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London Scottish Troubles

We have reported extensively on the difficult times being experienced by many loans companies in the UK and London Scottish, historically a big player in the market, is the latest firm to announce closure of its loan operations.

Over previous years London Scottish became well known for buying up various loan brands including Easy Loans, Pacific Home Loans, both secured loans providers and operating the Personal Loans Company brand supplying unsecured loans. It's loans offers were often cheaply priced and it gained a reasonable market share, but increased competition and the recent credit pressures have forced London Scottish to suspend lending operations across the mortgage, secured loans and unsecured loan product ranges. The business's share price has crashed by almost 90% since the start of 2008 and the company is having to take significant measures to shore up it's finances.

The company employs around 2000 staff and the closures are bound to have implications for employees although no announcements have been made yet. In the year to October 2007 the company lost 15 million pounds followed by a further 6.5 million in the next 6 months. Such losses are of course unsustainable and hence the closure of it's loss making loans businesses

Another smaller lender, Edeus, has also stopped it's mortgage loans arm. The firm is being forced to "re-engineer" itself and will concentrate on asset management services. Like many other loans companies going through the same turmoil, Edeus says it will consider a return to the lending market once conditions improve.

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