Bradford & Bingley(BB.)

Mortgage lender Bradford & Bingley says its liquidity position is funded into 2009, despite on-going difficulties in the wholesale markets.

"The first quarter of 2008 has seen excellent growth in our retail deposit base. Bradford & Bingley has a strong capital base and has funded its business activities through 2008 and into 2009," chief executive Steve Crawshaw said.

B&B, which last week denied it was planning a rights issue, said demand for buy-to-let mortgages reamined strong but margins on loans written in the second half of 2007 were affected by the emerging liquidity crisis, which has also impacted the overall group margin in the first quarter of 2008. A repricing of its products recently will help offset this, it said.

Loan arrears rose in the quarter and B&B said it expected tougher credit conditions overall combined with falling house prices to result in higher impairment provisions in 2008.

The company also booked £38m of permanent losses on SIVs in the first quarter, and further write-downs on structured instruments of £87m.

"To enhance business quality, we have increased minimum credit requirements and selectively lowered maximum loan-to-value levels," the bank said. "As a result, the new business pipeline is below the same period last year, but in line with our plan for 2008," Crawshaw added.

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