  We expect the sale to close on
or before June 9, 2003.  As of March 31, 2003,  LPA's  assets under  management,
consulting or administration were approximately $2.3 billion.

       We  will  use the  initial  proceeds  from  the  sale of LPA to  SunGard,
expected in early June 2003,  and our cash or the proceeds  from the sale of our
listed equity  securities  to pay off the  remaining  $7.25 million in guarantee
obligations under the bank facility.  In the unlikely event that the sale of LPA
is not completed in June 2003, in order to meet our  near-term  obligations,  we
will need to find other  sources of  liquidity.  We believe that we can meet our
near-term  obligations  through the sale of LPA to another  party or the sale of
our listed equity securities. As of April 30, 2003, our listed equity securities
(excluding  those held by LPAL) had a market  value of $6.6  million  and we had
cash and cash  equivalents of $9.9 million  (excluding cash held by LPAL). If we
are unable to pay off the remaining $7.25 million in guarantee obligations under
the bank facility  should a sale of LPA not be completed by the end of September
2003,  we will need to pay down the facility by $2.25  million on September  30,
2003 and by $5.0 million on December 31, 2003.

       Our consolidated results for the quarter ended March 31, 2003 resulted in
a  breach  of the  core  operating  profit  financial  covenant  under  the bank
facility.  We have  been  granted a  written  waiver  of this  breach by Bank of
Scotland.  It is  possible  that  we may  again  fail to meet  the  bank's  core
operating profit financial covenant at the quarterly reporting dates of June 30,
2003 or September 30, 2003. If the bank were  unwilling to waive such a covenant
breach,  we may be in default under the bank facility and all of the outstanding
amounts under the bank facility would immediately  become due. In the event that
the bank  facility  becomes  immediately  repayable,  we believe the balances of
existing  cash,  proceeds from the sale of listed equity  securities and the net
proceeds from a sale of LPA will be sufficient to repay the bank facility and to
meet other obligations for the next twelve months, including working capital for
operations.

                                       32
<PAGE>



       As  disclosed  in our Annual  Report on Form 10-K for 2002,  on August 6,
2002,  on petition of the  Commissioner  with the consent of LPLA and  unanimous
approval of its board of  directors,  the  Superior  Court of Wake County in the
State of North Carolina  ordered the Commissioner to take possession and control
of all of the property, books and accounts, documents and other records of LPLA.
LPLA and its officers,  directors,  agents, employees and all other persons were
enjoined from disposing of LPLA's property and from transacting  LPLA's business
except  with  the  consent  of  the   Commissioner.   The  Court  appointed  the
Commissioner as  Rehabilitator  of LPLA. Based on this court order, we no longer
exercise control over LPLA.

       During 2002, LPLA paid investment management fees to our asset management
and venture capital  management  segments totaling $3.6 million.  The investment
management  agreement  between LPLA and our other  subsidiaries and related fees
had been approved by the NCDOI. Due to the loss of control of LPLA, we no longer
manage LPLA's  portfolio of public  corporate  bonds and private equity and debt
investments and no longer receive investment management fees for these services.

       We are not aware of any  obligations of the Group to cover any current or
future losses of LPLA.  However,  in the course of the administration of LPLA in
rehabilitation, during November 2002, the NCDOI requested information concerning
the  history of a limited  number of  investments  in  securities  of  portfolio
companies.  These portfolio  investments have been associated with LPLA for more
than seven  years,  and  involve  intercompany  transfers.  The history of their
investment  performance  and  ownership is complex.  We have complied with these
requests.  We are not able at this time to predict  what  conclusions  the NCDOI
will reach after evaluating this information.

       On  July 2,  2002,  we  announced  that  LPAL  discontinued  issuing  new
policies.  Subsequent to this announcement and other  announcements  relating to
the  Group  and  LPLA,   LPAL   policy   surrenders   substantially   increased.
Approximately 76% of LPAL's $140.2 million  policyholder  liabilities as of June
30, 2002 had been redeemed as of March 31, 2003. Policy surrenders for the first
quarter of 2003 totaled $1.0  million.  We do not expect  significant  surrender
activity during the remainder of 2003;  however,  approximately  $9.8 million of
policyholder  liabilities  are  scheduled to mature  during the  remaining  nine
months of 2003. These maturities are expected to be met by a combination of cash
held as of March 31, 2003 of $9.2 million and the proceeds from  maturing  bonds
which are  estimated to be $12.6  million  during the  remaining  nine months of
2003.  Assuming  the  reinvestment  of excess cash in bonds,  investment  income
should  approximately equal the amount credited to policies during the remainder
of 2003.

