Bradford and Bingley Suffered Major Losses

Bradford and Bingley In Most Trying Times

UK lender Bradford and Bingley suffered major losses in investment and writedowns and a setback 155 million pounds. By the end of 2007, debts were up by more than half according to the UK lender. It also send out warning signals to landlords that the condition would through 2008 as there would be a fall in profit margins. However, investors have some good news as they said that they would renegotiate one of the two agreements and also plans to renew contract with GMAC-RFC that improved arrears. The results of Bradford and Bingley no matter how appalling it might be were expected according to analysts. Bradford and Bingley were compelled to raise 400 million pounds in a cut-price cash call in the month of August as the market conditions deteriorated. The lender showed a pre-tax loss of 26.7 million pounds ($48.9 million) this year while last year the profits were 180.4 million. The losses on investments and underlying pre-tax profit amounted to 70.2 million pounds in the first six months of 2008.

Investors are keeping a close watch on the Mortgage book of B& B which comprises of loans given out to landlords. They are also looking at the deteriorating arrears across the whole of UK as there is a fall in property prices and consumers come under burden. The number of mortgages who were 3-4 months in debts worsened from 1.48 percent to 2.29 percent towards the end of last year. However, B&B has released a statement saying that it is doing its best to improve arrears and collection process. It also extended its agreement with Kensington to reduce the amount of loans in 2008 and 2009. So, in the present scenario, it will take only 1.3 billion pounds of loans in 2011 while it was initially supposed to borrow a further 1.15 billion of home loans. Though it was supposed to have talks with GMAC, it gave no further information. The image of Bradford and Bingley has suffered after sending out warning signals on profits and also the surprise exit of its CEO and TPG Capital pulling out of a stake purchase after receiving a bad credit from credit rating agency Moody. Though a new CEO has been appointed, Richard Pym, he said he would plan his strategy only in autumn.

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