Santander said to take Bradford & Bingley deposits (AP)
29.09.2008 03:40 Finance
The report comes after earlier British media reports that Bradford & Bingley will be nationalized and sold off in parts.
Treasury officials and financial regulators held talks over the weekend on the future of the mortgage lender. Bradford & Bingley spokesman Tony McGarahan says an announcement will be made before the stock market opens Monday but the company would not comment Sunday on the media reports.
Press Association says Santander will take over the retail deposits and branch network, but offered no further details. The news agency quoted a spokesman for the company but did not name him.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
LONDON (AP) — The troubled mortgage lender Bradford & Bingley is to be nationalized and sold off in parts, British media reported Sunday.
Treasury officials and financial regulators have held talks all weekend over the future of the bank. Bradford & Bingley spokesman Tony McGarahan said an announcement would be made before the stock market opened Monday but the company would not comment Sunday on the media reports.
The British government is likely to take on the bank's toxic loans and fold them into Northern Rock, another mortgage lender nationalized by the British government in February, the BBC and other media reported. The BBC said the Treasury will then try to sell the company's 200 branches and savings business to other banks.
Bradford & Bingley specializes in buy-to-let mortgages for rental properties, now considered one of the most volatile parts of Britain's troubled housing market. Investors who took out loans to buy apartments and rent them out now find the value of their property has fallen and that rental income does not cover their mortgage payments.
Bradford & Bingley said last week it was cutting 370 jobs as a response to the worsening economy but that was not enough to save the institution.
The bank's shares have plunged from around 300 pence at the start of the year to 20 pence (32 U.S. cents) Friday, amid fears that it is overexposed to Britain's falling housing market.
The country's biggest mortgage lender HBOS PLC has already fallen victim to the credit crunch, and was taken over by rival Lloyds TSB PLC in a $21.85-billion deal on Sept. 18.
The property Web site Rightmove reported last week that house prices in Britain fell for the fourth consecutive month in September, and another respected survey showed that home sales in Britain fell to a 30-year low in August.
Average house prices across the country fell 1 percent in September to 227,438 pounds ($419,357). New listings per real estate agent dropped to the lowest level for September that the index has ever recorded.
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