Not a good start to the week for the finanicials. First shares in John Duffield’s New Star Asset Management were suspended on Monday as the company talks to its lenders – and then this from doorstep lender London Scottish Bank:
Without the certainty of an offer for the Group or the regulatory capital shortfall being remedied, the FSA yesterday took action to impose a requirement on the Company’s permission to prevent it from accepting deposits and the Company is therefore unable to renew maturing deposits. Consequently, the Company instructed its lawyers to take immediate steps to petition the Court for an Administration Order, which was made by the Court at 11.54pm on 30 November.
Thomas Burton, Margaret Mills, Thomas Jack, and Simon Allport all of Ernst & Young LLP have been appointed as joint administrators. Consequently, the Company instructed its lawyers to take immediate steps to petition the Court for an Administration Order, which was made by the Court at 11.54pm on 30 November. Thomas Burton, Margaret Mills, Thomas Jack, and Simon Allport all of Ernst & Young LLP have been appointed as joint administrators.
LSB, which has net debt of £240m, has three main operations: Robinson Way, which collects consumer debt for blue chip companies in the public and private sectors, Morses Club, which offers unsecured loans from £100 to £1,000 and a High Interest Bond product that allows £2,000 and £250,000 can be invested over one, two, three, four or five years.
The good news for regular savers is that they are covered by the Financial Services Compensation Scheme – even those that have more than £50,000 lodged with LSB. Although, Alphaville imagines there aren’t many of those.
This news will set the alarm bells ringing at Cattles, the doorstep lender consumer finance group. Cattles is currently trying to get a banking license from the FSA so it can offset its reliance on wholesale funding markets. One wonders how keen the regulator will be to grant that licence in the wake of this morning’s news.
Related Links:
HM Treasury Statement on London Scottish – RNS
Suspension London Scottish Bank – RNS