Poppy Trowbridge and Jon Menon
Sunday, Sept 28, 2008
The U.K. government will take control of Bradford & Bingley Plc, the U.K. mortgage lender whose shares have tumbled 93 percent this year, the British Broadcasting Corp. reported, without saying where it got the information.
The Treasury and Financial Services Authority will negotiate with banks interested in buying parts of the Bingley, England- based bank, the BBC said today on its Web site. Possible buyers include Banco Santander SA, HSBC Holdings Plc and Barclays Plc, the report said.
A voicemail message left on the cellphone of Bradford & Bingley spokesman Tony McGarahan today wasn’t immediately answered.
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The nationalization of Britain’s biggest lender to landlords would follow Northern Rock Plc’s in February and a government- assisted takeover of HBOS Plc, as banks struggle with funding amid the seizure of credit markets. U.S. lawmakers today said they made a breakthrough in talks on a $700 billion plan to buy assets from financial companies affected by a record number of home foreclosures, in an effort to revive credit markets.
Almost half of Bradford & Bingley’s 42 billion pounds ($77 billion) of loans in the first half were to landlords, bringing its share of the U.K. buy-to-let market to 19 percent. About 17 percent of the bank’s loans go to customers who certify their own income on application and typically have a higher level of default than standard borrowers. Bad debts in the first half jumped to 74.6 million pounds, from 5.3 million pounds last year.
This article was posted: Sunday, September 28, 2008 at 3:46 am