       During  the  first  quarter  of  2003,  LPAL  continued  to  service  its
policyholders.  Policyholder liabilities for LPAL fell slightly during the first
quarter of 2003 from $35.4  million as of December 31, 2002 to $34.3  million as
of  March  31,  2003.  To  date,  the  capital  base is  sufficient  to  support
liabilities.  As of March 31, 2003,  LPAL's  corporate  bonds,  cash and accrued
interest totaled $36.9 million,  listed equity  securities were $7.9 million and
the book  value of  private  equity  securities  was  $5.6  million.  Due to the
weakened economic  environment,  in February 2003, the Jersey Financial Services
Commission  ("JFSC")  amended LPAL's  insurance  permit such that private equity
investments are no longer  approved  assets.  Therefore,  declines in the market
value of LPAL's listed equity securities, which totaled $8.9 million as of March
31, 2003, could have a significant impact on LPAL's statutory capital level.

       As of March 31,  2003,  we had no material  commitments  outstanding  for
capital   expenditures  or  additional  funding  for  private  equity  portfolio
companies.


Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       The nature of our  businesses  exposes us to market risk.  Market risk is
the risk of loss that may occur when changes in interest rates and public equity
prices adversely affect the value of invested assets.

Interest Rate Risk

       LPAL is subject to risk from interest rate fluctuations when payments due
to  policyholders  are not matched in respect of amount and duration with income
from investments.  LPAL attempts to minimize this risk

                                       33
<PAGE>

by ensuring  that  payments and income are matched as closely as possible  while
also  maximizing  investment  returns.  LPAL has not used  derivative  financial
instruments as part of its investment  strategy.  Exposure to interest rate risk
is estimated by performing sensitivity tests to changes in interest rates.

       For LPAL's business, the amount of policyholder liabilities is unaffected
by  changes in  interest  rates.  Given the  existing  policy and bond  maturity
profiles,  and that bonds will be held to maturity and early policy  redemptions
are protected by a market value adjustment and surrender penalty,  the bonds and
policies carry no interest rate risk.  Excess cash from bond  maturities,  after
meeting redemptions and operating  expenses,  is expected to yield approximately
$0.2 million  during the full year 2003. For each 100 basis point move in market
interest rates this amount will vary by approximately $67,000 per annum.

       As of March 31,  2003,  $4.4  million  was  outstanding  under our credit
facility with Bank of Scotland.  In addition,  $10.6 million remaining under the
facility  was utilized in the form of  guarantees  provided on behalf of certain
former investee  companies.  During May 2003, we sold  substantially  all of the
assets and operations of BCM and used $7.75 million of the initial proceeds from
the sale to reduce our borrowings to zero and the guarantee  liability under the
facility to $7.25 million. Under the terms of the loan facility, the total usage
must be reduced to $5.0 million by September 30, 2003 and the final $5.0 million
will expire on December 31, 2003. In the event that the sale of the LPA business
is not  completed  and the bank facility is not repaid in full during June 2003,
for every 100 basis point  movement in market  interest  rates,  our exposure to
liabilities  relating to the guarantees will increase by  approximately  $73,000
per annum.

Equity Price Risk

       We are exposed to equity price risk on the listed equity  securities held
entirely in our trading portfolio.  Changes in the level or volatility of equity
prices affect the value of the listed equity  securities.  These changes in turn
directly  affect our  consolidated  net income  because  our  holdings of listed
equity  securities  are marked to market,  with  changes in their  market  value
recognized in the income  statement  for the period in which the changes  occur.
These listed equity  securities  are primarily in companies in the volatile high
technology industry sector, many of which are small capitalization stocks.

       If the fair value of our listed  equity  portfolio,  as of March 31, 2003
and 2002,  which  totaled  $12.8 million and $70.6  million,  respectively,  had
abruptly  increased or  decreased  by 50%,  the fair value of the listed  equity
portfolio  would have  increased or decreased by $6.4 million and $35.3 million,
respectively.

