Bradford & Bingley is primarily a mortgage lending firm but as the Wall Street Big Banks, it has been suffering the Sub prime Mortgage Crisis and the Credit Crunch. Hence, giving to the situation, the ailing mortgage lender has decided to shut down its mortgage processing centre in Borehamwood, Hertfordshire. It is expected to save 15 million USD a year. As per the news, The closure, which is expected to be early next year, will see 300 of the centre's 370 staff made redundant and its work transferred to the bank's head office in Bingley, Yorkshire.
The remaining 70 workers will stay with the bank, working in its arrears department. After cutting the number of in-branch mortgage advisers to 50 from 160 in the first half, B&B is axing the remainder of the employees. It will also cut back staff who deal with mortgage brokers, and make cuts at its head office.
As per the news, B&B has been hit by big write-downs on investments in toxic structured credit and surging arrears from its buy-to-let and self- certified mortgage lending. The bank said it had sold or written down to zero all its holdings in collateralised debt securities and structured investment vehicles and had sold 40m of asset-backed securities, resulting in the pre-tax 134m charge to its profit and loss account.
Richard Pym, the former boss of Alliance & Leicester, joined B&B last month as chief executive. Keefe Bruyette & Woods analysts said his tough actions made a takeover of the bank more likely, though with little premium in prospect for shareholders.
Mr Pym said: "The changes we have announced today focus the business as a strong savings bank, reduce the size of our lending activities and increase our capacity in arrears collection. We are a strongly capitalised bank now undertaking a complex transition with regrettable job losses."
The Bradford & Bingley shares fell 15 per cent to a new low of 21.25p.
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