The credit lender, which bails others out, may need help of its own after announcing $44 million will be needed to cover its losses.
The main reason for the bank floundering is due to defaults on consumer loans, which forced it to increase impairment provisions.
London Scottish has been asked by the Financial Services Authority (FSA) to increase its capital base, which has meant 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'', said the bank, referring to the year ending October 31st.
After the latest sub-prime problems, London Scottish will hold talks with the FSA over how to stabilise business.
Around $100 billion has been written off by major banks after US sub-prime mortgage losses.
London Scottish has nosedived 18 per cent on the stock market following the news - the biggest fall in over a decade.