Bradford & Bingley Share Discussion Threads

[birchin] 03/1/2015 09:02

Bradford & Bingley's 'Full Nationalization' Should Never Have Happened - Group Claims


For those who like a good yarn the saga of Bradford & Bingley (B&B), the UK bank that was hastily nationalized by the British Government in a transatlantic phone call, one would be hard pressed to beat years of obfuscation by the authorities – from within Whitehall to the UK’s financial regulator. Some might think the spirit of Sir Humphrey Appleby, a character in the 1980’s BBC comedy Yes Minister, was very much alive and well.

Sir Humphrey you see was a master at the art of manipulation and obfuscation, often making long-winded statements. He was an unflappable symbol of a machine that had no gears – just brakes deflecting the noise. It’s a bit like the situation that has confronted many B&B shareholders who have had hundreds of Freedom of Information requests over the past six years declined time after time by the authorities.

The stalling over information sought as to the precise details around why the bank was nationalized is regarded in certain quarters as shocking. Rather than being bailed out and partially nationalized – as was the case with Royal Bank of Scotland – B&B’s fate seemed a done deal and executed in haste for political reasons according to David Blundell, chairman of the Bradford & Bingley Action Group (BBAG) based in Leeds.

It might also reflect the ‘Too Big To Fail’ syndrome, a term popularized by U.S. congressman Stewart McKinney, where certain institutions (especially financial) are so large and interconnected that their failure would prove a disaster to the wider economy. Quite possibly B&B was too small to succeed and thrive, but the jury is out on that given its balance sheet strength prior to nationalization. But that’s a matter for another day.

However, despite what could be described as an appalling level of subterfuge that BBAG and almost one million B&B shareholders have suffered there appears to be some good news. That said, it might not result in fair compensation for them just yet. Still, an increased offer early this December to B&B Perpetual Subordinated Bond holders (around five times more than a previous offer in 2010) might offer a glimmer of hope.

Specifically, UK Asset Resolution (UKAR), the body established in October 2010 to integrate the activities of NRAM (previously known as Northern Rock (Asset Management) plc) and Bradford & Bingley plc, has offered to buy out holders of two perpetual subordinated bonds issued by B&B through a tender offer for the securities. These securities were originally sold as Permanent Interest Bearing Shares – PIBS for short.

According to Mr Blundell, who has campaigned vigorously since late 2008 for the truth as to why the bank was nationalized, the latest and revised offer to bond holders adds weight to what the action group has always believed, namely that B&B “should never have been fully nationalized and its savings and retail [not] sold to Santander at a fire-sale price.” Blundell also claims there is likely to be substantial surplus when B&B is finally wound down, which would go to the Treasury – not shareholders.

The view is reinforced by the recent offer to holders of 13% and 11.625% Perpetual Subordinated Bonds issued by B&B – at purchase prices per £10,000 in principal amounts outstanding of £19,900 and £18,650, respectively. It should be pointed out this new offer compares favourably with the first one made around four years ago of just £3,800 and £3,600.

Back then BBAG stated that it was both “derisory and opportunistic” since it was taking advantage of savers – many of whom were pensioners in severe financial difficulties due to non payment of interest on their bonds.

Mr Blundell contends that the main causes of the UK banking crisis was a “Government and bank engineered credit bubble”, combined with the introduction of the International Financial Reporting Standards that enabled banks to “indulge in false accounting”, the UK Government’s light touch regulatory approach and failures of the Treasury and the Financial Services Authority (the forerunner of the Financial Conduct Authority). He may well have a point when he says: “They above all failed in their duty of care to ordinary savers and investors.”

UK Financial Investments Ltd (UKFI), the body established in 2008 as part of the UK Government’s response to the banking crisis and responsible for managing the Government’s 100% shareholding in UKAR and its subsidiaries including B&B plc on behalf of HM Treasury, reported in its 2012 accounts that: “All creditors including the Government are expected to be repaid in full by B&B plc and the company is forecast to yield an annual rate of return of 5% to 6% to the Treasury, which reflects a total investment of £27 billion and a total return to the Government of circa £49 billion.”

More recently in the UKFI’s 2013/14 annual report and accounts for the period ending 31 March 2014 published this June, it was revealed that: “As of 31 March 2014, total assets of Bradford & Bingley were £35.2bn, of which £30.2bn were loans and advances to customers.”

