Bradford & Bingley Nationalised - Santander Scores Another Coup
29/09/2008
After a fraught weekend of negotiations, the beleaguered Bradford & Bingley mortgage and savings group was today finally taken under the government's wing and nationalised.
Using emergency legislation introduced to take control of the ailing Northern Rock earlier this year, the government has taken full control of the UK's ninth largest mortgage lender. This was a last resort for Alistair Darling, who is reportedly very disappointed that a private buyer for the entire business could not be found in time.
The government announced before the markets opened today that Spain's Banco Santander has bought Bradford & Bingley's savings division and 197 branches for £612m. Shares in Bradford & Bingley, which closed on Friday at 20p, have been suspended by the FSA. The price paid by the Spanish bank is less than half of Bradford & Bingley's market capitalisation on its last day of trading.
The mortgage portfolio will remain under control of the government and will likely be folded into Northern Rock. Bradford & Bingley was a major lender to the buy-to-let and self-employed markets. Its funding depended on the ever-decreasing liquidity in the wholesale credit market.
Using emergency legislation introduced to take control of the ailing Northern Rock earlier this year, the government has taken full control of the UK's ninth largest mortgage lender. This was a last resort for Alistair Darling, who is reportedly very disappointed that a private buyer for the entire business could not be found in time.
The government announced before the markets opened today that Spain's Banco Santander has bought Bradford & Bingley's savings division and 197 branches for £612m. Shares in Bradford & Bingley, which closed on Friday at 20p, have been suspended by the FSA. The price paid by the Spanish bank is less than half of Bradford & Bingley's market capitalisation on its last day of trading.
The mortgage portfolio will remain under control of the government and will likely be folded into Northern Rock. Bradford & Bingley was a major lender to the buy-to-let and self-employed markets. Its funding depended on the ever-decreasing liquidity in the wholesale credit market.
