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February 8, 2010

Cattles closes Welcome Financial to new lending

by Gill Montia

Story link: Cattles closes Welcome Financial to new lending

Cattles has warned of job losses following changes at its Welcome Financial personal finance business.

The troubled sub-prime lender says it is closing the unit to new lending following an extensive strategic review and discussions with its creditors.

The group will therefore focus on collecting out Welcome’s existing customer loans over the next two to three years.

Around 70 Local Management Branches and Local Collections Units will be closed nationwide, putting 450 jobs at risk.

Cattles’ problems began early last year when the firm issued two profit warnings within days, announced that its 2008 results would be delayed and began suspending directors.

A breakdown in internal controls had apparently resulted in the incorrect application of impairment policies at Welcome Financial.

In July 2009, a review carried out by Freshfields and Deloitte resulted in the dismissal of six of the group’s suspended executives.

 

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