The Government has confirmed that mortgage lender Bradford & Bingley will follow Northern Rock into nationalisation, with shares in the company suspended this morning (September 29). Under the arrangement, the government will take control of the bank’s £50bn in mortgages and loans.
B&B’s £20bn savings business and branch network will be bought by Abbey, which is owned by Santander, the Spanish bank which is also buying struggling rival Alliance & Leicester.
In a statement, the Treasury says: “Following recent turbulence in global financial markets, Bradford & Bingley has found itself under increasing pressure as investors and lenders lost confidence in its ability to carry on as an independent institution.”
It adds that the move would protect savers’ money and that B&B’s branches, call centres and internet operations would “be open for business as usual to provide continuity of service to customers”.
The deal follows this month’s rescue of HBOS, owner of Halifax and Bank of Scotland, by rival Lloyds TSB in a £12.2m takeover.
The nationalisation of B&B is likely to lead to the bank’s brand disappearing from the high street. The Government is likely to retain the brand, as it did with Northern Rock, but its branch network will disappear under its acquisition by Santander.