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.”