purchasing a slice of London Scottish, the UK bank which this week
saw its share price fall by nearly 10 per cent following
revelations of a capital shortfall.
It is likely Cattles will buy the troubled bank’s consumer
credit business which, according to James Hamilton, an analyst at
Numis, requires more capital.
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It is understood that Cattles and London Scottish held
discussion talks last year, but the shortage of capital is driving
forward a quick sale.
Last June London Scottish sold its leasing business, Manor
Credit, to the Davenham Group for £25.1m.
At the time capital outstanding to customers amounted to £23.1m,
and pre-tax profit for the business, which comprised commercial
vehicles, construction plant and equipment for the SME market, in
the first six months of this financial year was £464k.
Last month Cattles, which provides working capital financing
through its factoring services, reported that client numbers in
this division grew by 14 per cent to 731 in the 2007 financial
year. However, its loan to loss ratio rose to 1.9 per cent from 1.2
per cent reported in 2006.
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By GlobalDataOn January 1 London Scottish said it may not be able to pay a
final divident as a result of insufficient capital.
In other M&A news, General Electric and private equity
group, Blackstone aborted a US$1bn deal to acquire PHH, a US
mortgage and leasing business.
