London Scottish Bank put into administration

Specialist financial services group London Scottish Bank said today that it had gone into administration.

The Treasury confirmed that it would protect all retail deposit savings with the bank - including those with deposits above the £50,000 maximum limit.



The Manchester-based bank said it was forced to call in administrators after suffering a shortfall in regulatory capital and was unable to find a firm buyer for the business in time.









The bank has around 10,000 savers with some £250m in deposits.



There are also more than 700 staff at the bank, which offers fixed-rate savings accounts and lends money to people with poor credit histories.



The Chancellor confirmed all eligible depositors under the Financial Services Compensation Scheme (FSCS) would be not lose their savings.



Administrators said all 10,000 depositors are eligible under the scheme.



The Treasury said it had "taken decisive action to protect the interests of retail depositors and wider financial stability".



Administrator Ernst & Young will be in contact with individual savers "shortly", it added.



London Scottish had been hoping to secure a sale after it struggled with a multimillion-pound hole in the amount of capital it is required to hold by regulators.



The bank said today that a number of potential suitors remained interested, but added that it was forced to go into administration with "no certainty" of any offer or that the capital shortfall would be met.



The Financial Services Authority yesterday ruled that it could no longer take deposits in light of the failure to secure its future, leading to an administration order being made just before midnight.



Shares in the group were suspended today at 2.62p having lost almost all of their value amid its financial problems over the past year.









The group offers unsecured loans from £100 to £1,000, which it collects direct from people's homes.



It also has mortgage business, including "right-to-buy" under local authority housing sales.



As at the end of April, it had £274m in customer loan accounts.



However, the bulk of its business is run through its debt collection arm, Robinson Way, which collects consumer debts for blue-chip companies and public sector bodies, including local authorities and utility firms.



The group has built up its retail deposit base through offering a high- interest bond guaranteeing fixed interest payments on lump sums between £2,000 and £250,000 which are invested over periods from one year to five years.



London Scottish had begun moving away from door-to-door collection in recent years to more branch-based business, but its financial troubles saw it start to exit consumer finance.



Earlier this year it employed more than 2,000 people at 52 branches across the UK, but has closed 48 of those branches and made around 330 staff redundant since January.



The firm reported widening losses from its consumer credit business and bad debts in the division left it nursing a regulatory shortfall, which was first revealed last New Year's Eve.



Its underlying pre-tax loss in the six months to 30 April stood at £7.4m.



The group has been in close contact with the FSA since the shortfall was uncovered.



The FSA said today: "As a result of the bank's administration, the Financial Services Compensation Scheme (FSCS) has been triggered to safeguard retail deposits.



"The FSCS is now putting arrangements in place to pay back customers and will provide further information for customers shortly. The Chancellor has taken action to protect FSCS-eligible retail depositors above the FSCS limits."



London Scottish customers can contact the FSCS through its website at www.fscs.org.uk/consumer or by phoning 020 7892 7300.

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
PROMOTED VIDEO
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
News
Bey can do it: Beyoncé re-enacts Rosie the Riveter's pose
newsRosie the Riveter started out as an American wartime poster girl and has become a feminist pin-up. With Beyoncé channeling her look, Gillian Orr tells her story
Life and Style
Donna and Paul Wheatley at their wedding
healthShould emergency hospital weddings be made easier for the terminally ill?
Arts and Entertainment
Residents of Derby Road in Southampton oppose filming of Channel 4 documentary Immigration Street in their community
tv
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Should emergency hospital weddings be made easier?

Some couples are allowed emergency hospital weddings, others are denied the right. Kate Hilpern reports on the growing case for a compassionate cutting of the red tape
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for