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Monday, December 01, 2008

London Scottish Fails

London Scottish Bank (LSB) went into administration this morning.

LSB specialises in offering fixed rate savings accounts and loans to customers with poor credit histories.

Its structure was somewhat top heavy, it had only 10,000 savers, £250M in deposits but employed 700 people.

In the six months to April 2008, it made a loss of £7.4M.

The Treasury issued a statement guaranteeing all deposits (even those above the FSCS £50K limit):

"The Chancellor has put in place arrangements to ensure that all eligible retail depositors in London Scottish Bank will receive their money in full, including those with balances above the current 50,000 pound FSCS limit."

Shares were suspended at 2.62p.

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