Bradford and Bingley Sell GBP4.2 Billion of Loans

Fri, 30 Nov 2007

Having been hit hard by the effects of the US sub-prime mortgage crisis, Bradford and Bingley have sold £4.2 billion of loans in a bid to ensure emergency government funding isn’t required. The bank, who raised their personal loan rates by more than any other bank in the immediate aftermath of the sub-prime crisis, has seen its share price fall by over 35 per cent since August.

Dexia, a financial serviced group who operate primarily in Belgium, France and Holland, have purchased £2.2 billion of Housing Association loans, paying 2 per cent more than the value of the loans, though Dexia should make that money back seeing as those loans contributed £21 million to Bradford and Bingley’s 2006 profits.

GE Real Estate, meanwhile, have paid £2 billion for Bradford and Bingley’s portfolio of commercial loans, and have paid 4 per cent less than the loans are worth. The commercial loans contributed £26 million towards Bradford and Bingley’s profit last year.

The sales of the loans are in addition to the £2.5 billion that Bradford and Bingley have raised this month from securitising books of mortgages and the issue of covered bonds .
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