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Failed mortgage venture costs B&B £10m

Bradford & Bingley is writing off £10m to end its European joint venture with software firm Alltel, claiming the mortgage outsourcing deal has failed to deliver.

Alltel and B&B entered an agreement to develop and sell new mortgage service systems two years ago. But B&B is bringing the servicing of its own borrowers back in house, blaming uncertainty created by changing UK mortgage regulation and slow development of the European outsourcing market.

B&B announced the scrapping of the project last week and outlined how it was negotiating with Alltel to terminate the deal, a move it expects will incur further charges once complete.

But B&B says analysts still predict it will make a £265m profit during 2002, up from £234m in 2001.

However, rival outsourcing company Homeloan Management refutes B&B&#39s claim that there has been slow growth in the industry or that regulation is a barrier to growth and says it has seen significant growth this year.

B&B group chief executive Christopher Rodrigues says: “The discontinuation of our joint venture with Alltel will not impact on customers and will prevent future losses.”

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