Sky News Business Editor Michael Wilson
It had all the signs of a shambles this morning when the well-trailed profits warning and the details of the cash call didn't happen until share trading had been suspended just after eight o'clock. The Bradford and Bingley press office had no clue what was going on, and it reminded us of the whole rights issue fiasco - no proper guidance of what cash the company actually needed, and then the U-turn last month when there was, apparently, a need of some £300m. The City didn't like that, and the shares are now so low that company is barely worth more than that.
What has Texas Pacific bought ? On B and B's books is a 50% increase in customers who are having difficulty repaying their loans, and the little bank is very much in the wake of its giant counterparts, RBS and HBOS, who are trying to tap the same market, not for a few hundred million, but for £17bn between them.
It's been suggested today that the Texas Pacific deal means that the worst is over for the UK's mortgage lenders. The private equity group will stay in for three to five years. I'd be prepared to bet that Bradford and Bingley will be bought long before then.
Hopefully this bank won't become Bradford, Bingley and Brown, please UK Plc do not buy another bank!
The City also have a lot to answer for in this Credit Crunch, the financial sector has been on a runaway train for a good number of years, and has now hit the buffers, so this current situation of crisis is a just reward for years of helping people to spend more than they earn. LIke that or lump it!
Posted by: Elizabeth Davies Cape Town 3 Jun 2008 08:02:22
The bets are now on! N rock, B&B who's next? HBOS or RBS! Um HBOS is UK sub-prime suspect! This has nothing in the UK to do with american subprime, its all to do with UK subprime. Min 10% deposit 4 times income = UK prime mortgage any thing else is UK SUBPRIME. HBOS mortgages have not been affected by the credit crunch as most of their mortgage money comes from savers money. This is even more unsound in todays climate than N Rocks business model was last year. They have lent so much on non prime mortgages that most of their recent mortgages will now have negative equity. So the depositors / savers money is lost and because of the credit crunch they now cannot cover savers trying to withdraw their savings. No lender will lend HBOS the money to cover savers money!!!! Bye Bye soon HBOS!
Posted by: mark dorset 3 Jun 2008 00:01:44
Fiasco sums it up,I would like to add 'Where is the leadership'
Posted by: Michael Cornwall 2 Jun 2008 18:40:09
Sir
Yet again we find that incompetent management has borne the fruits of destruction, whilst our friends from across the pond have told us [We Are Family].
As [Sister Sledge] goes about further re-assuring all and sundry that whether you buy to let or let to buy, the desire to keep a roof over your head is paramount to business success. However, I find this fall somewhat not too unusual suffice to say that this sector of the market has long seen a decline whilst those who receive such sums from rental income not often fall within the HMRC £4K tax free bracket, yet make it tax free.
Property is indeed one of those markets that you cant either live with them or without them but need them, yet added choice and permission to change more often than not curtail viewings / completion.
B&B is no doubt a big player, however, unlike the Northern Rock, this remains an exclusive market practice and as such I wont let it bother me too much.
Posted by: Khalid 2 Jun 2008 16:22:25