CIAO REVIEW - DATED 12-02-09

BRADFORD AND BINGLEY

Bradford & ?Binley? plc is a British bank with its HQ in the West Yorkshire town of Bingley. They did provide a mortgage and saver plans to customers with bowler hats and enjoyed onion soup every lunch-time. They were established in 1851, the same year as ?The Great Exhibition? devised by Prince Albert. In 1964, they merged with ?Bingley Equitable? and became Bradford and Bingley. They were once the biggest mortgage lender in the North of England and had a portfolio worth of the state of Congo. Impressive statistics and figures that had pride of their upper class bowler hat image. In the late 1990?s B&B had huge payouts for share-holders and directors alike and was a supremo hard hitting lender with as much clout as a ?super heavy weight? champion.

On 29 September 2008, after a weekend of twittering and head scratching, the British government announced that the troubled bank, whose profits were adversely affected by the credit crunch, had been part owned by the taxpayer; without going through the relevant credit checks nor went through the House of Commons, ?Old Spice? brigade. The winners were Grupo Santander due to buying up a £20 Billion savings business. The loser?s being the UK taxpayer for being shafted for the rest of the crazed toxic debt, delivered onto the tax paying public doormat like a gift-wrapped dog turd. Resulting in higher taxes for the long term for the ordinary folk and yet again leaving alone tax havens for the super rich.

The problem with Bradford and Bingley (B&B) is it prides itself as a specialist lender, with buy-to-let and self-certification mortgages forming the bulk of its mortgage book, opening up room for account default at such an epidemic level an astonishing 5.11% of all BTL (Buy to Let) were reliable default merchants. Not surprising now, especially while UK is now having the worse recession in living memory and the new business minister ?Prince of Darkness? Lord Peter ?Mandy? Mandelson is too busy papering over the cracks in his prized new office wondering what colour his shade of magnolia his walls will be painted next month, or will it be wallpapered instead ? decisions, decisions. ? Forget the poor B&B work-force who are in line for the chop, actually just over 300 ex employees have already been released since the end of September 2008; there are two to many where I live near London.

Many of Bradford & Bingley's assets now belong to Spain's Grupo Santander, the bank which already owns Abbey National and bought Alliance & Leicester in early 2008. The Spanish bank is paying £612 million, and has gained an incredible 197 branches from B&B saving sector. ? It was very well published that the PM Gordon Brown had a big hand in the quick rescue of B&B Saving deposits, during the potential financial melt-down in the UK at the end of last year. Saving face was the main reason that would possibly would of brought down the government, if the dithering continued at the level it so apparently was at the end of 2008.

The B&B supposed market over recent years, specialised in lending to the buy-to-let market and "self-certified" loans for the self-employed, both categories at the riskiest end of mortgage lending; due to poor business acumen and planning the guy who claimed to be a property developer was ex plumber, failed to recognise an obvious flaw. They couldn?t sell into the BTL market. What was a dream became a nightmare, because realities hit home and told them ?your too thick to realise what an ape you have been?; The stupidity lies in B&B?s obvious failings of believing crazed and wacky individual credit worthiness and being more engrossed in hitting targets.

Unlike Northern Rock, where the state has tens of billions of pounds in guarantees, the B&B isn't likely to cost taxpayers anything on paper as yet, except for loss of UK taxable income from employees, however, the possibilities of Santander?s saving stake of B&B being bought back by UK government and being state owned is quite high; even if it is to just safe-guard deposits. Santander?s Chief, Horta Osorio will no doubt come-out of it smelling of roses regardless of B&B?s plight in the financial market. His close connection with Gordon Brown and the UK?s treasury is very evident, considering how quickly the whole take-over of B&B Savings took. In comparison Northern Rock?s now evident nationalised status took for eternity for any outcome as dithering seemed to be the answer at the time. I fear B&B?s outcome will be again at the cost to all UK taxpayers within 18 months as the potential risk outweighs the current downturn market. Hence, the fact that prophet Ed Balls has claimed we are in the worse depression since the great depression and further more could be more severe; name it the ?greater depression?; from ?great balls of fire?. Thank goodness he is not a school lollypop man. There would be carnage where-ever he goes.