View more on these topics

FSCS called in as bank is shut down

The FSA and the Bank of England have shut down a small Havant-based bank with retail deposits of £7.4m, triggering compensation payouts from the Financial Services Compensation Scheme.

Southsea Mortgage and Investment Company ceased trading last week following a decision by the FSA to initiate the special resolution regime, which allows the regulator to wind down failing banks and building societies.

The BoE then applied to place Southsea into insolvency, with BDO appointed as bank liquidator.

Southsea is a small bank with just over 250 depositors. Money Marketing understands the company was offering loans to property development companies, which began to default on their loans in 2008. Southsea planned to develop the land bought by developers to pay depositors and creditors but was unable to do so as a result of the financial crisis.

Customers are entitled to compensation of up to £85,000 each. Most savers have already received their compensation.

The FSCS will pursue recoveries through the insolvency process to recoup the remaining balance for the 14 customers who had savings over £85,000 with Southsea.

The FSA says: “The steps to place Southsea in the bank insolvency procedure came after we found the bank was not meeting its regulatory requirements and can therefore no longer continue to operate as an authorised deposit-taker.

“The court was satisfied that Southsea was unable or likely to become unable to pay its debts.”

The FSCS says: “Anyone with mortgages or loans from Southsea should continue to make repayments and service their debts in the normal way.

“Customers of the firm will be contacted in due course and advised how loan and mortgage repayments will be handled in future.”



£54M redress for Arch cru clients

The FSA has set out a £54m compensation package for investors in CF Arch cru funds. The deal has been agreed between the regulator, Capita Financial Managers, BNY Mellon & Depository and HSBC Bank. The deal, alongside the distributions already made and remaining assets, is designed to give investors an average of 70 per cent […]


Hoban urges caution over European lobbying

Treasury Financial Secretary Mark Hoban says insurers and industry groups should exercise caution as they attempt to take a more “robust” lobbying approach to European regulation. Speaking at the Association of British Insurers biennial conference this morning, Hoban said the UK needed to “engage fully” with Brussels over regulatory reforms. However, he urged industry delegates […]


Government will not give RPI-linked schemes the power to shift to CPI

The Government has confirmed it will not introduce a legislative override to allow pension sch-emes with RPI-linked inflationary increases written into their rules to switch to the CPI. In its official response to a consultation on the impact of using the consumer prices index rather than the retail prices index to measure price increases in […]

Lenders are squeezing SVR borrowers, says Which?

Which? has criticised lenders for failing to cut their standard variable rates, despite base rate being at a record-low of 0.5 per cent since March 2009. The consumer champion says 95 per cent of lenders have failed to pass on cuts in base rate to their SVR customers and a fifth of lenders have increase […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Julian Stevens 24th June 2011 at 1:07 pm

    Why is it that so many people fail to learn from events of the past? All booms lead ultimately to bust and by the time you become aware of a particular sector booming, you’ve almost certainly missed the boat. The only people who make money out of booms are those who get in before the market really takes off.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm