- Bradford & Bingley
name = Bradford & Bingley
type = Public
foundation = 1964
Bingley, West Yorkshire
key_people = Rod Kent, Chairman and Chief Executive
operating_income = £572.3m (2007)
net_income = £93.2m (2007)
owner = Grupo Santander (savings) and
HM Government(mortgages) [cite web |url=http://www.hm-treasury.gov.uk/bradford_bingley_assets_transfer.htm |title=Bradford & Bingley assets transfer |publisher=HM Treasury |date=2008-09-29 |accessdate=2008-10-11]
num_employees = 2862 (FTE in 2007)
homepage = [http://www.bbg.co.uk/ www.bbg.co.uk]
intl = yes
The bank was formed in December 2000 by
demutalisationof the Bradford & Bingley Building Society following a vote of the building society's members, who swapped their nominal share of the building society for at least 250 shares of the newly formed bank.
On 29 September 2008, the British government announced that the bank, whose profits were adversely affected by the credit crunch, were
nationalisedand that sold the savings portion of the bank to Abbey, owned by the Spanish bank Grupo Santander.cite web |url=http://www.reuters.com/article/economicNews/idUSBINGLEY20080929 |title=Highlights - Britain nationalises Bradford & Bingley |publisher=Reuters |date=2008-09-29 |accessdate=2008-09-29] [cite web |url=http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2008/bradford_bingley_transfer.cfm |title=Transfer of Bradford & Bingley plc assets |publisher=HM Treasury |date=2008-09-30 |accessdate=2008-09-30] [cite web |url=http://www.bbg.co.uk/bbg/ir/news/releases/groupnews/pressrelease/?id=4765430 |title=Public Ownership and Sale of Savings Business |publisher=Bradford & Bingley |date=2008-09-29 |accessdate=2008-09-30]
Bradford & Bingley Building Society was formed in 1964 as a result of the merger of the Bradford Equitable Building Society and the Bingley Permanent Building Society, both of which were established in 1851.cite web |url=http://www.bbg.co.uk/bbg/ob/grpprofile/ |title=Bradford & Bingley History |publisher=Bradford & Bingley |accessdate=2008-09-27]
In May 1997 the Company bought "Mortgage Express" from
Lloyds TSBfor £64m. [cite web |url=http://findarticles.com/p/articles/mi_qn4158/is_19970524/ai_n14111200 |title=Bradford & Bingley buys arm of Lloyds TSB |publisher=The Independent |date= 1997-05-24 |accessdate=2008-09-27]
In December 2000 the Company
demutualisedand floated on the London Stock Exchange(using the symbol BB.) with former members of the Society each receiving a minimum of 250 shares worth about £500.00 at the time, and savers with more savings receiving more shares worth up to £5,000 each.
On Monday 29 September 2008 after a weekend of negotiations the British government announced that the troubled bank had been part
nationalisedand that the Spanish bank Grupo Santanderhad purchased all of Bradford & Bingley's £20billion savings business.cite web |url=http://www.reuters.com/article/economicNews/idUSBINGLEY20080929 |title=HIGHLIGHTS-Britain nationalises Bradford & Bingley |publisher=Reuters |date=2008-09-29 |accessdate=2008-09-29]
2008 credit crunch
In June 2008 to combat the effects of the
subprime mortgage crisis, the Company launched a £400 million rights issuewhich was not well subscribed by shareholders leaving much of issue with underwriters. The issue had not been helped when TPG Capital, who had previously agreed to take a 23% stake in the Company, withdrew their support. [cite web |url=http://www.guardian.co.uk/business/2008/aug/15/bradfordbingleybusiness.rightsissues |title=Bradford & Bingley rights issue: banks could be left with large stakes |publisher=The Guardian |date=2008-08-15 |accessdate=2008-09-27]
In September 2008 due to the effects of the credit crunch, the company's share price dropped to a record low. On 25 September they announced that 370 jobs were to go. [cite web |url=http://news.bbc.co.uk/1/hi/business/7635346.stm |title=Bradford & Bingley cuts 370 jobs |publisher=BBC News |date=2008-09-25 |accessdate=2008-09-17] The bank were also been seeking options from the Financial Services Authority (FSA) and the Government to secure the future of the company. Options included selling the company to another bank or
nationalisation. [cite web |url=http://news.bbc.co.uk/1/hi/business/7639199.stm |title=Treasury in talks to secure B&B |publisher=BBC News |date=2008-09-27 |accessdate=2008-09-17] With Bradford & Bingley being nationalised, the structure was already in place from the legislation involved in the nationalisation of the Northern Rockbank in February (see Banking (Special Provisions) Act 2008and Nationalisation of Northern Rock). The European regulators approved the government's rescue plan for Bradford & Bingley after just 24 hours. [cite web |url=http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4863698.ece |title=Europe approves Bradford & Bingley rescue in record time |publisher=The Times |date=2008-10-01 |accessdate=2008-10-04]
There were reports from various sources that Bradford & Bingley was to be nationalised in its entirety, [cite web |url=http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3094014/Bradford-and-Bingley-rescue-will-cost-taxpayer-billions.html |title=Bradford & Bingley rescue will cost taxpayer billions |publisher=The Telegraph |date=2008-09-27 |accessdate=2008-09-27] because a suitable buyer had not been found, but it later emerged that the Spanish bank
Grupo Santanderwould acquire all of Bradford & Bingley's £20billion (2.7 million customers) savings business. [cite web |url=http://news.bbc.co.uk/1/hi/business/7641055.stm |title=Spanish bank giant to acquire B&B |publisher=BBC News |date=2008-09-29 |accessdate=2008-09-29] The shares were suspended prior to the markets opening on Monday 29 September. Bradford & Bingley will be open as usual and the senior management team will remain.
