B&B finally nationalised

Source: Exec Digital UK

Date :29/09/2008 09:37:18

The Government officially nationalised the bulk of Bradford & Bingley this morning, September 29, seizing £50 billion of assets and taking measures to ensure depositors will not lose out.

Under the arrangement, the Government will take control of the bank’s £50 billion in mortgages and loans.

B&B’s £20 billion savings business and branch network will be bought by rival Abbey, which is in turn owned by Spanish banking group Santander.

The immediate cost of the bailout to taxpayers is around £18 million - a £4 billion payment to Abbey and a £14 billion government loan to the Financial Services Compensation Scheme.

Branches are open as normal this morning, but share trading in B&B has been suspended.

B&B is the second UK bank to be nationalised since the start of the global credit crunch, following Northern Rock's move into state ownership in February.

Speculation has mounted in recent weeks that B&B was approaching a funding crisis, leading to a growing number of customers withdrawing their funds.