(1 October 2008 – UK) Troubled UK bank Bradford & Bingley has been part nationalised and partly sold to International banking group, Santander.The Bank of England announced that Bradford & Bingley’s retail deposit business along with its branch network has been sold to Abbey National plc.
Abbey is part of the Santander Group, an international bank with nearly 70 million customers and a AA credit rating.
This transfer follows a competitive auction process for this part of the business, conducted by Morgan Stanley on behalf of the UK Government.
The remainder of Bradford & Bingley’s business, including the mortgage operation and headquarters, will be taken into public ownership.
The UK’s Financial Services Authority (FSA) determined that the firm no longer met its threshold conditions for operating as a deposit taker under UK law and FSA rules.
The British Government said that it made the decision in order to maintain financial stability and protect depositors, while minimising the exposure to taxpayers.
Sky News said that Santander would pay £400 million (A$888 million) for B&B’s 200 branches as well as about £22.2 billion (A$49.3 billion) of savings held by 2.5 million customers.
Further, reports suggest that the bank’s loans, worth £50 billion and including £41 billion pounds of mortgages, would then be nationalised.