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Treasury denies plans to split B&B into ‘good’ and ‘bad’ bank

The Treasury has denied reports Bradford & Bingley will divide its £50bn balance sheet into “good” and “bad” assets, echoing similar plans at Northern Rock.

According to reports in the Times, B&B which is part nationalised wants to sell off the “good” assets to private buyers in a bid to repay its loans as quickly as possible

B&B closed to new business last September and its mortgage book was nationalised with an £18.4bn loan from the Financial Services Compensation Scheme. Its £20bn deposits book was sold to Santander.

The Government paid the FSCS fee though the financial services industry will cover the fee over time. B&B has been told it has to repay the sum as soon as possible.

B&B currently receives £8.5bn of working capital from the state which is being clawed back as B&B customers pay off their mortgages.

B&B chairman Richard Pym (pictured) joined as chief executive in August 2008 and was made chairman three months later. He was group chief executive at Alliance & Leicester until July 2007.

The Times says the plan to split the bank in two is being considered by the European Commission and could be given the go-ahead as early as next week.

But the Treasury has denied the reports.

The EC is also considering whether to restrict Northern Rock’s ability to write new savings and loan business in light of the Government help it has received.


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