Wimbledon & South West cuts back on its lending: Bank's new chairman denies any shortage of funds Policy is to be 'a little more selective and careful'
Monday 01 November 1993
When questioned about this, Wimbledon's directors insisted that the bank is still lending and is not facing any special restrictions from the Bank of England.
Richard Scriven, who took over as Wimbledon's chairman after last Thursday's annual meeting, said: 'We have adequate funds at our disposal. The company is in no financial difficulties whatsoever.'
Mr Scriven, a former director of the merchant bank Morgan Grenfell, said: 'We are being a little more selective, perhaps a little more careful.'
Robin Eve, finance director, initially suggested that the letter to brokers may have been a euphemistic way of turning down a loan, 'a polite way of telling the broker to go away'.
After further investigation, he said Wimbledon had sent similar letters to only three or four brokers.
'Some of them were shut-offs to these brokers. The other was a very unfortunate turn of phrase.'
The copy passed to the Independent said Wimbledon was unable to consider any new loans 'because we have written much more new business in the first half of this financial year than we anticipated . . . We are hoping that we will be in a position to resume normal service early in the new year.'
Wimbledon has pounds 25m- pounds 30m of loans secured on a variety of residential and commercial property.
Earlier this summer, it was paying high rates of interest on deposits compared with those generally on offer from rival banks, building societies and finance houses.
Much-increased bad debts caused Wimbledon to lose pounds 1.7m in the year to March 1992, reducing its net assets to pounds 2.345m.
It lost more money in the year to March 1993, though 'considerably less' than in the previous year, according to Mr Eve.
He said that Wimbledon had turned in a 'reasonable profit' for the first half of the current year.
The bank's losses have left it with insufficient funds to meet the recent European banking directive on capital adequacy, which requires banks to have capital of 5 million ecu, or about pounds 3.8m.
Mr Scriven said Wimbledon was 'probably just a little bit short of (this amount)'.
The directive came into effect at the start of this year, but transitional 'grandfathering' arrangements allow Wimbledon additional time to meet the requirements.
To help it reach the target, earlier this year Wimbledon merged with a smaller but profitable rival, Holdenhurst Securities.
That company's last results show a pounds 134,000 pre-tax profit, and the company's balance sheet showed net assets of pounds 800,000. Mr Scriven and Mr Eve were previously directors of Holdenhurst.
Wimbledon's directors also include Viscount Glenapp, the eldest son and heir of the Earl of Inchcape. Viscount Glenapp, a Wimbledon shareholder, is a former director of Inchcape UK.
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