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B&B reveals H1 loss as bad loans surge

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Date: Friday 29 Aug 2008

LONDON (ShareCast) - Bradford & Bingley revealed a first half pre-tax loss of £26.7m compared with a profit of £180.4m the year before after it was hit by writedowns and investment losses.

The UK's biggest buy to let lender said it continues to be cautious on the economy and trading for the second half of the year and added arrears had continued to deteriorate.

Losses on bad loans surged to £74.6m from £5.3m last year as the number of mortgages in arrears of three months or more grew.

B&B, which recently completed its £400m rights issue, said it was taking steps to improve bad debts. This includes renegotiating its contract with GMAC-RFC to "take into account changing economic conditions."

"We continue to expect arrears and repossessions to increase for the remainder of the year, although we will be putting further resources into tackling the problem," the group added.

New chief executive Richard Pym is to announce his plans for the bank in the autumn, the statement said.

Chairman Rod Kent noted, "In the light of the turbulence in the banking and housing sectors, the first six months of this year have been very challenging. The results for the half year are, of course, disappointing."

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