Nationalisation and Santander transfer for Bradford & Bingley
Bradford & Bingley has been nationalised and its savings business and branches transferred to the Santander Group. Credit: HM Treasury & Bradford & Bingley plc
The HM Treasury has announced the nationalisation of the bank Bradford & Bingley plc, coupled with the transfer of its savings business and branches to the Abbey-owning Santander Group.
The UK Government has today (29 September) acquired all the shares in Bradford & Bingley, taking control of the bank’s £50 billion mortgages and loans, while its £20bn savings unit and branches will be bought by the Spanish-owned Banco Santander Group by way of a Transfer Order made under the Banking (Special Provisions) Act 2008.
Santander is a group of banking and financial companies that operates through a network of offices and subsidiaries across Spain and other European and Latin American countries (including the UK). All of Bradford & Bingley’s direct channels, including its retail branches and its savings accounts have been transferred to Abbey, which has been part of the Santander Group since 2004.
The Treasury said: “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.
“The Government, on the advice of the FSA and the Bank of England, acted immediately to maintain financial stability and protect depositors, while minimising the exposure to taxpayers. It has worked over the weekend to bring about the part public, part private solution which best meets those objectives.
“For savers and borrowers of Bradford & Bingley it will be business as usual. Customers should continue to use their normal branches to access their accounts. The transfer of the retail deposit book has been backed by cash from HM Treasury and the Financial Services Compensation Scheme.”
There had been considerable speculation that the bank was approaching a funding crisis – as a specialist buy-to-let mortgage lender, the bank had suffered from falling property prices and the troubled housing market as a whole. A growing number of customers have withdrawn their funds in recent weeks.
Bradford & Bingley is the third major British bank to run into trouble since the credit crunch began just over a year ago. Northern Rock PLC was nationalised in February, and HBOS PLC was bought by Lloyds TSB Group PLC on 18 September.
