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Local bank in administration
Kevin Feddy1/12/2008
HUNDREDS of jobs are at risk after a Manchester-based bank collapsed today.
London Scottish Bank, which has its headquarters on Deansgate and employs 700 staff, went into adminstration after running up a cash reserve shortfall of £12m.
The bank, which roots go back more than 100 years, went to the wall after failing to find a buyer. It specialises in lending to consumers with poor credit histories and offers unsecured loans from £100 to £1,000 which it collects door-to-door.
Shocked staff spoke of their uncertainty as they arrived at work today. It is thought about 200 of the company’s employees work in the IT and finance departments of the bank’s Deansgate office.
One, who declined to be named, said: “I don’t know what’s going on. I’m just going in to find out. I’m not even sure I’ve got a job to go to. It’s terrible news just before Christmas.” Another said: “I don’t have a clue what’s going on. We’re all waiting to hear.”
The bank has around 10,000 savers with £250 million in deposits, and has £367m in loans.
The Treasury confirmed today it would protect all savings, including those above the £50,000 maximum limit set by the Financial Services Compensation Scheme.
It said it had ‘taken decisive action to protect the interest of retail depositors and wider financial stability’.
London Scottish said it had been in discussions which may lead to a bid for the group, but added that it was uncertain whether an offer would be made.
The company instructed lawyers to seek an administration order which was made just before midnight.
Simon Allport, Tom Jack, Thomas Burton and Margaret Mills, of accountancy firm Ernst & Young, have been appointed as joint administrators.
A bank spokesman said: “The company will seek to work closely with the administrators to minimise the effect on employees.”
Shares in the bank, which were trading at over 80p a year ago, were suspended at just 2.62p today.
The bank’s roots trace back to the early 20th century when Lewis Livingstone set up a small money-lending business in Wigan, providing short-term loans to mill workers. He later moved the business to Manchester and was joined by his son Harry. The pair built the business, by then known as the Refuge Lending Society, and Harry was joined by his son Jack in 1958.
It floated on the stock market in 1970 and changed its name to London Scottish Bank in 1986.
Most recent 2 of 8 user comments
1/12/2008 at 22:51
Got an opinion you want to share?| Company | Typical APR |
| Platinum Exclusive Loan | 7.8% |
| AA | 7.9% |
| Sainsbury's Personal Loan | 8.2% |
| Alliance & Leicester | 8.7% |
| Lloyds TSB | 8.9% |
| Abbey Personal Loan | 8.9% |
| Provider | AER* |
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ICICI BANK HiSAVE Savings Account |
4.50% |
|
FIRST DIRECT Everyday e-Saver |
1.75% |
|
SAINSBURYS FINANCE Internet Saver |
2.25% |
3/12/2008 at 10:02