       Our listed equity  securities  largely  represent  investments  that were
originally  made as private equity  investments  in companies that  subsequently
completed  an initial  public  offering or were  acquired  by a larger  publicly
traded company.  The performance of these listed equity securities can be highly
volatile, but we attempt to manage this risk in various ways. The performance of
the listed equity  securities are monitored daily. In addition,  we seek to sell
investments  after a period of time,  particularly  in the case of large  public
company securities.

       As of March 31, 2003,  we held $5.7 million in private  corporate  equity
securities  primarily in technology  companies  for which liquid  markets do not
exist.  Private  equity  prices do not  fluctuate  directly  with public  equity
markets,   but   significant   market   movements   may  trigger  a  review  for
other-than-temporary  adjustment  of the carrying  values of our private  equity
securities.  The risks  inherent  in these  private  equity  investments  relate
primarily to the viability of the investee  companies.  We try to mitigate these
risks in various ways  including  performing  extensive due  diligence  prior to
making an  investment,  and  regularly  reviewing  the  progress of the investee
companies.


Item 4.   CONTROLS AND PROCEDURES

       We maintain  disclosure  controls and procedures  designed to ensure that
information  required  to be  disclosed  in our  filings  under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported  within the periods  specified in the rules and forms of the Securities
and Exchange Commission. Such information is accumulated and communicated to our
management,  including our chief

                                       34
<PAGE>

executive officer and chief financial officer,  as appropriate,  to allow timely
decisions  regarding required  disclosure.  Our management,  including the chief
executive  officer and the chief financial  officer,  recognizes that any set of
controls and procedures,  no matter how well designed and operated,  can provide
only reasonable assurance of achieving the desired control objectives.

       Within 90 days prior to the filing date of this quarterly  report on Form
10-Q,  we  carried  out an  evaluation,  under  the  supervision  and  with  the
participation of our management, including our chief executive officer and chief
financial  officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls  and  procedures.  Based  on  such  evaluation,  our  chief
executive  officer and chief  financial  officer  concluded  that our disclosure
controls and procedures are effective.

       There have been no  significant  changes in our  internal  controls or in
other factors that could  significantly  affect the internal controls subsequent
to the date of their  evaluation  in  connection  with the  preparation  of this
quarterly report on Form 10-Q.


                           PART II - OTHER INFORMATION


Item 1.   LEGAL PROCEEDINGS

       We are  involved  in  various  legal  proceedings,  including  claims for
damages from clients of a nature we consider to be normal for our  business.  We
believe  the  ultimate  settlement  or other  resolution  of the claims will not
materially affect our consolidated financial position,  results of operations or
cash flows.


Item 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

       Under  the  terms of our bank  facility,  no  dividends  may be  declared
without the prior consent of Bank of Scotland.


Item 3.    DEFAULTS UPON SENIOR SECURITIES

       On December 20, 2002, we and the Bank of Scotland agreed to the terms and
conditions of an amended credit facility.  We agreed to new financial  covenants
under this reducing  credit facility and must formally meet such covenants as of
the end of each quarter.  Our  consolidated  results for the quarter ended March
31, 2003 resulted in a breach of the core operating  profit  financial  covenant
under the facility. We have been granted a written waiver of this breach by Bank
of Scotland.

       It is  possible  that  we may  not be  able  to  meet  one of the  bank's
financial  covenants  at the  quarterly  reporting  dates  of June  30,  2003 or
September  30,  2003 due to a  potential  shortfall  in  operating  income.  The
financial covenant relates to our cumulative quarterly loss targets for our core
businesses.  If the bank were unwilling to waive such a covenant breach,  we may
be in default under the bank facility and all of the  outstanding  amounts under
the bank facility would  immediately  become due. In the event the bank facility
becomes  immediately  repayable,  we believe the  balances of existing  cash and
proceeds from the sale of listed equity  securities  will be sufficient to repay
the bank  facility  and to meet other  obligations  for the next twelve  months,
including working capital for operations.

       We will use the initial  proceeds from the sale of LPA to SunGard,  which
are expected in early June 2003,  and our cash or the proceeds  from the sale of
our listed equity  securities in order to pay off the remaining $7.25 million in
guarantee obligations under the bank facility. In the event that the sale of LPA
is not completed in June 2003, in order to meet our  obligations  to the bank as
of the end of the third and fourth  quarters  of 2003,  we will be  required  to
identify  other sources of  liquidity.  We believe that we will still be able to
meet our near-term  obligations  through the sale of LPA to another party or the
sale of our listed equity securities.

