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B&B reveals 114% profit slump

Troubled lender Bradford & Bingley has revealed massive pre-tax losses of more than £200 million in the last year.

In its interim report the lender admitted its losses were “disappointing” and planned cutbacks across the company.

Pre-tax profits fell by £207.1 million in one year. For the first half of 2008 B&B lost £26.7 million against profits of £180.4 million at the end of the first half of 2007. Underlying profits fell by more than 60% from £181.3 million to only £70.2 million.

Much of its losses came as a result of acquired loans instead of its own mortgages: while B&B loans had arrears rates slightly above national averages, its acquired book had delinquencies of 5.11 per cent, almost five times the national average.

B&B reported an 8 per cent market share of net mortgages in the first half of 2008. This comes after the bank reduced its in-store mortgage advisers from 160 to just 50.

The bank also revealed that it has lost £18 million through mortgage fraud.

The report also revealed that B&B has renegotiated it’s flow of mortgages from Kensington, which will continue to sell books to B&B until 2011. B&B says it is in similar negotiations with GMAC-RFC.

B&B chairman Rod Kent says: “In the light of the turbulence in the banking and housing sectors, the first six months of this year have been very challenging for B&B. The results for the half year are, of course, disappointing.”


Tax gets tough

Tax has never been so taxing for the Treasury and its taxpayers. This week it was announced that HM Revenue & Customs inspectors are to be granted greater powers to inspect and fine UK taxpayers.

The long-distance runner

First State’s defensive style of running its Asia Pacific Leaders makes it a contender for being a fund for all seasonsIwould not care to estimate how many fund managers I have met over the years but the number clearly runs into hundreds. During that time, many have impressed me, many have left me ambivalent and there have been those that I considered sub-standard. I always think a true test is whether or not I have the conviction to invest my own money in a fund.


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