An indication that direct lenders may be over reaching themselves in the F&I sector is provided by Sainsbury’s Bank’s recent problems.

Its chief executive Tim Pile left in mid March after Justin King, chief executive of the parent supermarket group, expressed “disappointment” with the bank’s performance. It is a 55/45% joint venture between Sainsbury and HBOS. Losses of £10m are anticipated for the year to March 2006.

Last November the bank reported interim £5m losses and bad debt charges rose 68% to £49m.