UK Will Protect Bradford & Bingley Customers As It Heads For Nationalization

September 28, 2008 10:27 a.m. EST

London, UK (AHN) - Customers of mortgage lender Bradford & Bingley PLC, Britain's largest lender to landlords, will be protected by the U.K.'s government as the firm heads for nationalization.

The British Broadcasting Corp. was the first to report on the nationalization of the troubled mortgage lender, which is the latest victim of the U.S. subprime mortgage crisis and the global credit crunch.

The country's biggest lender to landlords will be taken over by the state a year after Northern Rock faced a run on its deposits in the autumn of 2007 forcing the government to nationalize the firm.

The Treasury and Financial Services Authority are planning to sell Bradford & Bingley's 200 branches and its savings business to another bank, BBC reported.

It said that the authorities and the regulators are negotiating with the potential buyers including Banco Santander SA, HSBC Holdings PLC and Barclays PLC.

The shares of the firm, which was listed on the London Stock Exchange in December 2000, have tumbled by as much as 93 percent so far this year.

Bradford & Bingley recently reported $137.3 million (74.6 million pounds) related to bad mortgage loans in the first half of this year, compared to $9.8 million (5.3 million pounds) reported for the same period last year.

Experts believe that the nationalization of the firms like Bradford & Bingley and Northern rock by the U.K. government is similar to the U.S. government's $700 billion bailout plan.