                                       35

<PAGE>

Item 5.    OTHER INFORMATION

Unaudited Pro Forma Financial Information

       Pro forma financial information has been presented below to show what the
significant effects on the historical financial  information might have been had
the subsequent  events  described in the third paragraph of Note 2.  "Subsequent
Events"  occurred on or before March 31, 2003.  The  condensed pro forma balance
sheet was prepared  assuming  that we had sold all of the  outstanding  stock of
London Pacific Advisory Services, Inc., London Pacific Securities,  Inc. and LPA
Insurance  Agency,  Inc.  together  with the  associated  assets of the advisory
business held within London  Pacific  Technologies,  Inc.,  and LP Advisors Inc.
(together, "LPA" or the "LPA business") on or before March 31, 2003. It includes
pro  forma  adjustments  that are  directly  attributable  to this  transaction.
Condensed pro forma income  statements for the three months ended March 31, 2003
and year ended December 31, 2002 have also been prepared on the assumption  that
the sale was consummated at the beginning of each respective period.

       The pro forma  statements  do not purport to  represent  what the Group's
financial  position or results of operations  would have been if the sale of the
LPA business had in fact  occurred on or before March 31, 2003 or to project the
Group's  financial  position or results of  operations at any future date or for
any future  periods.  Consequently,  any gain on sale,  taxes and costs directly
relating  to the  sale  of the  LPA  business  that  would  be  included  in the
consolidated income statement of the Group within twelve months of the sale have
not been included in the condensed pro forma income statements.


                                       36
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

                 CONDENSED PRO FORMA CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                        As               Pro Forma                As
                                                                     Reported    -------------------------     Adjusted
                                                                     March 31,        LPA                      March 31,
                                                                       2003       Adjustments   Adjustments      2003
                             ASSETS                                ------------  ------------  ------------  ------------
                                                                                     (1)         (2)
<S>                                                                <C>           <C>           <C>           <C>
Investments:
   Fixed maturities:
     Available-for-sale, at fair value............................  $    26,963   $        -    $         -   $    26,963
   Equity securities:
     Trading, at fair value ......................................       12,772             -             -        12,772
     Available-for-sale, at fair value ...........................        5,687            (3)            -         5,684
                                                                   ------------  ----------------------------------------
Total investments ................................................       45,422            (3)            -        45,419

Cash and cash equivalents.........................................       19,025          (647)            -        18,378
Accrued investment income ........................................          735             -             -           735
Property and equipment, net ......................................        2,928        (2,757)            -           171
Goodwill..........................................................        1,301        (1,301)            -             -
Other assets......................................................        2,044        (1,466)        1,250         1,828
Total assets held for sale........................................        2,022             -             -         2,022
                                                                   ------------  ------------  ------------  ------------
Total assets .....................................................  $    73,477   $    (6,174)  $     1,250   $    68,553
                                                                   ------------  ------------  ------------  ------------
                                                                   ------------  ------------  ------------  ------------
                LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Life insurance policy liabilities ................................  $    34,336   $         -   $         -   $    34,336
Notes payable ....................................................        4,370             -             -         4,370
Accounts payable and accruals.....................................        3,014        (2,114)            -           900
Guarantees under bank facility....................................       10,590             -        (6,390)        4,200
Total liabilities held for sale ..................................          369             -             -           369
                                                                   ------------  ------------  ------------  ------------
Total liabilities ................................................       52,679        (2,114)       (6,390)       44,175
                                                                   ------------  ------------  ------------  ------------
Commitments and contingencies

Shareholders' equity:
Ordinary shares, $0.05 par value per share........................        3,222             -             -         3,222
Additional paid-in capital .......................................       68,450             -             -        68,450
Retained earnings ................................................       14,200        (4,060)        7,640        17,780
Employee benefit trusts, at cost .................................      (63,571)            -             -       (63,571)
Accumulated other comprehensive loss .............................       (1,503)            -             -        (1,503)
                                                                   ------------  ------------  ------------  ------------
Total shareholders' equity .......................................       20,798        (4,060)        7,640        24,378
                                                                   ------------  ------------  ------------  ------------
Total liabilities and shareholders' equity .......................  $    73,477   $    (6,174)  $     1,250   $    68,553
                                                                   ------------  ------------  ------------  ------------
                                                                   ------------  ------------  ------------  ------------

<FN>
(1)    The pro forma  adjustments  for LPA reflect the elimination of all assets
       to be sold and  liabilities  to be assumed in the sale  transaction,  and
       equity from the consolidated group.

