Spring Onion
PDF VETERAN
- Joined
- Feb 1, 2006
- Messages
- 41,403
- Reaction score
- 19
- Country
- Location
Britain may nationalise B&B bank, sell savings
... Sun, Sep 28 04:03 PM
By Steve Slater and Sumeet Desai
LONDON (Reuters) - Britain could nationalise troubled mortgage lender Bradford & Bingley in the third rescue of a major bank this year, with a decision possible later on Sunday, people familiar with the matter said.
The Treasury is leading talks on the rescue of the bank and is likely to opt to nationalise it and look to sell its savings business and branches to a commercial rival, the people said.
A final decision has not yet been made, but a plan will be announced on Sunday or early Monday, they said.
The Treasury would prefer a private sector rescue for Britain's ninth biggest mortgage provider but nationalisation is a more likely outcome, one person familiar with the talks said.
The BBC said B&B will be nationalised and its mortgage book merged with Northern Rock, the lender taken under state ownership in February.
The government this month brokered the takeover of HBOS, Britain's biggest home lender, by rival Lloyds TSB.
B&B is the latest bank to be hit by a global financial crisis, which was sparked by losses on poor quality U.S. home loans and has claimed a number of high-profile victims in the United States and Europe.
The crisis and Britain's weakening economy have heaped pressure on British Prime Minister Gordon Brown, whose party lags the opposition Conservatives in opinion polls and whose leadership has been questioned by some in his own party.
BRANCHES COULD BE SOLD
B&B's 24 billion pounds ($44 billion) of savings and its 200 branches could be sold to a rival or rivals under the plan being discussed, with Spain's Santander and Britain's HSBC and Barclays the most likely buyers, the sources said.
But rivals appear unwilling to take ownership of B&B's book of 41 billion pounds of residential loans -- representing 3.4 percent of UK mortgages -- as many of them are higher risk buy-to-let and self-certified loans and the British housing market is weakening, raising the prospect of rising bad debts.
The government could nationalise B&B using legislation put through to deal with the Northern Rock crisis.
B&B declined comment.
B&B shares tumbled to a record low on Friday and the cost of insuring its debt jumped, prompting regulators to step up efforts to find potential white knights for the bank.
Its shares closed on Friday at 20 pence, valuing it at under 300 million pounds.
A banking source said Santander, which owns Abbey and is in the process of buying Alliance & Leicester, was talking to the government and regulators about possibly taking over the deposits and branches.
Santander, HSBC and Barclays declined comment or could not immediately be reached.
Another option being considered is asking a group of banks to take part in a "lifeboat rescue" of B&B, where they would take all or the best of its mortgage book, the sources said.
Britain's top five banks -- HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS -- and Santander already own about 30 percent of B&B between them after they stepped in to help save a rights issue that flopped in June.
Talks were also being held in Amsterdam and Brussels on the fate of another European bank, troubled Belgian-Dutch financial group Fortis, and one report said it may sell itself or the ABN AMRO Dutch banking business it acquired last year.
(Additional reporting by Adrian Croft)
Britain may nationalise B&B bank, sell savings - Yahoo! India News
... Sun, Sep 28 04:03 PM
By Steve Slater and Sumeet Desai
LONDON (Reuters) - Britain could nationalise troubled mortgage lender Bradford & Bingley in the third rescue of a major bank this year, with a decision possible later on Sunday, people familiar with the matter said.
The Treasury is leading talks on the rescue of the bank and is likely to opt to nationalise it and look to sell its savings business and branches to a commercial rival, the people said.
A final decision has not yet been made, but a plan will be announced on Sunday or early Monday, they said.
The Treasury would prefer a private sector rescue for Britain's ninth biggest mortgage provider but nationalisation is a more likely outcome, one person familiar with the talks said.
The BBC said B&B will be nationalised and its mortgage book merged with Northern Rock, the lender taken under state ownership in February.
The government this month brokered the takeover of HBOS, Britain's biggest home lender, by rival Lloyds TSB.
B&B is the latest bank to be hit by a global financial crisis, which was sparked by losses on poor quality U.S. home loans and has claimed a number of high-profile victims in the United States and Europe.
The crisis and Britain's weakening economy have heaped pressure on British Prime Minister Gordon Brown, whose party lags the opposition Conservatives in opinion polls and whose leadership has been questioned by some in his own party.
BRANCHES COULD BE SOLD
B&B's 24 billion pounds ($44 billion) of savings and its 200 branches could be sold to a rival or rivals under the plan being discussed, with Spain's Santander and Britain's HSBC and Barclays the most likely buyers, the sources said.
But rivals appear unwilling to take ownership of B&B's book of 41 billion pounds of residential loans -- representing 3.4 percent of UK mortgages -- as many of them are higher risk buy-to-let and self-certified loans and the British housing market is weakening, raising the prospect of rising bad debts.
The government could nationalise B&B using legislation put through to deal with the Northern Rock crisis.
B&B declined comment.
B&B shares tumbled to a record low on Friday and the cost of insuring its debt jumped, prompting regulators to step up efforts to find potential white knights for the bank.
Its shares closed on Friday at 20 pence, valuing it at under 300 million pounds.
A banking source said Santander, which owns Abbey and is in the process of buying Alliance & Leicester, was talking to the government and regulators about possibly taking over the deposits and branches.
Santander, HSBC and Barclays declined comment or could not immediately be reached.
Another option being considered is asking a group of banks to take part in a "lifeboat rescue" of B&B, where they would take all or the best of its mortgage book, the sources said.
Britain's top five banks -- HSBC, Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS -- and Santander already own about 30 percent of B&B between them after they stepped in to help save a rights issue that flopped in June.
Talks were also being held in Amsterdam and Brussels on the fate of another European bank, troubled Belgian-Dutch financial group Fortis, and one report said it may sell itself or the ABN AMRO Dutch banking business it acquired last year.
(Additional reporting by Adrian Croft)
Britain may nationalise B&B bank, sell savings - Yahoo! India News
