Cattles, the sub-prime and doorstep lender, unveiled plans to slash 1,000 jobs and slammed the brakes on new lending as it launched a concerted push to renegotiate its debt burden before July.

In a further surprise move, David Postings, the chief executive, told Times Online that Cattles was no longer presuming it would secure a banking licence from the Financial Services Authority in the coming months.

Mr Postings said that Cattles, which applied for the licence in August to dilute its reliance on the wholesale markets for funding, has yet to be given a date by the regulator for approval to take retail deposits.

"We are no longer acting on the presumption that we will get a banking licence. We now see it as a bonus," Mr Postings said. It was unlikely that Cattles would hear a response before the end of February, he said.

Failing to secure a banking licence would mark a dramatic setback for Cattles, which had hoped to secure about £1 billion in retail deposits by 2010 once the licence came through.

The FSA has toughened its criteria and requirements on capital reserves in recent months, which has helped to stall the licence application process and has sent the lender's shares plummetting.

Today they lost a further 20 per cent before closing 16.95 per cent lower down 5p at 24.5p.

The job losses at Cattles, which has also scrapped dividend payments for at least a year, represent about a fifth of the lender's 5,000-strong workforce. Call centre offices in Hull will be closed, accounting for 400 job losses as part of the process.

A further 600 jobs will be lost across the rest of the business, with some of these likely to be at another call centre in Nottingham.

Cattles expects to save £40 million a year in costs by shedding staff.

Mr Postings said the job losses were regrettable but unavoidable.

Cattles will now cut its new business lending by 75 per cent in order to conserve cash, he said. This will equate to a cut of about £700 million in new loans this year, Mr Postings said.

Cattles lent about £1 billion to its 850,000 customers with poor or patchy credit records last year. Mr Postings said typical customers included bus drivers and nurses, earning £15,000 to £25,000 a year.

Mr Postings said that the cost reduction drive would help the lender renegotiate its £3.2 billion debt burden with its lenders. About £500 million of this comes due in July and Cattles has been in regular talks with its banks about renegotiating terms.

The bank boss told Times Online that he was confident his bank lenders would agree to roll over parts of Cattles debt before the end of March. Funds saved would help to pay back some of the loan as well, he said.

"Even if we don't get a bank licence at all we can still run the business profitably in a covenant-compliant way," he said.

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