The acquisition price paid by Santander will be £612 million, including the transfer of £208 million of capital relating to offshore companies. Santander bought Bradford & Bingley's 197 retail branches, 141 agencies and related employees and will combine the business with those of
Alliance & Leicesterand Abbey. The Bradford & Bingley brand will also remain. [cite web |url=http://www.santander.com/csgs/StaticBS?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1205449297559&cachecontrol=immediate&ssbinary=true&maxage=3600 |title=Bradford & Bingley's direct channels and retail deposits to transfer to Abbey |publisher=Santander |date=2008-09-30 |accessdate=2008-09-30]
Bradford & Bingley's UK and Isle of Man retail deposit business along with its branch network will be sold to Santander. On behalf of
HM Treasury, Morgan Stanleywill conduct the transfer. The mortgage book, personal loan book, headquarters, treasury assets and its wholesale liabilities will be taken into public ownership. The bank has now been closed to new business for mortgages, although it continues to administer existing mortgages (including offers made prior to nationalisation).
When the shares closed on 26 September they were worth 20 pence each, valuing the bank at £256 million, which is substantially less than Santander are purchasing the bank for. However in March 2006 the bank was valued at £3.2 billion. [Cite web |url=http://www.bloomberg.com/apps/news?pid=20601087&sid=asXYtDbW_Lso&refer=home |title=U.K. Treasury to Protect Bradford & Bingley Deposits |publisher=Bloomberg |date=2008-09-28 |accessdate=2008-10-07]
The former shareholders of Bradford & Bingley have been angered, as they (like the Northern Rock shareholders) have not been reimbursed for their shares which the Government took control of. The UK Shareholders Association noted that they had received 300 complaints from private Bradford & Bingley shareholders who have not had any communication concerning the fate of their holdings. [Cite web |url=http://uk.reuters.com/article/businessNews/idUKL648054520081006 |title=Bradford & Bingley bail out angers shareholders |publisher=Reuters |date=2008-10-06 |accessdate=2008-10-07]
The group ran two distinct businesses:
Bradford & Bingley distributed brand-name and third party financial products. As at 31 December 2007 they had 197 branches and 140 third party agent locations offering retail products and face to face advice in addition to online and intermediary distribution.cite web |url=http://www.bbg.co.uk/bbg/ir/news/releases/groupnews/gn2008/2008-02-13/2008-02-13a.pdf |title=Bradford & Bingley Preliminary Results for the 12 months ended 31 December 2007 |publisher=Bradford & Bingley |date=2008-02-13 |accessdate=2008-09-27]
Bradford & Bingley's approach to mortgage advising was innovative as they advised on and sold other providers mortgages as well as their own from 2000 to 2006. In late 2006, as part of their aim to become the UK's leading specialist lender, Bradford & Bingley reverted to selling only their own mortgages under the Bradford & Bingley and Mortgage Express brands. In addition, Bradford & Bingley acquired mortgages from
GMAC-RFCand Kensington Mortgage Group Ltd; this accounted for 44% of gross residential advances during 2007.
Bradford & Bingley has its own lending products including
mortgageand commercial real estateproducts. Bradford & Bingley Internationalis an offshore subsidiary based on the Isle of Man. Bradford & Bingley also provided loan quotes through "Compare the Loan" [Cite web |url=http://www.comparetheloan.co.uk |title=Compare the loan] for those who did not have a Bradford & Bingley branch locally.
Bradford & Bingley had developed Mortgage Express into a 'niche' lending brand dealing with specialist lending with more complicated underwriting requirements such as buy-to-let and self-certification mortgages.
Bradford & Bingley is team sponsor of
Bradford City A.F.C.. It also sponsors Yorkshire County Cricket Club. Valley Paradestadium had previously been known as Bradford & Bingley Stadium through sponsorship rights.
During the nationalisation process, it was revealed that the bank had registered more than 100 separate trademarks featuring the
bowler hat, its long-running logo.cite web |url=http://news.bbc.co.uk/1/hi/business/7641493.stm |title= Who'll get custody of Bradford and Bingley's bowler hat? |publisher=BBC News |date=2008-09-30 |accessdate=2008-10-02] The bank had also purchased a bowler hat which had formerly belonged to Stan Laurelin 1995, for £2000.
* [http://www.bbg.co.uk/ Bradford & Bingley corporate site]
* [http://www.bradford-bingley.co.uk Bradford & Bingley]
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