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 isnt 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 Bingleys 2006 profits.
GE Real Estate, meanwhile, have paid £2 billion for Bradford and Bingleys 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 Bingleys 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 .





Paying Too Much?