London Scottish Bank Plc has broken records by falling the most by value in ten years.
The credit lender, which bails others out, may need assisstance of its own after announcing that up to $44 million will be needed in order to cover its losses.
The primary reason for the bank’s problem is due to defaults on consumer loans, which have forced it to increase impairment provisions. London Scottish has been asked by the FSA to expand its capital base, which has led to a deficit of millions of dollars.
“Until the company has remedied the shortfall of regulatory capital, it may have to restrict new lending volumes and may be unable to pay a final dividend”, says the bank.
After the latest sub-prime problems, London Scottish will hold talks with the FSA over how to stabilise business. Approximately $100 billion has so far been written off by the major banks after US sub-prime mortgage losses.
London Scottish has nosedived 18% on the stock market following the news; the biggest fall in over a decade.