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Bradford & Bingley in pounds 500m write-off.

Byline: By HENRYK ZIENTEK Business Reporter

NATIONALISED lender Bradford & Bingley is writing off more than pounds 500m in mortgage loans that have "turned sour".

B&B is taking the charge of pounds 507.7m to reflect estimated arrears at the end of 2008 and the impact of further house price falls ahead.

The hit compares with a pounds 22.5m provision for the previous year. The group said 4.6% of its pounds 41bn mortgage book was three months or more in arrears or repossessed.

B&B's savings business was sold to Abbey at the height of the financial meltdown last September and its mortgage book and other loans were taken on by the taxpayer.

Including the Treasury aid and pounds 612m sale of the savings arm to Abbey, B&B turned a profit of pounds 134m last year - although the lender said it would have been loss-making without public support.

It warned: "In the prevailing economic environment, further deterioration in the arrears rate should be expected in 2009 and 2010."

Under the nationalisation, B&B's lending business will be wound down over the next 10 years to repay Treasury funds pumped into the stricken firm. But this will mean job losses at the lender, which employed almost 1,000 full and part-time staff last year.

Its annual report said: "Bradford & Bingley has for some time been one of the largest employers in the Aire Valley. Bradford & Bingley is working with Yorkshire Forward and Bradford City Council to ensure that any negative community impact is minimised."

Under the plans, B&B will cease new lending and offer incentives to existing customers to move their mortgages elsewhere through measures such as waiving early redemption fees.

It hopes to cut its mortgage book to pounds 36.3bn by the end of 2011.

B&B said there had been 80 voluntary redundancies and 75 resignations since the nationalisation, although the lender has recruited a further 87 staff in its arrears handling department.
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Title Annotation:Business
Publication:Huddersfield Daily Examiner (Huddersfield, England)
Date:Mar 31, 2009
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