Bradford & Bingley swings back into profit

30 July 2010 0:00 am | Updated: 30 July 2010 2:42 pm | By John Kenchington

Nationalised mortgage lender Bradford & Bingley has announced a return to profit in the first half of the year.

The group said its pre-tax profits in the six months to June 30 were £896m, compared with a loss in the same period last year of £160m and an overall loss in 2009 of 196m.

The figures were boosted by an open market tender of subordinated debts that completed in June and yielded a pre-tax profit of £712.3m, as the group gears up to repay its government bailout.

Without this and other exceptional items the group’s pre-tax profits for the first half of 2010 were £79.4m.

The group announced costs of £2.5m as it prepares to integrate with Northern Rock Asset Management - the bad bank that is being spun out of the failed lender.

It also incurred costs of £3.3m from the Treasury for work associated with the nationalisation of Northern Rock.

Lower ongoing operating costs of £58.6m, compared to £65.3m over the same period in 2009, thanks to efficiency measures helped to offset this.

Elsewhere, during the first half of 2010 arrears levels continued to trend downwards with accounts three months or more in arrears falling by 18 per cent to 15,653 compared to 19,159 at the end of 2009.

The total number of cases of arrears or home repossessions equates to 4.72 per cent of mortgage accounts, compared with 5.88 in the first half of 2009, the group said.

Managing director Richard Banks said: “I am pleased to announce that we have returned to profit and made great progress against all our financial targets.”

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