(2)    Upon the  closing  of the sale of LPA,  the Group  will:  (a) have  $1.25
       million of  receivables  due to holdbacks on the initial sale proceeds of
       $8.2 million,  (b) be required to repay approximately $6.4 million to the
       bank related to guarantees  under the facility,  and (c) record a gain on
       sale of  approximately  $3.6 million (based on March 31, 2003 book values
       of LPA's assets and liabilities). Adjustments for these amounts have been
       made in the condensed pro forma consolidated balance sheet.
</FN>
</TABLE>
                                       37
<PAGE>


       Pro forma net income  represents  the results of  operations  adjusted to
reflect the Group's operations excluding LPA. The condensed pro forma statements
of income  below were  prepared  assuming  that we sold the LPA  business at the
beginning of each respective period.


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

              CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
             (In thousands, except share, per share and ADS amounts)
<TABLE>
<CAPTION>

                                                                        As               Pro Forma                As
                                                                     Reported    --------------------------    Adjusted
                                                                   Three Months                              Three Months
                                                                      Ended                                     Ended
                                                                     March 31,        LPA                      March 31,
                                                                       2003       Adjustments   Adjustments      2003
Continuing operations:                                             ------------  ------------  ------------  ------------
                                                                                                   (1)
<S>                                                                <C>           <C>           <C>           <C>
Revenues:
Investment income.................................................  $       534   $        (3)  $        39   $       570
Insurance policy charges..........................................            4             -             -             4
Financial advisory services and other fee income..................        3,564        (3,564)            -             -
Net realized investment losses....................................       (7,324)            -             -        (7,324)
Change in net unrealized investment gains and losses
   on trading securities .........................................        8,313             -             -         8,313
                                                                   ------------  ------------  ------------  ------------
                                                                          5,091        (3,567)           39         1,563
Expenses:
Amounts credited on insurance policyholder accounts...............          519             -             -           519
Operating expenses................................................        6,292        (4,558)            -         1,734
Interest expense..................................................          142           (45)           39           136
                                                                   ------------  ------------  ------------  ------------
                                                                          6,953        (4,603)           39         2,389
                                                                   ------------  ------------  ------------  ------------
Loss from continuing operations before
   income taxes...................................................       (1,862)        1,036             -          (826)

Income tax expense................................................           11            (4)            -             7
                                                                   ------------  ------------  ------------  ------------
Loss from continuing operations...................................  $    (1,873)  $     1,040   $         -   $      (833)
                                                                   ------------  ------------  ------------  ------------
                                                                   ------------  ------------  ------------  ------------


Basic and diluted weighted average number of shares ..............   50,754,192                                50,754,192

Basic and diluted loss per share and ADS from
   continuing operations:

Basic and diluted loss per share from
   continuing operations .........................................  $     (0.04)                              $     (0.02)
                                                                   ------------                              ------------
                                                                   ------------                              ------------
Basic and diluted loss per ADS from
   continuing operations .........................................  $     (0.37)                              $     (0.16)
                                                                   ------------                              ------------
                                                                   ------------                              ------------
<FN>
(1)    Adjustments to the condensed pro forma  consolidated  statement of income
       are for  interest  paid by LPA to BICC of  $39,000  for the three  months
       ended March 31, 2003.
</FN>
</TABLE>
                                       38
<PAGE>



                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

              CONDENSED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
                                   (Unaudited)
             (In thousands, except share, per share and ADS amounts)
<TABLE>
<CAPTION>

                                                                        As               Pro Forma                As
                                                                     Reported    --------------------------    Adjusted
                                                                       Year                                      Year
                                                                      Ended                                     Ended
                                                                     December         LPA                      December
                                                                     31, 2002     Adjustments   Adjustments    31, 2002
                                                                   ------------  ------------  ------------  ------------
                                                                       (1)                         (2)           (3)
Continuing operations:

