Wednesday, February 13, 2008

Hurry up Darling and rescue them, there’s a good chap

Bad debts up threefold, profit halved, mortgage arrears nearly double at buy to let specialist Bradford & Bingley

Bradford & Bingley, the UK's biggest buy-to-let lender, has seen its mortgage arrears leap by a huge 42 per cent in 2007. Their bad debts trebled as more homeowners struggle to keep up with repayments. Pressure on borrowers contributed to a threefold increase in bad debt charges to £22.5 million, from £7.4 million in 2006. Writedowns have reduced the lender's statutory pre-tax profit by 49 per cent to £126 million in the full year to 31 December...

Posted by converted lurker @ 11:56 AM (1162 views)
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12 thoughts on “Hurry up Darling and rescue them, there’s a good chap

  • Profit reduced to £126 million? Boo hoo……

    Are banks really in as much danger as many would have us believe? Sure, the credit crunch may be particularly severe, but isn’t it just banks protecting profits? I know more mortgages in arrears, repossesions etc, are on the way, but even after writing off bad debts, sub-prime involvements etc. etc. most banks still seems to be pretty profitable.

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  • japanese uncle says:

    BTL specialist bank sounds almost synonymous to a football player playing with a barrel of a loaded shotgun stuck in his mouth all the time.

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  • Put things in perspective… their profit rose 100% in the first half of 2007
    how big was the loss in the second half to come 49% down for the full year?

    And… how many bad loan write downs they will have to make?
    remember that profit is a meager 1% on the loan book value… so if you write assets down 1% of BTL loans you lose profit for the year

    then, are they offering savings rates at 6.5% ? yeeesssss
    so are they making or losing money when they lend at 6.0%?

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  • Comment by Numis on B&B

    Buy-to-Let (BTL) bubble: BTL has supported the UK property market, for the first
    time allowing property to fund property purchases. In Q1 1999 there were 11,100
    BTL mortgages against 119,300 first time buyers (FTB). By Q3 2007 BTL volumes
    were up 750% with FTB numbers down 19%. For property prices to have tracked
    income growth over the past 25 years house prices would need to fall by over 44%.
    The OECD and IMF also believe that the UK property market is at least 40%
    overvalued. B&B is the most exposed stock we cover to the property market. If BTL
    is deemed to have been mis-sold (we can not see how it is appropriate to hold
    1000% of your net worth in one asset class) B&B is bankrupt.

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  • I like BTL described as “we can not see how it is appropriate to hold
    1000% of your net worth in one asset class”

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  • RE “then, are they offering savings rates at 6.5% ? yeeesssss”

    Means they are broke and desperate for savers cash

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  • interesting, the local B&B has a queue of people outside it!!! is this the start of another run???

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  • All together now… La la la I waaaaannnt that house… !

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  • Landofconfusion says:

    > we can not see how it is appropriate to hold 1000% of your net worth in one asset class

    I notice that Greenbay hasn’t commented on this article yet.

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  • B&B has no alternative but to reduce its LTV for mortages and increase mortgage rates to cover its losses. Expect it to increase its savings rates as well, as it needs investment so badly.

    Having saved NR, how can the government not save B&B if needed?

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  • it_is_going_with_a_bang says:

    Halved Profits and tripling of bad debt – and it s a good year?
    What’s this guy’s idea of a bad year – I would think only one in which he runs out of Bullsh1t and can’t cover his behind any longer and gets the boot.

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  • Mortgage Arrears says:

    I’m feeling glad towards the comments and like to express my view that at all cost mortgage arrears will have to be paid. If not now, then by arrangement, bit by bit.Mortgage arrears will cost you dearly because lenders apply interest on the outstanding amount. There may well be other late payment charges too.

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