Troubled Bradford & Bingley Nationalised

Troubled Bradford & Bingley has been nationalised. The government will take control of the bank's £50bn mortgages and loans, while B&B's £20bn savings unit and branches will be bought by Spain's Santander.

Abbey, which is part of Spanish banking group Santander, is paying £612m to buy B&B's savings business and 197 branches. To help facilitate Abbey's takeover of B&B's savings business and branches, it has been paid £14.6bn from the Financial Services Compensation Scheme - funded by the Bank of England - and a further £4.5bn from the Treasury. This £19.1bn is to guarantee that Abbey could pay back all B&B savings account customers, if need be. The government says it will get the money back - starting with the Treasury's £4.5bn - following the redemption and sale of B&B's mortgages, that are now in public hands.

Under the move, all B&B savings accounts are protected, and taxpayers are being shielded from any losses. B&B is just the latest bank that has needed rescuing in a turbulent period for British financial institutions.

It follows after the announcement two weeks ago that HBOS is being bought by Lloyds TSB, and Nationwide's takeover of smaller building society rivals Derbyshire and Cheshire.

For any Question and Answers you have about this announcement you can visit the B&B Q&As.


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