The FSA said yesterday that it no longer meets the threshold conditions for authorisation and the court placed it into administration on the application of its directors. Ernst and Young has been appointed as administrator.
The bank has approximately 10,000 depositors and the Financial Services Compensation Scheme has been triggered to safeguard retail deposits.
The FSCS is now putting arrangements in place to pay back customers and will soon provide further information.
The Chancellor has taken action to protect FSCS eligible retail depositors above the FSCS limits, guaranteeing to 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.