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B&B reveals £500m write-offs

Bradford & Bingley has revealed mortgage write-offs of more than £500m in 2008 and predicts more to come over the coming year.

The bank has revealed that impairments for 2008 totalled £507.7m, up from £22.5m in 2007. However, actual losses on properties sold following repossession were £65.5m, up from £23.8m in 2007.

B&B says the impairment charge estimates the full loss on mortgages known to be impaired at the balance sheet date, “although most of this loss will not be realised until later financial periods”, it says.

In its year-end results for 2008, the nationalised lender revealed profits of £134.3m, which came from the £216.3m sale of its retail deposit arm to Santander as well as the net of the cost of the guarantees provided by the Treasury following the bailout.

As a result of the bailout provided by the FSCS and the Treasury, the lender owes £18.4bn; it says its over-arching objectives are to repay the debt “as soon as market conditions allow”.

The report also revealed the total number of mortgages three months or more in arrears or in possession equates to 4.6 per cent, up from 1.63 per cent in 2007. The total value of the group’s arrears is now 0.27 per cent of its mortgage balances.

B&B chairman Richard Pym says: “2009 is going to be a further year of change and the B&B team will be working hard to protect the value of our assets and to minimise the risk to taxpayers.

“We aim to continue to give excellent service to our customers and, whilst we undertake further restructuring to reduce costs, we intend to minimise any adverse impact on the Aire Valley community.”


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