<S>                                                                <C>           <C>           <C>           <C>
Revenues:
Investment income..............................................     $     6,607   $       (18)  $       173   $     6,762
Insurance policy charges.......................................           1,155             -             -         1,155
Financial advisory services and other fee income...............          19,092       (16,184)            -         2,908
Net realized investment losses.................................         (21,507)            -             -       (21,507)
Change in net unrealized investment gains and
   losses on trading securities ...............................         (22,483)            -             -       (22,483)
                                                                   ------------  ------------  ------------  ------------
                                                                        (17,136)      (16,202)          173       (33,165)
Expenses:
Amounts credited on insurance policyholder accounts............           6,031             -             -         6,031
Amortization of deferred policy acquisition costs..............           2,952             -             -         2,952
Operating expenses.............................................          31,200       (20,395)            -        10,804
Goodwill amortization and write-offs...........................             396            (7)            -           389
Interest expense...............................................           1,031          (240)          173           965
                                                                   ------------  ------------  ------------  ------------
                                                                         41,610       (20,642)          173        21,141
                                                                   ------------  ------------  ------------  ------------
Loss from continuing operations
   before income taxes.........................................         (58,746)        4,440             -       (54,306)

Income tax expense.............................................           3,864        (2,573)            -         1,291
                                                                   ------------  ------------  ------------  ------------
Loss from continuing operations................................     $   (62,610)  $     7,013   $         -   $   (55,597)
                                                                   ------------  ------------  ------------  ------------
                                                                   ------------  ------------  ------------  ------------


Basic and diluted weighted average number of shares............      50,753,084                                50,753,084

Basic and diluted loss per share and ADS (4) from
   continuing operations:

Basic and diluted loss per share from
   continuing operations ......................................     $     (1.23)                              $     (1.10)
                                                                   ------------                              ------------
                                                                   ------------                              ------------
Basic and diluted loss per ADS (4) from
   continuing operations ......................................     $    (12.34)                              $    (10.95)
                                                                   ------------                              ------------
                                                                   ------------                              ------------

<FN>
(1)    Reclassifications  have  been made  related  to  discontinued  operations
       treatment  for BCM as held for sale as of March 31, 2003  (together  with
       the remaining asset management segment for 2002).

(2)    Adjustments to the condensed pro forma  consolidated  statement of income
       are for  interest  paid by LPA to BICC of  $173,000  for the  year  ended
       December 31, 2002.

                                       39
<PAGE>

(3)    As of December 31, 2002, total operating and capital lease commitments of
       the Group were approximately $2.8 million and $0.3 million, respectively.
       Commitments  that would be  eliminated as a result of the sale of LPA for
       operating and capital lease  commitments are  approximately  $2.0 million
       and $0.1 million, respectively.

(4)    ADS amounts have been restated to reflect the  one-for-ten  reverse split
       in June 2002.
</FN>
</TABLE>


Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

(a)EXHIBITS

       The following exhibits are filed herewith:

Exhibit
Number      Description
-------     -----------------

4.5         Warrant  Agreement  dated  February  14,  2003  between  us and  the
            Governor  and Company of the Bank of  Scotland  relating to the Term
            Loan and Guarantee Facility dated December 20, 2002.

10.1.3      Stock  Pledge  Agreement  dated  January 29, 2003  between  Berkeley
            International  Capital  Limited and the  Governor and Company of the
            Bank of Scotland,  relating to the Term Loan and Guarantee  Facility
            dated December 20, 2002.

10.1.4      Stock  Pledge  Agreement  dated  February 7, 2003  between  Berkeley
            International  Capital  Limited and the  Governor and Company of the
            Bank of Scotland,  relating to the Term Loan and Guarantee  Facility
            dated December 20, 2002.

10.1.5      Stock Pledge  Agreement  dated  February  19, 2003 between  Berkeley
            (USA)  Holdings  Limited and the Governor and Company of the Bank of
            Scotland,  relating to the Term Loan and  Guarantee  Facility  dated
            December 20, 2002.

10.1.6      Security  Agreement  dated  February  28,  2003  between  us and the
            Governor  and Company of the Bank of  Scotland  relating to the Term
            Loan and Guarantee Facility dated December 20, 2002.

10.5        Asset  Purchase  Agreement  dated  March 7,  2003  between  Berkeley
            Capital  Management  ("BCM"),  Berkeley (USA)  Holdings  Limited and
            Berkeley   Capital   Management   LLC   relating   to  the  sale  of
            substantially all of the assets and operations of BCM.

