Bradford & Bingley nationalised

by Gill Montia

Story link: Bradford & Bingley nationalised

The Government has confirmed that Bradford & Bingley (B&B) is to be nationalised.

Parts of the buy-to-let lender will be sold, including its savings account business (which is worth around £22 billion) and its 200 branches, all of which should be functioning normally today.

Both are being acquired by Spanish banking group, Santander, which owns Abbey and is in the process of acquiring Alliance & Leicester.

The retail deposit business, which has around 2.5 million customers, will be taken over by Abbey and savers are being reminded that the Financial Services Compensation Scheme guarantees £35,000 per individual in deposits.

B&B’s £41 billion mortgage book will come into public ownership and may even be merged with Northern Rock.

Shares in B&B closed at 20p on Friday and shareholders are unlikely to receive any compensation for the nationalisation; many of B&B’s 800,000 small private investors obtained their shares when it demutualised from building society status, in December 2000.

The bank employs around 3,000 staff and job losses are expected.

Also over the weekend, the governments of Belgian, the Netherlands and Luxemburg bailed out insurance and banking group, Fortis, to the tune of €12 billion.

The banks involved in the rescue will each own 49% of Fortis’s operations in their country.