In its preliminary lending results for the year ended 31 October 2007, the bank revealed a restructure which will see focus shifted away from all lending vehicles, including mortgages and secured lending.
This will be done by significantly reducing its capital exposure within its lending divisions, with a view to fully exiting the markets given time.
This repositioning will leave the business solely dependent on its debt collection arm, Robinson Way, which saw profits grow by 57 per cent last year.
This drastic action has been taken after larger than expected losses ravaged the lender's funding reserves by £13 million, forcing them below the minimum level required by the Financial Services Authority (FSA) for the bank to continue lending.
Following talks with the regulator, London & Scottish has now agreed a plan to drum up funds and get the business back on track, although it gave no indication of how these will be sought.
The bank posted losses within its unsecured credit and broking divisions, the former making a loss of over £22 million, with only moderate gains in its mortgage and secured lending divisions to offset the plunge.