99.1        Certification  by the Company's  Executive  Chairman  pursuant to 18
            U.S.C.  Section  1350,  as adopted  pursuant  to Section  906 of the
            Sarbanes-Oxley Act of 2002.

99.2        Certification  by the Company's Chief Financial  Officer pursuant to
            18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.


                                       40
<PAGE>

(b)      REPORTS ON FORM 8-K:

       We filed three  Current  Reports on Form 8-K during the first  quarter of
2003 as follows:

       The Report filed on March 10, 2003 contained information  announcing that
Berkeley (USA)  Holdings  Limited,  one of our  wholly-owned  subsidiaries,  had
signed a  definitive  agreement  to sell  substantially  all of the business and
operations  of  our  primary  asset  management  subsidiary,   Berkeley  Capital
Management,  to a  newly  formed  company  majority-owned  by  funds  under  the
management of Putnam Lovell NBF Private Equity.

       The Report filed on March 20, 2003 contained  information  announcing our
preliminary financial results for the year ended December 31, 2002.

       The Report filed on March 28, 2003 contained information announcing that,
effective  March 28, 2003, Mr. Harold  Hughes,  Jr. was appointed as a member of
the Compensation Committee of the Company's board of directors.


                                       41
<PAGE>

                                    SIGNATURE


       Pursuant to the requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                LONDON PACIFIC GROUP LIMITED
                                (Registrant)

Date:  May 15, 2003             By:    /s/  Ian K. Whitehead

                                Ian K. Whitehead
                                Chief Financial Officer

                                (Principal Financial and Accounting Officer
                                 and Duly Authorized Officer of the Registrant)





                                       42
<PAGE>



                                  CERTIFICATION


I, Arthur I. Trueger, certify that:

(1)    I have  reviewed  this  quarterly  report on Form 10-Q of London  Pacific
       Group Limited;

(2)    Based on my knowledge,  this quarterly report does not contain any untrue
       statement of a material fact or omit to state a material  fact  necessary
       to make the statements  made, in light of the  circumstances  under which
       such  statements  were made,  not  misleading  with respect to the period
       covered by this quarterly report;

(3)    Based on my knowledge,  the  financial  statements,  and other  financial
       information  included in this  quarterly  report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the  registrant  as of, and for,  the periods  presented in this
       quarterly report;

(4)    The  registrant's  other  certifying  officer and I are  responsible  for
       establishing  and  maintaining  disclosure  controls and  procedures  (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant  and
       we have:

       (a)    Designed such  disclosure  controls and  procedures to ensure that
              material  information  relating to the  registrant,  including its
              consolidated  subsidiaries,  is made known to us by others  within
              those  entities,  particularly  during  the  period in which  this
              quarterly report is being prepared;

       (b)    Evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls and  procedures  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

       (c)    Presented  in this  quarterly  report  our  conclusions  about the
              effectiveness  of the disclosure  controls and procedures based on
              our evaluation as of the Evaluation Date;

(5)    The registrant's other certifying officer and I have disclosed,  based on
       our most recent  evaluation,  to the registrant's  auditors and the audit
       committee of the registrant's  board of directors (or persons  performing
       the equivalent function):

       (a)    All  significant  deficiencies  in  the  design  or  operation  of
              internal  controls which could adversely  affect the  registrant's
              ability to record,  process,  summarize and report  financial data
              and have  identified  for the  registrant's  auditors any material
              weaknesses in internal controls; and

       (b)    Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal controls; and


(6)    The registrant's  other  certifying  officer and I have indicated in this
       quarterly  report  whether  or not  there  were  significant  changes  in
       internal  controls or in other  factors that could  significantly  affect
       internal controls  subsequent to the date of our most recent  evaluation,
       including any corrective actions with regard to significant  deficiencies
       and material weaknesses.