BBAG plans to convene a public meeting next year in London as part of their ongoing campaign for justice. It may be a bitter battle getting the level of compensation sought (suggested at between 55p and 100p a share), but the whole matter certainly highlights the woeful neglect afforded to shareholders in B&B.

[daytraders] 02/1/2015 21:45

Aint the goverment already had there money yet then ?

[loganair] 02/1/2015 21:39

What I read is that the Government could easily return to the B&B shareholders 50p per share (price of the B&B Rights Issue) as wouldn't even cost them £1bln out of the many, many £blns they are gong to make out of B&B in profit.

[chesty1] 02/1/2015 21:01

I take it this still does not help shareholders though....



The leaders of the main political parties were invited to speak at BBAG's meeting on the 24 January 2015 at St Columba's Church, Knightsbridge to answer the question: "What action would be taken on behalf of B&B employees, share/bondholders and residents of Bingley, a once vibrant and prosperous community but now a virtual ghost town, if you form the Government after the General Election in May 2015. The Information Commissioner Christopher Graham was also invited to attend and explain why despite appeals to his office BBAG still do not know how and why B&B was expropriated in the way that it was.



To date BBAG has not received a meaningful response from any of the above parties which has left it with no alternative but to postpone the meeting. This is a further example of the obfuscation to which BBAG has been subjected for over six years by successive governments and explains why Whitehall and Westminster are held in such contempt by so many. However despite the appalling level of subterfuge that BBAG has suffered there is good news: UK Financial Investments Ltd, created in 2008 as part of the UK Government's response to the banking crisis, reported in 2012 that "All creditors including the Government are expected to be repaid in full by B&B plc and the company is forecast to yield an annual rate of return of 5% to 6% to the Treasury which reflects a total investment of £27 billion and a total return to the Government of circa £49 billion. This adds weight to what BBAG has always believed, namely that B&B should not have been fully nationalised and its savings book and retail network sold to Santander for a fire sale price. BBAG's view is reinforced by the recent offer to holders of 13% and 11.625% Perpetual Subordinated Bonds at purchase prices per £10,000 in principal amount outstanding of £19,900 and £18650 respectively which compares favourably with the first offer in 2010 of £3800 and £3600. At the time BBAG stated the first offer was both opportunistic and derisory as it was taking advantage of savers, many of whom were pensioners in severe financial difficulties due to non payment of interest on their bonds.



The main cause of the UK banking crisis was a Government and Bank engineered credit bubble, the introduction of the International Financial Reporting Standards by the UK Government in 2005, which enabled the banks to indulge in false accounting, and its 'light touch regulatory approach' allowing the Treasury and the Financial Services Authority to fail in their duty of care to ordinary savers and investors.



BBAG will be holding a meeting at St Columba's Church as part of our ongoing campaign on a date to be advised soon after the General Election in May 2015.



David Blundell

[birchin] 01/10/2014 21:59

hxxp://www.ftadviser.com/2014/10/01/ifa-industry/mps-join-fight-for-bradford-bingley-shareholders-uKjJyLpU7qEl8kWPwJRQoL/article.html

By by Roger Aitken | Published 16:23

MPs join fight for Bradford & Bingley shareholders


Politicians from the three main political parties have backed a call for a full and independent inquiry into the nationalisation of Bradford & Bingley in 2008.

During a public meeting in Bradford, held to mark the sixth anniversary of the Bradford & Bingley nationalisation, Philip Davies, conservative MP for Shipley; Gerry Sutcliffe, Labour MP for Bradford South; and David Ward, Liberal Democrat MP for Bradford East, voiced concern that shareholders have been left with financial losses.

Speaking at the event, which was hosted by the Bradford & Bingley Action Group, Mr Ward said that the government should conduct such an inquiry, a view shared by Mr Davies and Mr Sutcliffe.

David Blundell, chairman of BBAG, which has been fighting for compensation for approximately 1m shareholders, said that the sale of B&B’s savings book and retail network to Santander had been undertaken at a “fire sale price”.

He added: “The mortgage book is being wound down by United Kingdom Asset Resolution Ltd, whose accounts suggest a substantial surplus when the process is completed.”

