London Scottish ceases secured loan business

London Scottish Bank has ceased writing new secured loan business, but will continue to write small volumes of new first-charge mortgages.

The division reported a profit of £2.1m for the five months to March 2008, but has decided to exit the secured loan market.

The second charge secured business remained profitable after impairment charges of £1.5m.

A statement to the London Stock Exchange, says the group is focused on the development and growth of its successful debt purchase and debt collection division, Robinson Way. It will also be reducing the capital employed in its lending divisions and, over time, effecting a reduced level of lending and a managed exit from these lending businesses.

The lending divisions comprise factoring, mortgages and secured lending and unsecured consumer credit. Capital employed will be reduced by tightening lending or, where shareholder value can be created or preserved, by appropriate disposals.