Date:  May 15, 2003                              By:    /s/  Arthur I. Trueger
                                                        ----------------------
                                                        Arthur I. Trueger
                                                        Executive Chairman


                                       43
<PAGE>

                                  CERTIFICATION


I, Ian K. Whitehead, certify that:

(1)    I have  reviewed  this  quarterly  report on Form 10-Q of London  Pacific
       Group Limited;

(2)    Based on my knowledge,  this quarterly report does not contain any untrue
       statement of a material fact or omit to state a material  fact  necessary
       to make the statements  made, in light of the  circumstances  under which
       such  statements  were made,  not  misleading  with respect to the period
       covered by this quarterly report;

(3)    Based on my knowledge,  the  financial  statements,  and other  financial
       information  included in this  quarterly  report,  fairly  present in all
       material respects the financial condition, results of operations and cash
       flows of the  registrant  as of, and for,  the periods  presented in this
       quarterly report;

(4)    The  registrant's  other  certifying  officer and I are  responsible  for
       establishing  and  maintaining  disclosure  controls and  procedures  (as
       defined in Exchange Act Rules 13a-14 and 15d-14) for the  registrant  and
       we have:

       (a)    Designed such  disclosure  controls and  procedures to ensure that
              material  information  relating to the  registrant,  including its
              consolidated  subsidiaries,  is made known to us by others  within
              those  entities,  particularly  during  the  period in which  this
              quarterly report is being prepared;

       (b)    Evaluated  the   effectiveness  of  the  registrant's   disclosure
              controls and  procedures  as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

       (c)    Presented  in this  quarterly  report  our  conclusions  about the
              effectiveness  of the disclosure  controls and procedures based on
              our evaluation as of the Evaluation Date;

(5)    The registrant's other certifying officer and I have disclosed,  based on
       our most recent  evaluation,  to the registrant's  auditors and the audit
       committee of the registrant's  board of directors (or persons  performing
       the equivalent function):

       (a)    All  significant  deficiencies  in  the  design  or  operation  of
              internal  controls which could adversely  affect the  registrant's
              ability to record,  process,  summarize and report  financial data
              and have  identified  for the  registrant's  auditors any material
              weaknesses in internal controls; and

       (b)    Any fraud,  whether or not material,  that involves  management or
              other  employees who have a significant  role in the  registrant's
              internal controls; and

(6)    The registrant's  other  certifying  officer and I have indicated in this
       quarterly  report  whether  or not  there  were  significant  changes  in
       internal  controls or in other  factors that could  significantly  affect
       internal controls  subsequent to the date of our most recent  evaluation,
       including any corrective actions with regard to significant  deficiencies
       and material weaknesses.



Date:  May 15, 2003                              By:    /s/  Ian K. Whitehead
                                                        -----------------------
                                                        Ian K. Whitehead
                                                        Chief Financial Officer


                                       44
<PAGE>


                  LONDON PACIFIC GROUP LIMITED AND SUBSIDIARIES

               EXHIBIT INDEX FOR THE QUARTERLY REPORT ON FORM 10-Q
                      FOR THE QUARTER ENDED MARCH 31, 2003

Exhibit
Number      Description
-------     -----------------

4.5         Warrant  Agreement  dated  February  14,  2003  between  us and  the
            Governor  and Company of the Bank of  Scotland  relating to the Term
            Loan and Guarantee Facility dated December 20, 2002.

10.1.3      Stock  Pledge  Agreement  dated  January 29, 2003  between  Berkeley
            International  Capital  Limited and the  Governor and Company of the
            Bank of Scotland,  relating to the Term Loan and Guarantee  Facility
            dated December 20, 2002.

10.1.4      Stock  Pledge  Agreement  dated  February 7, 2003  between  Berkeley
            International  Capital  Limited and the  Governor and Company of the
            Bank of Scotland,  relating to the Term Loan and Guarantee  Facility
            dated December 20, 2002.

10.1.5      Stock Pledge  Agreement  dated  February  19, 2003 between  Berkeley
            (USA)  Holdings  Limited and the Governor and Company of the Bank of
            Scotland,  relating to the Term Loan and  Guarantee  Facility  dated
            December 20, 2002.

10.1.6      Security  Agreement  dated  February  28,  2003  between  us and the
            Governor  and Company of the Bank of  Scotland  relating to the Term
            Loan and Guarantee Facility dated December 20, 2002.

10.5        Asset  Purchase  Agreement  dated  March 7,  2003  between  Berkeley
            Capital  Management  ("BCM"),  Berkeley (USA)  Holdings  Limited and
            Berkeley   Capital   Management   LLC   relating   to  the  sale  of
            substantially all of the assets and operations of BCM.

99.1        Certification  by the Company's  Executive  Chairman  pursuant to 18
            U.S.C.  Section  1350,  as adopted  pursuant  to Section  906 of the
            Sarbanes-Oxley Act of 2002.

99.2        Certification  by the Company's Chief Financial  Officer pursuant to
            18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002.


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