The 2008 reported figure, however, was helped by the £216m one-off gain from the sale of retail deposits to Abbey and the £196m adjustment to net interest income due to the expectation that its mortgage terms will now be longer than B&B first thought.
The results were £71m lower than the forecasted figure of £267m in the business plan.
The nationalised bank’s outstanding lending balances were reduced from £41.8bn in 2008, to £39bn in 2009.
B&B has also put aside a £388.4m provision for potential losses on its mortgage book from fraud.
Arrears cases of three months or more for the year ending 2009 stood at 5.54 per cent, compared to 4.6 per cent a year earlier.
Bradford & Bingley managing director Richard Banks says: “We have made substantial progress against our business objectives in 2009 and met all of the financial goals in our agreed business plan. The loss before tax of £196.0m for the year was £71.0m better than our original plan.
“We have completed our restructure to create an organisation that is fit for purpose to deliver a high quality service to our customers whilst reducing costs, minimising losses and delivering value to the taxpayer.”