London Scottish Bank goes into administration

On 30 November, the FSA determined that London Scottish Bank plc should be prevented from accepting further deposits as it no longer met the FSA's threshold conditions for authorisation. It was placed into administration later that evening by the Court on the application of its directors. Ernst and Young has been appointed as administrator.

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.

Eligible retail depositors will be compensated through the FSCS with HM Treasury protecting balances above the current UK deposit limit of £50,000. The FSCS will administer the full payout of deposits.

London Scottish Bank plc based in Manchester, accepted deposits, and provides loans principally through door-to-door collection as well as mortgage business including ‘right-to-buy' under local authority housing sales. The bank has approximately 10,000 depositors.

Further information about the FSCS can be found at fscs.org.uk