Interim Management Statement

    17 September 2008

                           London Scottish Bank plc                            

                         Interim Management Statement                          

London Scottish Bank plc (the "Group"), the specialist provider of financial
services, today issues its Interim Management Statement in accordance with the
UK Listing Authority's Disclosure and Transparency Rules.

Commenting on performance, Peter Cordrey, Chairman, said:

"Management has made good progress in refocusing the Group around its
successful debt purchase and debt collection division, Robinson Way, while
continuing to reduce the capital employed in its lending divisions. Robinson
Way and London Scottish Mortgages continue to trade profitably, however, the
Group as a whole is loss making, primarily due to continuing losses in the
Unsecured Consumer Credit division.

The Group remains engaged in discussions with a number of interested parties,
which may or may not lead to an offer being made for the Group."

Trading Update

Debt purchase & debt collection

Robinson Way's debt purchase business continues to grow its volumes, albeit
behind plan, and year to date it has purchased 46 portfolios for �25m (2007:41
portfolios for �26m). Underlying profits, excluding any positive reassessment
of the carrying value of purchased debt portfolios, are higher than the same
period last year. While collections on the debt purchase portfolios have
performed satisfactorily, there has not been the same significant
out-performance of collection expectations which drove strong positive
reassessment of the carrying values in previous years. However, impairment
remains well controlled and is 42% lower than the same period last year.

Unsecured Consumer Credit ("UCC")

The customers of the London Scottish Finance ("LSF") branch business have been
successfully integrated into the Morses home collected credit business and the
48 LSF branches closed. Although the UCC division continues to incur
substantial losses (�16.7m year to date), it has collected �69.3m and reduced
the value of its loan receivables by 41% to �49.5m as at 31 August 2008 (31
October 2007 : �84.2m).

Mortgages & Secured Lending

The first charge mortgage business continues to trade profitably and impairment
is in line with expectations. The second charge secured loan business has seen
increased impairment resulting in a small loss for the year to date.

Loan Broking

The Loan Broking division was closed at the end of May 2008 incurring closure
costs of �0.4m.

Other Financial Information

Regulatory Capital

The Group continues to have a shortfall of regulatory capital, (�12.0m at 31
August 2008), as a result of losses incurred during the year, despite shrinking
its risk weighted assets and the profits made on the disposal of the Factoring
business.

Funding and Liquidity

The Group continues to be funded by a mixture of retail deposits and bank
borrowings. As at 31 August 2008, the Group had net debt of �238m.

On 28 May 2008, Robinson Way entered into an agreement for a new medium term
revolving credit facility, the details of which were announced on 29 May 2008.
That facility requires the Group to raise regulatory capital of a minimum of �
32.5m by 31 October 2008. If this is not achieved, the facility's maturity date
will be brought forward by one year to 28 May 2010. Additionally, in such
circumstances, the Group has agreed to take steps to effect the sale of
Robinson Way or the Group by 30 June 2009.

Disposal of London Scottish Invoice Finance ("LSIF")

As announced on 31 July 2008, the Group successfully completed the disposal of
its subsidiary company LSIF to Hitachi Capital (UK) PLC. LSIF was the invoice
discounting and factoring subsidiary of the Group. This disposal was part of
the Board's strategy to refocus the Group on Robinson Way's successful debt
purchase and debt collection business and to reduce the capital employed in its
lending divisions. The proceeds from the disposal have been used to reduce the
Group's net borrowings.

Enquiries:

Citigate Dewe Rogerson :

Lindsay Noton Tel: 020 7638 9571

Grant Ringshaw

Website: www.london-scottish.com

London Scottish Bank plc Page 2 of 2

Interim Management Statement - September 2008



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