Bradford and Bingley follows in the steps of Northern Rock
Following the disasters at Northern Rock another mortgage bank is starting to look shaky. In the first few months of the year Bradford and Bingley has managed to actually lose money, which is very unusual for a mortgage bank.
Because of this remarkable poor performance it is having to shore up its finances to the tune of £400m.
But it is the lender’s bad debt figures, located towards the back of its 11-page announcement, which are just as worrying. The slowdown in the economy, and higher household bills, have affected quickly the ability of home owners to repay their mortgages.
By the end of April, 8,333 of the Bradford and Bingley’s borrowers, 2.16% of all the bank’s mortgage customers were in trouble, with arrears of three months or more, or in the throes of being repossessed.
That was 35% more than at the end of last December when only 1.63% of borrowers 6,170 were in that position. And that was already far worse than the industry average, which stood at just 1.1% in the second half of last year.