Mr Davies said that either the mortgage book surplus should be returned to the shareholders – not the Treasury – or UKAR continues as a mortgage provider, is sold, and its shares distributed to the former shareholders.

The headquarters of Bradford & Bingley has been scheduled for demolition in October.

Adviser view

Robert Simpson, managing director of Leeds-based Bartlett Wealth Management, said: “The nationalisation happened far too quickly and far too early. The deal was done in the space of a weekend. In this part of the world the Bradford & Bingley was a viable and larger employer. A lot of staff were shareholders, and inevitably they lost their shareholdings. So I certainly support an inquiry.”

[birchin] 28/9/2014 12:33

The conservatives privatised the CEGB I lost my job ! Labour sold B&B behind our backs I lost 20k I could be what you call a floating voter.

[birchin] 28/9/2014 12:09

Extrader

I expect you are right. But when you have lost just under 20k. 10k of that about 5 minutes before the bell on the last Friday of trading you live in hope you might get something back.

[extrader] 28/9/2014 11:21

Hi all,

I wouldn't get your hopes up re any recovery for shareholders : sadly, the approach to the EC for relaxation of conditions (to the likely benefit of BB bondholders) is driven by HMG's interest - as SOLE SHAREHOLDER - in benefitting from any eventual profit on writedown.

It can't do this until the preferred creditors have been taken out of the picture.

HMG is unlikely to do anything that might be of benefit to the previous shareholders.Indeed, now that there is the prospect of some gain, it'll likely resist restitution efforts all the more ;-<<br />
Good luck with your campaign, though !

ATB

[debbiegee] 28/9/2014 11:18

Thanks,please share if you find.

[birchin] 28/9/2014 11:08

I expect there will be something on the Bradford & Bingley Shareholder Action Group site in the next day or two.

[debbiegee] 28/9/2014 10:52

Seems no news of yesterdays meeting.
This was the only interesting article I found with a google search.
Alright for some !

[leecoyote] 28/9/2014 10:20

Gobsmacking revelations on the CFD industry -

[birchin] 28/9/2014 10:06

Has any one found or heard news from yesterdays meeting ?

[debbiegee] 12/9/2014 07:26

I have reposted Chestys post above just to remind everybody or for anybody that missed it.
Im sorry I wont be able to attend but I hope you all have good support.
Thanks to anybody working behind the scenes for us and hopefully soon we will have some progress..

[optomistic] 11/7/2014 09:12

hxxp://www.thebusinessdesk.com/yorkshire/news/642494-regulator-fines-former-bradford-amp-bingley-fd-again.html?

Regulator fines former Bradford & Bingley FD again
11th July 2014

THE former finance director of Bradford & Bingley has been fined for failing to alert his board to a serious worsening of the bank's financial position during the financial crisis.

According to a report in The Guardian, the Financial Reporting Council (FRC) reprimanded Chris Willford and fined him £13,000, reduced from £20,000 because he settled early. The FRC's fine follows a £30,000 penalty imposed by the Financial Conduct Authority (FCA) in December over the same matter. Click here to read the story.

In May 2008, Mr Willford received information that suggested that Bradford & Bingley's financial outlook might be weaker than expected. As Bradford & Bingley was preparing to raise capital through a rights issue, this should have immediately been raised with B&B's board and investigated to ensure that the information provided to shareholders about the rights issue on May 19 was correct. Willford failed to tell his fellow board members in time for the rights issue circular to shareholders to describe the bank's worsening finances.

In a statement last year the FRC said it did not find that Willford's conduct caused the failure of the rights issue, or Bradford & Bingley's subsequent nationalisation.


...fined peanuts!!

[optomistic] 17/12/2013 14:57

. agreed PW

[pwhite73] 16/12/2013 23:13

The question of bust or not is irrelevant. The live issue here was that B&B was a private concern. If nationalised by the government shareholders have to be compensated. Some injustices can take years to resolve just like the Birmingham Six and the Guildford Four.

The nationalisation of B&B is tantamount to the Fire Service laying claim to your home on the grounds that if they hadn't come out your house would have burnt to the ground rendering it worthless. Not only that the fire would have probably spread to all the other houses on the street putting the safety of the entire neighbourhood at risk.

So your house that once belonged to you now belongs the Fire Service for if it hadn't been for them the consequences would have been incalculable.

Justice will be done.