By IRNA,
London : London Scottish Bank (LSB) announced Monday it was going into administration after regulators stopped the lenders, which specializes in customers with poor credit histories group, from accepting customer deposits.
In the six months to April 2008, the bank unveiled losses of Pnds 7.4 million (Dlrs 11 m). Its shares were also suspended at 2.62 pence, having lost almost all of their value amid its financial problems over the past year.
The collapse of the latest British bank comes after a report on Sunday showed that total consumer borrowing in the UK reached Pnds 1.5 trillion, driven by a 6 percent growth in unsecured lending on credit cards and loans.
Unsecured borrowing in Britain was the highest in Europe, amounting to 17 percent of national income, compared with averages of between 7 percent and 13 percent across the rest of the continent, accountants PricewaterhouseCoopers said.
The report also found that 20 percent of British borrowers were worried about the future availability of credit with almost 30 per cent concerned about their ability to repay debts.
LSB, the latest casualty in the financial crisis, had issued several warnings of its deteriorating health during the past year.
Before the suspension of its shares the stock had fallen by 95 per cent in less than 12 months.
In line with Prime Minister Gordon Brown’s policies, the British government pledged that no savers would lose money as a result of the bank’s collapse, even if their savings exceeded the Pnds 50,000 limit set by the Financial Services Compensation Scheme.
Last Friday, the government bought a 58 per cent stake in the Royal Bank of Scotland, which owns NatWest, one of the UK’s ‘Big Four’ banks, after shareholders shunned an offer to buy new shares as part of a capital injection.