No major job losses at B&B, says boss (From Bradford Telegraph and Argus)

No major job losses at B&B, says boss

11:00am Tuesday 31st March 2009 in Business By Chris Holland

Bradford & Bingley boss Richard Pym says there will be no widespread job losses among the bank’s near 1,000 Aire Valley workforce this year.

In fact, the B&B has added 87 staff to its collections operation and is recruiting more people to handle rising arrears.

Following nationalisation in September, around 80 staff had taken voluntary redundancy, another 75 had resigned and a small number of compulsory lay-offs were under way.

Mr Pym, chairman, said: “We aim to continue to give excellent service to our customers and, whilst we undertake further restructuring to reduce costs, we intend to minimise any adverse impact on the Aire Valley community.”

B&B has unveiled pre-tax profits of £134 million in 2008 compared with £126 million in 2007 due to gains of £216 million from the sale of the savings business and £115 million from interest-free public funding to replace retail deposits.

B&B says it would have made a loss without public support .

Arrears among its 300,000 borrowers soared, with those three months or more in arrears and in possession rising from 2.48 per cent of loans in 2007 to 4.60 per cent last year.

B&B is writing off £507 million to reflect estimated arrears for 2008 and the year ahead, compared with a £22.5 million provision for 2007, The unexpected profit prompted Shipley MP Philip Davies to question the Government’s decision to break up B&B, with the mortgage business going into state ownership and the savings and branch business being sold to Abbey National.

Mr Davies said: “Bradford & Bingley was facing challenging times but these figures question whether it needed to be dismantled when other struggling banks have been left intact.

“I’m certain than most of the other banks would give their right arm for such a figure.”

Mr Pym said external events had damaged public confidence in the banking system leading to the nationalisation of B&B.

He said: “This was a hugely disappointing outcome for the organisation. Although we had a difficult last week of trading, thanks to the efforts of colleagues, there were queues outside only four branches and every customer was served before we finally shut our doors on Saturday, September 27.”

He said 2009 was going to be a further year of change with B&B working hard to protect the value of its assets and minimise the risk to taxpayers.

“Whilst 2008 was a turbulent year for banks and for Bradford & Bingley in particular, the restructuring we are undertaking will, we expect, enable us to repay the taxpayer and the Financial Services Compensation Fund in full,” he said.

B&B had stopped new lending and would be wound down in an orderly fashion over a number of years. Under the plans, B&B has ceased new lending and is offering incentives to existing customers to move their mortgages elsewhere through measures such as waiving early redemption fees.

It hopes to cut its mortgage book to £36.3 billion by the end of 2011 as well as selling commercial loans and its portfolio of Treasury investments.